Arts-crafts board fires CEO Henisa

F or the third time in less than a decade, the Navajo Arts and Crafts Enterprise board of directors has fired the chief executive officer.

The board voted Friday to terminate the contract of Sean Henisa, who has been heading the enterprise for the past three years.

They gave him until 4 p.m. Wednesday to move out of the Karigan Estates house that NACE had provided for his use.

No reason was given for firing Henisa, who could not be reached for comment by press time Wednesday. He has left the area, according to tribal officials.

"NACE faced an issue and the board and the new management dealt with it," said Barbara McGough, who was appointed to replace Henisa.

McGough, a Corrales, N.M., resident who has a background in financial management, has been a financial analyst for the enterprise for the past two years.

Henisa was the subject of an investigation by the white-collar crimes unit of the tribe's prosecutor's office after Lalora Charles, a former financial officer for NACE, made a series of allegations about mismanagement within the enterprise.

Charles said Henisa improperly charged personal expenses - including some as petty as laundry - to the tribal enterprise.

Before going to the prosecutor's office, Charles said she tried to raise the issue with Henisa, who was her boss.

"He would say that this was the way it was done in corporations but I would explain that this was not the way it was done in the Navajo Nation," she said Wednesday after learning that Henisa was removed.

In addition to living in a house furnished by NACE - not an uncommon perk for top professionals on the reservation, where housing is very scarce - Henisa would routinely assign NACE employees to do his housekeeping or make repairs.

He also reportedly sent staff members to attend classes he was taking at the University of New Mexico-Gallup when he couldn't make it himself. They were instructed to tape the session so he could listen to it later.

Henisa also helped himself to some of the best rugs and katsina carvings acquired by NACE, borrowing them to decorate his house, Charles said.

When she questioned the practice, he argued that since the house belonged to NACE, he had the authority to take the items and display them there.

Altogether, Charles lodged more than 40 allegations of mismanagement and misconduct by Henisa back in June. Henisa denied the charges then, saying they were baseless complaints by a disgruntled former employee (Charles said she quit under pressure from Henisa after she started to ask questions).

The allegations became the framework for the investigation undertaken by the prosecutor's office.

Charles accused Henisa of using "non-real" numbers in his financial statements to the NACE board to make the company's financial picture look a lot better than it was.

He also burned up much goodwill toward NACE by stalling as long as possible before paying vendors.

Employees at NACE said that in November, Henisa put out a memo saying that no vendors were to be paid until after the holiday sales period, thus making December look more profitable than it actually was.

By fall, word was circulating that the tribe's investigation was stalled because many of the problems found were due more to mismanagement than corruption "... and you can't indict people for stupidity," said an official close to the situation. "If you could, half the tribal government would be in jail."

No indictments have been issued in the NACE probe. There were reports that the tribe was considering hiring a financial expert to continue the probe but that hasn't happened yet.

In her memo, Charles also alleged that Henisa was able to get away with violating NACE policy because he curried favor with the board of directors, to whom the CEO answers.

He allegedly gave board members special buying privileges that were not allowed anyone else who bought merchandise from the enterprise.

But employees said Wednesday that apparently the board could no longer overlook some of Henisa's alleged misdeeds and got "tired of his lying to them" so they fired him.

McGough said Wednesday that NACE has not yet inspected the Karigan Estates house so she did not know if the artifacts he borrowed are still there.

NACE employees said it would be difficult to determine if any items are missing since Henisa did not make a record of what he took to the house and what he brought back.

Charles said there was a provision in Henisa's contract that called for a buyout of his contract if he was terminated but there was also a clause that no buyout was necessary if he was removed for cause. No information has been released on whether Henisa received any severance pay from the board.

McGough said she "preferred not to comment" on changes at NACE in the wake of Henisa's removal.

Employees at the enterprise asked not to be identified because they were not told they could talk to the press. However, several said a number of changes appear to be in the works and that NACE may back off of some of Henisa's plans, including his most recent announcement of a plan to corner the market for silversmithing supplies.

McGough said employee morale is "great" and that "every single employee is looking forward to the future."

One NACE worker said that view may be overly optimistic.

"We've been though changes in administration several times now so I think what most employees are doing is just sitting back and seeing what changes are made and how it affects them," the employee said.