PRESS RELEASE – CONTROLLER, BUDGET AND FINANCE, SIHASIN COMMITTEES MAKE $525M CASH OFFER TO BUY REMINGTON WITHOUT PRESIDENTIAL INVOLVEMENT
WINDOW ROCK, Ariz.- (7-19-18) Responding to a New York Times article that claims the Navajo Nation made an offer to buy Remington Arms Company, LLC, for approximately $525 million cash, President Russell Begaye said his office was unaware of the proposal.
President Begaye, who became aware of the issue after reading the article, said the Office of the President (OPVP), the Economic Council and the Division of Economic Development were unaware of any negotiations to purchase Remington.
“As President, I question the secrecy by which this offer was made,” President Begaye said. “Offers that include high dollar amounts and do not include the involvement of the Executive Branch are highly questionable. It’s my responsibility to protect the Navajo people’s money.”
The Budget and Finance Committee discussed the Remington proposal in secret during an Executive Session and Special Meeting held on May 29, 2018. Neither the Office of the Controller nor the Legislative Branch communicated the $525 million offer with President Begaye or his staff.
“My economic team was unaware that this offer was being made to Remington by the Controller’s Office and certain members of Council,” President Begaye said.
Navajo Nation Attorney General Ethel Branch was also unaware of the offer. As such, the proposal was done without proper legal authorization or approval.
The article misidentified Drew Ryce as the tribe’s lawyer.
Pursuant to 2 N.N.C. 1964(C), “No division, program, enterprise, or other entity of the Navajo Nation government shall retain or employ legal counsel except as may be approved by the Attorney General.” There is no other applicable Navajo Nation law that grants the Office of the Controller the authority to “retain or employ legal counsel” without the approval of the Attorney General.
Attorney General Branch stated, “It is very disturbing to me that the Nation’s laws for engaging outside counsel appear to have been disregarded. Those laws are in place to protect the legal and financial interests of the Nation. Our public officials should do their part to protect those interests by fulfilling their legal and ethical duties in following those laws.”
Attorney General Branch, who is also a member of the Navajo Nation Investment Committee, which makes recommendations on the investment of the Nation’s Master Trust Fund, stated, “As a member of the Investment Committee, I would have expected to be apprised that the Nation was considering the Remington investment. My office will of course investigate what appears to be a highly irregular manner by which this supposed investment was pursued.”
The Attorney General further stated, “It is very concerning to me that the amount of the Nation’s investment portfolio has been so publicly announced. We can now expect to be targeted by unscrupulous investment brokers, which raises an even greater need for stronger internal controls to protect our trust funds.”
In a press release issued on July 18 by the Speaker’s Office, Speaker LoRenzo Bates tried to deflect responsibility to non-communication by the Office of the Controller, stating the office is “under the Executive Branch.”
Yet, according to CF-17-17, the resolution appointing Pearline Kirk as Navajo Nation Controller, “The Navajo Nation Controller serves at the Navajo Nation Council’s pleasure.”
“It’s obvious that this secret deal blew up in the faces of both Council and Speaker. They should have enough integrity to admit that they made a mistake,” President Begaye said. “As the news broke, the Speaker’s Office scrambled to provide damage control to this situation. However, when you’re dealing $525 million of the Navajo people’s money, your false excuses and statements have no merit. My office will continue to safeguard and protect our Navajo people’s money. We cannot allow another financial scandal similar to what occurred in the past with over $35 million in Discretionary Funds being spent by the Navajo Nation Council.”
The President’s Office has a strong economic plan in place that embraces economic business development while assessing the available workforce and resources of the Navajo Nation. OPVP has reached out to highly accomplished and successful tribal corporations to learn from their successes.
“We’ve involved team members from Council in our economic plan every step of the way. We’ve taken Council members with us as we visited tribal corporations so they could observe the type of economic development plans that more progressive tribes are using to grow their tribal economies.”
President Begaye said it’s questionable that the Office of the Controller, Budget and Finance Committe, Sihasin Committee, and Speaker’s Office moved forward on a cash offer of this amount without involving or consulting with the Executive Branch.
“We will look further into the process that was used to see if any Navajo Nation laws were violated,” President Begaye said. “It’s highly irregular for such a significant transaction to take place without the involvement of the President.”
