An audit of the Paskenta Band of Nomlaki Indians, which is riven in two by disputes between two factions, has uncovered evidence of millions of dollars in mismanaged casino funds.
The leaders of the tribe, which owns and operates the Rolling Hills Casino near Corning in Northern California, “have fallen far short of their legal and ethical obligations to the tribe” according to the audit, which lists such things as spending $17 million on private jet travel for personal business and $450,000 in sports tickets.
The audit was conducted by WilmerHale, out of Washington D.C.
On September 13 the 216 adult members will vote on who should lead them, as well as whether a third of the tribe’s members should be removed from the tribal rolls. Currently each member is paid $54,000 a year. That number would, of course, go up, if large numbers were disenrolled.
According to tribal treasurer Ambrosia Rice, “I think it speaks for itself. I mean, seriously, it’s pretty clear as to where our money has gone and what’s happened to it and who spent it.”
Other officials, including some who were kicked off the tribal council during the power struggle earlier this year challenged the objectivity of the audit. Former Economic Development Director John Crosby, who has been accused of buying a jet for his own use and for purchasing large amounts of gold bullion, declared, “You can spin those things a lot of different ways, and that’s what I believe happened in that report. Tribes don’t look like the corporate world.”
In April during a General Council meeting Chairman Andrew Freeman suspended three council members. The members declined to be suspended. During the period the power struggle has included armed standoffs as the two factions tried to gain control of tribal buildings, including its casino.
The audit was conducted as part of the mediated settlement between the two groups, who also promised to abide by the results of the upcoming election. Nevertheless, one of the groups says it did not sign off on the selection of the audit firm.
According to that group’s attorney, “Despite the fact that the settlement agreement entered into by the two sides called for the selection of a mutually acceptable independent firm to do the investigation, the Lohse-Crosby group had no input into the selection of WilmerHale. From its inception, this creates questions of legitimacy around the report.”
The audit blames extremely poor bookkeeping practices and records and cites officials who declined to cooperate with the audit.
Besides the purchases of gold bullion and a corporate jet, the audit also criticized $93 million in investments made without any underlying strategy, as well as excessive overhead and overpaid employees and officials.
“Over the last 12 years, much of the leadership and senior management of the tribe has betrayed the trust of the general membership in significant ways,” said the audit.
