A federal magistrate judge has recommended that the leader of the Skull Valley Band of Goshutes be required to turn in documents and testify in an IRS investigation of a company related to the tribe.
The IRS investigation is just one of a series of legal wranglings involving the tribe, though tribal chairman Leon D. Bear is not accused of any criminal wrongdoing in this case, nor is anyone else connected with the tribe.
The IRS is looking into the tax liability of Starlike Properties Inc., a company owned by the Goshute band, which has made national news in its controversial bid to raise money by allowing spent nuclear fuel to be stored on its Tooele County reservation. The IRS is looking into a 1998 Starlike tax filing claiming a financial loss on a currency investment.
In February, Bear and his attorney, Joseph Thibodeau, went before U.S. Magistrate Judge David Nuffer to explain why Bear and the tribe did not comply with an IRS summons seeking a host of documents related to Starlike. The summons also sought Bear's testimony, which he refused to give.
Among their contentions, they argued that the IRS overstepped its bounds by seeking information from a sovereign Indian tribe and that the summons' timing was suspiciously close to the federal government's filing of criminal charges against Bear, alleging such things as theft and bank fraud. Dissident members of the tribe who oppose Bear's efforts to secure a fuel-storage contract were also charged with similar but unrelated crimes on the same day Bear was charged.
Though the IRS probe and the criminal charges are not directly related to the nuclear storage question, they have pointed to conflict brewing within the tiny tribe and have raised questions for some people inside and outside the tribe about Bear's leadership.
And Thibodeau also sees a connection, worrying that the IRS summons for testimony by Bear could set Bear up for potentially making a self-incriminating statement in violation of the Fifth Amendment to the U.S. Constitution.
"It's always been troubling, from the very beginning, that the government is simultaneously proceeding to charge someone with criminal wrongdoing" and trying to compel testimony on an unrelated but similar matter, Thibodeau said after giving the recommendation a cursory review Tuesday. He said the testimony sought "is inevitably and inextricably" connected to Bear's criminal charges, although the court proceedings on the two issues are separate.
Bear's charges do not mention any activity related to Starlike but instead accuse him of filing false tax returns and stealing money from the tribe's bank accounts.
In Nuffer's recommendation, which was filed Monday, he concludes that the IRS met the obligations necessary in obtaining a summons. He also wrote that while Bear may be legitimately concerned about self-incrimination, established law allows a person to invoke the Fifth Amendment on a question-by-question, document-by-document basis. The amendment, he writes, does not allow someone to "refuse to answer questions or to produce documents on the basis of a general claim of constitutional privilege."
He also concludes that Bear has not shown any connection between the civil tax investigation and the criminal charges, refuting Bear's arguments that the government is trying "to put pressure on Mr. Bear in the criminal case."
The recommendation is not legally binding but provides U.S. District Judge Dee Benson with an analysis of the issues presented by both sides. Bear has 10 days from the time his attorney received the recommendation to file any objections. Benson will then issue an order, either requiring Bear to comply with the summons or denying the IRS' motion seeking such an order.
Thibodeau said he had just received the recommendation Tuesday morning and that he and Bear would make a decision on whether to file any objections after giving it a more in-depth reading.
W. Carl Hankla, the attorney from the U.S. Department of Justice who argued this case before Nuffer, said he had not yet seen the recommendation and could make no comment.
E-mail: dsmeath@desnews.com