According to the Special Prosecutor:
It is important for the Special Prosecutor to clear present and former government officials of charges where the facts and the law do not justify continued legal proceedings. We are now able to announce that we will not pursue the civil claims filed in July 2011 alleging breach of fiduciary duty against Louis Denetsosie, Harrison Tsosie, Leonard Tsosie, and Lorenzo Bates.
The Special Prosecutor was appointed to investigate claims that Navajo Nation council delegates had misused the discretionary fund program, which was established by the Navajo Nation Council, to provide financial relief to needy constituents. The Special Prosecutor is also charged with investigating whether former President Joe Shirley acted improperly in connection with the OnSat contract with the Navajo Nation and the Navajo Nation’s guarantee of a JP Morgan Chase loan to BCDS Manufacturing, Inc., a failed Shiprock steel and fiberglass fabrication company.
During the course of investigating these potential claims, the scope of the Special Prosecutor’s jurisdiction was expanded to cover former Attorney General Louis Denetsosie, Attorney General Harrison Tsosie, and the controller of the Navajo Nation, Mark Grant. In July 2011, the Special Prosecutor brought a civil action for breach of fiduciary duty which included claims against the former and current attorney general. The complaint alleged that each of the attorneys general had improperly interfered with the Special Prosecutor by approving Navajo Nation funds to hire an attorney for President Joe Shirley and for the president’s chief of staff, Patrick Sandoval. Former Attorney General Louis Denetsosie was also charged with failing to prevent the Navajo Nation Council from adopting or misusing the Discretionary Fund Program.
After completing a thorough investigation, the Special Prosecutor has concluded that no crimes or misconduct were committed by Louis Denetsosie or Harrison Tsosie, and neither of them violated any civil laws within the jurisdiction of the Special Prosecutor. In this case, the former attorney general and the current attorney general authorized the use of Navajo Nation funds to retain separate counsel for the president and the chief of staff based upon a determination that this would be in the best interest of the Navajo Nation. The Navajo Nation is not obligated to provide a defense for an employee or elected official charged with a crime, but there is no prohibition against its doing so. One can agree, or disagree, with the decision to pay for separate counsel for President Shirley and Chief of Staff Sandoval, but that decision does not constitute a crime or misconduct.
The Special Prosecutor is continuing to investigate the use of the Discretionary Fund Program by council delegates.
We have concluded that a number of council delegates misused the Discretionary Fund Program to improperly benefit close family members. The Discretionary Fund Program was administered without careful financial controls or oversight. The few written rules for the program were frequently ignored.
The investigation has revealed two common abuses -- First, some council delegates approved grants from the discretionary fund for family members. The second abuse was more involved. Council delegate A would approve payments to family members of Council delegate B, while Council delegate B in turn approved payments to family members of Council delegate A. The abuses of the Discretionary Fund involved large sums of money. Navajo law specifically prohibits a council delegate from using his or her position to benefit himself and/or his immediate family.
The Special Prosecutor has interviewed a number of witnesses and has reviewed detailed financial records of the Discretionary Fund Program. A number of council delegates and other witnesses have cooperated in this investigation. As a result, a number of instances of misuse of discretionary funds have become clearly apparent, and the Special Prosecutor intends to pursue claims arising from those cases vigorously. At the same time, the Special Prosecutor has concluded that Leonard Tsosie and Lorenzo Bates did not misuse the Discretionary Fund Program. This conclusion is based on independent records as well as the willingness of Leonard Tsosie and Lorenzo Bates to cooperate fully with the Special Prosecutor.
As a result, the Special Prosecutor has concluded that it is in the best interest of the Navajo Nation to dismiss all claims for breach of fiduciary duty with prejudice against Leonard Tsosie and Lorenzo Bates.