Charlene Nez, secretary-treasurer for the Council of Naat’aanii, said the officials knew it was wrong to take chapter funds in the form of bonuses.  RICK ABASTA / COURTESY PHOTOFLAGSTAFF, Ariz. (AP) – A day after voters in one of the Navajo Nation’s largest communities approved a local sales tax, its elected officials rewarded themselves with thousands of dollars in bonus money. The payments came on the heels of a Christmas bonus and preceded bonuses for other projects.

In all, the handful of officials that served on Tuba City’s Council of Naat’aani, or council of leaders, received more than $80,000 in bonuses from late 2009 to 2011. As a result, ethics cases were brought against them by the larger tribal government, stripping four of the five of their jobs and requiring that all five pay back the money.

Tribal ethics investigators and justice officials said elected officials are not supposed to be compensated beyond stipends for meetings and legitimate travel. Investigators alleged that the officials engaged in favoritism and put themselves above the needs of the community, where the annual per capita income of $15,000 is less than the bonuses paid to individual leaders.

However, a lawyer for one of the deposed officeholders said the tribal law that gave reservation communities increased authority over local finances is vague and doesn’t prohibit the payments.

“I don’t agree at all with starting with the presumption that bonus equals bad.” said David Jordan, representing council Vice President Robert Yazzie on appeal.

The Tuba City Chapter was one of the first to become certified under the tribe’s Local Governance Act, which gives local communities the authority to issue business and home site leases, contract with outside attorneys and develop local ordinances. Since it was passed in 1998, about one-third of the reservation’s communities have earned the designation that loosens oversight from the central government.

Another perk for certified chapters is that they can designate a sales tax above the tribe’s standard 4 percent. Tuba City voters approved a 6 percent sales tax on Jan. 12, 2010, an extra two percent that has brought in millions to the community that borders the Hopi reservation and sits along a highway well-traveled by tourists in northern Arizona. The next day, Max Goldtooth, Yazzie, Helen Herbert, Charlene Nez and Jimmy Holgate got checks for $3,000 each.

A week later, they all received a $1,000 check, the first of four they would receive for securing business site leasing authority for the community.

The bonus payments kept coming and might not have become public knowledge if not for Nez. Even though she accepted the money, she said she was building a case against herself and the others because of the guilt she felt. When she refused to sign checks as secretary-treasurer, one of two required co-signors, she said the administrative staff went above her head to Yazzie and Goldtooth, who was president, for their signatures.

She further alleged that nepotism and favoritism were rampant at the chapter house, which functions similarly to a city hall, as well as an atmosphere of intimidation.

“I felt bad for people,” Nez said. “How come we get the bonuses?”

She said community members seeking assistance at the chapter house often left “in tears, because they’d get yelled at and ridiculed.”

Regina Allison, whose office provides technical support to the chapter, wrote to the tribe’s Department of Justice in December asking that the chapter’s accounts be frozen and that her office be allowed to take over. In the letter, she said she suspects the mismanagement of finances stretched beyond the bonuses paid to officials to the administrative staff.

Allison based her request partly on a review of Tuba City executive manager Priscilla Littlefoot’s travel file. Allison said per diem and meal rates were overstated, and Littlefoot received an $811 travel advance for a training trip that she did not attend.

Littlefoot and another administrative staff member, Noreen Parish, were fired the day Nez went before the tribe’s Office of Hearings and Appeals and agreed to repay the $20,000 in bonuses she received. But Nez will keep her position until replacements are named, and Jordan said he plans to challenge Littlefoot’s firing as her attorney.

Meanwhile, the financial picture for Tuba City remains unclear. Brian Lewis, an attorney for the tribe’s Department of Justice, said the community brought in at least $2.5 million in the last fiscal year, which included taxes and lease payments. Allison wrote in court documents that her attempts to get the chapter to turn over yearly records were met with resistance.

The tribe’s Office of the Auditor General now is conducting a special review of the chapter.

In another strange twist, Tuba City managed to exempt itself from an obligation to report what it received in sales taxes to the Navajo Nation Tax Commission through a resolution approved by the Tribal Council, said the commission’s executive director. An online system for chapters to post their budgets, expenditures and revenue online also is voluntary, and Tuba City officials were posting limited data.

Tribal Council Delegate Joshua Lavar Butler said the community should have been using its extra tax monies to supplement the fire department and law enforcement, and providing other municipal services but “we do not have a clear picture, or statistics on how those dollars were used.”

Officials with the tribe’s Division of Community Development, which oversees the chapters, have proposed amendments to the Local Governance Act to strengthen reporting requirements, division of duties for chapter officials and financial management.

“There’s a lot of inconsistency in the law...we’d like to close those loopholes,” said division director Arbin Mitchell.

Attorney Jordan said current law does not specify whether a chapter that created its own government should operate like other chapters, nor does it state that the bonus payments were wrong. Jordan said Yazzie and Goldtooth never denied authorizing the bonuses.

Yazzie and Goldtooth were found in violation of ethics laws, Herbert and Nez admitted to the allegations, and a deferred judgment was granted against Holgate because he failed to show up for a hearing.

For now, Mitchell and Nez are signing checks to make sure the chapter’s bills get paid. A third person is stationed at the chapter house and issues firewood hauling permits.

Investigations into the chapter’s finances are ongoing.