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THURSDAY, MARCH 17, 2011 • PAGE A'11
Audit paints negative picture of egg project
BY MArLEV SHEBALA
NAVAJO TIMES
WINDOW ROCK- The $12.2
million egg farm project of the now
defunct Din6 Poultry Products Inc.
is probably the best example of the
May 2006 to December 2008, the
company's board of directors used
about half of the $1.25 million, or
about $630,000, for consultants
and paid themselves more than
$341,000.
The Navaj0 Nation ended
clicM "don't count your chickens up, paying back the egg farm
before they're hatched." " company's loan to Native American
Otherwise, you'll end up with Bank with more than $1.25 million
egg on your face, which is what
happened to poultry products
board members, who consisted
of Nageezi and Huerfano chapter
officials and members.
And according to a 17'page
audit, which was released March 7,
the poultry board shared more than
$1.25 million worth of eggs on their
faces with the Navajo Nation, then
President Joe Shirley Jr., Native
American Development, LLC, of
Alabama, and the 20th Council's
Economic Development and
Budget and Finance committees..
Ben Shelly, the current president
of the Navajo Nation, chaired the
"B&F. .....
On Wednesday, the Council's
Budget and Finance subcommittee
unanimously voted to refer the egg
farm audit tO the chief prosecutor's
office,
The $i.25 million was part of
a $3 million loan from Native
American Bank of Denver to
finance the egg farm project, which
was expected to produce about
157 million eggs per year from
1 million chickens that would be
marketed to federal, state, and
local government programs and
agencies within Arizona, Nevada,
California, Colorado, Utah, and
New Mexico.
But according to a 17-page
March 7 audit, which looked at the
poultry business operations from
• from the Navajo Dam Escrow Fund
in December 2008.
The Navajo Dam fund was used
to repay the loan because in July
2004 the Economic Development
Committee approved the use of
$4.5 million from the dam escrow
fund as collateral for the one-
month-old Nageezi Enterprise Inc.
followed by the B&F Committee's
approval in September 2004.
Auditors reported that for some
unknown reason, the B&F's
approval was contingent upon
Nageezi Enterprise getting its $12.2
million together in six months,
which consisted of a $3 million
loan collateralized by the escrow
fund, a $7.7 million guaranteed
loan from the Bureau of Indian
Affairs, and $1.5 million from the
New Mexico tribal infrastructure
fund, capital outlay, and'other
grants.
The poultry products entity
was initially incorporated under
Nageezi Enterprise as a for-profit
business by the New Mexico
Public Regulation Commission on
June 25, 2004, by board members
Nageezi Chapter President Calvert
Garcia and Oswaldo Galarza. The
corporation's address was 1425
Carlisle N.E., Albuquerque, N.M.
In July 2005, Nageezi Enterprise •
amended its incooration papers
to become Din6 Poultry Products
with Garcia contin.uing as board
president and joined by new board
members who were Nageezi
Chapter officials Daniel Lopez,
Nelson Toledo, and George Werito,
Nageezi' chapter representative
Samuel Henry, who was also
Nageezi chapter coordinator,
Huerfano chapter president Wilson
Ray=, and Huerfano chapte r
representative Leroy Bonney,
who also was Huerfano chapter
coordinator.
The auditors reported that the
name change occurred after Native
American Development advised
Garcia to recruit another chapter
to join the egg farm venture,
At the time, Garcia was also
serving as a staff.assistant to
Shirley, who issued a press release
about the Nageezi Enterprise egg
farm groundbreaking in March
2005.
But in March 2005, the enterprise
had not secured any of the $12.2
million, which would be used
for $10.7 million in construction
costs and $1.5 million for start-up
operations.
' Auditors reported that in
October 2008, the BIA denied
the company's repeated pleas for
a $7.7 million guaranteed loan
because the BIA questioned the
poultry business' 20 percent equity
of the $12.2 million, which was
$2.4 million, and the ability of the
company to repay the $7.7 million
loan.
The $2.4 million equity was a
requirement of the BIA for the $7.7
million loan.
The poultry board reported
that the $2.4 million consisted
of $200,000 from the Business
Industrial Development Fund,
$340,000 from New Mexico tribal
infrastructure fund and about $1.9
million from private investors, who
were not identified.
On
Wednesday,
the Council's
Budget and
Finance
Committee
unanimously
voted to.
refer the egg
farm audit
to the chief
prosecutor's
office.
But auditors noted that
the Division of Economic
Development notified the poultry
board that the $200,000 from the
BIDF was contingent upon the
board obtaining full funding for
the egg farm.
During the Council's Budget and
Finance subcommittee meeting
on Wednesday, subcommittee
chairperson Lorenzo Bates
(Nenahnezad/Newcomb/T'ilstoh
Sikaad/Ts6 Daa K'aan/San Juan)
questioned how the poultry business
was able to get a $3 million loan
from the Native American Bank
when the board had failed to meet
the 20th Council's B&F committee
six-month deadline.
