Native American Press / Ojibwe News (Bemidji, Minnesota), 2000-03-24

              INDEX
News Around Indian Country 2
News Tidbits 3
Commentary/Editorials/Voices 4
Smoke Signals of Upcoming Events 5
Classifieds 6-7
Candidates Reese, Martineau,
Wadena, Brunner introduce
their positions to voters
pg2,4
Investigation into White Earth
housing fraud ends, U.S. attorney
refuses to prosecute
pg 1
Writers debate
denial to certify
convicted felons
as political
candidates
pg4
Press/ON receives reports on
Leech Lake tribal casino "check-
to-cash" scam, U.S. attorney
refuses to prosecute
pgi
Peltier moved to
Rochester, Minn,
prison to be close
to Mayo Clinic
pg 1
reports on Leech Lake
tribal casino "check-to-
cash'scam
US Attorrey refuses to prosecute
By Bill Lawrence
In response to a Freedom of Information Act request dated Nov. 30,
1999, Press/ON received on March
21 copies of three investigative reports on the Leech Lake tribal casino
"check-to-cash" scam.
According to the reports, the scam,
which involved in excess of
$262,000, was principally orchestrated by former Leech Lake tribal
chairman Alfred "Tig" Pemberton
and former Leech Lake District III
Representative Myron Ellis. Fonner
Leech Lake tribal gaming comptroller George Wells admitted preparing,
cashing and remitting the proceeds
from the checks in question to
Pemberton and Ellis. In some cases,
Wells wired the funds to Pemberton
and Ellis while they were out of
town.
U.S. Attorney Todd Jones has refused to prosecute those involved in
the scam, citing the fact that both
Pemberton and Ellis were previously
prosecuted for other scams involving
theft of tribal funds. Jones says his
decision not to prosecute Wells is
because Jones could not prove Wells
had personally received any ofthe
money.
Despite the fact that the Department of Interior Inspector General's
staff blacked-out names in the Closing Investigative Memoranda, Press/
On has learned that Case No. 96VI-
297 pertains to George Wells; Case
No.96VI-297A to Alfred "Tig"
Pemberton and Case No. 96VI-297B
to Myron Ellis. As a matter of public
service, Press/ON has decided to
publish copies ofall three memoranda as part of this article have
been reprinted on page 5.
Investigation into White Earth
housing fraud ends
V   O   I   C   E        O
I    HE        P   E   O   P   L   E
By Gary Blair
The Seattle Times newspaper reported in Sept. of 1996, that from $5
million to $8 million in U.S. Housing
and Urban Development (HUD)
funds were missing at White Earth
and a criminal investigation by
HUD's Inspector General (IG) had
been launched. That investigation followed earlier convictions of three of
the reservation's former tribal officials who had been charged with
other federal offenses. The newspaper
received a Pulitzer Prize in journalism for their investigative work in uncovering and reporting on the story.
To date, the only people to be
charged in that theft have been two
non-Indian brothers, Chad and Jason
Smeby, owners ofa lumberyard in
Mcintosh, MN. The Smebys were indicted in 1999 for over billing
$270,000 to the reservation's housing
program. Wording found in the
Smeby's indictment indicated that
other unnamed individuals were also
involved in the theft.
The Smeby's pled guilty as part of
plea bargain agreement on Jan. 7,
2000, in federal court in Duluth,
Minn, and are scheduled to be sentenced next month. Sources say the
Smebys plea agreement ended the
HUD investigation at White Earth.
"The word around there (White
Earth) is, that (fonner secretary/treasurer) Jerry Rawley and (former
council member) Rick Clark turned
over housing billing records to investigators and that blocked the Smebys
from telling on them.
"I heard that there isn't going to be
anybody else charged in the theft,"
the source said.
According to a fraud auditor that
was hired by newly elected White
Earth officials in 1996, at least $3
million ofthe missing money included HUD funds and couldn't be
accounted for. The auditor told your
writer in the spring of 1998 that his
audit ofthe reservation was turned
over to federal authorities. "I assume
that they're going to prosecute," he
said at the time.
White Earth sources who met with
HUD investigators say they (investigators) initially named over 25
people, both Indians and non-Indians
they believed were involved in the
theft. The list of suspects included
former tribal officials and relatives,
the reservation's former controller
and attorney, local bankers, the
reservation's former housing director,
individual housing staffmembers and
others.
In the fall of 1996, federal officials
seized stolen White Earth housing
constmction supplies and other items
from storage sheds located on property owned by former reservation
council member, Rick Clark. Clark
was convicted of bid-rigging and
voter fraud along with two other
tribal officials, fonner White Earth,
chairman, Darrell "Chip" Wadena
and secretary/treasurer, Jerry Rawley
in June of that year. Wadena had not
been charged with voter fraud.
Shortly after Clark was released
from federal prison in the fall of
1998, he was allowed to buy back
.some ofthe items seized earlier by
federal officials from his property —
iems such as, new and used automobiles, various watercraft, snowmobiles, and motorcycles. U.S. Marshals
that your writer spoke with confirmed
that Clark was allowed to buy back
the items for $30,000.
