The Nebraska U.S. Attorney’s office has launched an investigation of past and current members of the Omaha Tribal Council suspected of stealing of federal funds, embezzlement and conspiracy.
The investigation is related to incentive payments tribal council members gave to themselves and to other tribal employees in 2012, according to a letter from the U.S. Attorney’s Office to those being investigated.
Jan Sharp, chief of the Criminal Division for the U.S. Attorney's Office in Omaha, declined to comment about the investigation.
Maurice Johnson, attorney general for the northeast Nebraska tribe, also declined to comment, except to say, “We are fully cooperating.”
U.S. Attorney Deborah Gilg sent a letter April 12 to an unknown number of people informing them her office is investigating at least five possible violations related to the 2012 incentive payments, including theft from federally funded programs, theft or conversion of funds from a tribal organization, theft or embezzlement in connection with health care, conspiracy and criminal activities involving contracts related to Indian Self-Determination and Education Assistance funds.
A 2013 audit conducted by Omaha accounting firm BKD at the tribe’s request showed the tribal council granted nearly $389,000 in incentive payments in 2012 to council members and other tribal employees.
It said tribal finance employee Barbara Freemont approached two tribal council members in August 2012 to propose paying employees who helped gather information needed for a lawsuit against the federal government.
The Omaha Tribe, with headquarters in Macy, had joined a lawsuit alleging the federal government failed to adequately reimburse tribes for their support costs as required by the Indian Self-Determination and Education Assistance Act, which allows tribes to take over services once provided by the federal government and requires the government to pay their costs to do so.
In June 2012, the U.S. Supreme Court ordered the federal government to pay the tribes’ contested support costs.
According to the BKD audit, Freemont talked to then-Omaha Tribe Chairman Amen Sheridan and then-Treasurer Jeff Miller about paying tribal employees for helping the tribe submit information needed for the lawsuit.
“Ms. Freemont indicated she was aware another tribal member had recently been paid an incentive for successful efforts to secure a grant for the tribe and felt that one would be appropriate in this instance as well,” the audit states.
Freemont began working with Jessica Webster, administrative officer of the tribe’s health center, to draft a proposal to present to the tribal council for the incentive payments. Webster indicated she expected the Omaha Tribe to receive $8.9 million from the federal government as a result of the lawsuit.
Their final proposal called for the following.
* Each of them would receive more than $89,000.
* Three tribal employees would get nearly $27,000 each.
* Six council members would receive more than $13,000 each.
* Three administrative personnel, $3,000 each.
* Former treasurer Miller, more than $40,000.
Their proposal called for the money to come from the tribe’s health center as the tribe had not yet received its judgment from the federal lawsuit.
Freemont and Webster initially had considered giving each council member $9,000 but later decided to increase that.
“I feel they won’t complain about our payment if they get a little more,” Freemont wrote in an email to Webster.
The two women then began approaching individual council members to try to gain their support for the incentive proposal. They received mixed reactions, with at least two council members refusing, according to the audit.
Still, on Nov. 5, 2012, one day before tribal council elections, the council voted to approve the $389,000 in incentive payments. The audit showed several recipients of the payments, including Webster and Freemont, actually cashed their checks even before the council voted to approve them.
An accountant for the tribe later told the tribal council the tribe had not yet received payment from the federal government and that she believed the incentive payments weren’t allowable, according to the audit.
“Several tribal council members indicated to BKD that it was at this point they became concerned regarding the circumstances surrounding the payments,” the audit states.
The council decided to perform an internal investigation, and Freemont and Webster were subsequently suspended. Webster later resigned as administrative officer for the tribe’s health center.
The council asked those who had received the incentive payments to repay the money, although just one recipient had actually done so at the time the audit was conducted.
The council officially rescinded the incentive payments through a March 2013 resolution and hired BKD to perform its audit. The council also voted to repay the tribe’s health center using tribal funds.
Of those who received incentive payments, at least four still serve the tribe, including Webster, Freemont, Jeff Miller and Rodney Morris. Webster was elected to the tribal council and now serves as its treasurer, while Freemont works for the health center.
One Omaha tribal member said he is glad to see the U.S. Attorney’s Office investigating.
Charles Baxter said he hopes federal authorities will also investigate the tribe’s use of federal funds for assistance payments to members and travel money for employees.
Indeed, the BKD audit expressed concern about council members being able to provide assistance payments to tribal members leading up to an election.
“One issue that was brought to BKD’s attention was the possibility of assistance payments to tribal members being used to ‘buy votes,’” the audit says.
Baxter said he approached federal authorities about tribal corruption several years ago but was ignored, and he fears federal authorities simply don’t care.
“They’re aware of how the money is being spent, but they don’t give a damn.”