IHS pays $29.5M to end contract dispute with Cherokee Nation

Tribal leaders broke ground on the Cooweescoowee Health Center in December 2013. Photo from Cherokee Nation
Tribal leaders broke ground on the Cooweescoowee Health Center in December 2013. Photo from Cherokee Nation


Source: Indianz.com
The Cherokee Nation of Oklahoma has accepted a $29.5 million settlement with the Indian Health Service.

The tribe entered into self-determination contracts to manage programs that were formerly run by the IHS. But the agency failed to pay contract supports costs as required by law and as confirmed by two U.S. Supreme Court decisions.

“The settlement is a major milestone for the Cherokee Nation and our health centers. Payment of these millions of dollars from the federal government is long overdue, and now these funds will be utilized to provide expanded and improved health care services to our citizens. We will be able to equip our new centers with state-of-the-art medical devices and technology,” Chief Bill John Baker said in a press release.

The tribe was the plaintiff in the first contract support cost case that went to the Supreme Court. Despite a unanimous decision in 2005, however, it took another lawsuit and a change in administration for IHS to start paying what was owed.

“I am extremely pleased the Cherokee Nation is finally going to recoup funds that were owed to us for so long,” Attorney General Todd Hembree, who negotiated the settlement, said in a press release “These funds will be put to great use in helping meet the needs of the Cherokee people. Many thanks should be given to the dedicated employees in our self-governance, finance and health services departments.”

The tribe is in the middle of building four new clinics, a $100 million investment in its health system.


Get the Story:
Press Release: Cherokee Nation awarded $29.5M settlement with Indian Health Service (Cherokee Nation 7/15)
Cherokees Top Out New Clinic in Washington County (Public Radio Tulsa 7/15)

Tribal dispute puts Chukchansi casino at risk of default

Marc Benjamin, The Fresno Bee

The ongoing leadership dispute at the Picayune Rancheria of Chukchansi Indians has put the tribe at risk of defaulting on its bonds for Chukchansi Gold Resort & Casino, according to a lawsuit filed Tuesday in New York.

A $250.4 million agreement was reached last year when Chukchansi’s economic development authority restructured its financing after the tribe struggled to pay its debts.

But the tribal dispute over who controls the Coarsegold casino’s funds left the development authority unable to make its full May payment.

“The actions of the tribal parties and individual defendants endanger the collateral (casino revenue) and place the financial well-being of the casino in danger,” the suit filed by Wells Fargo Bank said.

The suit is against the tribe, its casino-affiliated corporations and commissions, competing tribal council factions, as well as three financial institutions that hold proceeds from the casino.

Wells Fargo holds the note for casino investors. The Chukchansi Economic Development Authority agreed to a 9.75% interest rate to restructure its debt.

The tribe was supposed to pay off $310 million in loans last year, but couldn’t make the payments. Instead, the tribe arranged an agreement with bondholders to restructure its debt to be due in 2020 and allow a longer-term payback for much of the remaining loan. The previous interest rate was 8%.

Wells Fargo declared itself “an innocent bystander” in the tribal dispute between two factions that contend they represent the tribe — one led by Reggie Lewis and the other by Nancy Ayala.

The bank’s lawyers said Wells Fargo has “done everything it can to resolve the issue consensually, but is left with no choice but to seek the court’s intervention” by filing the suit.

The Ayala group took control of the tribal business complex and casino after a February referendum the Lewis faction contends was unconstitutional.

The Lewis group then took control of a Rabobank account used to pay off casino debt. Rabobank officials didn’t recognize the Ayala group’s leadership and the Ayala group refuses to deposit money into the Rabobank account.

Since the last week of February, “presumably because of the disputes,” the tribe stopped depositing revenues and cash into the Rabobank accounts, which violates the agreement with Wells Fargo and the tribe’s bondholders, the suit said.

The Rabobank account is designed to use proceeds from the casino and make twice yearly bond payments of $11.93 million.

A partial payment was made in May, which constitutes “an event of default,” the lawsuit said.

Wells Fargo lawyers say money was available for the full payment if not for the ongoing factional dispute.

Under its agreement, the tribe is supposed to put casino revenue into the Rabobank account once each week, but can hold out $10 million in cash to run the casino, the suit said.

When the Lewis group gained control of the account, the Ayala faction opened accounts with other banks. Wells Fargo contends those are illegal under its agreement with the tribe.

Rabobank, which is named in the suit, froze its account, leading the Ayala group to move casino revenues in the casino “cage” instead of a bank, the suit contends.

