Jury to decide 'wolf or friend of Diné' in NHA corruption case
By Cindy Yurth
LAS VEGAS, April 11, 2013
T he U.S. government opened its corruption case against former Navajo Housing Authority CEO Chester Carl and contractor Bill Aubrey at the federal courthouse here Tuesday, with Assistant U.S. Attorney Timothy Vasquez portraying Aubrey's company, Lodgebuilder, as a "wolf in sheep's clothing" out to fleece the federal government, and Carl as the negligent shepherd who let him into the corral.
The two defendants' attorneys, however, painted quite a different picture, casting them as award-winning friends of the people who had devised a way to build quality homes quickly and under budget, incurring the wrath of the unwieldy NHA bureaucracy.
By lunchtime on Wednesday, only one witness had been called - Jennifer Bulough of the U.S. Department of Housing and Urban Development's Office of Native American Programs.
Bulough laid the groundwork for the case by describing the Native American Housing and Self-Determination Act under which HUD issues block grants to tribes and their designated housing entities, like the NHA.
She noted that the entities receiving the funds are supposed to have a system of self-regulation in place, and HUD does not regularly monitor the grants.
Carl and Aubrey are charged with conspiracy, bribery and conversion of funds in connection with several housing developments built by Lodgebuilder in the early 2000s while the company was contracted to manage the Fort Defiance Housing Authority.
According to the U.S. government, Aubrey converted $2 million of federal grants and loans for his own use instead of paying subcontractors on Chilchinbeto Estates while Carl looked the other way in exchange for thousands of dollars worth of gambling chips.
The for-profit Lodgebuilder, Vasquez said, was "masquerading" as the non-profit Fort Defiance Housing Authority - the entity designated by the tribe to receive grants for the project - with Aubrey given exclusive authority to be the single signer on FDHC's checks.
Even when, in the summer of 2002, the Southwest Office of Native American Programs threw up a red flag at the arrangement, Vasquez said Carl continued to turn a blind eye and gave Aubrey even more authority.
Aubrey's attorney, Michael Kennedy, stated in his opening argument that Aubrey was paying himself back for the millions in his own money he used to start the project, and that Lodgebuilder actually lost money on Chilchinbeto when the NHA withheld $3.3 million in grant funds Aubrey had been counting on. The company filed for bankruptcy in 2004.
Kennedy pointed out that Aubrey's Rio Puerco project had been selected by the U.S. Department of Housing and Urban Development as "the best of the best of the best" in low-cost housing.
"Bill Aubrey didn't need to bribe anybody," he said.
As for the gambling chips, cashed at the Tropicana and traced to Aubrey, both Kennedy and Carl's attorney, Todd Leventhal, said Aubrey enjoyed high-stakes gambling and often invited friends to play with him, loaning them chips for which they paid him back at the end of the night if they won money.
Leventhal said Carl shouldn't be judged for gambling.
"Chet came into town like thousands and thousands of people do," he told the jury. "Guess what? Oh my God, they gambled! Here in Las Vegas, they actually gambled!"
According to Vasquez, however, the men were pretty serious about it. Carl at one time cashed in $20,000 worth of Aubrey's chips at the Tropicana casino.
In a post-court interview, Carl recalled that night. It was getting late, he said, and "The management called me over and asked me if I could get Bill to call it a night. I said, 'Come on Bill, it's time to go to bed,' and I took the chips and cashed them. I gave all the money to Bill."
Carl said he's not a big gambler and accompanied Aubrey to the casino "out of friendship."
Although Vasquez blamed Aubrey's gambling "addiction" for the Chilchinbeto fiasco, Aubrey said after court was recessed for the evening that he's no addict.
"I like to gamble," he said. "I don't have an addiction."
He said the $2 million was "my money and I spent it on what I felt like."
Carl said he was glad the charges, filed against him in 2009, were finally coming to court.
"Finally," he said, " I get a chance to clear my name."
Carl, who resigned from NHA in 2007 after the Lodgebuilder scandal broke, also had some choice words for the present NHA administration.
"It's a tragedy to see where the Navajo Nation is with its housing program," he said. "It's sad to see all those storage buildings fixed up like houses on lots in Gallup. People can't get financing for trailers any more so they're paying $30,000 and living in those things."
Why is that?
"NHA management not knowing what they're doing," he stated bluntly.