FBI investigates Tuba Chapter for possible embezzlement, theft of millions
By Marley Shebala
WINDOW ROCK, November 1, 2012
T he Federal Bureau of Investigations has been called in to investigate the Tuba City Chapter after the tribal Auditor General's Office discovered the "financial irregularities" during their audit of the chapter.
Navajo Nation Deputy Attorney Dana Bobroff announced in a Tuesday press release that, "extensive financial irregularities discovered at the Tuba City Chapter have been referred to the Federal Bureau of Investigations for investigations and possible prosecutions under federal criminal statutes."
Earlier this year, the entire chapter's elected officials and two staff members were removed from office for tribal ethics violations regarding salary bonuses that they gave themselves, which amounted to $80,000 for the years 2009 to 2011.
"The irregularities involve the administration and expenditure of very large sums of chapter monies over a period of several years," Bobroff stated. "Details of the audit cannot be released as they are part of an ongoing criminal investigation."
Bobroff noted that the theft and, or embezzlement of funds from a tribal organization, including chapters, is a federal criminal offense and the penalties include, but are not limited to, federal imprisonment.
Council Delegate Joshua Lavar Butler, who represents Tuba City Chapter, said he was aware of the possibility that the FBI might be called in to investigate and prosecute those individuals involved in the misuse of chapter funds.
Butler praised the auditor general's office for going through chapter finances with a "fine tooth comb."
He added that as a result of the audit and the removal of the chapter officials and staff, the Council's Resources and Development Committee started looking at decertifying the To'Nanees Dizi chapter.
The To'Nanees Dizi chapter was the first chapter to receive local governance certification in Dec. 2004, which allowed the chapter to approve and collect taxes, approve business site leases, comprehensive land use planning and collect lease fees, and adopt an alternative form of government.
The chapter voted to have an alternative form of government, Council of Naat'aa'nii and executive manager and voted 43-26 in 2006 in favor of adopting a local tax code that allowed the chapter to collect retail taxes for a trust fund, tax refunds, local government operations and administration, local government projects, public safety projects, waste management, and matching funds for Western Agency non-local governance chapter projects.
The To'Nanees Dizi tax code also allowed the chapter to collect the tribal Hotel Occupancy Tax, which is deposited into the local tourism fund, local tax refund account and local scholarship program.
Butler said the chapter collects millions of dollars in taxes and it needs to be "accountable and transparent."
He recalled that his number one campaign platform in 2010 was for an open government at the chapter level.
Butler said that when he was elected, he found out that chapter secretary and treasurer Charlene Nez had filed an ethics complaint against her colleagues in late 2010 and started putting pressure on the ethics office to move it forward.
In August 2011, the ethics office announced that it had investigated Nez' complaints and was filing ethics charges against all the chapter officials, including Nez.
Butler said that he's been keeping an eye on the new chapter officials and administration and found out to his dismay that they were late in filing their financial reports for the past seven months with the tribal local governance office.
"Every quarter, the chapter collects about half a million dollars in taxes," he said. "The Budget and Finance Committee and Resources and Development Committee is aware of the chapter's late financial reports so it's not helping matters regarding possible financial sanctions and a move to decertify the chapter."
"The bottom line is that the taxes that are collected by the chapter are the people's money," Butler said. "The people have a right to know how the money is being used."
B&F Committee Chairperson LoRenzo Bates (Nenahnezad/Newcomb/San Juan/T'iistoh Sikaaad/Tse'Daa'Kaan/Upper Fruitland) declined to comment because the matter is under federal investigation.
Bobroff stated that the tribal Office of the Attorney General is working with the B&F Committee and tribal Office of the Chief Prosecutor to establish a theft or embezzlement of public funds as a separate criminal offense under tribal law, which would include stricter penalties.
She added that she hopes that the Council approves the new law during its winter session in January.
Before going to the Council, the proposed law is scheduled to go before the Council's Law and Order Committee, tribal Division of Public Safety and Judicial Branch for review and comments in late November.