Navajo Dam Escrow Account under microscope

By John Christian Hopkins
Dine Bureau

WINDOW ROCK — The Budget & Finance Committee is determined to do everything it can to make sure the Navajo Nation does not lose $2.2 million from the Navajo Dam Escrow Account.

The Shiprock Chapter approved a resolution in May asking for an investigation and audit of Shiprock Bio Chemical Decontamination Systems Manufacturing Inc. and the expenditure of $2.2 million from the Navajo Dam Escrow Account, which was used as collateral for the company's planned expansion.

Not only has the project stalled, but BCDS owners are now threatening to close the facility down, B & F member Pete Ken Atcitty said.

According to the Shiprock resolution, the chapter wants an investigation and audit done by B & F, the Ethics and Rules Committee, the Navajo and U.S. Departments of Justice and the Navajo Auditor General's Office. The chapters also asked for a copy of the report.

Mark Grant, the nation's controller, said he was "aware" of the resolution and some concerns that were raised, but said his office had not received instruction on how to proceed.

"(Economic Development Director) Allan Begay is working with the plant owner," Grant said. "Any information I give you would be better coming from Mr. Begay."

Escrow establishment

The Navajo Dam Escrow Account was established by the tribal council with the funds to be used solely for the purpose of collateralizing loans to Navajo entities within San Juan County or chapters within Shiprock Northern Agency for economic development projects.

BCDS (Bio Chemical Decontamination Systems) is a joint venture corporation with the Navajo Nation the Nation owns 51 percent.

The company's proposal to the previous B & F Committee was approved last fall, including the use of the Dam Escrow Account's $2.2 million. None of the current B & F members served on that previous incarnation.

The collateral funds were to be used to secure a loan to finance construction of a 100,000-square-foot industrial facility and operation expansion, allowing for the hiring of approximately 100 Navajo workers.

Shiprock officials claim that nine months have elapsed, there is no expansion plan and some of the workers have been laid off.

Millions goneThe chapter also is concerned by reports that the $2.2 million is gone possibly misused.

"As a result, there are allegations (and) appearance of impropriety over the expenditure and use of $2.2 million escrow funds," the resolution said.

The expansion could not be completed because the property boundary line was too close, Grant said.

But, the Shiprock resolution also calls for investigation into whether BCDS was issued a cease-and-desist order regarding improper use of a patent design in trailer manufacturing which resulted in the trailer manufacturing operation being shut down and the welders laid off.

"I want to see the expenditure accounts," Atcitty said. "There have been concerns that money from other programs was directed to help (BCDS)."

The committee could ask the plant owners to appear before the committee voluntarily, Grant suggested.

"Calling for an audit implies improprieties," the controller added.

Bates wanted to know if the escrow account was at risk?

The escrow fund stays intact unless the loan is defaulted on, Grant replied evasively. Several things would have to happen before the situation reached that point, he added.

It's unlikely that JP Morgan would foreclose without allowing the Nation an opportunity to make good, Grant said.

Plant closesIf the plant closes as the owners threaten wouldn't that put the Dam Escrow Account in jeopardy, Bates pressed.

"We don't know their finances, we have to assume they'll pay off the loan," Grant said.

"You're the controller, you're responsible for the tribe's money," snapped committee member Lorenzo Curley. "Talk to us in plain language; tell us what is going on?"

"If we're going to speak in public, it's best that we not speak in specifics," Grant replied.

Bates asked if something concrete could be reported. After Grant again spoke hesitantly, Bates accepted his response as "a shady 'yes'," and called for a vote on executive session.

No committee member wanted to convene in executive session.

The controller, Economic Development office, Office of the Auditor General and DOJ need to provide any information they have regarding this business deal, Vice Chairman Leonard Chee said.

Allan Begay also needs to be present to answer questions, Atcitty added.

(John Christian Hopkins can be reached at hopkins1960@hotmail.com.)