FARMINGTON — A debate over whether to ratify amendments to the Navajo Nation Oil and Gas Co.'s charter took center stage in a Navajo Nation Council committee meeting on Monday.

"What we ask and what we request of you all is to hold off on that legislation," said Lennard Eltsosie, chairman of the company's board of directors, during the meeting in Window Rock, Ariz.

Eltsosie and Navajo Nation Oil and Gas Co. CEO, Louis Denetsosie, presented a report on the company's financial state to the tribe's Law and Order Committee. But the topic of qualifications for board members dominated the conversation.

The company, which is worth about $500 million, has been at the center of controversy over the last few months because of its leadership changes.

Navajo Nation Oil and Gas Co. CEO Louis Denetsosie and the company’s board chairman, Lennard Eltsosie, right, give the company’s annual report
Navajo Nation Oil and Gas Co. CEO Louis Denetsosie and the company's board chairman, Lennard Eltsosie, right, give the company's annual report to the Law and Order Committee on Monday in Window Rock, Ariz. (Noel Lyn Smith / The Daily Times)

A Navajo Nation Supreme Court ruling in June reinstated five board members — Diandra Benally, Jennifer Hatathlie, Mae-Gilene Begay, Nelson Toledo and Eltsosie — who shareholder representatives either suspended or removed at a Dec. 21 meeting. The five reinstated members then fired company CEO Robert Joe and Chief Financial Officer Reuben Mike.

The amended charter, if ratified, would increase the required qualifications of board members. The amendments state members must have direct experience in business and the oil and gas industry, with an emphasis on knowledge of corporate financial statements and financial planning.

Board members can earn up to $500 per meeting, plus mileage if travel and the meeting time is more than three hours. For meetings that last less than half an hour, they are paid $125. In addition, board members can be compensated $250 a day for travel costs, according to tribal documents.

Eltsosie said the tribal council should wait for the forensic audit to be finished before voting on ratifying the new charter. Navajo Nation Oil and Gas Co. hired an accounting firm last week to conduct an audit of the last four years of the company's finances.

Eltsosie also spoke out on Monday against the new qualifications for board members, saying members need to be knowledgeable in traditional Navajo cultural practices.

Speaking mostly in Navajo, he said Navajo people who have been educated don't possess the traditional Navajo knowledge needed to understand prayers and offerings that take place when breaking ground for new wells or during other activities.

He said educated Navajos don't know how to pray and often guess about traditional practices.

"To me, that's not doable," he said in English.

Eltsosie added board members and executives should understand the relationship between Navajos and their natural surroundings, much like a sheepherder. He sided with the current bylaws, which call for board representatives to be from Navajo agencies. The bylaws also allow people with traditional knowledge to serve on the board.

Council Delegate Russell Begaye countered Eltsosie's claim that becoming college-educated correlates with not understanding Navajo traditional practices.

"I just want to speak up for the people who are being educated out there," Begaye said. "I think we will see a high return from the people who are being highly educated."

He said he has met educated sheepherders, including one who has her doctorate.

"Every day, she takes her sheep out," he said.

Young Jeff Tom, a board member with Navajo Oil and Gas Co., said there needs to be a balance between collegiate education and traditional Navajo values. Speaking in Navajo, he said receiving a formal education is important, but prayers and offerings also need to be learned.

After the comments, Eltsosie said he wasn't speaking against educated Navajo people.

"I'm not talking against any educated people because I'm working on my doctorate," he said.

Eltsosie has a master's degree in education, according to published reports.

During Monday's report, Denetsosie said the company will not be able to drill new wells or build new stores because of the financial condition of the company.

According to company projections, Navajo Nation Oil and Gas Co. will have nearly $160 million of outstanding debt in 2015 and will only be able to borrow $110 million from its banks.

Begaye said the tribe might be able to help the company but that would mean using the tribe's permanent trust fund. To access that fund, which holds more than $1 billion, the council would have to develop and approve a five-year plan for the funds. The plan would appear before Navajo voters as a referendum.

"I keep bringing it up that we need to utilize it," Begaye said.

Reporter Noel Lyn Smith contributed to this report.

Erny Zah is The Daily Times business editor. He can be reached at 505-564-4638.and ezah@daily-times.com. Follow him @ernyzah on Twitter.