Tag Archives: Discretionary Funds

8/3/2011 Gallup Independent: Dine´officials answer special prosecutor's allegations

8/3/2011 Gallup Independent: Dine´ officials answer special prosecutor’s allegations By Kathy Helms, Dine Bureau: WINDOW ROCK – Former Navajo Nation Council Speaker Lawrence T. Morgan and former Attorney General Louis Denetsosie have denied breaching their fiduciary duties to the Navajo people as alleged in a complaint filed last week by Special Prosecutor Alan Balaran. Attorney General Harrison Tsosie was out of the office Tuesday and unavailable for comment. Controller Mark Grant said he had no comment, and former Navajo Nation President Joe Shirley Jr. has not yet responded. Balaran has alleged that Morgan, acting in concert with other delegates, “unlawfully manipulated his position” to encourage other delegates to award approximately $50,000 in discretionary funds to some of his family members.

“I can attest that I’ve never encouraged anyone or delegate to cater to my family. I’ve never gained any money from the discretionary fund, nor gave money to any organization disguisely,” Morgan stated in an e-mail.

“But I would assure that each Council delegate had assisted the Navajo individuals sincerely for their (clients) benefits – in education, household utilities, livestock, etc., etc. Those should be exposed too. That would truly outweigh these negative allegations,” Morgan said.

Denetsosie, who along with Tsosie is alleged to have breached his fiduciary and ethical duties by approving payments to a law firm to defend Shirley against the special prosecutor’s investigation into OnSat, issued a statement, saying, “There is no merit whatsoever in the claim made against me by the Special Prosecutor.

“I will contest this claim vigorously, with the thankful recognition that people who know me and know the accomplishments of my lifetime of work for the Navajo Nation are giving me their full support.” He said he has devoted his time and effort selflessly to protect the proprietary and governmental interests of the Navajo Nation.

Denetsosie – who served as attorney general for eight years and is now general counsel for Navajo Oil and Gas – said that at his request the special prosecutor was granted jurisdiction initially by a Special Division established under Navajo law to prosecute persons involved in the OnSat and BCDS matters and the expenditures of discretionary funds administered by the Navajo Nation Council.

“Later, again at the request of my office, the Special Division enlarged his authority to include investigation of discretionary funds administered by the Office of the President/Vice President and activities of the Tribal Ranch Program. To date, the Special Prosecutor has not obtained a conviction against any person in connection with these matters, although he has reportedly spent over a million dollars of Navajo money in his brief tenure here.”

Balaran said last week that in order to prosecute the case, money had to be expended toward computer forensic experts, accounting forensic experts, other lawyers and staff and that he has not just pocketed the $1.1 million the Nation was billed, as was being portrayed by delegates at a press conference last Friday in response to the complaint. Though there have been no convictions to date, several of those charged last October have settled their cases, including President Ben Shelly and Vice President Rex Lee Jim.

Denetsosie stated that without the approval of the Navajo Nation Department of Justice required under Navajo law, the special prosecutor sought to expand his own authority. “Rather than focus on the non-Navajos who have apparently absconded with Navajo money, the Special Prosecutor focuses on Navajo leadership, alleging that I and others breached our fiduciary duties to the Navajo Nation. Nothing could be farther from the truth.

“Notably, the Special Prosecutor does NOT allege that I acted in any way for personal gain; rather, he misunderstands the role of the Attorney General with respect to the Navajo Nation Council (which has its own legal representation) and with my decision to permit President Shirley to have independent legal representation where the Navajo Nation Department of Justice could not ethically provide such services.”

Denetsosie also said that while the claim against him states that the OnSat matter involved a “scheme to enrich OnSat officials,” that this is the initial matter the special prosecutor was supposed to look into, “but he has not brought one lawsuit to recompense the Nation for this ‘scheme.’”

7/28/2011 Navajo Times: 142 face charges in slush fund scandal Delegates: Special prosecutor overstepped authority

7/28/2011 Navajo Times: 142 face charges in slush fund scandal Delegates: Special prosecutor overstepped authority By Bill Donovan Special to the Times: WINDOW ROCK, July 28, 2011: he Navajo Nation’s special prosecutor on Thursday carried through with his plans to file civil suits against members of the Navajo Nation Council in connection with allegations that they converted millions of dollars in discretionary funds to their own use. These replace the criminal charges Alan Balaran filed earlier against 77 former and present members of the Council and then dismissed them.

