Reinstatement of Legitimate Marshals
JAT Order: Filed July 7, 1998
Filed July 7, 1998 at 4:45 PM
in the Judicial Appeals Tribunal
Case No. JAT 97 42 B
AND
Case No. JAT 97 43 B CONSOLIDATED
WILLIAM PATRICK RAGSDALE, SHARON WRIGHT, GREG CHUCKLUCK, BRIAN BLAIR, MIKE DAWES, JAMES REDCORN, FRANKY DREADFULWATER AND LEONARD MCMILLIAN
Appellants,
v.
CHEROKEE NATION Appellee.
-AND-
STACY R. EUBANKS
Appellant,
v. CHEROKEE NATION
Appellee.
ORDER
The Appellants were employed as Cherokee Nation marshals until they were terminated in 1997. Among their causes of action, the Appellants claim that their employment rights were violated under Article XII. Employee Rights of the Constitution. In response, the Appellee filed Motions to Dismiss (pre-consolidation of the causes) in December 1997. In these Motions, counsel for the Cherokee Nation urged that the causes were moot, to wit: Appellants have been rehired as employees of the Cherokee Nation into a position (sic) similar in nature to that from which they were terminated, and at the same salary. In addition, Appellants have received back pay and benefits from the date of their termination. The Motions to Dismiss were overruled and the consolidated causes moved forward toward trial.
On May 21, 1998, the Appellants filed an Application for Emergency Hearing stating that they had been laid off due to alleged “funding constraints” notwithstanding the marshals’ belief that there was, or should be adequate funding to pay them. The Appellee timely responded stating that the Application should be filed as a separate and distinct lawsuit. A hearing was held on Appellants’ Emergency Application on June 20, 1998, at which time both sides presented their case vis-a-vis the so-called layoff. At the close of the hearing, the Court announced that the matter would be taken under advisement. Both sides were well represented at the hearing by their respective attorneys and the Court hereby expresses its appreciation for the professionalism demonstrated by the lawyers.
The only real issue presented at the hearing was: Was the layoff a legitimate act by the Executive Branch in view of the legislation previously enacted by the Council of the Cherokee Nation?
According to the Appellants’ witnesses, approximately $1,000,000.00 in federal funds had been designated for use by the Cherokee Council for the funding of the Cherokee Nation Marshal Service for fiscal year 1998 of which approximately $600,000.00 had been used for its designed purpose at the effective time of the layoff, May 15, 1998.
The Appellee presented evidence that not only was the Marshal Service 1998 fiscal year budget exhausted, but, indeed, there was a deficit in expenditures as of June 6, 1998 of $329,567. (1)
-(1) A footnote to Appellee’s Exhibit 1 states that “The actual expenditure information printed on May 15, 1998 (??) amending of $?71,548.00 (emphasis added). The significant difference between the two figures may well be an entry booked on May ?, 1998, ? charge by the BIA for law enforcement totaling $180,018.00. The layoff was on May 18, 1998. There were no explanations given at the hearing as to why the BIA was charging such a large amount nor why it was done so soon after the layoff.”-
There was considerable testimony elicited by the Appellee’s counsel from the witnesses as to how much was received under the Babbitt Agreement (ranging from $250,000.00 to 180,000.00) and, to a lesser degree, what fiscal year (1997 or 1998) it was, or was to be, applied. Taken together, the evidence from both sides, as to the effect of the money from the Babbitt Agreement, whether applied in 1997 or 1998, on what should be available for funding now, appears to be irrelevant.
Appellee’s principal witness was Mr. Jodie Reece. Mr. Reece possess impressive professional credentials. He testified that he is a Certified Public Accountant, a Certified Internal Auditor, and a Certified Management Accountant who has been employed by the Cherokee Nation in various financial positions for approximately seven (7) years. Mr. Reece prepared Appellee’s Exhibit 1. Mr. Reece testified that he is familiar with generally accepted accounting procedures. Mr. Reece also testified that he is familiar with the accounting procedures utilized by the Cherokee Nation. “However, Mr. Reece was not asked, and did not otherwise testify, as to whether the Cherokee Nation follows generally accepted accounting procedures.” In footnote 4 to Exhibit 1, mentioned in the footnote above, Mr. Reece writes: The amounts for actual expenditures are based on reports from the American Fundware information accounting system and have not been verified or adjusted. Mr. Reece did not testify as to whether or not the figures produced by the Cherokee accounting system are reliable, correct and/or trustworthy.
