New Navajo leaders say they’ll repay tribal funds

By Felicia Fonseca
Flagstaff, Arizona (AP) January 2011

Incoming Navajo President Ben Shelly and his vice president have agreed to repay money they were accused of stealing from the tribal government in exchange for having criminal charges against them dismissed.

Shelly announced the settlements with a special prosecutor Jan. 10, a day before he and Rex Lee Jim are to be sworn into office. Shelly and 77 lawmakers were charged with offenses including conspiracy, fraud and theft in an investigation of the Tribal Council’s discretionary spending.

“By settling the charges against us, we are doing what we believe is honorable and the right thing to do in this matter,” Shelly said in a statement.

A tribal judge finalized Jim’s settlement with special prosecutor Alan Balaran on Jan. 10, but Shelly’s still was pending approval in tribal court in Crownpoint, N.M., late in the day, court officials said.

Shelly pleaded not guilty to charges of fraud, theft and conspiracy late last year and sought to have the charges cleared before he succeeds Joe Shirley Jr. as tribal president starting Jan. 11. Shelly, a 16-year lawmaker, served as Shirley’s vice president in his second term.

A criminal complaint alleged that Shelly took $8,850 to benefit himself and his family. Under the settlement, Shelly will repay all but $600 that he had received for funeral expenses.

Jim will repay $3,200 to clear charges of theft and conspiracy.

Both men will have $100 automatically deducted from each paycheck until the amounts are paid, according to the settlements.

The parties agreed that the settlement would serve the best interest of justice, preserve the court’s resources and allow Shelly and Jim to perform their duties as the top two leaders of the Navajo Nation unhindered by the charges.

“This repayment is not, and shall not be construed, as an admission of guilt or any liability whatsoever on the part of the defendant,” the settlements say.

Shelly and Jim have pledged to help reform tribal laws regarding discretionary funding that led to sharp criticism of elected tribal officials after Balaran filed complaints alleging they took a combined $1.9 million.

Shelly urged other lawmakers facing charges to settle their cases. Eleven of the 24 tribal lawmakers who took office last week were charged in the probe.

The Tribal Council called for a special prosecutor last year to look into Shirley’s relationship with two companies that had operated on the reservation. The Navajo attorney general accepted that request but also expanded the probe to include the council’s use of discretionary funds, to the surprise of the council.

Shelly and Jim have agreed to lobby the incoming 24-member Tribal Council to enact reforms that Shelly and Balaran agree on, according to the settlements. Shelly said he would work to remove the “discretionary” element of the financial assistance program that’s meant for elderly Navajos on fixed income, college students or other Navajos facing hardships.

The Navajo Nation Supreme Court criticized the spending in a ruling last week and banned any further use of it until guidelines are established.

The legislative branch received $33 million in discretionary funding during fiscal years 2005-2009, the majority of which came as supplemental budget appropriations.