Lawsuit alleges corruption and back door dealings at Key First Nation

The chief of Key First Nation in Saskatchewan is suing two band councillors on behalf of the nation for allegedly taking money in exchange for awarding contracts.

The lawsuit filed in October seeks more than $3.8 million in damages from councillors Sidney Keshane, Kimberly Keshane and 10 other companies and individuals. 

The statement of claim alleges the two councillors "would accept payments from various parties in exchange for the granting of KFN contracts to such parties on a quid pro quo basis."

Lane Zabolotney, a lawyer representing Sidney and Kimberly Keshane, said his clients "vehemently deny the allegations against them and look forward to their names being cleared through the litigation process."

None of the allegations have been proven in court.

"It's been no secret to anybody that our community has had struggles for many, many years with our leadership," said Solomon Reece, a Key First Nation councillor who is not named in the lawsuit. 

Reece said there is mistrust between the First Nation's government, administration and community members. He said many members of the nation aren't engaged with the band council. 

"For a lot of our members, the Nation is something of a black hole," said Reece. 

Reece said the allegations are serious and feels the lawsuit is a step to regain trust with the community. 

Key First Nation has about 1,500 members, with 300 living on reserve, about 225 kilometres northeast of Regina. The First Nation's council consists of the chief and five councillors.

Land leases 

Sidney Keshane and Kimberly Keshane are uncle and niece, and were both elected to the band council in June 2022. 

According to the statement of claim, in the summer of 2023 the First Nation was looking to lease three parcels of reserve land, totalling about 3,600 hectares, for agricultural use to generate revenue. 

According to the statement of claim, a band councillor not named in the suit added an item to a meeting agenda several weeks before the tendering period closed, to grant the lease to a farmer. Key told the rest of the council it would be inappropriate to do so before the tendering period closed. 

The First Nation received three bids by the closing date, one of which offered just over $1.3 million for the lease, according to the statement of claim. 

The statement of claim says that at a council meeting after the closing date, Sidney Keshane left and returned with a bid from the same farmer's agricultural company, that had not been submitted during the tendering period. The late bid for the 3,600 hectares was just over $828,000. 

The statement of claim says that at a meeting on Sept. 7, 2023, four councillors granted that company a five-year lease for about 2,800 hectares for just over $880,000 a year, despite not making a bid through the tendering process, nor being the highest bid. 

Key and Reece opposed the resolution, according to the statement of claim. 

About a month later, Key spoke to a farmer who previously held an agricultural lease with the First Nation, who told Key he had paid Sidney Keshane about $40,000 in order to secure a lease and that the money was to be shared with Kimberly Keshane, according to the statement of claim. 

The farmer also told Key that he had promised Sidney Keshane an additional $100,000 in exchange for settling a legal action between him and the First Nation. 

A few days later Key spoke to a different farmer, one of the three who made unsuccessful bids, who told him he had given Sidney Keshane $9,800 to secure a lease, and the money was to be shared with Kimberly Keshane, according to the statement of claim. 

Both of these farmers told Key the winning bidder had also given money to Sidney Keshane to secure the lease, according to the statement of claim.

After learning of the payments to Sidney Keshane, Key retained an investigative accountant to look into the financial transactions of the First Nation and the councillors. 

Judge grants access to bank records 

On March 5, 2024, Key and the accountant went to look at the band's financial records but staff refused to co-operate. Key returned to the band office with the RCMP and a locksmith to gain access to the records, according to the statement of claim. 

Key then applied for a court order to gain access to Sidney Keshane's banking records. According to the statement of claim, the accountant accessed two years worth of Sidney Keshane's bank statements and found: 

• Thousands of dollars in e-transfers to Sidney Keshane from companies connected to business with the Key First Nation, including e-transfers from the two farmers who spoke with Key. 
• 228 e-transfers between Sidney Keshane and another family member named in the lawsuit. 
• 56 transactions between Sidney Keshane and Kimberly Keshane. 
• Cheques from the Key First Nation that were "double deposited" resulting in double payment, such as the same cheque being deposited using a phone app and then again in person. 
• Money from a Key First Nation trust account deposited into Sidney Keshane's account without lawful explanation. 

The lawsuit also alleges that the four councillors called a meeting without Key and Reece and passed a resolution to fire the First Nation's law firm that had been tasked in the fall of 2023 with reviewing the land lease tendering process. 

According to the statement of claim, the bank statements showed that the First Nation's new sole legal counsel e-transferred Sidney Keshane a total of $88,885 between June 2022 and August 2024.