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PRESS RELEASE – Navajo Nation Council members respond to reports of Remington proposal
WINDOW ROCK– Speaker LoRenzo Bates (Nenahnezad, Newcomb, San Juan, Tiis Tsoh Sikaad, Tse’Daa’Kaan, Upper Fruitland) and members of the Budget and Finance Committee on Wednesday, issued the following statements regarding reports over a proposal submitted for the possible acquisition of Remington – a manufacturer of firearms and ammunition.
Statement from Speaker LoRenzo Bates – 23rdNavajo Nation Council:
“This proposal regarding Remington was brought forth by the Office of the Controller – under the Executive Branch – and presented to the Síhasin Fund Subcommittee, the Budget and Finance Committee, and officials within President Russell Begaye’s Administration. The Controller recommended to initiate discussions with Remington and to begin the due diligence on Navajo involvement.
The President is wrong in his accusations against Council members. In fact, President Begaye’s Administration was directly involved in discussions – whether or not his staff communicated with him is not the problem of the Council, but it is a problem within his own office.”
Statement from Council Delegate Seth Damon – Chair of the Budget and Finance Committee:
“To be clear, there was no discussion or consideration of using funds from the Permanent Trust Fund, as reported. The committee discussed this proposal with the Controller as an economic initiative with the potential of bringing potentially thousands of needed jobs to the Navajo Nation. We have so many people who need and want jobs and that’s what this discussion centered on.”
Statement from Council Delegate Leonard Tsosie – Chair of the Síhasin Fund Subcommittee:
“The Russell Begaye Administration has no economic development plan to bring large scale employment to the Navajo Nation, so the Council and Committees are taking the initiative to discuss possible ventures to help our unemployed Navajo people. The Subcommittee has not had any formal investments on a so-called ‘deal.’ Delegates talk about many different subjects, including Remington. When these matters become legislation, the Navajo public will know.”
For news on the latest legislative branch activities, please visit www.navajonationcouncil.org or find us on Facebook and Twitter, keywords: Navajo Nation Council
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July 17, 2018
Quote from Navajo Nation President Russell Begaye:
“Today, I read the New York Times article about the offer made by the Navajo Nation to purchase Remington. The Office of the President and Vice President, the Economic Council and the Division of Economic Development were not aware of any negotiations to purchase Remington. As President, I question the secrecy by which this offer was made. As it relates to the Navajo people’s money, to consider an offer without the involvement of the Executive Branch is highly questionable. We will look further into the process that was used to see if any Navajo Nation laws were violated. It’s highly irregular for such a significant transaction to take place without the involvement of the president.”
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Duped Delegates Led by Unethical non-Diné Attorneys.
A simple Google search results in an article on Drew Ryce, the Navajo “Tribe’s Attorney” who facilitated the failed “Remington” purchase. The TuryleTalk article shows an unethical attorney who has an apparent habit of taking advantage of uneducated, uninformed and gullible tribal leaders.
Note the comment section:
“We are from the Colville Confederated Tribes of the Pacific Northwest. We have employed here a Drew Ryce, which his background info was not available to us then because you were setting up a lawsuit with he and Pearline Kirk (who is also employed here).”
“He is trying to get our tribe to sign 2 contracts, immediately, in a rush. What is so amazing is some of our council persons are “falling for it”. I am so angry my leaders are listening to his ‘talk’.”
“I would love there to be a way we could put a stop to these people going from tribe to tribe getting away with the same unlawful schemes. We need a way to let our sister tribes know when these type of people have “hit” one of our reservations and ready to go to another without paying any consequences.”
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NEW YORK TIMES published the following article on the Navajo Nation’s attempt to buy Remington on July 16, 2018: “A Surprising Bid for Remington, and an Unsurprising Rejection”, which prompted press releases from Navajo Council and tweets from Navajo President Begaye.
By Andrew Ross Sorkin
July 16, 2018
This spring, I wrote a column suggesting someone should try to buy Remington, one of the country’s oldest and largest firearms makers, and transform the company into a model for advanced and responsible gun manufacturing.
A surprising investor made a bid to do just that. Perhaps not surprisingly, Remington’s management rejected the offer.
The proposal came from the Navajo Nation, one of the largest Native American tribes in the country with more than 350,000 members and land holdings of more than 27,000 square miles in Arizona, New Mexico and Utah.
