WINDOW ROCK, Ariz. — A Tribal Council resolution demanding immediate removal from office of Navajo President Joe Shirley Jr. and Vice President Ben Shelly failed in a 45-18 vote Tuesday.

Legislation to put top executives on investigative leave went before delegates on the second day of the Council's fall session, following a five-hour executive session Monday called to discuss the details of ongoing investigations and alleged legal violations arising from the Nation's questionable contracts with OnSat Network Communications and Biochemical Decontamination Systems, or BCDS.

"The reports reveal serious impropriety and serious violations within the executive branch of the Navajo Nation," Council spokesman Joshua Butler said.

Shirley, who took office in January 2003, was in meetings Tuesday to discuss the Council's proposed action and was unavailable for comment.

The Council began drafting emergency legislation Monday to put Shirley and Shelly on leave with pay. The legislation also alleges seven additional former or current Navajo officials, including former Shiprock Chapter President Duane "Chili" Yazzie, of ethical, civil or criminal involvement with the two companies.

As president, Yazzie accepted consulting fees of about $50,000 for guiding BCDS through the loan application process, an action that raised questions about ethics in office and conflict of interest.

Also named for investigation and possible prosecution are directors of the Navajo divisions of economic development, community development and public safety, the Nation's controller and the president's chief of staff, Patrick Sandoval.

The bill called for the investigation of all individuals named to be forwarded to the Navajo attorney general and the Window Rock, Ariz., district court for special prosecution.

The measure failed to pass with a simple majority vote.

However, after the defeat vote Tuesday, the Council decided to meet in special session next week to revisit the proposed action.

The Council, which can vote on proposed suspension as often as it wants, first exercised its right to put the president on leave in 1989 when it suspended Chairman Peter MacDonald. MacDonald later was convicted of federal crimes, including fraud, extortion and bribery. He served time in federal prison.

The Council has voted to suspend other presidents since, Shirley spokesman George Hardeen said, but it lacks the authority to permanently remove an executive from office.

A special prosecutor has to review the case and find the person in question guilty of a criminal or ethical violation.

"There are many who feel there is not enough evidence to put both the Navajo Nation and all the people through this yet again," Hardeen said of the proposed legislation. "You need some egregious violations to do this. They just don't exist."

If the top two executives are eliminated from office, the legislative branch can appoint a replacement, Hardeen said. He called the Council's proposal a "planned takeover of the president's office" and warned that dismissing the president would make the tribe look unstable as it seeks financial and other support from the federal government.

"There are many practical reasons that doing this is impractical for the Navajo Nation," he said.

Hardeen also faulted the Council for its timing. The proposed action comes on the heels of Shirley's initiative to cut the legislative branch from 88 delegates to 24.

Among those voting for immediate suspension Tuesday was Shiprock Delegate Leonard Anthony. The other two Shiprock delegates, GloJean Todacheene and Pete Ken Atcitty, voted against the bill, as did Upper Fruitland Delegate LoRenzo Bates.

Anthony said the investigation was long overdue, and the results were alarming.

"The laws of the Navajo Nation (were) violated, and officials are charged by the people to make sure there's fiduciary responsibility," Anthony said. "The report revealed serious legal violations. The investigation identified names, and unfortunately, the names were alarming, but the people have the right to know."

Other delegates said they voted against the bill because of language.

"The reason I voted no was not necessarily to prevent it from happening, but because of the way the legislation read," Bates said "It just wasn't clear."

George Arthur, delegate for the San Juan, Nenahnezad and Burnham chapters voted in favor of the suspension, as did Edward Jim, delegate for the Newcomb, Greyhills and Sheepsprings chapters. Delegates for the Hogback and Beclabito chapters voted against it. Delegates for the Nageezi and Sanostee chapters did not vote.

The Nation entered into a $1.9 million contract with the Utah-based OnSat Network Communications in 2001.

OnSat agreed to provide satellite Internet services to all 110 chapters on the Nation, but service was disrupted after the tribe stopped making payments, claiming the company had overbilled for services and the Nation paid for services not delivered.

The Nation owns 51 percent of the Shiprock-based company Biochemical Decontamination Systems, or BCDS, a corporation created to seek large federal government contracts for the sale of metal fabrication products.

The Nation invested $300,000 in the company in 2003 from the Business and Industrial Development Fund.

In July 2006, the Nation approved using the Navajo Dam Escrow Fund, an account established through settlement between the Nation and the city of Farmington, to back a $2.2 million JP Morgan Chase loan to finance a 100,000-square-foot expansion of BCDS. Shirley signed an agreement with the bank in September 2006.

A Daily Times investigation and a 2008 Navajo Nation review of the steel and fiberglass fabrication company found the governing agencies that approved the loans and investments failed to properly investigate the company and its former CEO, Hak Ghun. Ghun was one of seven individuals convicted of fraud in a 1984 case involving $11 million.

The Nation's 2008 audit also found BCDS was $4.7 million in debt and Ghun intermingled his personal funds with corporate funds, using $3 million in corporate dollars to pay personal expenses.

Ghun was ousted from his position in October 2007, but he still is a BCDS shareholder, a complication that hinders recruitment of manufacturing companies to take over the factory and the loans.

The Council has not released the investigative reports to the public.

The Council continues with its fall session today.

Alysa Landry:

alandry@daily-times.com