Court: Start poring through 50 years of records or appeal

A federal appellate court ruling may send Utah officials to the U.S. Supreme Court to dispute the mandate they must cull through decades worth of records to show how Navajo trust funds were spent.

Or, accountants could just roll up their sleeves, dust off the hundreds of boxes and embrace the "major undertaking" ordered Wednesday by the 10th Circuit Court of Appeals in Denver.

At issue is expenditures from the estimated $150 million fund derived from gas and oil exploration on Navajo land in Utah dating back to the 1950s, when money first started funneling into the account.

Set up by Congress in 1933, the trust is from 37.5 percent of the royalties stemming from exploration of the lands. The state of Utah was designated the administrator of the fund, which has thousands of beneficiaries.

A number of suits have been filed over the years demanding an accounting of how the money was spent, especially after some leaders of the Utah Navajo Council were convicted of embezzling trust money.

In 1992, a class action suit was filed in federal court and in 2007, U.S. District Judge Tena Campbell ruled the state must go back as far as the mid-1950s to provide an accounting of all the transactions.

The state has turned over a partial accounting — for fiscal years 1987 through 1991 — but assistant Attorney General Philip Lott said the state wanted to avoid digging through 30 years worth of records.

"We have hundreds and hundreds of boxes of documents. It is a matter of personnel time, and apart from the documents, it means locating witnesses who may have been involved in spending the money back in the 1950s and 1960s. It is a major undertaking to do all that."

Brian Barnard, the attorney representing the fund's beneficiaries, hailed the appellate court's decision and described the state's resistance to provide accounting as one of a multiple of roadblocks carried out over years.

"It is a substantial win," he said. "When the suit was filed the state came in with a laundry list of 15 to 20 reasons why we would not be able to pursue the lawsuit. Over the years we've spent time knocking down each of those roadblocks. And this was one of them."

The state, in addition to either asking the U.S. Supreme Court to hear the case or abiding by the Denver court's decision, could ask for a re-hearing before the 10th Circuit in which all justices would review the case.

Both Lott and Barnard were quick to emphasize the Denver ruling does not impart financial liability to the state. That would only come later when, or if, the state can't account for how the funds were spent, or if expenditures were found to be mishandled.

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E-mail: amyjoi@desnews.com

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