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Navajo leaders clash over control of oil trust

Congress must assign trustee before funds can be spent

WASHINGTON — Navajo leaders clashed at a Senate hearing Thursday over who should control a $30 million trust fund for oil and gas royalties after the Utah government gave up control of it in 2008.

Tribal leaders have been split on where the responsibility should fall, and no funds will be spent from the trust until Congress designates a trustee.

On Thursday, Navajo Nation Vice President Rex Lee Jim told the Senate Indian Affairs Committee that the tribal government is best suited to control the funds. But Navajo Nation Delegate Kenneth Maryboy said that the nonprofit Utah Dineh Corp. would work better for the Utah Navajos.

“I’m a Utah Navajo, and it’s about time we administer our funding,” said Maryboy, who is also a San Juan County commissioner. “For many years, we have not laid a hand on this.”

But Jim asserted that the nonprofit could not be as accountable as the Navajo government. He said it would be irresponsible to put so much money into a brand-new corporation “with zero experience as a trustee and absolutely no outside capital.”

“He (Maryboy) said in his testimony they don’t even have a checking account,” Jim said after the hearing.

The hearing was called to consider a bill sponsored by Sen. Orrin Hatch, R–Utah, that would make Utah Dineh the trustee. It is similar to a Senate measure proposed in 2009 that did not make it out of committee.

The Utah Navajo Trust Fund was established in 1933, after the tribe acquired the resource-rich land in southeastern Utah. It was created to compensate the state for lost tax revenue, with a stipulation trust funds be spent to benefit the tribe, on such things as paying Indian student tuition or building roads across tribal land.

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For decades, tribal leaders charged the state with mismanaging the fund, claiming millions of dollars in losses. In 2008, state lawmakers voted to give up control of the fund, which was placed in a holding account that does not disburse any of the royalties. That law says the state will continue to control the account – which is simply sitting in the bank now – until Congress can come up with a solution.

“With the holding account simply accumulating money, the people are suffering from lack of services,” Maryboy testified.

The trust receives about $6 million to $8 million per year, Jim said. That is about one–third of the total royalties generated annually, depending on the price of oil, with the remaining two–thirds going to the Navajo Nation.

The Department of the Interior opposes Hatch’s bill. Del Laverdure, the department’s principal deputy assistant secretary of Indian affairs, testified Thursday that the agency respects the Navajo Nation’s ability to manage the money as originally intended.

When asked if it was possible to divert trust funds away from Utah tribe members, Jim said the Navajo Nation could not and would not do it.

“It is not possible because it is mandated by the U.S. legislation, and the Navajo Nation has proven itself,” he said, adding that the tribe has an appeal system for beneficiaries of the trust already in place.

But Maryboy said that it would be too easy for the tribal government to dismiss complaints by tribe members who were dissatisfied with the Navajo Nation’s handling of the trust.

As to the charge that the Utah Dineh Corp. is too new and inexperienced to take on the trust, Maryboy said the lack of experience could be a good thing because it keeps the corporation flexible. He said it is open to accepting scrutiny, and its board of directors is willing to work without pay if necessary.

“Utah Dineh Corp. is well–structured and in the wrapper and ready to go,” he said. “All we lack is the nod from this committee.”

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1 comment on this story

Oct 21, 2011, 8:15 am
-0 +0

Sounds to me that if the Utah Navajo can iron out its internal disagreements, then they themselves should spend the cash on what they see fit…

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Joshua Armstrong/Cronkite News Service

Navajo Nation Delegate Kenneth Maryboy, left, and Navajo Nation Vice President Rex Lee Jim testify at a Senate Indian Affairs Committee hearing on who should manage a Navajo oil trust fund. The tribe has split on whether it should be run by the tribal government or a nonprofit, with Maryboy and Jim on opposite sides of the issue.