NTEC summoned to defend mine buys
The Naabik’iyati Committee will finally hear from Navajo Transitional Energy Company on its acquisition of three Wyoming coal mines today.
During a Sept. 19 Naabik’iyati meeting, which was subsequently cancelled due to not making quorum, Department of Justice attorney April Quinn gave a report on NTEC’s acquisitions of the mines, and that’s when lawmakers asked that NTEC representatives make a presentation to the committee.
In her presentation, Quinn said DOJ had not spoken with NTEC about their recent acquisition, but upon review of the purchase agreement it showed that the enterprise waived its sovereign immunity upon acquiring the bankrupt coal mines. She said all enterprises are supposed to inform the Navajo Nation of their waiving of sovereign immunity and NTEC never gave notice.
“In the enabling legislation it requires 10-day notice of the proposed transaction or agreement that would waive their sovereign immunity,” said Quinn. “We give them to the speaker and the president. DOJ has reviewed the purchase agreement for Cloud Peak (coal mine). There is a waiver of sovereign immunity in that agreement, and I don’t believe that notice was given to the Nation.” Delegate Raymond Smith asked, since NTEC had waived its sovereign immunity, could the Navajo Nation be dragged into an ensuing lawsuit?
“They are allowed to be sued,” said Quinn. “That does not affect the Navajo Nation. We wont be dragged into courts.” Quinn said she wasn’t allowed into a recent NTEC meeting.
She was told no attorneys were allowed but NTEC’s attorney was inside the meeting, she said. “That’s a question for NTEC,” said Quinn. “Navajo Nation attorney should’ve been in the room. There were security guards at the door and I wasn’t allowed. This was the first time I’ve been restrained from being in the room with a client.”
Quinn explained that NTEC is empowered to control, own, operate, conduct oversight operations and develop energy resources, tangible and intangible property assets and interests within and outside the boundaries of the Nation. They may also conduct activities in the Nation and any other jurisdiction.
Delegate Eugenia Charles-Newton said the legislation that created NTEC states they would look into alternative energy and she has questioned what projects or proposals they looked into. “They haven’t answered that question,” said Charles-Newton. “We need to make sure to hold them to that legislation. How do we tell our people that we are going to allow for them to purchase mines that are going into bankruptcy?”
Not only was DOJ left out of the loop, but so were delegates, including those who sit as shareholder representatives on NTEC’s board of directors, Charles-Newton charged. As a shareholder, she said she was never told about the recent purchase made by NTEC of three coal mines in Wyoming.
As for Navajo Nation President Jonathan Nez and Speaker Seth Damon, they received notification through a letter and memo on Aug. 19, the same day NTEC sent out a press release to the public about their acquisition. “This is a deal that cannot and should not be supported by the Council,” said Charles-Newton. “We have a board and CEO who has not abided by the rules — regulations that are put in place by this Council, put by this Nation. This is the people’s money and the people were never notified and as a shareholder of NTEC I was never notified.”
Nez, who has supported the closure of the Navajo Generating Station and for the Nation to go in a renewable and sustainable direction, confirmed his office did not receive prior notice or information about the purchase, but this is in part due to how NTEC was created years ago.
“The provisions under which they were created afford NTEC a certain level of autonomy and we also understand that non-disclosure agreements are often required in business transactions,” said Nez in a Sept. 19 statement to the Times. “But there is also the responsibilities of the NTEC member representatives to communicate with Navajo Nation leadership and the public,” he said.
Since the report was given, the U.S. District Court for Delaware approved the sale of substantially all of Cloud Peak Energy’s assets, marking the final approval needed to transfer the company’s Montana and Wyoming mines to NTEC. “We are pleased to have this final order approved and look forward to assuming operations in Montana and Wyoming in mid-October,” said NTEC CEO Clark Moseley in a press release. “As a company we have a solid record of returning mines to profitability and doing so as an industry leader in safety and reclamation.”
According to NTEC, the mines support about 1,200 jobs and provide $230 million in taxes and royalties to their respective states. NTEC plans to retain the employees at the mines. The purchase of the mines will also provide an increased revenue base to support the Navajo Nation, according to NTEC.
“If NTEC wants to purchase this mine then we need to look at the CEO and his managers’ salaries,” said Charles-Newton. “Cut that in half and have them invest in that coal company using their own money.”
Cloud Peak Energy had suffered in recent years due to very high levels of debt created by borrowing to finance certain acquisitions. Despite solid performance at the mines themselves, the company was unable to sustain the finance costs associated with this debt. NTEC will focus on diligent mining and marketing fundamentals to achieve profitability, just as they have done at their Navajo Mine in New Mexico, according to NTEC.
Delegate Daniel Tso said he wants to see Mosley and other figureheads of NTEC in the Council Chamber. He referenced a time when NTEC was looking to buy NGS, but rather than meeting in Window Rock the delegates had to travel to Phoenix. “They are a Navajo company and they don’t want to walk in here,” said Tso.
“That is the respect they need to show. We haven’t been introduced to the board of directors. All we see is their profile on the website.” But the agenda for today’s meeting lists only Steve Grey, NTEC’s government and external relations director. The report may require an executive session.
Questions sent to Erny Zah, communication director for NTEC, were not answered by press time Wednesday and no other comments were received by the Times.