WINDOW ROCK-The Navajo Nation has received notice that a lawsuit looms in the future against a resolution authorizing the use of what could be a $100 million line of credit from JP Morgan Bank.
A group of individuals who, for varying reasons, believe that President Joe Shirley and the Navajo Nation Council overstepped their authority in passing a resolution intended to secure funding for the building of at least one casino on the Navajo reservation.
Navajo Nation Sovereign Immunity requires that the Nation receive notice of intent 30 days before a lawsuit is actually filed against it, which allows the Nation time to resolve the case outside of court. Once a lawsuit has been filed in tribal district court, the Nation has 60 days to respond.
The Navajo Nation Council Resolution No. CO-46-07 (hereafter, the resolution) of October 22, 2007, carries an unwieldy title, namely "An Action Relating to an Emergency; Economic Development; Community Development, and Finance; Authorizing the Issuance of General Obligation Bonds within the Meaning of the Bond Financing Act to Finance the Development and Construction of One or More Gaming Facilities and Related Infrastructure as Capital Improvement Projects within the Meaning of the Appropriations Act and the Bond Financing Act; Authorizing a Limited Waiver of Sovereign Immunity; Designating Authorized Officers to Take Such Actions and to Execute and Deliver a Loan Agreement, Promissory Notes and Other Agreements in Connection with the Issuance of Such General Obligation Bonds in Compliance with the Bond Financing Act; Authorizing the Payment of Bond-Related Costs in Connection Therewith; and Authorizing Related Matters." A summary of the resolution could be made with far fewer words. In essence, various members of the Navajo Nation have retained the services of Albuquerque attorney James Zion to address their concerns about the resolution, which they say gives the Executive Branch too much power over a $100 million line of credit from JP Morgan Chase that could ultimately risk Nation general funds, federal grant money and trust assets.
In a telephone interview on Dec. 6, Zion stood on a statement given during a press conference earlier in the week.
"In response to an offhand question by two different reporters, I stated that if I were an official at JP Morgan Chase, I would be very careful about releasing any money to the tribe while the threat of a lawsuit is in the air," Zion said. "I have been reading press on the case to try and see what the other side has to say, and I read where [it was] predicted that JP Morgan Chase would seek an opinion that the lawsuit has no merit, and then go through with the loan. My question is, why would a bank rely on an attorney who had no authority in Navajo Nation law? And would I rely on the Navajo Nation?"
Zion answered his own questions with a laugh, then said that should any funds be expended by the time a judge could act on the lawsuit, JP Morgan-not the Navajo Nation-could end up being liable for any funds expended while the matter was in court.
Plaintiffs Milton Bluehouse, Sr (Ganado), James Henderson Jr. (Window Rock), Ivan Gamble (Lechee), Vern Lee (Fruitland), Eddie Arthur (Chinle), Arnold Yellowhorse (Tuba City), Billy Reese Kee (Tuba City), Norris Nez (Tuba City), Elouise Brown (Sanostee), Ambrose Teasyatwo (LaPlata), and Alfred Bennett III (Shiprock) have attached their names to a Notice of Intent to Institute Suit against Mark Grant, Controller of the Navajo Nation, and against the Navajo Nation (for declaratory relief). Zion of Albuquerque filed the document on Nov. 4.
Plaintiffs claim that Navajo Nation Council delegated powers to Controller Mark Grant that violated the fiduciary duties of his office, as well as separations of powers in that he operates under the authority and supervision of President Joe Shirley Jr. The resolution does not mandate council supervision over Grant, Shirley or Attorney General Louis Denetsosie. The resolution violates the natural law obligation held by the council as stewards of all that was, is and will be provided to the Navajo people. The council further bypassed proper review and signoff procedures by receiving the resolution as an emergency issue, when in fact not meeting the definition of an emergency by tribal code.
Plaintiffs further assert that the resolution gives the controller law-making power to amend existing laws, statutes and custom, waive past legal irregularities, and amends the dispute resolution provisions of the Navajo Sovereign Immunity Act.
The resolution violates the Appropriations Act by breaching the fiduciary responsibility to account for public funds as well as other requirements, nor does it minimize financial risk to the Nation. The resolution is invalid without a two-thirds vote of the full membership of the council, nor was authorized "capital improvement" pare of a Capital Improvement Plan approved by the Transportation and Community Development Committee.
In failing to define its pledge of "the full taxing power and borrowing power" of the Nation, or any other security, the Council created further problems that plaintiffs claim are illegal. Plaintiffs charge that any loan for infrastructure or buildings will become realty or trust property, and as such unavailable as security for the loans. Further, vague language could include Permanent Fund and trust assets, and that Navajo Nation "Revenue" could be at risk-including all taxes, oil, gas, mining/minerals, land rentals, and all other income and receipts, which could include federal grant and program monies.
Plaintiffs assert that the objects of the loan authorized by the resolution are not part of an approved Capital Improvement Plan, nor did the Controller review a request to issue general obligation bonds or submit to full Council a plan that would certify that funding is available to pay principle and interest pursuant to 12 N.N.C. § 1330(A). Other concerns are non-compliance with the Bond Financing Act under subsection (C) of the same statute; that the financial commitment exceeds that permitted by the Navajo Nation Council and that it offers no assurance that the Nation will not be a victim of subprime and predatory lending in the current financial market. Not only does the resolution violate Navajo Nation statutes and Bill of Rights, it also violates Navajo common law and its principles of popular participation, popular sovereignty and participatory democracy.
Plaintiffs will seek a mandatory injunction or writ prohibiting implementation of Res. CO-46-07, and declaration that it is invalid, that any contracts and agreements are invalid. They further seek attorney fees, and relief in the nature of nalyeeh (a respectful demand to be made whole, or, as commonly interpreted, restitution) under Navajo common law.
C. Dale Raphael, a board member of the Forgotten People group, explained why the grassroots group signed on as a plaintiff in the lawsuit.
"Forgotten People is a plaintiff on the lawsuit to oppose the $100 million line of credit from JP Morgan Chase because of the Navajo Nation process of keeping the public locked out of secret negotiations behind closed doors in violation of due process," Raphael said. "The Navajo Nation did this with passage of the Navajo Hopi Intergovernmental Compact and they are doing the same thing with JP Morgan Chase. Our leaders must be held accountable so they consider the effects of their actions to ensure the protection of our rights and freedom in a moral and legal manner."
Ray Etcitty, the Chief Legislative Council for the Navajo Nation, was away from his office during the time this report was prepared. The Navajo Hopi Observer will continue in its attempt to reach him for comment.