The Navajo Nation — which controls a $3.3 billion investment trust — sent a letter to Remington in May offering to buy the company for $475 million to $525 million, according to a draft of the letter reviewed by The New York Times. The tribe planned to pay for the purchase in cash.
The Navajo Nation’s plan for Remington was novel: It intended to shift the company away from its consumer business, including curtailing the sale of the AR-15-style weapons frequently used in mass shootings, to focus on police and defense contracts.
The tribe planned to use profits from those businesses to invest in research and development of advanced “smart guns” — those with fingerprint or other technology intended to prevent anyone but the gun’s owner from using the weapon. Smart guns have so far failed to make much headway at the major gun manufacturers, which have faced pressure from groups like the National Rifle Association.
It’s not clear that the tribe’s proposal would have worked, of course. But the Navajo Nation would have had an advantage in sales for police and military contracts. Not only must a certain percentage of government business go to minority-owned companies, but the Native American Incentive Act also confers certain other advantages, according to the American Bar Association.
The only guns the Navajo Nation planned to sell to consumers were long guns like rifles and shotguns used by hunters.
“Navajo is a community of veterans and people of the land,” the tribe’s lawyer, Drew Ryce, said in an email. “We are indifferent to the AR-15 and happy to leave that business behind.”
The tribe saw a purchase of Remington as way to invest in its people, too.
“Navajo has over 70 percent unemployment,” Mr. Ryce wrote. “Over the next few years we would shift the assembly (i.e. lesser trained) parts of the business onto the reservation.”
Over the longer term, he said, the tribe would have created the kinds of small machining operations that supply many parts to the company. “We would establish this specific machining of specific parts on-reservation and assemble and ship the products on-reservation,” Mr. Ryce said.
Remington, which emerged from bankruptcy this spring, is not a public company. It is largely owned by the investment firm Franklin Templeton, which was a creditor before the bankruptcy. JPMorgan Chase owns a smaller part of the company as a result of previously providing it a loan. Had Remington accepted the offer, both creditors would have been able to quickly exit an investment that has brought with it unwanted attention.
Remington did not answer questions about the bid. In a statement, the company said all offers were submitted to a review committee appointed by its board, which was selected by the stockholders. “All such opportunities are being and have been submitted to the committee for review,” the company said.
A spokesman for Franklin Templeton declined to comment, as did a spokesman for JPMorgan Chase.
The bid was rejected last week after Remington had delayed a formal reply for nearly two months, according to a memo from Christopher Wu, president of Teneo Restructuring, a banker for the Navajo Nation.
“The conversation was cordial,” he said of a call he received from Remington’s general counsel in reply to the bid. “He conveyed an official message from the board thanking us for our interest in pursuing a strategic transaction. He let us know that the company at this time is not prepared to engage with third parties and they required time after their reorganization to assess their business.”
When he asked about the delay, he wrote, he was told again that Remington was not prepared to engage with third parties. There was no mention that the bid price was too low.
Mr. Wu said that Remington had offered a potential olive branch to revisit the bid next year. But given the politics of the tribe — primaries for leadership position will be held next month — it’s not clear that another bid would be possible in 2019.
Perhaps it was inevitable that a suitor like the Navajo Nation with such ambitious plans would be rejected — it would clearly upend the company’s management — but it would be a shame if Remington and its investors didn’t reconsider the offer and the enormous opportunity that it represents.
The bid was rejected last week after Remington had delayed a formal reply for nearly two months, according to a memo from Christopher Wu, president of Teneo Restructuring, a banker for the Navajo Nation.
“The conversation was cordial,” he said of a call he received from Remington’s general counsel in reply to the bid. “He conveyed an official message from the board thanking us for our interest in pursuing a strategic transaction. He let us know that the company at this time is not prepared to engage with third parties and they required time after their reorganization to assess their business.”
When he asked about the delay, he wrote, he was told again that Remington was not prepared to engage with third parties. There was no mention that the bid price was too low.
Mr. Wu said that Remington had offered a potential olive branch to revisit the bid next year. But given the politics of the tribe — primaries for leadership position will be held next month — it’s not clear that another bid would be possible in 2019.
Perhaps it was inevitable that a suitor like the Navajo Nation with such ambitious plans would be rejected — it would clearly upend the company’s management — but it would be a shame if Remington and its investors didn’t reconsider the offer and the enormous opportunity that it represents.