This time he charged all members of the 21st Navajo Nation Council who served in office between 2007 and 2011, as well as former President Joe Shirley Jr., former Attorney General Louis Denetsosie, the current attorney general, Harrison Tsosie, and the controller, Mark Grant.

He also lists “John Does 1-50,” unknown individuals and employees who had a part in the illegal distribution of discretionary funds.

The total number of individuals facing charges is 142.

Discretionary funds were money allocated to delegates and the president’s office to provide assistance to citizens in need.

The suit goes after the former and current members of the Navajo Nation government for actions that “covertly manipulated and converted Navajo, federal and state funds resulting in a disparity of wealth whereby the vast majority of the Nation lives precipitously on the edge of poverty while those in positions of authority have amassed considerable wealth.”

In short, instead of promoting the well-being of their constituents, the civil suit claims they practiced the “art of self-dealing, ineptitude and secrecy.”

According to the suit, each member of the Navajo Nation Council received approximately $250,000 between 2005 and 2010, which they “unlawfully appropriated to themselves, their families, friends, other delegates and their friends, resulting in a total unlawful expenditure of tens of millions of dollars of the Navajo Nation.”

The lawsuit also indicates that the Council delegates may have also violated federal IRS laws when they adopted a policy a month after the fund was created that eliminated the requirement that the awards be reported to the IRS.

“In one sampling of awards, the (delegates) gave more than $2 million to 130 recipients with little regard to the beneficiary’s indigency,” the suit states. “These recipients were given checks in amounts ranging from $10,000 to $54,000.”

Another sampling showed that family members of 14 delegates received awards ranging from $51,000 to $130,000.

Shirley was named because he did not carry out his fiduciary duties to the Navajo people when he was president by approving the resolutions passed by the Navajo Nation Council that allowed the council delegates to acquire the discretionary funds.

Grant was also named because as controller he had a duty to see that tribal funds were handled in a proper manner.

He was also accused of promoting incompetent fiscal management, which resulted in the tribe having to return more than $100 million in federal and state grants between 2005 and 2009.

Denetsosie’s charges stemmed from signing contracts with the law firm of Gallagher and Kennedy to provide legal services for Shirley in his dealings with the special prosecutor. By doing this, he acted outside his scope of employment and tried to impede the special prosecutor’s investigation.

Tsosie’s charges stemmed from signing of the same contracts.

Within hours of the charges being filed, several members of the Council went on the attack, holding a noontime press conference Friday in front of the Council Chamber.

Speaker Johnny Naize said after looking at the language in the lawsuit he felt that Balaran’s charges were cast so broadly “that almost anyone doing business with the Navajo Nation government is guilty, from tribal employees to constituents.”

He said he had strong suspicions of why Balaran is targeting the tribe’s leadership and it has to do with the money he is making as special prosecutor.

So far, Naize said, Balaran has billed the tribe more than $1.1 million which has “only netted a group of allegations that were reduced from criminal charges to civil charges.”

So far, Naize said, no tribal court has acted on them and all of these charges continue to sit in limbo.

He stressed that despite all of Balaran’s attempts to undermine the tribal government, the government continues to operate.

Delegate LoRenzo Bates said he felt Balaran’s lawsuit exhibits vengeance against those who acted against him.

He also pointed out that since this is a civil suit, it could go on for years and become a drain on the Navajo people’s money at a time when funds are needed for other purposes.

Delegate Katherine Benally said she was so upset at Balaran’s false accusations against her that she was considering filing a countersuit against him.

Delegate Leonard Tsosie disagreed with the lawsuit’s figures that each Council delegate received $250,000 in discretionary funds, saying he never received that much.

He and others argued that Balaran exceeded his authority as special prosecutor and has failed to do what he was originally hired to do – look into the misuse of funds in the BCDS and OnSat scandals.

This was also pointed out by another delegate, Jonathan Nez, who said that in the BCDS scandal, a non-Indian made off with $4.4 million and is now vacationing on the tribe’s money and Balaran is doing nothing about it.

