Mille Lacs Band fraud claims multiply

ONAMIA, MINN. - Rjay Brunkow, solicitor general for the Mille Lacs Band of Ojibwe, said he knew something was fishy when tribal money that was set aside for school construction last year also paid for a $1,600 replica French toilet and an $800 waterfall faucet.

"We said, 'What building has this in it?'" Brunkow said.

The exotic fixtures had been installed in the home of the tribe's chief executive, Melanie Benjamin, a revelation that helped form the basis for her removal last month from the central-Minnesota Indian reservation's highest office. Benjamin denies any wrongdoing and says she'll fight to regain the office she'd held since 2000.

But the dispute, which has divided members of the band and eroded trust in what was long considered one of the state's most progressive tribal governments, is linked to a far wider investigation.

Last week, Brunkow revealed that a yearlong "active criminal investigation" by the FBI, the U.S. Bureau of Indian Affairs and a Twin Cities law firm hired by the tribe has uncovered massive fraud within the band's Community Development Department, involving tribal building projects. No criminal charges have been filed, but the band has fired its commissioner of community development and five department employees, all of whom were implicated along with Benjamin in having personally received services or materials from public projects, Brunkow said.

So far, employees and contractors appear to have diverted more than $1 million in band and federal money that was meant for two schools, a homeless shelter and 20 homes for low-income people, Brunkow said.

In one case, the contractor was paid $207,000 to build a nonexistent fourplex at an address that would place it in a swamp. In another, a $140,000 home project exceeded its budget by $212,000. The publicly financed home, to which custom cabinets, a wine cellar and sauna were added, was for the commissioner's assistant. She was fired along with her boss.

Bid-rigging, forgery

According to Brunkow, the investigation began last year, when a contractor complained about a project manager in the Community Development Department.

Brunkow, whose office was assigned to look into it, said they soon found evidence that the manager had falsified bids in order to steer work toward a friend.

The project manager also had set up a $1.5 million "draw account" at a Home Depot, supposedly for project materials. Many of the unauthorized diversions appear to have been made from that account, including more than $8,600 for Benjamin's plumbing and fixtures. The band also was billed almost $25,000 in labor and other material for Benjamin's project, according to a summary of the investigation's findings. Not all of that was paid, and Benjamin later reimbursed the band more than $11,000, leaving almost $6,000 not reimbursed, the summary said.

The project manager and contractor implicated in most of the fraud also arranged and did the work on Benjamin's house.

In an interview, Benjamin said she's the victim of "political maneuvering" and "sloppy bookkeeping." She said she is one of many tribal members who got a $35,000 home-improvement loan from the Community Development Department. The department requires invoices from contractors, Benjamin said, to ensure that the loans aren't used for purposes other than home improvement. She said that makes it appear she was billing the band, when she followed the rules and has been repaying the loan.

Brunkow disagreed that Benjamin followed proper procedures. Regardless, "that would not explain Home Depot," he said.

Benjamin's attorney, Andrew Birrell, said "she's a victim of people who were hired to do the work on her house, and things were not done correctly."

'Diamond Club' perks

Documents also accuse Benjamin of taking more than $50,000 in illegal casino "comping" privileges, such as concert tickets and dinners. She said the band's casinos offered the perks to all tribal elected officials as part of a marketing strategy, and she used the freebies to entertain and assist tribal members and guests.

"Everyone knows when you're in elected office you receive a lot of perks and things of that sort," Benjamin said. "And so I thought if there's some way I can at least extend that out to the band members, I'm going to do that."

Brunkow said that the band stopped extending special casino privileges to its officials in 2004, after the National Indian Gaming Commission ruled it improper. That makes them the same as other customers, who earn "comps" based on their frequency and level of play.

But Brunkow said Benjamin, after 2004, somehow was issued a "Diamond Club card that was nowhere near commensurate with her play," which should have entitled her to only $600 in free services since then.

Band members elected Benjamin to her third term in June. In September, by executive order, she prohibited release of the band's internal investigation report, due out that month.

Those seeking her removal saw the order as an attempted coverup and added interference with the investigation to the alleged acts of "malfeasance" in the removal petition.

That petition, signed by more than 20 percent of band members, triggered the vote by the band's four other elected officials to remove Benjamin, despite a stay Benjamin won from a tribal appeals court judge. Benjamin charged that the stay made the removal a "lawless" violation of the band's separation of powers.

The band's full appeals court later ruled that the Minnesota Chippewa Tribe's constitution, which the band follows, gives the legislative branch unreviewable authority over removal decisions.

Last week, Benjamin said she plans to file to run in the special election that will be scheduled as a result of her removal. The constitution allows her to do so unless she is convicted of a felony or any crime of theft against an Indian band.

"The truth has to come out," Benjamin said. "If I don't keep going, I'm afraid the truth will be buried."

Sandra Blake, one of the band's elected district representatives, said that once she and her fellow elected officials saw the evidence against Benjamin, they had a constitutional duty to remove her. She acknowledged that the band's reputation for using its casino funds for the public good has suffered a blow.

"This is a hard time for our community," Blake said. "But we will come out OK ... We're working to maintain the integrity we've always had."

Larry Oakes • 218-727-7344