Letting Down the Tribe

By Jacob V. Lamar

Of all the tales of hard-pressed people, few are more tragic than the history of affliction borne by the Indians of the U.S. Years of reservation life have left many of them mired in poverty and despair. In Washington the Senate's Select Committee on Indian Affairs is holding hearings on the general state of Indian problems, and they seem to be no better than ever: a high rate of alcoholism and mortality, desperate health conditions, low employment and income, rampant child abuse. Bad enough that years of failed policies administered by the Bureau of Indian Affairs have contributed to the difficulties. Now the committee has discovered a style of corruption usually associated with the white man.

A key figure in the lawmakers' investigation is Peter MacDonald, 60, Chairman of the Navajo nation, whose reservation encompasses 17 million acres in Arizona, New Mexico and Utah. Raised to be a medicine man, MacDonald went on to become a successful aerospace engineer. In the 1960s he gave up a lucrative job to return to his people and help manage their finances. It turns out, investigators say, that he managed only too well.

Elected tribal Chairman in 1970, MacDonald set out to improve the Navajos' economy by demanding better prices for the tribe's oil, coal and natural-gas reserves. Along the way, say his critics, the Chairman spent tribal funds profusely. He reportedly hired a public relations firm for $1.5 million. He had his office in Window Rock, Ariz., remodeled for $600,000, of which $4,800 alone went to pay for carved office doors. He chartered a jet for more than $18,000 to take him and his family to the 1988 Orange Bowl.

At the same time that his accusers say he was depleting the tribal treasury, MacDonald was considerably improving his own financial state, supplementing his $55,000-a-year salary with lavish "gifts" from outside contractors. His critics did not call him "MacDollar" for nothing. Testifying under immunity before the Senate committee, MacDonald's son Peter Jr. said that when his father needed cash, he would call a benefactor and ask for "golf balls," MacDonald Sr.'s code word for $1,000 cash payments. MacDonald Jr. would then collect the bribe.

The most serious allegation facing MacDonald -- who has yet to respond to a committee subpoena -- concerns a tawdry kickback scam. In July 1987 MacDonald arranged for the Navajos to buy the 491,000-acre Big Boquillas ranch near Seligman, Ariz. The tribe paid $33.4 million for the place, which only two days earlier had been purchased by an oil company for $26.2 million. Real estate broker Byron ("Bud") Brown testified that when he was fixing the deal with MacDonald, the Navajo leader smiled and said, "I assume I'll be taken care of." Replied Brown: "Certainly."

For his part in the scheme, MacDonald was to receive up to $750,000 in cash payments. By the time the plot was exposed, Brown says, he had given MacDonald $75,000 in cash and use of a $55,000 BMW. Most of MacDonald's fellow Navajos did not share in his good fortune; they continue to live their old, hardscrabble life. Fully half of all Navajo homes, for example, have no electricity or flush toilets.

But there's always bingo. According to federal officials, the game has become a $400 million business on the nation's reservations, and for an obvious reason. Since federal laws give Indians some of the privileges of independent countries, gambling operations are free from state regulation. Thus while most church bingo games in the U.S. might permit a maximum prize of $250 a card, the Indian version can offer as much as $50,000 for a single game. Several tribes hire management companies to run their bingo enterprises, and some of these companies, says the FBI, are fronts for organized crime, which skims the profits, leaving a pittance to the Indians. At least the Navajo nation is spared this form of corruption, since bingo is unpopular there; but those looking for a big-money game can always find one on a neighboring reservation.

/ MacDonald denies the litany of charges lodged at his mahogany door. He claims that the testimony in Washington is unsubstantiated and unfair and that he is the victim of an attempt to divert attention from mismanagement in the BIA.

When the tribe's 88-member council voted to place him on indefinite leave with pay, MacDonald got himself reinstated by appealing to a Navajo tribal judge, who happens to be his brother-in-law. But last week the tribe's supreme court challenged the reinstatement. A new judge will hear MacDonald's latest appeal. Says Navajo Peterson Zah, a MacDonald rival and former tribal chief: "MacDonald has let the Navajo people down."

With reporting by Jerome Cramer/Washington and Nancy Harbert/Albuquerque