They all questioned whether Balaran was actually working to benefit the Navajo people and whether he was just another non-Indian who is trying to acquire as much Navajo money as he can before he heads back home.

7/29/2011 AP Washington Post: Lawsuit accuses 78 current and former Navajo Nation Council members of fraud in use of funds

7/29/2011 AP Washington Post: Lawsuit accuses 78 current and former Navajo Nation Council members of fraud in use of funds: WINDOW ROCK, Ariz. — A special prosecutor filed a lawsuit against 78 current and former Navajo Nation Council members alleging massive fraud in their use of $36 million in discretionary funds intended for Navajos in need. The lawsuit filed Thursday accuses the council members of unlawfully taking about $36 million belonging to the deeply impoverished American Indian reservation from 2005 through 2010 to benefit themselves and their families. The council receives millions of dollars a year through supplemental budget appropriations to dole out to elderly Navajos on fixed incomes, college students, organizations in need or Navajos looking for emergency funding. Any member of the nation can seek financial help from a single lawmaker every six months.

The nation’s Supreme Court put on hold the discretionary until rules were established on how they could be doled out.

The civil case comes after all or nearly all of criminal cases against council members for alleged misuse of the money were dismissed. The lawsuit seeks the recovery of the money and accuses council members of ignoring their responsibility to keep tight controls over the nation’s money.

“These officials have divested themselves of their duties of honesty and transparency, choosing instead to perfect the art of self-dealing, ineptitude and secrecy,” said the lawsuit filed by special prosecutor Alan Balaran.

Tribal Council Speaker Johnny Naize, one of the lawmakers who was sued, said the lawsuit was a shoddy piece of legal work by the special prosecutor. “He is throwing darts again trying to see if any will stick,” Naize said.

David Jordan, an attorney who represented dozens of lawmakers in the criminal cases, said Balaran has billed the nation for $1.1 million for his investigation and came up empty handed.

Balaran didn’t immediately return a call seeking comment on Friday afternoon.

The lawsuit said that one sampling of the misspent money found that council members gave more than $2 million to 130 recipients with little regard over whether they were poor. The recipients received checks ranging from $10,000 to $54,000.

Another sample found that family members of 14 council members received $51,000 to $130,000. Additionally, millions of dollars went to Navajo Nation employees, even though they were ineligible to receive them, the lawsuit said.

The lawsuit said Joe Shirley Jr., the nation’s president from 2003 to 2011, sanctioned the passage of dozens of unlawful budget appropriations that resulted in the illegal conversion of tens of millions of dollars belonging to the nation.

Shirley approved resolutions which appropriated money to the discretionary fund and to a charitable contribution fund and which were falsely touted as emergency legislation, the lawsuit said.

The filing accuses Shirley of supporting appropriations knowing the money would be spent to enrich delegates, their families and other ineligible recipients.

“It’s outrageous that you could sue President Shirley for signing off on a budget,” said Jordan, who has advised Shirley on the investigation by the special prosecutor.

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed

7/29/2011 Gallup Independent: 'Brazzenness' Navajo officials charged with misusing millions

7/29/2011 Gallup Independent: ‘Brazzenness’ Navajo officials charged with misusing millions By Kathy Helms, Dine Bureau: WINDOW ROCK – A lawsuit charging current and former top-level officials of the Navajo Nation – including former President Joe Shirley Jr. – with breach of fiduciary responsibility was filed Thursday with Window Rock District Court by Special Prosecutor Alan L. Balaran. The complaint alleges the loss of hundreds of millions of dollars in federal and state grant and contract funds and the associated loss or drastic curtailing of programs vital to children, the elderly, and the indigent. “I filed a complaint against almost every delegate – except for the three or four that settled – against the ex-president, against the current and former attorneys general, against the controller and against the speaker,” Balaran said late Thursday. He also requested that those still in office “be removed from their jobs, do a full accounting, give up their salaries for those times that they were stealing from the people, and return everything.”

Fifteen of the 16 delegates from the 21st Navajo Nation Council who are now part of the 22nd Council, including Speaker Johnny Naize, are being sued solely in their individual capacity as having acted outside the scope of their authority. Charges also were filed against former Speaker Lawrence T. Morgan, former Attorney General Louis Denetsosie, current Attorney General Harrison Tsosie, Controller Mark Grant, and John Does 1-50.

