Parallel probe
Special prosecutor looking at Shirley actions
By Bill Donovan
Special to the Times
WINDOW ROCK, June 2, 2011
While public attention has focused on Balaran's pursuit of misspent discretionary funds by the Navajo Nation Council, court documents show that he also has been investigating the issue for which he was originally hired: to determine if Shirley and his staff are at fault in two business deals that cost the tribe millions.
In October, as Balaran put the finishing touches on criminal charges against 78 current and former delegates, he also subpoenaed records from the president's office. When Shirley balked at releasing some records, Balaran went to court to get them.
The case has now been before Window Rock District Judge Carol Perry for six months with a decision yet to be rendered.
Balaran is seeking access to some 16,000 records generated by the president's office during Shirley's two terms in office, according to court documents Balaran filed.
While it is evident from the charges against the delegates that Balaran spent much of the past year looking into their use of discretionary funds, District Court records released last week indicate that he is also looking for evidence of corruption by Shirley and others, including his former chief of staff Patrick Sandoval, involving the tribe's business dealings with BCDS Manufacturing Inc. and OnSat from 2005 through 2009.
In 300-plus pages of documents, Balaran discusses his efforts to gain access to the tribal computers used by Shirley and others in his office to look for information beyond what they have been willing to give him.
Shirley, using tribal funds, hired former U.S. Attorney Paul Charlton to fight that effort.
Both Shirley and Sandoval have maintained that the president's office had little to do with BCDS. It was primarily promoted by Shiprock Chapter officials, although the tribe invested $300,000 directly in the company in 2003 and held a 51 percent ownership interest.
BCDS, however, also received a $2 million loan from the tribe's Business Development Fund and went bankrupt in 2008 leaving the tribe holding debts of more than $4.7 million.
Proud to claim OnSat
By contrast, Shirley was proud of his association with OnSat, a company headed by Dave Stephens that spent several years on the reservation providing satellite linkups to chapters, Head Start classrooms and the tribe's police department.
During those years, OnSat received millions of dollars in tribal funds and Stephens often worked from the president's office. Stephens promoted Shirley as a pioneer in bringing Internet connectivity to the Third World, helped to arrange personal appearances in Africa, Europe and elsewhere, and told officials in South America that he was Shirley's official representative.
By 2008, however, OnSat faced allegations by tribal auditors that it had overcharged for some of its services, and circumvented rules to expand its work to 10 times its original scope of work for the tribe. OnSat responded by asking the tribal court to suppress the audit, which was granted by Window Rock District Judge T.J. Holgate.
Unresolved concerns raised by the audit, however, led to a stoppage in the federal subsidies that funded 90 percent of OnSat's business here, and the company closed up shop and left town.
Shirley's lawyers said the president's office has turned over a number of documents requested by Balaran dealing with BCDS and OnSat. But he balked at providing unfettered access to computer files, including some that he felt were protected by attorney-client privilege.
Shirley stated in his pleading that he was willing to negotiate a compromise on information release, but that Balaran was unreasonable.
"The president has offered several ways in which the special prosecutor can obtain the requested information while still preserving the privileges (but) the special prosecutor has insisted on immediate disclosure of all documents and all hard drives that may contain 'relevant information,'" Shirley's office said.
Shirley's attorneys said they attempted to meet with Balaran "in an effort to fulfill the Navajo process of talking things out" but the talks ended in an impasse.
Balaran responded that Shirley, whose actions are at the core of the probe, should not be allowed to control the release of information to investigators.
There's a question of how many of these records are still around, given the fact that Shirley left office in January.
Officials in the Shelly administration said they did not purge any records of the previous administration, but did not know if the outgoing officials purged any.
Who controls access?
Balaran's attempts to acquire the records began Oct. 4, 2010, when he issued a subpoena to the president's office. On Oct. 12, a computer expert did keyword searches on the computers to identify potentially responsive documents.
"The search identified approximately 16,000 documents that may be responsive," Balaran told the court.
Because of the number of documents flagged, Shirley's attorney offered to provide them on a rolling basis.
"That is, rather than wait until the completion of his review of the documents, counsel (for Shirley) would provide batches of responsive, non-privileged documents after they were reviewed for relevancy and privilege," court documents stated.
Balaran agreed and on Oct. 22 he received more than 1,000 paper documents that had been scanned and sent as computer files. On Oct. 27, another 3,500 pages of documents were provided.
As for the remaining presidential documents, Shirley's lawyers wanted to sift out those covered by attorney-client privilege and then give Balaran the non-privileged material plus a list of those documents they believe are privileged, the court documents show.
Balaran objected, saying there is no privilege in communications between himself and his advisers. It was at that point that he went to court seeking immediate access to all of the hard drives from the Shirley administration.
Shirley cited Title 2, section 1964 of the Navajo Nation Code, which states that "all communications between elected tribal officers, employees or agents of the Navajo Nation government and its attorneys shall by protected by the attorney-client privilege and shall not be admissible or discoverable in any judicial or administrative proceeding."
The court documents indicate that Balaran is also looking into the use of discretionary funds by the president's office. His investigation of the Council slush funds revealed that almost $3 million had gone to relatives of current or past delegates, he stated to the court.
In October, Balaran was given an opportunity to review discretionary fund spending by the Office of the Vice President, whose occupant - Ben Shelly - handled the OPVP funds and who was soon to be elected Navajo Nation president, the court records show.
As of Nov. 29, Balaran had not taken up the offer and it is uncertain whether he has yet seen those records. He declined the Navajo Times' request for comment.
In addition to the issue of privileged communications, the court also must decide whether Shirley attorney Paul Charlton can continue to represent him in the records case.
Charlton is not a member of the Navajo Nation Bar and court policy allows non-members to appear before the tribal courts in just one case per year. Charlton represented Shirley in 2010 in a separate case, but is asking Perry to consider Jan. 1 the beginning of a new year, rather than looking at the previous 365 days.
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