Whose fault is $4.7 million loss?
Panel votes to fire Begay, then changes its mind

By Kathy Helms
Diné Bureau

WINDOW ROCK — The Budget and Finance Committee voted Tuesday to seek the removal of Division of Economic Development Director Allan Begay, then changed its mind.
B&F spent more than an hour in executive session listening to a report from Navajo Nation Department of Justice on the Nation’s $4.7 million debt inherited from Bio-Chemical Distribution Services Manufacturing Inc., and what recourse it might have to recoup its loss.

“The Nation has been took,” Chairman LoRenzo Bates said after coming out of closed session. “Unfortunately, it’s a reflection on the Nation, on how we conduct business. It’s also impacted 30 to 40 people in the Shiprock community.”

A special review of BCDS’s financial activities by the Office of the Auditor General presented to B&F last month found that nearly everyone responsible for overseeing investment of the Nation’s money into BCDS failed to exercise due diligence.

Auditors also found that JP Morgan Chase Bank conducted limited due diligence prior to approving the initial $2.2 million loan to BCDS because the Navajo Dam Escrow Account was pledged as collateral. The loan was considered low risk.
After DOJ’s report, Vice Chairman Leonard Chee recommended a letter be written to President Joe Shirley Jr. asking for the resignation or removal of Begay and the dissolution of BCDS, a Navajo Nation enterprise, and setting an Aug. 5 time line.

The Nation became 51 percent owner in the company after paying more than $300,000 in exchange for 25,500 shares of BCDS stock. The Nation was the only monetary contributor.
B&F’s Hoskie Kee wanted to keep the two directives separate from the acceptance of the report, however, the committee voted 4-3 to accept the report with Chee’s recommendations.

After leaving the meeting briefly, Nelson Begaye returned and made a motion to recall the vote. He said later that he jumped the gun in voting to accept the recommendation for Begay’s removal.

Kee and Jonathan Nez also expressed reservations. “I don’t think it’s Mr. Begay’s fault,” Kee said. “It wasn’t him that was supposed to do due diligence. ... It was the previous Budget & Finance Committee also for approval of the legislation to move forward on the collateralization of the Dam Escrow Account.”

Nez said there’s plenty of blame for everybody, “but we’re, in a way, singling out one person and that really bothers me.” Dissolving BCDS, however, was a good recommendation, he said.

Kee and Ralph Bennett – members of the 20th Council’s Economic Development Committee — along with Begaye and Nez then voted not to accept the report and recommendations. Pete Ken Atcitty, Chee and Lorenzo Curley voted in favor.

Curley said he thought they should have let the vote stand. He said the president’s whole initiative to reduce the Council is based on Council not taking care of public monies.

“Mr. Begay did not take the precautionary measures and steps to protect this money. The president thinks, under those circumstance, the Council has to go. We feel likewise, that he (Begay) should go too.”

Chee also was disappointed. “ I feel very strongly that it is within Mr. Begay’s shop that all this evolved and happened and was approved. I think he should still be held responsible for this whole mess here. ... Whatever move we make, the Nation’s been had.”

Bates said the recall and vote “caught me totally by surprise. I have no idea what caused the committee to do what they did.”

“I’m not going to go against the wishes of the committee, however, by virtue of their decision, it puts a new light on the direction of the process. It puts into question the direction of what needs to occur next,” he said.