Last October, weeks before the General Election, criminal charges alleging conspiracy, fraud, theft, forgery and abuse of office – relating to how the Speaker’s Office managed its discretionary fund program – were filed against 78 delegates of the 21st Council. Balaran withdrew those earlier this year in anticipation of Thursday’s filing.

Each person charged “has a fiduciary duty to protect the Nation and to do everything in their best interest,” he said. “Clearly their actions were antagonist to those of the Nation and instead were simply selfish moves to further their own personal gain.”

According to Title 2, anyone who violates ethical rules can be incarcerated, forced to pay restitution, and removed from their job, he said.

President Ben Shelly and Vice President Rex Lee Jim settled their cases earlier this year. Also not named in the new complaint are 22nd Council Delegate Roscoe Smith and 21st Council Delegates Jerry Bodie, Herman Daniels Sr. (deceased), Tom LaPahe (deceased), Lawrence Platero, and Harold Wauneka. Delegates not charged last year but whose names appear in the new complaint include LoRenzo Bates, Katherine Benally, Naize, Jonathan Nez and Leonard Tsosie.

Balaran alleges that the senior officials acted in concert and that the “brazenness” demonstrated by them demands not only monetary redress but the appointment of a Financial Receiver to assume the responsibilities of the controller, as well as the immediate removal and replacement of those delegates still occupying positions of authority.

Between 2005 and 2010, each delegate was given $250,000 in discretionary funds which they are alleged to have unlawfully appropriated to themselves, their families, friends, and other delegates and their families, “resulting in a total unlawful expenditure of tens of millions of dollars of the Navajo Nation.”

Balaran claims that those unlawful appropriations and expenditures by delegates could not have been carried out without the assistance of the other named defendants, “either acting in concert with the delegates or recklessly refusing to exercise their own powers to stop the delegates’ massive fraud upon the Navajo Nation.”

Supplemental appropriations were unlawfully approved by using two strategies, according to Balaran, including falsely casting the appropriations as “related to an emergency,” or by waiving all Navajo Nation laws which might have impeded the appropriations or expenditures.

Those charged Thursday include: Alice W. Benally, Amos F. Johnson, Andy R. Ayze, Benjamin Curley, Bobby Robbins Sr., Cecil Frank Eriacho, Charles Damon II, Curran Hannon, Danny Simpson, David B. Rico, David Shondee, David L. Tom, Davis Filfred, Edmund E. Yazzie, Edward V. Jim Sr., Elbert R. Wheeler, Elmer P. Begay, Elmer L. Milford, Ernest D. Yazzie Jr., Ervin M. Keeswood Sr., Evelyn Actothley, Francis Redhouse, George Apachito, George Arthur, Gloria Jean Todacheene, Harriett K. Becenti, Harry H. Clark, Harry Claw, Harry Hubbard, Harry J. Willeto, Harry Williams Sr., Herman R. Morris, Hope MacDonald Lone Tree, Hoskie Kee, Ida M. Nelson, Jack Colorado, Jerry Freddie, Joe M. Lee, Johnny Naize, Jonathan Nez, Katherine Benally, Kee Allen Begay Jr., Kee Yazzie Mann, Kenneth Maryboy, Larry Anderson Sr., Larry Noble, Lee Jack Sr., Lena Manheimer, Leonard Anthony, Leonard Chee, Leonard Teller, Leonard Tsosie, Leslie Dele, Lorenzo Bedonie, LoRenzo C. Bates, Lorenzo Curley, Mel R. Begay, Nelson BeGaye, Nelson Gorman Jr., Norman John II, Omer Begay Jr., Orlanda Smith-Hodge, Pete Ken Atcitty, Peterson B. Yazzie, Phillip Harrison Jr., Preston McCabe Sr., Ralph Bennett, Ray Berchman, Raymond Joe, Raymond Maxx, Roy B. Dempsey, Roy Laughter, Sampson Begay, Thomas Walker Jr., Tim Goodluck, Tommy Tsosie, Willie Begay, Willie Tracey Jr., Woody Lee, Young Jeff Tom, Louis Denetsosie, Harrison Tsosie, Joe Shirley Jr., Mark Grant, Lawrence T. Morgan, and John Does 1-50.