When Minnesota U.S. Attorney
Todd Jones was asked in June of
1999, during a meeting at his office
with this newspaper's publisher William Lawrence and your writer why
Clark was allowed to buy back his
HUD topg.5
five
merican
web page: www.press-on.net
#
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Ojibwe News
We Support Equal Opportunity For All People
A weekly publication.   Copyright, Native American Press, 2000
Founded in 1988
Volume 12 Issue 23
March 24, 2000
Indians must pay state taxes on lottery winnings
for tickets purchased on reservations
By Jeff Armstrong
Excerpted in part from Pat Doyle
Star Tribune
While American Indians living on
reservations don't need to pay state
taxes on casino-related income, the
Minnesota Court of Appeals ruled
March 21 that they won't get a break
on winnings from lottery tickets.
The court said that Paula
Littlewolf, a resident ofthe white
Earth Reservation, was required to
pay $8,000 in state income taxes on
a winning "High Stakes II" instant
ticket she bought on the reservation.
The Minnesota State Lottery withheld $28,000 in state and federal
taxes from Littlewolf's 5100,000
prize when she turned in the winning ticket in 1996.
While Indians must pay federal
income taxes, those living on a reservation are typically exempt from
state taxes on income received on (
the reservation.
Littlewolf filed suit against Revenue Department commissioner
James Girard after the department
failed in 1997 to refund $8,000 in
state taxes withheld on her winning
ticket the previous year. Citing the
case of MeClanahan v. Arizona State
Tax Commission, Littlewolf had argued that because the store where she
bought the ticket. Village Store, and
her residence were both located on
the reservation, the income was exempt from state taxation.
The Department of Revenue rejected her claim, and the Appeals
Court agreed, upholding a
Mahnomen County District Court
ruling.
The appeals court noted that
Littlewolf picked up her prize at the
lottery headquarters in Roseville, not
on a reservation, and that she implies
itly consented to be bound by the detailed state rules and procedures as a
condition of purchasing the ticket.
"Littlewolf's lottery winnings con
stituted income earned off the reservation," the court wrote.
In order lorofl-reservalion activi- '•?
ties to be immune from statejurisdiction. the exercise of such legal authority must be found to interfere
with self-government or be contrary
to federal law, the court ruled.
"We are, unable to discern how, in
any manner or to any extent, compliance with Minnesota State Lottery
statutes could interfere with reservation self-government or would impair
a right granted or reserved by federal
law," the court wrote. "Neither the
self-government of an Indian reservation nor any right granted or reserved
by federal law is implicated in this
case."
Ruling unanimously in the decision
of Littlewolfv. Commissioner ofthe
Department of Revenue were appeals
court judges Doris Huspeni, R.A.
(Jim) Randall, and Chief Judge Edward Toussaint.
Indian
Market
Midwest's
largest sale,
show of
Native
American art
Authentic Native American art of
today and cultural traditions of
thousands of years will come to the
Eiteljorg Museum of American
Indians and Western Art in Indianapolis June 24-25. when the
museum hosts the eighth annual
Indian Market. It's the largest sale
tad juried show of Native American
art in the Midwest.
This year's signature image is
"The Blessing" by David K. John
(Navajo), part ofthe artist's Mother
and' Chila'series. The painting
features a mother and a child and
two handprints - one ofhis wife,
and one ofhis four-year-old
daughter.
"The image fits in perfectly with
the exhibition that will be at the
Eiteljorg during Indian Market,"
said Cynthia School craft, the
Eiteljorg's festivals manager.
former
Minnesotan
wants to build
state-sponsored
casino
Excerpted from Pat Doyle
Star Tribune
A former Minnesotan who built the
small casino city of
Laughlin, Nevada is reviving an old idea: building a government-sponsored casino in Minnesota
to compete with Indian
tribes.
Don Laughlin said
March 16 that he held a
series of meetings with 20
Minnesota legislators this
week to gauge interest in
a non-tribal casino in die
Twin Cities that would
send 90 percent of its
profits to the state. He'd
keep the rest.
Other proposals for a casino to help
build a new stadium or to help Canter-
Don Laughl
bury Park have come up. They died in
the face of heavy opposition from Indian tribes
that own casinos and
from gambling foes.
The Legislature narrowly rejected the most
recent proposal, to put
slot machines at Canterbury.
Laughlin said he wants
to put together a casino
plan for legislators to
consider in 2001.
"I think there is more
support for it as time
goes on," said Laughlin,
68, who grew up in Owatonna, Minn.
CASINO topg.8
Indian activist Leonard Peltier moved to Rochester
prison to be close to Mayo Clinic
Associated Press
LEAVENWORTH, Kan. - The
federal prison system has met a request from ailing Leonard Peltier,
the American Indian imprisoned
for the deaths of two FBI agents,
and transferred him to the Federal
Medical Center in Rochester,
Minn.
Peltier, suffering from a jaw condition as well as diabetes and a heart
condition, had sought to be transferred so he could be close to the
Mayo Clinic. A doctor there had
agreed to treat him.
