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Dispute continues with Northern Ute fiscal management

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Lower court decision stands

DENVER - Two former Northern Ute tribal officials have unsuccessfully appealed their business committee ouster through the courts in Denver, but the tribe itself may end up compensating them for time lost in a running controversy.

At the same time, the Northern Ute Tribe is apparently curbing a business arrangement with a group formed by a former financial adviser who was at the heart of the dispute in the first place.

The conflict is described in 10th Circuit Court of Appeals records and in the tribal newspaper of the Ute Indian Tribe of the Uintah and Ouray Indian Reservation, headquartered in northeastern Utah, where tribal officials and key litigants were not immediately available for comment.

The disagreement over the expulsion of Ronald L. Wopsock, past chairman of the Ute tribal business committee, and Luke Duncan, a former committee member, wound down May 23 in federal appeals court, where they failed to overturn lower court decisions related to the legality of their ouster.

The two had objected to the practices of a former financial adviser, John P. Jurrius, hired by the tribe in 2000, and they eventually filed suit against tribal officials and federal oversight agencies that they contended did not adequately scrutinize or take action against Jurrius' plans to manage tribal assets.

Jurrius' resignation was accepted last September by the business committee. The six-year employee had earned $62,500 in annual salary and 10 percent of revenue he generated from deals he arranged.

Conflict intensified in 2001 when Jurrius withdrew tribal funds from the Office of Trust Fund Management and transferred them to a large banking and brokerage firm in New York in order to get a better rate of interest.

Wopsock and Duncan were expelled by the business committee over concern about Jurrius' standing with the tribe, which was itself divided into factions over Jurrius' financial plan. Jurrius' detractors said key financial information was not available to tribal members, while supporters credited him with tribal prosperity and monthly tribal payments to elders.

Before he accepted employment with the Northern Utes, Jurrius had been a financial adviser for the Southern Ute Indian Tribe in Colorado, where he was involved in a similar factional dispute in which one group alleged lack of access to fiscal records and another group said he had strengthened the tribe's financial base.

As the circuit court summarized the more recent allegations raised by Wopsock and Duncan:

''The Jurrius Group have mismanaged and misappropriated tribal assets by using asset funds to purchase a shopping center and hire an expensive law firm to pursue a risky lobbying scheme regarding water settlement funds.

''They assert that Mr. Jurrius and the Jurrius Group mortgaged the shopping center bought with asset funds and used the mortgage to pay certain tribal members for their political support.

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''Finally, they claim that the financial plan proposed and implemented by Mr. Jurrius and approved by the tribe has resulted in financial and employment losses as well as the mismanagement of various oil and gas leases.''

In mid-February this year, the tribe by resolution approved the prior resignation of Jurrius Ogle Group LLP to ''have no authority to act on behalf of the [tribe 's] Venture Fund or the tribe as its financial adviser.'' The group consists of businesses initiated by Jurrius on the reservation.

A day later, the business committee agreed by a resolution, later rescinded, to compensate Wopsock and Duncan ''for the pecuniary and other losses from seeking or holding office on the Tribal Business Committee from Oct. 21, 2003 - Oct. 21, 2007.'' Instead, on April 7, the business committee approved compensation ''for 1 year 7 months that they would have served as members of the Tribal Business Committee.''

In either case, the compensation seems to constitute a change for the two, who for years sought accountability from the financial adviser, other tribal officials, and the BIA and Office of the Special Trustee - agencies that, they said, should oversee and protect Ute tribal trust assets, including about $190,000 of a government settlement and gas and oil lease money. The settlement was later increased by about $50 million because of penalties and interest.

After Jurrius became the tribe's financial manager, he hired a Chicago-based asset management firm and a second consulting firm to advise the tribe on its investment portfolio.

Financial plans and investment decisions for the tribe drawn up by Jurrius and his consultants were not readily available to tribal members, according to Wopsock and Duncan.

Among those said to have been hired by Jurrius was the Denver law firm of Davis Graham & Stubbs, which, according to the tribal publication, over a recent four-month period billed the tribe $647,958, nearly half of which was for unspecified breach of trust litigation. The firm did not return a request for comment.

In aspects of litigation secondary to their concerns about the fiscal health of the tribe, Wopsock and Duncan maintained that after their expulsion from the business committee, ordinances were enacted that made it difficult for them to run for the committee again.

Generally, the courts ruled that challenges to tribal law were an intra-tribal matter governed by sovereign immunity and that the Indian Civil Rights Act did not apply.

The current issues have roots in a water development dispute that took place more than a decade ago, when the Northern Utes withdrew from a massive federal water project out of concern for their water rights and for the best use of the tribe's water.

The settlement later received by the tribe was provided under legislation that compensated the Utes for federally funded water storage that never materialized. Also at issue was income from oil shale reserve lands conveyed to the tribe by the federal government.

The Bureau of Reclamation water project in question was a transbasin diversion from the Northern Ute area across the mountains to the urbanized Wasatch Front, where Salt Lake City is located.

Water storage was to be provided to the Northern Utes in exchange for the transbasin diversion, but the cash settlement was offered instead under the Central Utah Project Completion Act.

The litigation mirroring the internal Ute tribal dispute began with the allegations of financial mismanagement, followed by complaints and amended complaints over issues of jurisdiction and areas of responsibility that were filed throughout 2004 and 2005 before the appellate court concurred with a lower court ruling disallowing further amendments May 23.