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Know the West

Five Navajos say Utah cheated their tribe

  Some Utah Navajos say their tribe has been cheated out of at least $52 million in oil and gas money by the state of Utah during the past 30 years (HCN, 12/16/91). Although the state says the tribe's claims are too old to be valid, a district court judge has rejected that argument and given the tribe time to investigate the issue.

The state set up a trust fund in 1933 to hold about one-third of the royalties from oil and gas drilling on Navajo land, with the state managing the money for the tribe's "health, education and general welfare." But an audit ordered by the Utah Legislature in 1991 found that nearly all of the $60 million trust had been spent on poorly managed tribal enterprise programs like the Utah Navajo Development Council and its for-profit subsidiary, Utah Navajo Industries, a group providing financial assistance to tribal businesses.

After the audit, five Navajos sued the state for damages, charging the fund's administrators had a responsibility to spend the money wisely. "(The state) might have had good intentions, but there's no defense called "empty head, pure heart," "''''says attorney Brian Barnard, who represents the five plaintiffs. "As a trustee, you're handling someone else's money, and you can't delegate that responsibility."

Assistant Attorney General Val Livingston says the tribe knew what the trust was doing. The money "wasn't just lost on the way to the supermarket," he says. "Over 80 percent of it was spent by the Navajos themselves." But in March, U.S. District Judge David Sam refused to dismiss the case and gave the tribe four months to gather evidence about the fund's management over the past 30 years.

Tribal members want to see the money replaced, says Barnard, and he hopes that the nearly six years of litigation will eventually be worthwhile for the tribe. "The state has thrown up every roadblock they could," he says, "but our tenacity is paying off. They're realizing this case isn't going to go away."

* Michelle Nijhuis