Would You Trust this Man with $600 Million Part 2

Yesterday we talked about Bill John Baker’s new pick to assist the best CPA in Vian, Lacey Horn. The Cherokee Nation now has some help from another Sequoyah County CPA, Jody Reece-- who just happened to be in charge of either the finance department & grants administration in the 1990s when the Nation got busted for not auditing its own books, for using federal program funds illegally, and using tens of millions of dollars improperly. The details are in yesterday’s blog, and you will find the list is very long and very embarrassing for the Nation.

How embarrassing? Well, the result way back when of all the financial shenanigans during the Byrd/Baker/Reece era was that the Cherokee Nation wasn’t trusted with its own money and had to be put on an allowance, like a third grader.

According to the Tulsa World, because the Nation was in such bad financial shape and the feds had “substantial concerns about the tribe’s financial systems” so they gave the money to the nation “month-by-month until the tribe restores its financial credibility…”

That made Cherokee Nation officials upset at the time.  The Tulsa World quotes one as saying: “While it’s embarrassing and uncomfortable for us to have lost credibility by having weaknesses pointed out everywhere, we’ve got a plan in hand,” said the tribe’s executive director of finance and administration in a November 6, 1998 interview with the paper.

So who said that he was so embarrassed about what happened either under his own watch as the top finance guy or the controller, Jody Reece, who moved over to administer grants, which then somehow got used for purposes they weren’t supposed to be?

None other than Charles Head. Remember him? He was recently appointed by Baker to be the new Secretary of State for the Cherokee Nation.  Head and Reese were in charge of the Cherokee Nation’s finances during the worst financial crisis in the history of the Cherokee Nation.  And now Baker has brought them both back.

Justice Darrell Dowty (left) administers the oath of office to the newly confirmed Secretary of State Charles Head while Frances Head looks on.
Photo Courtesy Cherokee Nation

Would You Trust this Man with $600 Million?

Jody Reece (Photo Courtesy Indian Country Today)

According to a news release on the Cherokee Nation's web site, "the Cherokee Nation has a new controller to manage its finances.  Jody Reece, of Muldrow, took on the job in late February."

Part of Reece's credentials are that, according to the news release, he worked at the Cherokee Nation from "1991 to 1997, starting as an accountant and eventually being promoted to controller, and again from 1998 to 1999 as director of grants administration and land management."

Well, those weren't exactly the glory years for the Cherokee Nation's accounting department and quite frankly-- those might be lines most people would leave off a resume!  Saying you were in charge of the Cherokee Nation finances during those years is a little like saying you were the guy in charge of the checkbook at Enron in 2000 or Worldcom in 2002.

But back to our point today: Mr. Reece (who is the second small town Sequoyah County CPA to be hired by Baker to run the Cherokee Nation's finances) has a pretty scary track record.

Mr. Reece was the financial boss during the years when Baker was chair of the executive and finance committee in the 1990s and Baker says "the Cherokee Nation will greatly benefit from his (Reece's) talents and expertise."

According to the Tulsa World, when Mr. Reece was the Controller in the 1990s (and while Baker was Chair of the executive and finance committee), there was quite a laundry list of financial misdeeds:

• The Nation did not have "prepared financial statements for 1997 and 1998..." according to a federal audit conducted because the Nation didn't do any audits itself.  
• An HHS audit of Reese's previous time concluded that the feds should have "substantial concerns about the tribe's financial accounting systems" and "used $1.9 million of IHS funds to cover deficits in other programs."

You should probably just read the articles in the Tulsa World yourself (after all, they were on the front page at the time and are hardly a secret), because they reveal too many financial screw-ups to list here, but we will provide some highlights during the Baker/Byrd/Reece financial era:

• Incurring legal costs without contracts
• Using taxpayers' dollars to fight the federal government
• Improperly placing $16 million of federal funds in its general operating account
• Improperly charging $88,000 to the (Interior) Department for legal services
• Transferring federal funds of at least $16.1 million to the (tribe's) general operating fund without assurance that federal program expenditures had been incurred previously and were owed.
• Inaccurate financial data in the financial status report submitted to the Bureau of Indian Affairs.
  

Like we said, not exactly resume material, unless your next move was to Enron.   

Tomorrow, we’ll talk about the consequences Cherokee Nation faced for the financial mismanagement that took place when Mr. Reece was in charge of the Cherokee Nation checkbook the first time.  Some of you might be surprised by one of the names that pops up - it's a guy who picked up right where Reece left off…

Second Chance

Joe Byrd hopped in the way-back machine and dialed up 1991 --- getting elected to the Tribal Council again 21 years after his last council election, and 16 years after winning his last election of any kind.  Byrd beat four other candidates, getting nearly two out of three votes.

We’ve chronicled Joe Byrd’s comeback before and it’s clear the people in Cherokee County (and part of Wagoner County) are ready to give Byrd another chance.

We’ve spent some time talking about Byrd’s pro-freedmen stance, his felonious former campaign manager/housing authority director, and all the turmoil know as the Constitutional Crisis that turned out so well that his Byrd’s buddy Bill John Baker joined him as a Deputy Chief candidate in the 1999 election, in which they were both skunked.

So Byrd is back. We assume that he learned from his mistakes.  The question is, did he learn not to make them, or did he just learn not to get caught? We’re sure we’ll all find out in the next few months and years.

LL Cool J Edition

Ladies Love Cool Joe?

Don’t call it a comeback, he’s been here for years!  Joe Byrd is bringing his bad self out of political retirement and said he wants to be the guy who replaces Bill John Baker on the Cherokee Nation Tribal Council.  

Byrd is one of five folks that are running.  He’ll be facing: Raymond Vann, who turned in a couple of all-star performances in Deputy Chief debates before finishing with 7 per cent of the vote; Pam Iron, who finished third in the June election; Brandon Girty who finished with 4% of the vote in June, and Geneva Reeves, who we don’t know a lot about (maybe you can help us).

The Tulsa World had a story with some of the highlights/lowlights of Byrd’s era as a Principal Chief back in the 1990s.They earned the understatement of the year award by summing up the Byrd years by saying they “consisted of arguments on many levels of tribal government.”

This council seat will represent Cherokee County and the part of Wagoner County that is within the Cherokee Nation.

LL Cool J reminds us Joe Byrd has been here for years.

The election is set for January 14, with a runoff, if necessary, on February  18.  At that point, we would finally have a full tribal council but the winner shouldn’t get too comfortable.   

They’ll have about a year to decide if they want to run for re-election in 2013.    

2 Days Until the New Election: Baker Finance Reports

As we’ve already mentioned, Smith and Baker have combined to make this a million dollar campaign.  We’ve already looked at Smith’s latest finance report, so today it’s Baker’s turn.

 

In the last reporting period, Baker raised $150,330, and had expenditures by others for another $2521.97 for a fundraising total of $152,851.97.  Notable Baker contributors include former Chief Joe Byrd at $2000, former Governor David Walters at $1000 and former CNI boss Bryan Collins.  By our quick count, he had 285 contributors with an average donation of $536.32. 

 

His biggest expenses were $62,337.68 for printing, $41,260 for mailing and $29,665 for miscellaneous, which includes money to a DC firm for phone calls.

 

A new employee seems to be Mrs. Chuck Hoskin Jr., but of course it could be some other January Hoskin.   

 

Baker’s total expenditures for the reporting period, which for him ended on the 15^th, were $150,325.53, leaving him $63,702.69 to spend over the last nine days of the campaign.  Which works out to about $7,000 day.  Assuming he doesn’t raise/loan himself another penny.  

Reminder:  Go Vote Saturday.