Joe Shirley Jr.
Joe Shirley Jr. (Erny Zah / The Daily Times)

Farmington — Claims that former Navajo Nation President Joe Shirley Jr. did not properly supervise the Navajo Nation Council's discretionary fund have been dropped.

The claims were dropped in exchange for Shirley providing information to the special prosecutor.

Window Rock District Court Judge Carol Perry signed the motion to dismiss all claims against Shirley, which stem from the July 2011 civil complaint filed by former special prosecutor Alan Balaran.

The civil complaint alleged Shirley breached his fiduciary duty by not properly supervising the Navajo Nation Council's spending of discretionary funds, which were established to provide emergency and hardship assistance to tribal members. The complaint — which named other tribal officials, including 81 members of the council at the time — said Shirley's lack of oversight allowed tribal delegates to make questionable expenditures.

The motion to dismiss was filed Wednesday by attorney Eric Dahlstrom with the Tempe, Ariz., law firm of Rothstein, Donatelli, Hughes, Dahlstrom and Schoenburg, which has been serving as the special prosecutor since October 2011.

Perry signed the motion at 3:27 p.m. on Wednesday, according to the Navajo Nation Judicial Branch.

The dismissal was ordered after the special prosecutor determined the claims made against Shirley in the 2011 civil complaint are "not justified."

The special prosecutor conducted an "extensive investigation" into the allegations and reviewed records, examined evidence collected by Balaran, conducted numerous interviews with witnesses and interviewed Shirley, according to court documents.

"Based upon a careful review of the evidence and the law relating to the claims made in the complaint, the special prosecutor has concluded that the facts and the law do not establish the claims of alleged misconduct made in the complaint against Defendant Shirley and, further, that a trial of the claims made in the complaint against Defendant Shirley would not result in judgment against Defendant Shirley," according to court documents.

In a statement by Shirley attached to the motion, he said he "truthfully" answered questions the special prosecutor asked him on Sept. 13. He provided a statement that day explaining his role as president and his "limited" involvement with the discretionary fund and charitable fund programs. He also talked about his relationships with OnSat Network Communications Inc., which had a contract with the tribe to provide Internet service to the 110 chapters, and BCDS Manufacturing Inc., a failed steel and fiberglass fabrication company in Shiprock.

Shirley wrote that in exchange for providing information to the special prosecutor, he would be dismissed as a defendant in the 2011 civil complaint.

"I also understand that no criminal prosecution or civil proceeding will be filed against me for any matter within the jurisdiction of the Navajo Nation Special Prosecutor based on my actions during my tenure as President of the Navajo Nation," Shirley wrote.

In 2009, the council called for a special prosecutor to investigate Shirley for alleged misconduct in the tribe's business dealings with OnSat and BCDS.

That investigation was later expanded to include delegates' alleged misuse of the council's discretionary fund.

Shirley's Gallup-based attorney, David Jordan, announced in a press release on Tuesday that the special prosecutor planned to file the motion to dismiss.

Jordan also mentioned the special prosecutor found no misconduct by Shirley regarding the tribe's business relationship with OnSat and BCDS.

"This concludes the special prosecutor's investigation of former President Shirley," Jordan said. "We are grateful that the Navajo people will finally have closure."

In an email Wednesday, Jordan said Shirley "does not intend to make any statements other than the press release at this time."

Shirley served as tribal president from 2003 to 2011 and was elected as Apache County Supervisor for District 1 in Arizona in November 2012.

Noel Lyn Smith covers the Navajo Nation for The Daily Times. She can be reached at 505-564-4636 and nsmith@daily-times.com. Follow her on Twitter @nsmithdt on Twitter.