Peltier, who has served 24 years,
has been the object of an international movement to win him clemency.   His supporters believe the
Clinton
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spokes-
man Claude Chester said Peltier left
the U.S. Penitentiary at Leavenworth
the morning of March 20.
Peltier suffers from a jaw condition
that is the result ofa tetanus infection
contracted in childhood. Peltier has
said he is only able to open his mouth
about one-half inch and must push
his food in by hand.
The Federal Bureau of Prisons said
the move to Minnesota is temporary.
"That' s something that Leonard
had been requesting for a really long
time," said Gina Chiala ofthe
Leonard Peltier Defense Committee.
"It's a positive development and so
we' re hoping that they will have adequate specialists examining him and
treating his jaw."
Peltier, 55, has served 24 years of
two life terms for the killings of two
FBI agents during a 1975 shootout on
PELTIER to P9s
BURY THE NEWS AT WOUNDED KNEE
In the poorest county in America,you can take over the government and the media won't even notice.
Excerpted from Julie Winokur
Hartford Current
If the people of Connecticut took
over the state capitol, the media
would swarm into Hartford and the
nation would tune in to watch. Such
a move might warrant the intervention ofthe FBI, the Justice Department and the National Guard. But
for two months, 100 Indians have
been occupying the tribal council
headquarters in Pine Ridge, South
Dakota'and the story has barely traveled past the edge ofthe plains. Despite the fact that a sovereign government is under siege, there has
been a virtual news blackout.
Jan. 16 a group calling itself the
Grass Roots Oglala Lakota Oyate
entered the Red Cloud Building and
declared a takeover of tribal council
headquarters. They met no resistance as they seized financial records
and installed their own tokalas, or
scouts, for security. They sealed off
part ofthe building containing critical files, locked down the computers
and called in the FBI to remove all
financial records. That they summoned federal law enforcement was
in sharp contrast to die famous
Wounded Knee uprising of 1973 in
which three people were killed.
This takeover, planned for nine
months, was a desperate measure by
a group who claim their tribal council has embezzled millions of dollars, that mismanagement of funds
has forced the Oglala Sioux into the,
depths of poverty, and that they had
no recourse but to seize the seat of
power.
Pine Ridge lies in the poorest
county in America, with 75 percent
unemployment and an average family income of $3,700 per year. The
life expectancy for men is 48 years,
25 years below the national average.
The infant mortality rate is the highest in the country. Bad health, dis
ease, drugs and alcohol have ravaged the Oglala Sioux.
"Millions are being embezzled and
nothing's being done," says Floyd
Hand, one of the leaders of the
Grass Roots movement. The group
points to personal loans to council-
men as high as SI26,000 in one
month (despite a $500 cap), countless job placements made to council
members' families and a complete
disregard for the tribal constitution.
The group has demanded the resignation of treasurer Wesley
"Chuck" Jacobs and immediate suspension ofall council members,
pending a referendum vote. They are
also calling for a complete overhaul
of the current form of government.
Hand insists that the only way to expose the truth is through a full forensic audit, and the only way to accomplish that was through a takeover.
An independent audit of the general fund is under way. Jacobs has
been suspended pending a hearing.
Other council members have been
sent into a frenzy defending their ac
tions, and Harold Dean Salway,
tribal president, has been forced to
document the spending of $30,000
in federal aid given in the wake of
last year's devastating tornado.
While people on the reservation
may disagree on the Grass Roots
movement's methods, they agree
that the tribe's funds are chronically
mismanaged, that nepotism niles job
placement and that a handful of
people are getting rich while the rest
ofthe tribe struggles to survive.
The Oglala Sioux have been mired
in corruption for decades, argues
Floyd Hand.
When President Clinton gave his
State ofthe Union speech in January
it was the first time the name Pine
Ridge had passed the presidential
lips in that context in anyone's recollection. While Clinton talked about
investment opportunities on the reservation, the tribal treasurer was
only a horsehair away from a public
lynching, and the tribal president
was fending off impeachment proceedings.
Prairie Island reservation buys
Frontenac ski, golf area
RED WING, Minn. (AP) - The Prairie Island Mdewakanton reservation
is diversifying its economic base by agreeing to buy Mount Frontenac
Ski and Golf Area in Frontenac.
The land will remain on the tax rolls, said Tribal Council Secretary Lu
Taylor. The tribe has no intention of either placing the land in trust or establishing off-reservation gambling.
The name will remain the same and all employees will keep their jobs.
The transaction is expected to be completed by early April, pending
regulatory approval. The purchase price was not disclosed.
"This is an important day for our community," Taylor said. "It's been a
goal of our community to diversify economically so that we are not
solely relying on our gaming operation to fund our government." The
tribe operates Treasure Island Resort and Casino.
The tribe will buy the property and operation from Mark and Cathy
Nichols of Apple Valley, who also own Americlnn motels in Red Wing,
Lake City and Winona.
"It's a wonderful fit and we feel comfortable that their vision is consistent with our long-term plans forthe area," Cathy Nichols said.