Fraud in New Mexico

ON A FRIDAY AFTERNOON IN August, Air Force One ascended above the town of Farmington, N.M. Enthusiastic supporters of the president fanned out of Rickets Park in the center of town waving Bush-Cheney placards. The police cars and motorcycles blocking the streets from traffic during George W. Bush's brief visit switched off their lights and drove away. Normalcy returned to Farmington.

For Ervin Chavez, president of the Shii Shi Keyah Allottee Association (shii shi keyah is Navajo for "this is my land"), normalcy means another day fighting against the federal government and big industry for Native American rights. In his darker moods, he despairs that it's a fight he'll never win.

"You think it would get better someday, and it only gets worse," Chavez says from behind his gold square-framed glasses in a near-empty Farmington restaurant a few hours after the president's plane had taken off.

Just beyond this small city in the northwest corner of New Mexico, normalcy means bitter poverty for the tens of thousands of Native Americans who live in a barren desert region known as the Checkerboard. Many of these Navajos — referred to as "allottees" because they reside on individual Indian allotments separate from the large Navajo Nation to the west — live in abject poverty, can't read or speak English and have no convenient access to telephones, schools or health-care facilities.

In the face of such stark facts are recent allegations that oil and gas companies have cheated these people out of enormous sums over the years, while the federal government has stood idly by. The Department of the Interior is the subject of a $100 billion class-action suit brought by the allegedly injured parties. Cobell v. Norton, originally filed in 1996 when Bruce Babbitt was Interior Secretary (current secretary Gail Norton is the defendant now), is the largest class-action lawsuit in U.S. history in dollar terms.

Chavez, a Navajo from the Checkerboard, doesn't seem surprised by the charges. A member of a class-action suit that led to several reforms concerning energy companies' use of Indian land in the 1990s, Chavez has battled industry and government for most of his life.

"You can prove the federal government is wrong," he says. "But the federal government will spend whatever it wants to and lie however it wants to, and it will go to whatever extent it can to prove that it's in the right."

Chavez cites the case of Kevin Gambrell, former director of the Farmington Indian Minerals Office (FIMO), an Indian-outreach office overseen by the Interior Department. Last year, Gambrell was fired from his position, ostensibly for destroying documents (the charge has never been proven). Gambrell sued the government under the Whistleblowers Protection Act and won an undisclosed settlement. Gambrell is not allowed to speak with the media under the terms of that settlement.

"They totally set him up," says Chavez. "We trusted Kevin. People went to him and asked what was wrong with their [Individual Indian] accounts, and he would find out...Kevin was victimized for being too nosy."

Patrick Etchart, spokesman for the Minerals Management Service (MMS), the branch of the Interior Department that oversaw FIMO, says he can't discuss Gambrell's case because of the settlement agreement.

The government has never explained why it settled Gambrell's case, but critics such as Chavez and the Project on Government Oversight, a government watchdog group based in Washington, D.C., say Gambrell was fired because he discovered fraudulent government auditing of oil and gas royalty payments made by companies operating on Indian land, and systematic underpayments of other fees.

An affidavit filed Thursday with a federal court shows that Gambrell wasn't alone in discovering such practices in New Mexico.

"I no longer can remain silent"
SmartMoney.com has investigated charges that the federal government has helped oil and gas companies deceive and cheat impoverished Navajo Indians in New Mexico for dozens of years. When evidence of these activities came to light in 2003, the Bush administration attacked the messengers, including Gambrell, and took extraordinary measures to protect the individuals implicated in the scheme.

In August 2003, Alan Balaran, the special master overseeing the Cobell v. Norton suit, filed a report with the U.S. district court alleging that the Bureau of Indian Affairs (BIA) was approving lowball deals for pipeline companies using Indian property on the San Juan Basin of New Mexico. These deals were at times 90% less than what private and tribal landowners were receiving for comparable rights-of-way payments, the report charged.

Balaran found that Indian allottees on the Checkerboard generally received $25 to $40 per rod for rights-of-way easements crossing their land. (A rod, a metric for measuring pipeline length, is 16.6 feet.) Tribal and private landowners, however, often received compensation at rates ranging from $140 to $575 per rod, according to the report. A rancher with land in Bloomfield, N.M., told SmartMoney.com that he received more than $1,000 a rod for three major pipelines crossing his property (see the pipeline agreement here).

SmartMoney.com has learned that senior officials in the Interior Department knew at least a year before special master Balaran submitted his report that oil and gas pipeline companies were getting sweetheart deals on Indian land — and turned a blind eye.

According to Thursday's affidavit filed with the court hearing the Cobell lawsuit, the federal employee who unearthed these practices was allegedly ignored by her superiors after she notified them about what she found. Deborah Lewis, an appraiser with the Office of the Special Trustee for Native Americans (OST), discovered these allegedly fraudulent activities during a four-month assignment as acting regional appraiser at the Navajo Regional Office in Gallup, N.M., in 2002. Lewis also found evidence of document destruction by the chief appraiser of that office, Anson Baker. (The OST, organized by Congress in 1994 under the Indian Trust Reform Act to manage Indian trust assets, took over the Office of Appraisal Services from the Bureau of Indian Affairs in June 2002.)

Lewis notified several of her superiors about her findings, and was ignored, according to her statement, a court document filed under penalty of perjury. Now, after two years of silence, Lewis — a Navajo Indian from Torreon, N.M., a small town in the Checkerboard — has decided to tell the court what she found. "I no longer can remain silent as others do at the Interior Department and the Justice Department about the misconduct of Baker," Lewis states in her affidavit.

A spokesman for the Interior Department wasn't immediately available for comment.