April 2006
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Utah Navajos seek trust-fund accounting

By Phil Hall

I have a private joke about the founding of this San Juan country, if it can be said that it was ever “founded.” Indeed it was not devoid of human habitation when the first Mormons came here at the end of the 19th Century. It was not devoid of humans when the Spanish came here more than a century earlier.

KENNETH MARYBOYBut the way I understand the most recent “founding” of southeast Utah, God (through his apostle Brigham Young) told the Mormons to go to Montezuma Creek to form an outpost on the edge of the new Mormon empire.

You could understand their reluctance to go any farther than they did: They’d come across some of the most brutal desert in the Southwest, down steep canyon walls and waterless, back-breaking, desolate country; they’d dynamited, picked and shoveled, lowered their pack animals in slings down places they could not traverse, they’d broken their wheels and their axles, they’d come up against the unbroken, unbreakable stubbornness of Comb Ridge, and picked and sweated and shoveled their way over San Juan Hill and across the country beyond and come finally to the little oasis of Bluff, and there they stopped. They could go no farther.

But the way I heard it was God told them to go to Montezuma Creek, not Bluff, and had they obeyed Him everything would have turned out differently. They couldn’t farm the sandy-bottomed country around Bluff. With an intransigence which frustrated them, seasonal floods wiped out their plans to irrigate from the San Juan River by wrecking the ditches they built with picks, shovels and broken backs.

LEONARD LEEAfter years of defeat they moved closer to the “Blue” Mountains (the Abajos, the Spanish named them, and so they are formally called), and traded their plows for lariats — they had much better luck ranching in this country with good winter range.

In the 1920s and ’30s the Bureau of Reclamation was crazy about dams, and it wanted to build one downstream across Glen Canyon. The problem was that a huge area that would be flooded by present-day Lake Powell was Navajo Reservation land, deeded by the Treaty of 1868.

So what did the government do? What it has always done when it suddenly found the natives occupying a desirable site it had given them by treaty — it changed the treaty. In 1933 Congress created the Aneth Extension, a looping surge of land which extends from east of Aneth north of the San Juan River and west of Montezuma Creek, in exchange for the area to be flooded by Lake Powell.

In addition to the land the government promised the Navajo Nation royalties from any minerals found on or beneath the surface of that land.

Of that royalty, 37 1/2 percent was promised to the Utah Navajos affected by any such mineral exploration. The government set up a trust fund in 1933. The act, as amended, limits expenditure of the funds to “the health, education, and general welfare of the Navajo Indians residing in San Juan County, Utah.” The trust fund was to be administered by the state of Utah.

In the early part of the 20th Century the San Juan River basin was awash with speculators and prospectors : They wanted gold, silver, oil. Oil? Yes, oil. Back in the 1920s there was a fair amount of prospecting for oil around Mexican Hat, and a number of wells were drilled, but they didn’t get diddlysquat for oil: little piss-ant wells that yielded in gallons rather than barrels.

It turns out they were looking for it in the wrong place.

There was oil, plenty of it, one of the biggest oilfields ever hit — all around the Aneth- Montezuma Creek area. I wonder how it would have turned out had the Mormons followed God’s will?

Missing money

The Navajo Nation got the millions for the leases from the oil companies, wells were drilled, and oil flowed.

The Utah Navajos who lived where the oil exploration and drilling occurred suffered a great deal as a consequence. Their way of life was severely disrupted. Traditional pasture was ruined by trucks, bulldozers, drilling rigs, and men.

Over time the springs and groundwater were permanently tainted (“Makes bad coffee,” commented former Aneth chapter president, Vietnam veteran, and public school teacher Wesley Jones), and the thudding of the pumps day and night disturbed the rest of children and elders. Health problems became epidemic as a consequence, the Navajos maintain.

But of course the oil boom had benefits, especially in the early years. There was a lot of oil in the 1950s, and the Utah Navajo Trust Fund grew. Navajos had jobs working in the oilfields and much-needed income flowed into the households.

But after the wells were established, up and running, only the maintenance crews were left. The environmental and health concerns continued.

And the payoff, the Utah Navajo Trust Fund, seems to be mysteriously missing a great deal of the money put aside “for the benefit of the Utah Navajos.”

Four major lawsuits have been filed over the years in an unsuccessful attempt to find out what happened to the money: the Sakizzie case in 1962, the Jim case, the Bigman case and finally, Pelt vs. Utah, a class-action lawsuit brought in 1992 on behalf of tribal members in San Juan County. That case is currently under litigation.

In January of this year, a federal judge ruled that the state must search accounting records back to 1955 to try to track millions of dollars allegedly unaccounted for in the fund. In her ruling, U.S. District Judge Tena Campbell said Utah must provide a more detailed accounting of how the Utah Navajo trust monies were managed and spent.

I asked Brian Barnard, lead attorney for the plaintiffs in Pelt vs. Utah, how much money they believe is missing from the fund.

“In the neighborhood of $30 million to $40 million,” he responded. That’s a fair amount of change, especially for people who suffer from the highest unemployment of any ethnic group in the state, a lack of infrastructure (sewer, water, electricity, roads), and little industry.

Going belly-up

Where has the money gone? Pelt (the name of the lead plaintiff) vs. Utah seeks to answer that question.

The Utah Navajo Development Council, a nonprofit based in New Mexico, was created in the 1970s as a means of channeling trust-fund money to the Utah Navajos. Later, the council created a subsidiary, the for-profit Utah Navajo Industries, which was supposed to use trust monies to help small businesses on the reservation.

The development council and UNI were not created by Navajos, but by Anglos in the San Juan County community, in collaboration with their counterparts in Salt Lake City.