Bates said that since the six
month deadline was not met that
the B&F's 2004 approval for the
poultry business to use $3 million
as collateral from the escrow fund
was null and void.
Auditors noted on Wednesday
that the tribal justice department
agreed that the 20th Council's B&F
legislation giving approval for $3
million from the escrow fund to
be used as collateral was null and
void,
Committee members then
unanimously voted to refer the egg
farm audit to the chief prosecutor's
office.
Auditors identified more then
$341,000 in board reimbursements,
wages and stipends as
"questionable" because board
members could not provide
"supporting documents" to justify
their expenses as business related.
The consultant that received
the biggest share of the more than
$629,000 was Native American
Development, which was the
poultry board's "key consultant"
for starting the $12.2 million egg
farm project.
The board paid NAD $565,000,
which was part of a $10.7 million
contract between the board and
the Alabama company for them
to design the egg farm, supply all
equipment and building materials,
construct and erect the buildings,
test run the equipment, and provide
training.
Auditors reported that the
contract, which NAD "likely
prepared," entitled NAD to
receive 5 percent of the $10.7
million contract in advance as a
mobilization fee. Five percent of
$10.7 million is $535,000.
According to bank records, the
board paid NAD an additional
$30,000 via wire transfer for pre-
construction costs.
Auditors stated, "We
specifically asked NAD to provide
documentation that itemized
the services rendered for which
. it received payments, and the
deliverables from these services."
NAD mailed a letter to the
auditors about how they got
involved with the egg farm
company, the risks it took, services
provided in "good faith" because
the company had no money, and
factors that resulted in the ultimate
failure of the egg farm project.
"NAD further stated that it
had wasted almost six years with
the egg farm project and was
closing its consulting firm with
the one regret of not being able
to construct the DPPI poultry
complex," auditors stated. "NAD
also indicated that it made cash
loans to 'certain Navajos' that was
to be repaid at a later time.
"NAD characterized their
experience with the DPPI egg
farm project as the most expensive
learning experience because
DPPI was essentially broke and
as a result, NAD had to cover a
variety of expenses to start up the
corporation and commence with
the project," they added.
Council's committee leadvership taking shape
BY NOEL LYN SMITH Yazzie was vice chair of the Mel Begay (Bahasti'ah/Coyote The subcommittees are operating So far only Benally and of the spring session, when the
AVAJO TIMES
WINDOW ROCK - The Navajo
Nation Council this week finished
choosing leaders for all four
subcommittees it organized last
month to' assist inthe work Of the
Nfibik'yiti' Committee.
The Nibik'yiti' Committee
was established by the Council in
January as part of the restructuring
brought about by downsizing from
88 to 24 members.
The four subcommittees are
Law and Order, Resources
and Infrastructure, Budget and
Finance, and Human Development.
Speaker Johnny Naize (Blue Gap-
Tachee/Cottonwood-Tselani/Low
Mountain/Many Farms/Nazlini)
appointed the members of each
committee, who in turn elected
their leadership.
The Law and Order Subcommittee
oversee the Division of Public
Safety and the Office of Ethics and
Rules.
The members are Elmer Begay
(Dilkon/Greasewood Springs/
Indian Wells/Teesto/White Cone),
Russell Begaye (Shiprock), Alton
Joe Shepherd (Cornfields/Ganado/
Jeddito/Kin Dab Lichg/Steamboat),
Duane Tsinigine (Bodaway-Gap/
Coppermine/K'ai'bii't6/LeChee/
Red Lake-Tonalea) and Edmund
Yazzie (Church Rock/Iyanbito/
Mari ano Lake/Pinedale/Smith
Lake/Thoreau).
On March 7 they chose Yazzie as
chair and Shepherd as vice chair.
Public Safety Committee in the
previous Council. Shepherd is new
to the Council.
Th
e Resources and Infrastructure
Subcommittee oversees the
divisions of Community
Development,' Economic
Development, Natural Resources
and Transportation, and the Navajo
Nation Environmental Protection
Agency. "
Its members are George Apachito
(Alamo/Ramah/T6hajiilee),
Katherine Benally (Chilchinbeto/
Dennehotso/Kayenta), Charles
Damon ('B iihiil I/C h,c hilt ah/
Manuelito/Ts6 Lichfi/Rock
Springs/Tsayatoh), Leonard Pete
(Chinle), Roscoe Smith (Crystal/
Fort Defiance/Red Lake/Sawmill)
and David Tom (Beclabito/Cove/
Gadii'ahi-Tokoi/Red Valley/
Sheepsprings/Toadlena-Two Grey
Hills/Ts6 Alnaozt'i'l').
On Feb. 28 they elected Benally
as chair and Damon as vice chair.
In the previous Council, Benally
was vice chair of/he Economic
Development Committee and
Damon'was a member of the
Government Services Committee.
The Budget and Finance
Subcommittee overseesthe
Division of Finance and
Coordinates and regulates the
tribe's budgetary, investment,
contracting and auditing policies.
