Ute Mountain Ute Tribe to disburse settlement

Ute Mountain Ute tribal leadership has decided to move ahead in distributing $42.6 million in federal settlement money despite lingering concerns about taxes on the money and recent upheavals among the tribe’s top leadership.

The tribe’s 2,110 members were sent forms last week asking each person to choose to receive $12,500 in one chunk or in multiple allotments.

Leadership considered various plans for the money, including one option to give tribal members only a small amount and put the rest toward investments and tribal programs.

But pressure was strong to distribute all of the cash equally among the tribe’s members.

“The tribe, at the urging of the membership,” set aside nothing for tribal operations or “future projected budget shortfalls,” said a letter about the settlement funds distribution.

News of the settlement money first broke in April. The Ute Mountain Ute was one of 41 Native American tribes to receive a portion of a $1 billion settlement that resolved numerous lawsuits alleging federal mismanagement of tribal money and trust lands.

Original calculations indicated each tribal member would receive about $20,000, but in its most recent plan the tribe reserved 28 percent of the money to cover potential costs and taxes should the Internal Revenue Service consider the settlement proceeds as taxable income.

The IRS is auditing several tribes for not withholding taxes from per capita distributions of resource funds, said the letter distributed to tribal members.

Another $3.7 million of the settlement money will be used to reimburse the tribe’s trust fund for advanced payments it sent out to all tribal members in May.

In distributing the money, tribal leadership conveyed a hands-off approach. Tribal members were required to accept full responsibility for negative impacts on their taxes or program benefits. Also, with the decision not to put any money back into the tribe’s coffers, the waiver form required tribal members to acknowledge “it will be my responsibility to use the disbursement funds wisely” as future tribal member benefits are not guaranteed.

Members concerned that the money disbursement would disqualify them for federal or state income-based programs such as Social Security disability income and Medicaid were encouraged to create a personalized distribution plan that would keep them in compliance with those program limits.

The distribution comes three weeks after Tribal Chairman Gary Hayes, at his own request, was placed on 45-day administrative leave, effective June 28. Since then, Tribal Council Vice President Bradley Hight has stepped into the chairman’s seat, the Cortez Journal reported.

At the same time, a petition to recall Hayes has moved forward. Last month, the tribe’s Election Committee verified that petitioners collected the required number of signatures to trigger a referendum vote.

However, it remains to be seen whether the constitution’s referendum provision allows for a recall of an elected official. The language only specifically refers to “any proposed or enacted ordinance or resolution of the Tribal Council.”

Reports that the tribe’s finances are being audited by the federal government have added to the controversy swirling through the tribe.

Those reports are not valid, said Nedra Darling, a spokeswoman for the Bureau of Indian Affairs.

“Our BIA Southwest Regional Office is not aware of any audit being conducted on the Ute Mountain Ute’s distribution of settlement money,” Darling wrote in an email.

ecowan@durangoherald.com