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Gambling on $100 million credit line to the Navajo Nation?

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  • Robert Schmidt
    http://www.navajohopiobserver.com/main.asp?SectionID=35&SubSectionID=47&Art icleID=6493 12/27/2007 11:06:00 AM Is JP Morgan Chase taking a gamble on $100
    Message 1 of 1 , Dec 28, 2007

      12/27/2007 11:06:00 AM

      Is JP Morgan Chase taking a gamble on $100 million credit line to the
      Navajo Nation?

      S.J. Wilson
      The Observer

      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. ยง 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.
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