November 5, 1998
The Annual Funding Agreement between the Cherokee Nation and the Bureau of Indian Affairs for fiscal year 1999 has been executed by Chief Byrd and by Kevin Gover for the BIA. This Annual Funding Agreement reveals the embarrassing restrictions imposed upon the Cherokee Nation by the BIA due to the Chief’s repeated careless and reckless accounting maneuvers. Since the fiscal year, which ended September 30, 1996, all of the audits and accounting reports on the Cherokee Nation have revealed that their accounting system is not capable of outside review, nor is it capable of producing accurate management reports on financial matters for the Tribe.
The recent financial reports on the Cherokee Nation by the Office of Inspector General of the U.S. Department of Labor and the U.S. Dept. Of Interior have pointed out that the disarray of the accounting system of the Tribe is not due to faulty software, but is due to Chief Byrd, ex-Secretary-Treasurer Jennie Battles, and other tribal administrators directing the accounting personnel to violate the accounting procedures which are in place in the Tribes’s Financial Department.
The Chief has recently said that “no smoking gun” was found in the Federal audits, claiming that it was only a “slap on the wrist” since no criminal violations were pointed out in these audits. This statement is misleading because it is inappropriate for any such audit to make any determination of criminality – or the absence of a crime. “We understand that the U.S. Attorney’s office and the FBI are presently reviewing the recent Federal audit reports to determine whether or not indictments should be brought against members of the Cherokee Nation Executive Branch,” said Chuck Shipley, a Tulsa lawyer representing some Tribal members in lawsuits against the Cherokee Nation Housing Authority.
“I have referred specific allegations of misuse of Tribal and Federal funds which violate Federal law to the U.S. Attorney’s Office. These violations of Federal law relate to the use of donations of Tribal and Federal monies to the Democratic National Committee, willful misapplication of Federal funds outside of program parameters, and questionable approval of contracts by the Tribe for Byrd cronies,” said Pat Ragsdale, former Dir. Of the Cherokee Nation Marshal Service. Under the fiscal year 1999 Annual Funding Agreement between the U.S. Dept. Of Interior (BIA) and the Cherokee Nation, “Section Eight – Payment,” the Nation has accepted the BIA’s ceasing annual funding by payment of the program monies at the start of the fiscal year which is October 1.
Due to the Nation’s continued failure to properly account for the expenditure of millions of dollars of Federal program money, the Nation has been forced to accept the parceling out of its Federal program money one month at a time. Additionally, the BIA has required the Cherokee Nation to “provide a monthly report of expenditures for each program covered by the FY 1999 AFA no later than the 27th of each succeeding month. If reports are not submitted on timely basis or if, in the opinion of the (BIA) there are questioned items or other irregularities, then the (BIA) will furnish the Nation with three business days to address such concerns. If the Nation fails to resolve such concerns, then the (BIA) will reduce the next monthly payment by the amount in question, with such amount to be reserved until all issues are resolved.”
Section Eight of the AFA indicates that this procedure of monthly monitoring the Nation’s expenditures will continue until the Nation submits an audited financial statement for fiscal year 1997 which ended September 30, 1997 and an unaudited financial statement which accounts for the source and use of all FY 1998 funds which fiscal year ended Sept. 30, 1998. Also, the BIA is requiring the Nation to “repay to the Federal government or otherwise resolve to the satisfaction of the (BIA) any funds spent for purposes other than those authorized by the terms of the applicable AFA…” Lastly, these conditions will continue to be imposed upon the Nation until the Nation “submits an independent assessment report from an impartial accounting firm stating that the Nation has implemented a functioning accounting system.”
“This is tantamount to having to put your teenager on a monthly allowance after you have found they are unable to handle an annual allowance without your supervision and control,” said Shipley. “Not only will this hamper the implementation of the service programs for the Cherokee people, but since 1990 the Cherokee people have been able to collect interest on the annually funded program funds until they were spent. Now that the program funds are only going to be doled out on a monthly basis, the Cherokee people will lose more than a million dollars simply in interest on these funds,” said Shipley. “You have to look at, not only Chief Byrd and Jennie Battles for having created this situation, but also the eight Tribal Councilors who support such fraud and mismanagement by the Chief. Those eight Councilors are led by Bill John Baker, Don Crittenden and Mary Cooksey. When responsible Tribal Councilors like Paula Holder, Barbara Starr Scott and Harold DeMoss have challenged the Chief’s mishandling of the Cherokee people’s money, Baker, Crittenden and Cooksey and the other five Byrd loyalists on the Council have prevented any investigation of such fraud and mismanagement,” said Shipley.
“Right now, the Cherokee people face the loss of up to $16.1 million of Federal funds that were withdrawn from program trust accounts by the Chief with no proof that the money had been spent for the Cherokee people’s assistance programs. Unless the Chief can come up with such documentation soon, those funds are subject to being refunded to the Federal taxpayer,” said Shipley.
Mr. Charles W. Shipley Attorney at Law
Shipley, Jennings & Champlin
201 West Fifth Street