Navajo Council now on Legislation No. 0355-14: Relating to Law and Order, Budget and Finance, and Naabik’iyati’ Committees, and Navajo Nation Council; Enacting “The Navajo Nation Trust Settlement Act of 2014” by Amending Title 12 of the Navajo Nation Code and Establishing “The Sihasin Fund” to include those Settlement Monies received from the United States through Settlement of Navajo Nation V. United States, No. 06-945L, and those Monies received through Future Settlement or Judgment of Other Litigation brought against the United States for is Failure to Ensure that the Navajo Nation Receives All Funding Owed TO it VIA The United States’ Trust and fiduciary Responsibilities to the Navajo Nation
(Sponsor: Honorable Lorenzo Curley)
DELEGATE DANNY SIMPSON
based on public hearings on how to use $554 million settlement and Settlement Task Force meetings, it would be better if language was not as specific and so language should just be housing for everyone.
DELEGATE ROSCOE SMITH
I understand that $554 million settlement put into Reserves so what happened to $4 million? and by law when dealing with this legislation, we already committed $66.4 million to Permanent Trust Fund and we are discussing veterans. Veterans Trust Fund got 4 percent, $22 million. and attorney got $44 million so balance is $404 million so Reserves Balance should be $440 million but balance is $409 million. And since there were already commitments made then how are we dealing with recommendations from public hearings.
NAVAJO NATION CONTROLLER MARK GRANT
sept 30, 2014, reserve balance, unaudited, and settlement not included because settlement arrived after sept. 30, 2014.
funds arrives in november 2014 and since no legislation to stop set asides, the set asides taken out – 12 percent Permanent Trust Fund, 2 percent Land Acquisition, 4 percent Veterans Trust Fund. this legislation removes settlement as “projected revenues” which would stop set asides.
The intent is to stop the set asides from being taken out. this money sent to investors and put in Master Trust.
DELEGATE LEONARD TSOSIE
which law are you following to send off money? and how much money did you send off? where is remaining law? did you act on own or on someone else’s advice? since you are telling us that already deposited, are there penalties for withdrawing funds? Delegate Katherine Benally brought up that Council directed that settlement not be used for set asides.
And how do you identify settlement as projected revenue which made it eligible for set asides.
DELEGATE RUSSELL BEGAYE
if this legislation passes, does entire settlement, with set asides returned and minus attorney fees, be deposited. rationale for delaying legislation is that we wanted to have input from communities. we did numerous public hearings delaying any legislation drafted with understanding that settlement would be deposited. so was that communicated to Controller?
the amount of set asides was $66 m. $11 m land acquisition and $22 m for Veterans Trust Funds and those funds were deposited into those trust funds and are being invested. are there any penalties if withdraw? two answers – if we withdraw money will there be penalty? there will be lost dividends, lost gains, lost interest on bonds redeemed. there won’t be penalty, just lost opportunity. second answer, if this legislation passes today, then no need to withdraw funds, simply transfer from where at to new fund and no losses.
There is no seeking of permission to deposit new funds into trust funds because that is the law. law says 12 percent of revenues goes into Permanent Trust and the language is similar for Land Acquisition Trust Fund and Veterans Trust Fund.
DELEGATE LEONARD TSOSIE
you causually flop off Permanent Trust Fund. and now the funds are deposited into the three trust funds and they have to be withdrawn. and you decided to deposit into trust funds, knowing the council didn’t want that and while the council was holding public hearings. and so you goofed and so the funds from the settlement that you deposited into trust funds should be replenished from you retirement. I don’t think you can causually say, we’ll just transfer it. but if we get letters from investors that the tribe can get back the $66 million anytime we want, I’ll be okay with that.
DELEGATE ROSCOE SMITH
if this is done every month which is based on information that settlement received in November 2014, why is Reserves balance $30 million.
so here is what the mechanics of transaction were – calculations based on $66 million and balance with Wells Fargo Bank where invested in short term maturities until this legislation passed and once committee decide how invested then tranferred to Northern Trust and then invested. $409 million deposited with Wells Fargo Bank.
money for lawyers has not been authorized yet so funds have not been disbursed to lawyers and hopefully this legislation authorizes that. lawyer fees was $44 million but that has increased.
Navajo Nation government operates on projected revenues which are any monies arriving after
$150 million budget and so if don’t operate on projected revenues, then have to operate on cash and don’t have that amount deposited.
NAVAJO NATION DEPUTY ATTORNEY GENERAL DANA BOBROFF
there were discussion when settlement received and directive to Controller to wait on set asides until hear from public.i don’t know if that was communicated to controller. Projected Revenues definition is found at Title 12 Navajo Nation Code section 901. And so there is assumption that all settlements are Projected Revenues. I bring this up because Controller acting based on past operations. We do not believe that set asides should have automatically come out of settlement. But those funds can be transferred into new account specifically for settlement.
In legislation 0355-14, Page 13, line 10 to 15, settlement clarified as not projected revenues.
regarding attorney fees, that was clerical action. generally when settlement funds received, settlement goes to law firm. in this instance, law firm felt that better to transfer funds because less transfers especially since federal government has lot of red tape. and so lawyers haven’t been paid. right now fee is $48 million and Controller needs authorization to pay law firm.
DELEGATE ALTON SHEPHERD
I don’t how to consider Council press releases but there was press release on Nov. 7, 2014, in here the intent was that legislation drafted and people would be kept informed. In press release, Controller Grant said that separate account created until legislation drafted for settlement. and that was our understanding that settlement put in “holding place” and that settlement was not Projected Revenues. so is accountable? i don’t know how to rectify problem. these funds invested after set asides. but Controller knew our intentions. hoping all of settlement without any penalties are deposited into special account. so troubling that Controller invested and put into different accounts when Controller knew intent of Council regarding settlement and set asides.
DELEGATE DWIGHT WITHERSPOON
controller put settlement to work. So is it beneficial to withdraw funds from investments. And we dont want settlement invested in short term investment which is what federal government was doing and we didn’t approve of that and that was part of reason for lawsuit, which resulted in settlement.