According to Barnard, projects received funding that had no business plans or clearly delineated goals. Money was spent, a lot of it, according to Utah Navajo accounts, and nobody quite knew where it went.

“Every one of their (UNI’s) projects went belly-up,” Barnard said. Both UNI and the development council have declared bankruptcy and are defunct; officers from both entities were convicted of embezzling from the trust fund. According to an audit performed by the Utah legislature in 1991: “Since 1959, the (Utah) state trust fund administrators have received approximately $61 million and have spent approximately $52 million. Approximately $9.6 million remains in the fund (at the time of the audit in 1991). While the trust fund has produced many benefits for Utah Navajos, some funds have been wasted or spent inefficiently.”

According to Leonard Lee, current chairman of the Dineh Committee, which serves as an advisory committee to the trust fund’s board of trustees, the trust fund was down to $6 million at one point. It now has $22 million.

Endurance race

It was nearly sunset on a breathtaking Sunday when I rode mi moto out to see Kenneth Maryboy, the Navajo Tribal Council delegate who represents the Aneth and Mexican Water chapters, at White Rock Point, 10 miles southwest of Bluff. Maryboy is listed as a plaintiff in the current case. He was behind his house with a gang of teenagers working on their four-wheelers, spinning wrenches, silent, intense.

“Damn,” he said, and stood gazing at my bike, hands on his hips. “That’s some kind of bike.”

I couldn’t help looking at his jacket. It had a design that was different than traditional camo. Pockets on the sleeves. Velcro at the throat. Man, I gotta have me one of those jackets. There’s an industry on the the Navajo reservation named Navasew, in Montezuma Creek, and Navajos are making those jackets for the U.S. military.

He poked around on my bike and I poked around on his jacket. I asked about his four-wheelers. There were a dozen of them parked out there behind the house. Most of them were either being torn apart or put back together.

“We’re on our way to Wendover, Nevada,” he said. “We’re going to race a 150-mile endurance race.”

“Cross-country?” I asked.

“About half salt flats and half cross-country, rugged terrain,” he said.

“Damn,” I said.

“It’s about drug and alcohol awareness,” he said. “We’re giving the kids something to do, something to think about besides drugs and alcohol. What’d you come way out here for?”

“I wanted to talk to you about the Utah Navajo Trust Fund,” I said. We arranged a meeting later in the week.

I started to leave. Hit the starter button. Nothing. I knew my switch was defective. I’d cracked it the week before. Maryboy came back over.

He fiddled with it, then said, “Where’s your battery?”

I took the seat off and he traced the battery lead to the selonoid, went to his toolbox for a pair of needle-nosed pliers, connected the positive to the negative, and “Vrroooooom,” she jumped to life.

“Damn,” I said.

Communication through litigation

No Navajo has ever served on the board of trustees of the Utah Navajo Trust Fund. “Wouldn’t it make sense,” Maryboy asked, “that a Utah Navajo would sit on the board of trustees of the Utah Navajo Trust Fund, since the trust fund was set up for the Utah Navajos?”

He said communication between tribe and the state and county is bad.

“The only way we communicate with them is through litigation,” he said.

“We just found out that $3.5 million has been requested from the trust fund and nobody knew about it. The Utah Navajo Health System wants the money for the health facility in Monument Valley. This money is supposed to be for the benefit of the Utah Navajos, but the Utah Navajos were not consulted about this funding request. It should have come before the people before it was requested from the State of Utah.”

I asked Maryboy and Lee, head of the Dineh Committee, whether they thought the case would be settled.

“There are many things we could accomplish if we could settle this question,” Lee said. “We have business investments we want to make.

“The Utah Navajo Trust Fund is for the benefit of the Utah Navajos,” Lee added, “but the good old boys in San Juan County have managed to divert the funds for themselves.”

“I don’t know how they do it,” Maryboy said. “They’re smart.”

‘Not a reasonable position’

A hearing is scheduled before Campbell on April 27 to decide how much detail the state must provide in its accounting of funds spent in the past. An unanswered question is whether the state is liable to pay back the money if it turns out that funds are indeed missing and unaccounted for.

The state’s position is that it has shouldered its share of the responsibility in the case and should not be held liable.

“The state has produced accounting records,” said Deputy Attorney General Phil Lott by phone from the state attorney general’s office in Salt Lake. “There is disagreement over the extent of the accounting required.

“As long as the state can show that the money was spent appropriately and it benefited the San Juan County Navajos as required by federal statute… there may be areas where there are questions about whether the money was appropriately spent, but to say that we must account for every penny and dime that went through the trust is simply not a reasonable position.

“Roofs were put on people’s houses, homes were built, young people have been sent to college. To say that every penny of the trust fund has been misspent is simply not reasonable.”

Lott said the plaintiffs are trying to force the state to do accounting for the defunct development council.

“If $100,000 was approved to give to UNDC for college tuition, for example, if UNDC misspent that money, still the state has fulfilled its obligation,” he said.

“If the request was appropriate, the state was told where the money was going, and someone misspent the money, then it’s really not the state’s responsibility.”

“That’s not good enough,” responded Barnard. “We can’t know about trust funds without an accounting.

“Essentially the beneficiaries (the Utah Navajos) don’t know what’s going on with the trust,” Barnard said, “and we think some of the expenditures of the trust money were outside the scope of the trust.” But there is no way to prove it without an accounting, and the state of Utah has fought that every step of the way, he said.

“The problem was that UNDC made a lot of bad investments; there was a lot of corruption, and as part of the accounting process, we are saying to the state: ‘You must account for the ways in which UNDC spent the money.’

“We need to know exactly what UNDC did with the money, that it was spent properly, that the beneficiaries did get the benefits, and that it was all done legally.”


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