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SALT LAKE CITY (AP) -- A federal judge has ordered the state of Utah to dig through up to five decades of accounting records for the Navajo Trust Fund and track some $35 million in unaccounted for funds and interest.
Utah holds the $150 million oil trust for tribal members in San Juan County, who filed a class action 1992 class action suit demanding the accounting and alleging the state has mismanaged their money. Money in the trust is supposed to be used for projects to benefit Navajos.
If the state can't account for the money, it will ultimately have to repay the trust, U.S. District Judge Tena Campbell said in her ruling.
Created by Congress in 1933, the trust documents mandate that 37.5 percent of royalties from oil and gas exploration on Navajo reservation be held by the state and used for health, education and general tribe welfare.
Attorney Brian Barnard, who represents the families, said there is some indication that the trust was correctly managed, but also evidence that Utah gave funds to groups that embezzled from it. For example, $35 million given to the Utah Navajo Development Council, a New Mexico nonprofit group, was used to create Utah Navajo Industries, a for-profit company that developed small businesses. Officers of both groups were later convicted of embezzling from the trust.
"The state has never taken money. What has happened is that the state has mismanaged it," Barnard said.
But deputy Utah Attorney General Phil Lott said a judge will have to ultimately decided if the state must pay the trust.
"Accounting does not equal a determination that the state has to pay anything," Lott said. "We're not at that point yet."
Lott could not estimate how long the accounting audit might take.
Campbell said in her ruling that she will examine each decade of records according to the accounting standards used during that time.
Barnard said he fears tracking funds some funds, given that the UNDC and UNI have both disbanded after declaring bankruptcy.
------ Information from: The Deseret News, http://www.deseretnews.com
(Copyright 2006 by The Associated Press. All Rights Reserved.)