Its members include LoRenzo
Bates (Nenahnezad/Newcomb/
San Juan/T'iistoh Sikaad/Ts6
Daa K'aan/Upper Fruitland),
Canyon/Mexican Springs/
Naschitti/Tohatchi), Nelson
Begaye (Lukachukai/Rock Point/
Round Rock/Tsaile-Wheatfields/
Ts6 Ch'fzM), Lorenzo Curley
(Houck/toh/Lupn/NahaI L
Oziil/is;,/Jr}
Nez (Navajo Mountain/Oljato/
Shonto/Ts'ah bii Kin) and Leonard
Tsosie (Baca-Prewitt/Casamero
Lake/Counselor/Littlewater/Ojo
Encino/Pueblo Pintado/Torreon/
Whitehorse Lake).
On March 7 they selected Bates
as chair and Nez as vice chair.
Both Bates and Nez served on
the Budget and Finance Committee
in the prev.ious Council and Bates
chaired the committee.
The Human Development
Committee oversees the
Department of Din6 Education
and the divisions of Health, Human
Services and Social Services.
Members include Joshua Lavar
Butler (T6h Nanees Diz0, Jonathan
Hale (Oak Sprlngs/St. Michaels),
Kenneth Maryboy (Aneth/Mexican
Water/Red' Mesa/Teec Nos Pos/
T61ikan), DannySimpson (Becenli/
Crownpoint/Huerfano/Lake
Valley/Nageezi/Nahodishgish/
Ts6 'ff'ihf/Whiterock), Walter
Phelps (Birdsprings/Cameron/
Coalmine Mesa/Leupp/Tolani
Lake) and Dwight Witherspoon
(Forest Lake/Hardrock/Kfts ' fflf/
Pifion/Whippoorwill).
On March 14, they selected
Phelps as chair and Witherspoon
as vice chair.
2011 Amendment Ordinance of the Council
of Naataanii and Executive Manager Local
Government for To'Nanees'Dizi Community
DO you 00AvE B00AcEs?
Vou sukl conside, qdhn 9 tlou, |edh cleaned Iqa J,,tal l, yq0000nJ00t
sP=ificollq t,.oined to tzot Patients wit bmc]
Always remember,
you don't need braces
to schedule an
exam and cleaning/
All insurance, New Mexico Medk:aid,
and Arbna AHCCCS occeptedl
(zono/¢CCS does nol cover orlhodo Ireotment )
Don't have insurance?
No Probleml It's only $125 for
adults and $75 for kids,
(includes foe exam, cleoning, x-rays and fluoaOe.)
Its that ectsyl
under the Council Rules of Order Damon have been confirmed
and meet as necessary to facilitate
the work of the Nibik'yiti'
Committee.
Each selection of the chairs and
hairs needs to be confirmed
e Nfibik ydti' Committee.
but the confirmation of Yazzie,
Shepherd, Bates, Nez, Phelps
' and Witherspoon is scheduled for
today, March 17.
The subcommittees will be in
place until April 18, the beginning
To'Nane ,-s Dlzl
e |
Council will take up amendments to
Title 2 of the Navajo Nation Code.
At that point the subcommittees
might be elevated to standing
committees, which are permanent
and do business in regularly
scheduled meetings.
pler
Date: March 22, 2011
The purpose of the 2011 Amendments to the Ordinance of the
Council of Naataanii and Executive Manager Local Government for
To'Nanees'Dizi Community is to modify the Ordinance in a way that
more realistically reflects the operation of the Local government.
The amended provisions are principally in the following sections:
. 1. The former Section 3.03
TRANSITION has been deleted
because the transition period has
already occurred.
2. Section 3-06 (G) modified the
appointment of committees and
tasks forces to comply with the
Local Government Plan of Opera-
tion and to require a plan of action
by the committees or task force.
3. Section 3-07 decreased the
compensation for the Council of
Naataanii.
4. Section 3-09 changes the public
notice shall be given 24 hour prior
to Council of Naataanii meetings.
5. Chapter 4 changes the quorum
from 4 Officials to 3 Officials,
6. Section 4-02 modifies the meet-
ing procedures regarding the
journal of proceedings, financial
reports and other reports.
7. Chapter 5 prohibits the influ-
ences of Officials regarding the
employment of family members.
8. Section 6-01 modifies the hiring
and qualification of Executive
Manager.
9. Section 6-02 increases the
duties and responsibilities of the
Executive Manager.
10. Section 7-03 modifies the
accessibility of Local Government
Ordinance to the public.
11. Chapter 8 which was formally
Section 1-05 has been modified
into Chapter 8.
To'Nanees'Dizi Chapter Council of Naataanii:
Max D. Goldtooth, President; Robert Yazzie, Vice-President;
Charlene A. Nez, Secretary/Treasurer; Helen Herbert,
Council Member; and Jimmy Holgate, Council Member.
0 FOUR CORNERS ORTHODONTICS
DR. DAVID HERMAN
'3751 N. Butler Ave., Farmlngton, NM 87401
www.Herman4Braces.com