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The Executive Committee hoped that bingo profits would yield $300 a month to each member on the roll, not to mention creating jobs. 25.3 percent of American Indians live in poverty, which makes them the poorest ethnic group in the United States. They also have one of the highest rates of incarceration, more than twice that of an average American. But an outside company, New River Management, who did not have to consult the General Council, was created to manage the bingo hall. Only a handful of Catawba were ever hired, and very little money ever went back to tribe. (One estimate puts the return to the tribe at as little as three cents per dollar of gross income.)
CL viewed five of the quarterly audit reports that New River Management submitted to South Carolina. The state only required the Catawba to pay a prize return of 50 cents to every dollar, but on four of the reports, New River Management gave out returns ranging from 56.7 to 63.9. This excess in payout money resulted in $215,449, $232,309, $381,432 and $394,659 in unnecessary losses. "All they have to do is write down that they gave it away as prize money, and then they don't have to account for it," says tribal member Fred Sanders.
Since the settlement, two former members of the Executive Committee involved directly with tribal finances have pleaded guilty to stealing from the tribe. Last year former executive director Wanda Warren, who oversaw many financial decisions, pleaded guilty to embezzlement of $24,000. Warren sought double reimbursement on what was already a generous stipend for a conference she and other members of the Executive Committee attended in Switzerland in 2000. In 1998 the accountant for the Tribe, Karen Gregory pleaded guilty and was sentenced to 17 months in jail for transferring over $125,000 worth of Catawba assets into her own name. Several members of the Dissident side believe that Gregory was taking a fall for Treasurer Carson Blue. Their suspicion is not without merit. After being released from prison, Blue hired Gregory to work at his private business Tire Town. Before the bingo operation closed down in 2005, The FBI seized financial records under suspicion that New River Management was contributing campaign finances over the yearly limit. Roy Kime, an FBI agent with the Department of the Interior, confirmed to CL that the tribe is still under investigation but would not elaborate on any specifics of the investigation.
With hardly anything to show for the money received in the 1993 settlement, the Dissident side is hoping the judge will uphold a motion that will require Blue to turn over financial records. The dissidents claim that Chief Blue told them in a July 26, 2005 conversation in which they tape-recorded, that he spent the $12.5 million of settlement money allocated for land acquisition to pay salaries of tribal employees (including his own) and on lawyer fees. If true, this would be an illegal expenditure of the settlement money. In August, the tribe sold the bingo hall and Rock Hill Mall for $4 million after paying $5.9 million for the property 10 years ago. Many Catawba believe the money from the sale of the mall will be used to pay more salaries. Chief Blue did not return calls made to his office.
According to Franklin Keel, who presides over 27 tribes from Maine to Louisiana, the tribe lost its Indian Health Services (IHS) and BIA funding, a large part of which went to finance cultural preservation projects like language recovery, "for failing to submit audits required by federal law." Keel says a tribe losing BIA funding "doesn't happen a lot."
"It was both a challenge and an opportunity to make the government work. Many good things got accomplished," says Bender on the financial situation. "Other things that were attempted were not successful for a variety of reasons. Lack of business experience, lack of governmental accounting experience would be two that would come to mind."
Bender points to the BIA's decision to pull funding and South Carolina's "leveling of the gaming playing field" when they began a state lottery in 2005 as major reasons for the drying up of resources. Bender is representing the tribe in two other lawsuits against municipal government, one claiming Rock Hill double charged the tribe for water utilities, and the other suit alleging the state reneged on promised video poker rights. Just a couple of weeks ago, a site was found in Fort Mill that contained historical Catawba relics and burial grounds. Bender says the Catawba were not even consulted about the land. "I always joke that my job as a lawyer for the tribe is to keep the boot heal of the state off the neck of the tribe," Bender says. "And that unfortunately is as true today as it was in 1840 when the state stole the tribe's 144,000-acre reservation."