Mr. Reece testified that a “good portion” of the budget for the Marshal Service comes from the approximate $8,000,000.00 the Cherokee Nation receives from the Interior Department in what is called the “Self-Governance Fund.” (Mr. Reece testified that the total annual budget of the Cherokee Nation is approximately $150,000.000.00) From the evidence, it appears to the Court the ultimate source for all funds from which the Marshal Program is funded is the treasury of the United States of America. Once the funds are obtained, they are budgeted by the Cherokee Nation Council for various programs. What is not spent under a particular program in one year is “banked,” at least as far as the books are concerned. What funds are spent in given year, in given program, would be under the control of the Administration. These unused funds are called “carry over funds.” Mr. Reece testified that “carry over funds” from 1996 were used in 1997 on other matters left almost no carry over funds available for 1998. It appears that Mr. Reece believes the lack of “carry over funds” and the Cherokee Nation Council not enacting a 1998 budget is the heart of the problem. The following was Mr. Reece’s testimony, in part, on cross-examination by counsel for the Appellants:
Q: You’re saying the problem lies that the Council has not taken action in approving the � budget?
A: Yes, sir. That’s my opinion.
Q: But the money is still there based on last year’s ?
A: No, sir. There is not enough carry over funding to do the same thing for fiscal year � that was done for fiscal year �.
Q: Where was that carry over money spent?
A: The carry over – there was approximately one point four million carry over to fiscal year � in savings. There was approximately one point three million spent in fiscal year 1997 out of that savings. There is no savings from fiscal year 1997. From my calculation there’s approximately thirty thousand dollars in carry over funds in the Department of Interior’s.
Q: Why is the funding so much less?
A: Because there was more appropriated in fiscal year 1997. All of the carry over was in fiscal year 1997, and when all the budgets came through there total budget fiscal year 1997, approximate, from data.
Q: Are you saying with regard to the budget in general, or with the budget in regard with the Marshals?
A: The budget in general or the Self-Governance program.
The Cherokee Nation’s accounting records, as to what has and has not been spent in fiscal year 1998 by the Administration, and the purposes for which it was spent, are only as reliable, accurate and trustworthy as the Cherokee accounting system itself. The Court takes judicial notice that cases have been filed in the past, on non-related matters, in which the inability of Cherokee Nation Council members to obtain any usable information from the Administration, on expenditures by the Administration, has been a significant issue.
It was not refuted by any witness that the fiscal year for the Cherokee Nation runs from October 1st through September 30th of each calendar year and that, with no 1998 budget approved, the Nation has been operating on a “Continuing Resolution,” passed by the Council, which is based upon the 1997 budget.
Ms. Paula Holder, witness for the Appellants, testified that she is a member of the Cherokee Nation Council, having served as such since 1991 and having been involved in approving and overseeing seven (7) annual budgets for the Nation. On what was done, and/or intended by the Council to be done by the Administration, with the Council’s passing of the Continuing Resolution, the testimony of Councilor Holder is most compelling, notwithstanding Mr. Reece’s opinion on that matter. The following is Councilor Holder’s testimony, in part, on direct examination by Appellants’ counsel:
Q: Are you familiar with the contents of the Continuing Resolution for fiscal year 1998?
A: Yes, I am.
Q: Do you recall what amount was designated for the Cherokee Nation Marshal Service in that?
A: The aggregate amount was approximately one million – a little over one million, one-point-one.
Q: Where does that money come from?
A: DOI
Q: That’s the Department of Interior’s, Self-Governance?
A: Yes, it is. Department of Interior’s Self Governance.
Q: So those are federal moneys?
A: Federal moneys.
Q: Has there been anything done to alter that Continuing Resolution as the amount of money designated for the Marshal Service? By that, I mean, has the Nation come to the Council and said, “We need more moneys designated for the Marshal Service,” or anything like that?
A: No, there has not been any amendments made to the component lining of the Marshal Service to my knowledge that Council has given any authorization for that, no.
Q: To your knowledge, is there any reason that the one million or one million-plus of Federal moneys designated for the Cherokee Nation Marshal Service should not be there?
A: Not to my knowledge, it should be there.
On rebuttal, re-direct examination, Councilor Holder testified, in part, as follows:
Q: Ms. Holder, the Continuing Resolution for fiscal year 1998, was that one hundred percent authorized as one hundred percent fiscal year 1997?
A: Yes, it was.
Q: So that means that the same amounts were allocated or designated as in the fiscal year 1997 budget?
