Yazzie requests leave pending audit
Shiprock Chapter votes down resolution on president

By Kathy Helms
Diné Bureau

SHIPROCK — The Shiprock Chapter voted down a resolution presented Sunday by Chapter President Duane H. "Chili" Yazzie, requesting that he be placed on administrative leave pending completion of an audit of BCDS Manufacturing Inc.

According to the resolution, Yazzie was retained as a consultant by BCDS to help acquire $2.2 million from the Navajo Dam Escrow Fund to be used as collateral on a loan from a commercial bank for the purposes of expanding the BCDS facility. The expansion has not yet materialized.

Shiprock Chapter voted May 20 to request an investigation and audit on the expenditure and use of the $2.2 million.

The resolution stated that in the event of an audit, the reviewing auditors may find it necessary to investigate the activities and role of Yazzie in acquiring use of the escrow fund.

"In such situations where an elected official is under investigation, it is proper that the official is placed on administrative leave pending the conduct of the investigation and the publication of the audit findings," the resolution states.

However, Shiprock Delegate Pete Ken Atcitty informed chapter members that there is no provision in the election law to place a chapter officer on leave. The only option is to resign, be recalled, or be removed by Ethics and Rules for a violation.

A prepared statement by Yazzie attached to the resolution, stated, "I accept that I was not an intended 'target' with the audit requests, as the sponsors have stated, however, with the way in which they are presented, coupled with the rumors of the BCDS' alleged improprieties, the implication is made that I had taken part in some of the alleged improprieties."

Technical consideration
Yazzie said he was asking to be placed on leave "as a technical consideration, because as I stated, my name will come up in an audit of BCDS due to my involvement with getting the funds approved from the Navajo Dam Escrow Fund."

Yazzie and Hak Ghun, director of BCDS, made a presentation on the proposed expansion project at an Aug. 10, 2006, meeting of the Navajo Dam Escrow Fund Project Review and Selection Committee at the BCDS Conference Room in Shiprock.

At that meeting, a recommendation was made to request the Navajo Nation Budget and Finance Committee approve the use of $2.2 million from the Escrow Fund as collateral for a loan to finance the 100,000-square-foot expansion project.

According to the agenda, presiding at the meeting was Randolph Sells, committee chairman appointed by Navajo Nation President Joe Shirley Jr. Other members present included Ervin Chavez of Navajo Agricultural Products Industry, Elmer Yazzie Sr. and Thomas L. Todacheeney. Member Andrew Tso was absent.

The committee approved the recommendation by a vote of 2-0-1, with Chavez abstaining.

Total cost
One document regarding the project states that the "grand total cost of the planned expansion is $3 million, of which $800,000 will be coming from private sources."

It states that BCDS had arranged for a loan package with JP Morgan Chase Bank in Phoenix and had received a conditional commitment from Vice President Derrick Watchman.

"The commitment from the bank is conditional upon the recommendation of the Navajo Dam Escrow Fund Selection Committee and the approval of Budget and Finance Committee for the utilization of the $2.2M from the Escrow Fund as collateral for the loan," the document states.

Yazzie said in his letter to the chapter that he was hired by Ghun to develop and process a proposal to get approval to use the Escrow Fund, "and I did the job I was asked to do as a consultant. That is the nature of work that I do to make a living."

When asked to work as a consultant for BCDS, Yazzie said he filed a written request with the Ethics and Rules Office asking for an opinion on whether it might present a problem. He said he received a response from former Ethics Director Virgil Brown that "there appeared to be no conflict of interest."

Shiprock Chapter members turned down Yazzie's request for administrative leave by a vote of 85-1.

In a June 6 meeting of the Economic Development Committee at NAPI, Economic Development Director Allan Begay said the tribe was not aware that Ghun previously had been charged with mail fraud, wire fraud, commodity fraud and perjury when it approved using the money from the Escrow Fund, and also said he didn't know whether that would have changed the tribe's decision.

Prison time
Ghun told the Farmington Daily Times that he 3 1/2 years in prison and paid a $25,000 fine. The incident occurred more than 20 years ago when he was owner/operator of the Wall Street firm of Nelson, Ghun & Associates. In his resume to Begay dated June 15, 2003, Ghun did not mention the criminal conviction.

Ghun also failed to mention the conviction in a statement of personal history to the U.S. Small Business Administration. BCDS Manufacturing Inc. is certified as a qualified HUB Zone, Small Business, and Native Indian Small Business Administration concern.

In the statement dated Feb. 15, 2005, Ghun checked "No" in response to a question on the SBA form inquiring whether he had ever been charged with and/or arrested for any criminal offense other than a minor motor vehicle violation.

He also checked the "No" box in response to the question of whether he had ever been convicted, placed on pretrial diversion, or placed on any form of probation for any criminal offense other than a minor vehicle violation.

The SBA form cautions: "Knowingly making a false statement on this form is a violation of Federal law and could result in criminal prosecution, significant civil penalties, and a denial of your loan, surety bond, or other program participation."

Punishment
The form also warns that a false statement is punishable under 18 U.S.C. 1001 by imprisonment of not more than five years and/or a fine of up to $10,000; under 15 U.S.C. 645, by imprisonment of up to two years and/or a fine of up to $5,000; and if submitted to a federally insured institution, under 18 U.S.C. 1014, by imprisonment of not more than 30 years and/or a fine of up to $1 million.

The April 2005 BCDS Manufacturing Inc. business plan, authored by Jin Ghun and Wilbur Nelson, listed the Navajo Nation as majority stock owner, at 51 percent; and Ret. Gen. Ron Fogleman, Ghun, and his brother, Jerry Dickenson, as minority stock owners, at 49 percent.

The chart also lists the Board of Directors as Fogleman, Dickenson, Ghun, Economic Development's Begay, Yazzie, and Lori Todacheene, who also was listed as chief financial officer.

An organizational chart included in the proposal requesting $2.2 million from the Navajo Dam Escrow Fund reflected a change in the board. Members included: Ray Benally, Rose Ben, Darrell Evans Smith, Dickenson, and L. Russell Freeman.

Ghun was listed as executive director, Yazzie as tribal program manager, and Todacheene as Human Resources manager.