State officials charged Monday that Navajo leaders who were supposed to be improving living conditions for Utah's Navajos have instead squandered millions of dollars, much of it in bonuses and special favors to themselves.
The Utah attorney general is investigating criminal allegations against several people named in the legislative audit of the oil royalties set aside "for the health, education and general welfare" of the state's Navajos."There's no question there should be criminal charges," said Rep. David Adams, R-Monticello, who requested the audit earlier this year from Legislative Auditor General Wayne Welsh.
"And I would hope the filing of charges would lead to testimony that would result in indictments of other individuals. The problem runs deeper than what is revealed in the audit," Adams said.
The Utah portion of the Navajo Reservation, deep in San Juan County, remains the state's most poverty-stricken region. Many areas have no running water or electricity, and unemployment often runs 50 percent.
The audit verifies the suspicions of many Utah Navajos, indicating mismanagement, conflicts of interest and misuse of funds were prevalent in the Utah Navajo Development Council and Utah Navajo Industries.
The council is a non-profit organization concerned with housing, health and education issues on the reservation. Utah Navajo Industries is a for-profit organization designed to create businesses and provide employment for Navajos.
The audit also says the state Division of Indian Affairs was ineffective in monitoring the Utah Navajo Trust Fund and that all three organizations spent an inordinate amount of time fighting among themselves.
The state is designated as the trustee of the oil royalties fund, which was created by Congress in 1933, when public land in San Juan County was transferred to the Navajo Reservation.
But the two organizations the state set up to manage the funds - UNDC and UNI - have wasted the money, according to the audit. About $52 million of the more than $61 million collected since 1960 has been spent.
Among the examples of misuse and mismanagement cited in the audit:
- UNI president Daniel Marianito sent a $500 check to the director of the Navajo Tribe Division of Social Services with a note that stated: "This is our way of saying thanks for your support and continued service to the Navajo Nation."
- The same UNI president paid his wife $4,500 to prepare UNI personnel policies, a brother-in-law was paid more than $20,000 as a consultant, his brother was paid for architectural services and his son and daughter were hired as employees. Company funds were used to send his daughter to basketball camp.
- The son of Gary Jenkins, identified in the audit as a high-level decision maker at UNI, received a $22,000 commission for finding retail office space.
- Despite the fact his UNI businesses were losing hundreds of thousands of dollars, Marianito paid himself $22,528 in bonuses during a one-year period. He also paid himself "consulting fees" in the form of $1,000 checks.
"Besides making poor business decisions, UNI management may have taken company funds for their personal use," the audit states. "A substantial amount of company funds appears to have been taken without justification."
- After UNI purchased a West Jordan shopping center, one board member negotiated a favorable lease with another board member, who owns Ream's grocery stores. The center is now for sale for $500,000 less than the purchase price.
- Another UNI board member was paid $30,000 for unspecified "board fees." The same board member was paid $2,000 in 1989 to attend President Bush's inauguration, but no travel receipts were ever turned in.
- In 1988 and again in 1989, all four UNI board members were paid $1,000 each, but no one could remember what the payments were for.
- The UNDC paid a member of the state Division of Indian Affairs board $200,000 for plumbing services.
- In 1983, the Division of Indian Affairs paid $150,000 to WICAT Inc. for computers and software in the Montezuma Creek Elementary School. At that time, Thomas E. Sawyer was a member of the UDIA board and was employed as a vice president of WICAT.
- Numerous checks ranging from $200 to $2,000 were written to tribal chapter leaders. During 1989 and 1990, checks were also written out to interim Tribal Chairman Leonard Haskie, and UNI money was also used to pay Has-kie's bill for a New Year's Eve party at a resort hotel.