Shirley, new prosecutors talking about info release

By Bill Donovan
Special to the Times

WINDOW ROCK, Jan. 5, 2012

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Former Navajo Nation President Joe Shirley Jr. is once again talking to special prosecutors about turning over his records regarding two business deals that failed, costing the tribe millions.

David Jordan, Shirley's attorney, said Tuesday he has been in discussions with prosecutors about turning over documents related to OnSat and BCDS.

The documents in question are not covered by attorney-client privilege, Jordan said.

This is the same stance that Shirley took more than a year ago with Alan Balaran, the former special prosecutor who had been hired by the Navajo Nation Council to look into allegations of misconduct by Shirley and his staff members in the OnSat and BCDS scandals.

Shirley has said he had no direct involvement in BCDS, a Shiprock manufacturer that received more than $2 million in loans backed by the tribe's business development fund and then folded. Tribal auditors later traced much of the cash to area casinos frequented by the company president.

Shirley denies any wrongdoing in connection with OnSat Network Communications Inc., a telecommunications provider with which he was closely associated.

OnSat lost its federal funding, which paid for almost all of its operations, after tribal auditors pointed to irregularities in the course of its rapid expansion on the reservation.

OnSat succeeded in getting a tribal court judge to clamp a gag order on the auditors, but federal authorities began their own inquiry into OnSat's operations and pulled the funding when OnSat officials failed to answer the questions raised.

OnSat was accused of overbilling the tribe by more than $2 million and expanding its original contract by more than ten-fold its value, all without undergoing a competitive bid process.

The company also acted as a middleman in promoting computer networking in the Third World, citing the Navajo program as a model. As part of this effort, it set up trips abroad for Shirley and members of his staff as ambassadors for the United Nations-backed effort, and also identified itself as Shirley's appointed representative while prospecting for business in South America.

Balaran said his efforts to investigate Shirley's involvement was stymied by Shirley's refusal to turn over all of the related documents in his possession.

In pleadings before the Window Rock District Court, Balaran argued that he should be allowed to see all of the documents in order to see if those being withheld were actually protected by attorney/client privilege.

At the same time he was looking into these cases, Balaran's separate investigation into Council slush fund misuse began to bear fruit and led to criminal and civil charges against all 88 members of the previous Council.

Shirley, Controller Mark Grant and the past and current attorney general of the tribe, Louis Denetsosie and Harrison Tsosie, were hit with civil suits alleging misuse of tribal funds.

Jordan is representing Shirley in that suit as well, in which Shirley is accused of failing in his fiduciary duty by not vetoing discretionary fund appropriations that he should have known were being misused.

The business deals and the slush fund case have nothing to do with each other and Shirley is willing to provide information about the role that he and his office played in the OnSat and BCDS matters as long as it does not involve giving up his attorney/client rights, his lawyer said.

"If the special prosecutors want more than that, we can fight it out in court," Jordan said.

Eric Dahlstrom, one of the special prosecutors, was asked to respond and issued the following statement.

"The special prosecutor has begun meeting with defense counsel and has offered to meet with any and all defendants, whether they are represented by counsel, such as former President Shirley, or not. The court was advised that the special prosecutor is taking a fresh look at all of the claims within its jurisdiction, which includes, OnSat, BCDS, and the Discretionary Financial Assistance Program.

"We hope that all of the defendants, including former President Shirley, will choose to cooperate with the special prosecutor's request to review records.

"We cannot comment on the substance of any discussions with any defendant," Dahlstrom said.

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