Kickbacks to Navajo Officials Alleged

The chairman of the Navajo Indian tribe has received kickbacks of at least $125,000 since 1986--including cash, expensive remodeling and hotel expenses--by companies vying for construction contracts on the reservation, two contractors told a Senate subcommittee Thursday.

The contractors, both white, said that they had set up dummy firms headed by Indians whose sole purpose was to qualify for jobs reserved for the minority group. They and their Indian colleagues said they believe they had to make payments to tribal chairman Peter MacDonald Sr. to get business.

‘Gave the Money to Mr. MacDonald’

“I gave the money to Mr. MacDonald because I thought he would give us a fairer opportunity to perform our trade on the reservation,” Pat Chee Miller, one of the Indian executives, said of the nearly $10,000 he gave to MacDonald.

A tribal spokesman said that MacDonald had no immediate response to the allegations but that the tribe would send a delegation to Washington next week to respond.

Contractor John Paddock, who was given immunity from prosecution by the committee, testified that his payments to MacDonald totaled more than $110,000, including free use of Paddock’s company plane, a $35,000 loan that has never been repaid and $1,220 for a birthday party for MacDonald’s wife.

Paddock said he thought that the costs were the price of doing business on the reservation and that in one instance the payoffs helped his company gain the necessary certification to do reservation work.

Paddock also said that under-the-table payments he made to MacDonald brought a request from the tribal chairman for his firm to do a $650,000 renovation of MacDonald’s office complex, although the construction company was never asked to follow through on the work.

He said that the improvements, eventually done by others, were extravagant. “They were talking in terms of solid mahogany paneling, the faucets were to be gold-plated, the tiles were to have turquoise inlays,” he said.

A spokesman in MacDonald’s office said that tribal officials moved late Thursday to form a task force to appear before the Senate committee. Tazbah McCullah said that officials probably will travel to Washington Monday or Tuesday.

In a resolution, the Navajo tribal council criticized “malicious . . . attempts to discredit the integrity of the Navajo nation” and said that “a great number of people . . . have been summoned before the Senate special investigators, threatened and sometimes offered immunity if they would just say something negative about the Navajo nation.”

Fraud, Corruption Evidence

The hearings follow nearly a year of FBI and congressional investigation that senators said turned up evidence of fraud and corruption in tribal and federal governments, tribal ties to organized crime and child abuse in government-run schools on reservations.

The special subcommittee of the Select Indian Affairs Committee, chaired by Sen. Dennis DeConcini (D-Ariz.), also will examine housing, health-care, law enforcement and natural resource problems on Indian reservations.