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FORT DUCHESNE, Uintah County — Two men extorted thousands of dollars from energy companies while working for the Ute Indian Tribe by threatening to withhold permits that are required to work on tribal lands, according to a pair of investigative reports.
The reports were filed in federal court by attorneys for Duchesne County as part of a long-running legal fight that now involves the state of Utah; Duchesne, Uintah and Wasatch counties; the cities of Duchesne and Myton; and the Ute Tribe.
Attorneys for Duchesne County argue in court filings that the reports, which detail alleged misconduct by Dino Ray Cesspooch and Leallen Avery Blackhair, prove that tribal officials "are engaging in racketeering, bribery and extortion" to enforce the Ute Tribal Employment Rights Ordinance, also known as UTERO.
Attorneys for the Ute Tribe dispute the county's claims, arguing that the reports prove the tribe "acted responsibly in dealing with allegations of impropriety on the part of its tribal departments and employees."
"The tribe is continuing at this time to take action on the facts that were uncovered in the investigator's report," tribal attorneys told the court. "Contrary to Duchesne County’s allegations, the tribe, its Business Committee, and individual Business Committee members did not authorize, aid, abet, or condone a 'pattern of racketeering and extortion' in the enforcement of the tribe’s UTERO."
Pressured donations?
The allegations against Cesspooch stem from his time as a UTERO commissioner. UTERO was adopted in July 2010 with the goal of promoting self-sufficiency for tribal members.
The ordinance outlined an "Indian preference" policy for awarding contracts on tribal lands, set forth rules for the hiring and retention of tribal members by companies that are not tribally owned, and called for the creation of improved job training opportunities.
UTERO also requires any company not owned by a Ute tribal member to pay the tribe 2 percent of its gross revenues for work performed on tribal lands as an "employment rights fee." Companies have the option, however, of making a donation to a UTERO scholarship fund in lieu of paying the fee.
That's where investigators with a California-based private detective firm hired by the Ute Tribe say Cesspooch got into trouble. Through interviews with UTERO employees and employees of several oilfield companies, investigators with the Baker Street Group said they found evidence that Cesspooch illegally solicited donations for the scholarship fund.
Cesspooch allegedly told a subordinate that the scholarship fund was "part of UTERO's policy to 'pressure white companies' into making contributions to support the tribe," according to a Baker Street report.
"Cesspooch instructed (the employee) to force the companies into making donations by withholding their (UTERO) certifications," the report states.
A district manager for Halliburton, an oil field service company that operates in the Uintah Basin, told Baker Street investigators that Cesspooch repeatedly pressed the company to make contributions to the UTERO fund that ranged between $150,000 and $180,000.
"Cesspooch's requests continued, despite being told (by the district manager) that Halliburton could not make any donations that were not 'legit,'" the report states, adding that Halliburton's corporate counsel could find "nothing in the UTERO ordinance requiring a donation to UTERO."
The Halliburton manager also told investigators Cesspooch threatened to have UTERO compliance officers take control of the company's equipment and said the company would be fined if a contribution was not made, the report states.
In all, Baker Street investigators met with owners or employees of nine oil field service companies. Most paid donations while some did not, according to the report. One interviewee described the UTERO certification process as "a nightmare."
"Most witnesses expressed a reluctance to cooperate in the investigation for fear of retaliation," the report states. "It is very difficult to accurately determine how much money was gained from the coerced solicitations."
Investigators also said they found instances where UTERO fees and scholarship donations were deposited into the wrong accounts, an error they believed might be inadvertent. A review of UTERO scholarship files showed "they are incomplete and contain no information as to who actually received scholarships," the investigative report states.
Cesspooch allegations
Cesspooch was fired in November, according to the report, but continued to represent himself as a UTERO commissioner until January, when tribal leaders sent a letter to area companies informing them of Cesspooch's dismissal.
Yet Wednesday, Cesspooch told the Deseret News he was reinstated as a UTERO commissioner in July by three of the six members of the Ute Tribe Business Committee.
"This investigation has been fabricated," Cesspooch said. "It's a smear campaign by (Business Committee Chairman) Gordon Howell for his own personal gain and benefit."
Efforts to reach Howell for comment were unsuccessful, but documents filed in federal court by attorneys for the Ute Tribe show that Cesspooch's appeal of his termination was rejected by a three-judge panel in September.
A search of federal court records shows that a jury convicted Cesspooch in January 2002 on a charge of theft committed within Indian Country. He was ordered to pay $4,361 in restitution to the Ute Tribe, which was identified as the victim in the case, and placed on probation for three years. Cesspooch was also ordered to serve 60 days home confinement and complete 50 hours of community service.
Blackhair allegations
The allegations against Blackhair, who served as the compliance supervisor for the tribe's Energy and Minerals Department from 2009 to 2013, are outlined in a second Baker Street report.
"Blackhair used violations of (tribal) access permits as the catalyst to ask for donations for various sporting events or causes, often seeking donations in lieu of fines, or in some cases, reductions in fines," the report states.
He also contacted companies that had already paid their fines and solicited donations, investigators said.
Baker Street investigators were asked by attorneys for the tribe to limit their probe of Blackhair's personal "donation scheme." Based on that limited review, investigators identified 10 companies that paid Blackhair a little over $30,000 between May 2011 and March 2013.
"Further investigation in this regard would undoubtedly increase the total fraud and extortion identified thus far," the report states.
Baker Street investigators said the FBI and Bureau of Indian Affairs police have made inquiries into Blackhair's activities. Special agent Todd Palmer, spokesman for the FBI in Salt Lake, said he could not comment Wednesday on whether the bureau is investigating Blackhair.
State court records show that Blackhair pleaded guilty in April 2007 to making a false or fraudulent insurance claim. His guilty plea to the third-degree felony charge was dismissed in October 2008 after Blackhair successfully completed a plea in abeyance term and paid $1,500 in restitution to the state's Fraud Division.
In 2012, four creditors filed civil cases against Blackhair in Ute Tribal Court seeking nearly $19,000 in judgements, according to information gathered by Baker Street investigators. The report states that the people interviewed by investigators told them that Blackhair "lived beyond his means and was believed to be a heavy gambler."
An effort by the Deseret News to reach Blackhair for comment was unsuccessful.
The Ute Tribe has asked U.S. District Judge Bruce Jenkins to strike the Baker Street report on Cesspooch from the court record, arguing that it constitutes hearsay evidence and that Duchesne County failed to follow the proper procedure when filing it. They are expected to file an identical motion seeking to strike the report on Blackhair.
Jurisdiction fights
The contentious legal fight between the tribe, the state, the counties and the cities to define who has criminal and regulatory jurisdiction over tribal members in a region of Utah where the jurisdictional map resembles a checkerboard has been going on for three decades.
Originally filed in 1975, the case was dismissed in 2000, after the Ute Tribe, the state and Duchesne and Uintah counties signed a trio of 10-year contracts that appeared to resolve their jurisdictional disagreements.
Tribal leaders succeeded in having the case reopened in April 2013 because the contracts had expired and efforts to renew them had failed. In court papers, they accused state and local law enforcement officers in eastern Utah of routinely engaging in racial profiling of tribal members. Law enforcement agencies and prosecutors in the region have flatly denied those claims.
The case is temporarily on hold pending rulings from the 10th Circuit Court of Appeals on several appeals filed by attorneys for the tribe.
