Tag Archives: Illegal Distribution Of Discretionary Funds

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.