Slush fund defendants claim sovereign immunity
By Bill Donovan
Special to the Times
WINDOW ROCK, March 29, 2012
Paul Frye, of Albuquerque, filed his motion in Window Rock District Court on Friday, a week before the court's deadline for motions seeking dismissal of the civil charges against 77 past and present members of the council, former Navajo President Joe Shirley Jr., Controller Mark Grant, and the former and present attorneys general for the tribe, Louis Denetsosie and Harrison Tsosie.
Frye represents a number of current delegates who were returned to office in 2010 by voters: George Apachito, LoRenzo Bates, Elmer Begay, Mel R. Begay, Katherine Benally, Lorenzo Curley, Charles Damon II, Kenneth Maryboy, Johnny Naize, Jonathan Nez, Danny Simpson, David L. Tom, Leonard Tsosie and Edmund Yazzie.
David Jordan, a Gallup attorney who represents 24 other defendants in the case including Shirley, said he will file a similar motion Monday on behalf of his clients.
The civil case was filed in July by former special prosecutor Alan Balaran, who did so after dropping criminal charges against most, but not all, of the civil defendants in connection with the misuse of tribal money.
The civil suit claims that the named defendants failed to carry out their duty to protect tribal funds, in the case of delegates, their slush funds.
Balaran's contract with the Navajo Nation expired shortly after he filed the civil suit and the tribe in October hired new special prosecutors, who have sought two time extensions while they examine the files and decide how to proceed.
Frye's motion contends that members of the Navajo Nation Council are immune from being sued for their actions under Navajo law.
He argues that the complaint did not provide a "proper factual basis" to prove the allegation that a "massive fraud" has taken place.
The prosecutor erred in not following the law that requires advance notice to be given before a suit is filed against the tribe, he said. The notice must include the identity of each prospective defendant and the nature of all claims and relief that was being sought.
Balaran's suit is against individual officials, not the Navajo Nation, but the law nevertheless applies to them, in Frye's view.
Balaran's suit claims the officials breached their fiduciary duties and in many cases engaged in theft and conspiracy, but Frye contends that they have to be viewed as acting in an official capacity.
"Similarly, the attorney general may represent a Navajo official sued in his or her personal capacity until 'it is established as a matter of law' that the official's actions were taken outside his or her scope of authority," the motion states.
This bring up a point that the defense has argued ever since criminal charges were filed alleging that 77 of the 88 members of the previous Council had converted millions of dollars to personal or family benefit, money that was intended to help their constituents.
In January 2011 the Navajo Nation Supreme Court put a moratorium on the use of discretionary funds based on Balaran's allegations. It remains in place until rules and controls are enacted to ensure the money is not misdirected.
While Balaran provided lists showing how much each defendant was alleged to have taken, the defendants claim he never provided them with the documentary evidence so their lawyers could not mount a defense.
Balaran had boxes of paperwork in his office ready for the defense attorneys to pick up, which he said they never did. The point was moot, at least temporarily, when he dropped the criminal cases and filed civil complaints instead.
The civil case involves not just allegations of theft but what officials such as the controller knew or didn't know about slush fund misuse. Balaran's civil suit said officials including Shirley should have known the funds were being misappropriated and should have taken steps to stop it, but did not.
In his motion, Frye states that any legislative decisions made by the delegates and tribal officials are protected by "absolute legislative immunity."
Frye's motion said there is "no exception" to the delegates' immunity from being questioned about the exercise of their judgment as a delegate.
Balaran's complaint, he said, falsely alleges that each delegate received $250,000 in discretionary funds "which they unlawfully appropriated to themselves, their families, friends and others."
Frye said the delegates did not disburse discretionary money but instead filed requests that had to be approved by the speaker and the controller, or their representatives. Only then could a check be cut.
Balaran claimed that the top officials were aware that the rules governing discretionary funds were being violated and that delegates were funneling money to their relatives and friends.
Jim Zion, former legal counsel to the Navajo Nation Supreme Court, said the issue of whether or not tribal officials can be sued has been addressed in a number of decisions.
The most prevalent decision, he said, is the 2004 Chapo case, where a Ramah Chapter family sued all of the tribal officials who were involved in sending a girl to the detention center while her parents were ordered to counseling and in-patient treatment for alcohol abuse.
The justices said the Navajo Nation will take responsibility for employees acting within the scope of their authority.
"The Navajo Sovereign Immunity Act, however, denies any liability on the part of the nation for 'the actions or omissions of public officials, employees or agents which are determined to be contrary to or without authorization or otherwise outside or beyond the course and scope of such officer's authority,'" the ruling stated.