The frozen account has led to employees getting paid in cash or by cash vouchers instead of check or direct deposit, adding security and internal cash concerns, the suit said.

“It is becoming increasingly difficult for Chukchansi Economic Development Authority to satisfy the daily cash needs of the casino, including payroll and the amounts required to maintain gaming operations,” the suit said.

Wells Fargo’s lawyers say the bank “takes no position with respect to which faction rightfully should be in control of the tribe and the tribal council,” the suit said. “But that does not change the fact that Chukchansi Economic Development Authority and the tribe have violated their agreements.”

Global Cash Access, which is named in the suit, is a company that reconciles all ATM cash dispensed at the casino. Wells Fargo estimates it holds $14 million in uncashed checks, the suit said.

The Rabobank account is supposed to have a minimum of about $14 million to make the twice yearly payment, tribe officials say. The suit said $10.55 million was in the account when the partial payment was made in May.

Wells Fargo also said the casino could lose its license because checks couldn’t clear through the Rabobank account and the casino was $551,250 in arrears to the California Gambling Control Commission.

Officials with both factions say they agree with the Wells Fargo action.

The Ayala group wants to get the Rabobank account out of the Lewis group’s hands.

“We have been operating the casino and taking care of day-to-day financial concerns,” said David Leibowitz, a spokesman for Ayala’s group. “The Lewis group has successfully sacrificed the biggest asset the tribe has and has ever had.”

But Lewis faction lawyer, Richard Verri, said the Ayala group can put money into the Rabobank account but refuses to because Rabobank recognizes the Lewis group.

“We have been waiting for this and pressuring (Wells Fargo) to get involved,” Verri said. “Now, the Ayala faction will be forced to make the deposits we are calling for.”

Read more here: http://www.fresnobee.com/2013/06/19/3351430/bank-tribal-dispute-puts-chukchansi.html#storylink=cpy

Nooksack tribal dispute heads to federal court

John Stark, The Bellingham Herald

After getting another rebuff in tribal court, Nooksack Indians facing loss of their tribal membership have filed a new lawsuit in U.S. District Court in Seattle.

Seattle Attorney Gabriel Galanda filed the federal suit Monday, June 17, on behalf of Rudy St. Germain and Michelle Roberts, two tribal council members who are among the 306 who could be stripped of their tribal membership because the validity of their Nooksack lineage has been called into question.

The suit declares that the move to purge the 306 is based on “racial animus,” because all 306 are part-Filipino. That charge is hotly denied by Nooksack Tribal Chairman Bob Kelly and his supporters, who have noted that many other Nooksacks have Filipino ancestors but can demonstrate their Nooksack lineage in a way that meets the requirements of tribal law.

But as Galanda and his clients see it, Kelly and the other five members of the council are in the process of changing that law to keep them out.

The Bureau of Indian Affairs of the U.S. Department of the Interior is currently supervising a mail-in constitutional amendment election that could make it more difficult to qualify for Nooksack membership. Kelly and his five supporters on the council have asked voters to repeal a constitutional provision that makes tribal membership available to anyone who has at least one-fourth Indian blood, plus Nooksack ancestry “to any degree.”

That election is scheduled to conclude June 21.

Galanda’s lawsuit argues that repeal of that provision of the tribal constitution would make it more difficult for his clients and other challenged Nooksacks to re-enroll in the tribe if the current effort to strip them of membership succeeds.

That, the suit contends, denies the affected Nooksacks the right to equal protection under law and is therefore a violation of the Indian Civil Rights Act. Galanda wants the judge to order federal officials to halt the constitutional election.

All of the 306 facing loss of membership are descendants of the late Annie George. Tribal officials contend that George did not qualify as Nooksack under tribal law, because her name does not appear on a tribal census of 1942 or on the list of those who got an allotment of tribal lands. Galanda and his clients have submitted other records and letters from anthropologists indicating that Annie George was, in fact, a Nooksack.

Also on Monday, Nooksack Court Tribal Chief Judge Rachel Montoya repeated the legal arguments of her earlier rulings and refused to stop the constitutional election. She found that a majority of the tribal council was acting within its proper authority in launching the constitutional election to change the membership rules.

The 306 challenged Nooksacks face loss of housing and medical benefits, tribal hunting and fishing rights, tribal jobs and other benefits if they are pushed out of the 2,000-member tribe.

Read more here: http://www.bellinghamherald.com/2013/06/17/3056967/nooksack-tribal-dispute-heads.html#storylink=cpy