A: Yes, it was. And especially for programs and continuing programs, yes. That issue covered the Marshal Service.
Q: If the money was not there that had been designated, did anyone ever come to the Tribal Council and say that or ask for additional allocations or additional money?
A: It would be the responsibility of the Administration to immediately come before the Council authorization for an alternative funding source or what have you. They did not do that. So the understanding of Council is that they passed the Continuing Resolution that funded fiscal year 1998, a hundred percent of 1997.
Q: Was there Council authorization for spending the carry over that’s been referred to?
A: For �, or give me a fiscal year. I’m sorry.
Q: For fiscal year � or fiscal year �.
A: Fiscal year � we appropriated the carry over. We did not appropriate the interest dollars that were never identified to the Council in the fiscal year 1997. My understanding of Mr. Reece’s testimony is that it was approved by Administration. My understanding of the Constitution of the Cherokee Nation, Article 10, fiscal responsibility lies with the Council. Therefore, we appropriate, approve, or prioritize any dollars that go through the Nation.
During the cross-examination of Councilor Holder by Appellee, she stated that fifteen “slots” were allocated to the Marshal Service. Mr. Starr then asked Ms. Holder:
Q: Do you know how many have been paid for a considerable length of time out of this particular department?
A: Anywhere from twenty-two to twenty-six. No one in budgeting, personnel, anywhere, can give me an exact number. I’ve been told twenty-two. I’ve been told twenty-four, and twenty-six.
On re-direct examination, Mr. Reece stated that he did not know how many marshals had been paid “this year compared to last year.” In his closing argument, Appellee’s counsel Mr. Starr stated: And I think probably a real, real important part for the Court to consider is we haven’t been talking about fifteen slots here that’s allocated. We’ve been talking about twenty-two, twenty-five, or whatever those figures were. We can see that any time we start increasing the pay slot by thirty or forty percent, it’s not going to go that far into the year.
Mr. Starr’s point is well made. However, there was no testimony that the Cherokee Nation Council requested or authorized the Administration to hire marshals above and beyond fifteen in number. The decision to increase the number of marshals was solely that of the Administration. More people means more money; it’s a self-evident fact. Councilor Holder testified that the Administration made no request from the Cherokee Nation Council for additional funds for the Marshal Service. A reasonable person might reasonably conclude that such inaction from the Administration is a sign that there is no need for additional funds; adequate funds are available. The converse proposition would be that the Administration’s policies, and/or its management of the government, are driving the Cherokee Nation into bankruptcy. Neither side offered evidence of the converse proposition.
Article X, Section 8 of the Cherokee Constitution states: All laws authorizing the expenditures of money by and on behalf of the Cherokee Nation shall specify the purpose for which the money is to be used, and the money so designated shall be used for no other purpose. Annual expenditures shall not exceed the available funds (emphasis added).
It is the responsibility of the Administration to vigilantly follow the Constitution and to faithfully execute the valid and lawful funding directives of the Cherokee Nation Council pertaining to the Marshal Service. There is no evidence in the record that the Administration has diverted marshal funds to other purposes, nor that it is inept or incompetent; indeed, the proper and respectful presumption is to the contrary. The Council provided a budget for the Marshal Service. The Administration did not ask the Council for additional funds for the Administration’s additional personnel. We therefore assume the Administration clearly saw the situation is created and found no reason to seek additional funds to implement its execution of the law enacted by the Cherokee Nation Council.
UPON CAREFUL CONSIDERATION OF ALL THE EVIDENCE AND ARGUMENT OF COUNSEL FOR THE PARTIES, IT IS THE FINDING OF THE COURT that the Appellants have met their burden of proof. THE COURT FINDS that the ultimate source of funds for the Cherokee Nation Marshal Program is the treasury of the government of the United States of America. THE COURT FINDS the May, 1998, so-called layoff of the marshals by the Executive Branch to be a void act in direct opposition to the prior directives of the Legislative Branch of the Cherokee Nation. The marshals are to be put in the same financial arrangement, vis-a-vis their respective positions within the Marshal Service, as they were prior to May 15, 1998, without delay, up to and through the time these consolidated cases are decided on the merits. IT IS FURTHER ORDERED that payment of all back pay and reinstatement of benefits is to be made by Appellee to Appellants, IMMEDIATELY.
IT IS SO ORDERED this 7th day of July, 1998.
/S/ DWIGHT W. BIRDWELL,
JUSTICE OF THE CHEROKEE NATION
