B-113003 March 5, 1953

B-113003: Mar 5, 1953

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Secretary: Reference is made to letter of December 1. Chavez while he was employed as District Agent at the Zunci Sub-Agency of the United Pueblos Indian Agency. It is reported that as part of the duties assigned to Mr. Chavez by the Superintendent of the United Pueblos Indian Agency he was charged with the general supervision of the Ramah Navajo Cooperative Store operations including assistance to the tribal officials and the store manager in the management and administration. That the funds involved did not represent money advanced from tribal funds in the Treasury belonging to this group of Indians but were derived from local activities of the Indians largely under their control. It is indicated in the investigation report that Mr.

B-113003 March 5, 1953

The Honorable The Secretary of the Interior

My dear Mr. Secretary:

Reference is made to letter of December 1, 1952, from the Administrative Assistant Secretary, transmitting a copy of report of the investigation of alleged financial irregularities by Mr. Pete A. Chavez while he was employed as District Agent at the Zunci Sub-Agency of the United Pueblos Indian Agency, and requesting a decision as to whether salary, lump-sum payment for annual leave, and the amount to his credit in the retirement fund may be applied against shortages disclosed by such investigation.

It is reported that as part of the duties assigned to Mr. Chavez by the Superintendent of the United Pueblos Indian Agency he was charged with the general supervision of the Ramah Navajo Cooperative Store operations including assistance to the tribal officials and the store manager in the management and administration, and the co-signing of all checks for the enterprise, and that the funds involved did not represent money advanced from tribal funds in the Treasury belonging to this group of Indians but were derived from local activities of the Indians largely under their control.

The investigation disclosed (1) that Mr. Chavez withheld cash in varying amounts from bank deposits made for the store: (2) that he persuaded another employee of the Zuni Sub-Agency to sign the name of a co-signer to a blank check and later chased it; (3) that he submitted a false voucher, purportedly on behalf of an Indian, to the Aldrich Butane and Transport Company and retained the proceeds; (4) that he paid an attorney $200 of an amount of $375 given him by Inidians to represent one of them in a court case but failed to account for the balance of $175; (5) that he failed to account for $2,584.19 (including the foregoing items) of the total cash and negotiable items belonging to the Ramah Navajo Cooperative Store, the Zuni tribal fund and to various individuals, which came into his possession during the period October 1, 1948, through September 15, 1951.

It is indicated in the investigation report that Mr. Chavez was bonded to Eric T. Hagberg, Special Disbursing Agent, and his Deputy Disbursing Agent, but it is stated therein that the bond appears to cover Mr. Chaves' activities only insofar as they relate to handling property or funds of the United States Government. The Articles of Association of the Ramah Navajo Cooperative Store provide for the bonding of any officer or employee handling funds of the association in an amount satisfactory to the board and offices in charge. However it is reported that no officer or employee was required to obtain a bond of any nature.

It is further stated in the letter of December 1, 1952, that charges are being preferred against Mr. Chaves and he will be placed in a leave status pending final settlement of the case.

Since, as above indicated, the funds here involved did not consist of appropriated funds or money advanced from tribal funds in the Treasury, but rather represented moneys belonging to the individual Indians and to the Ramah Navajo Cooperative Store, it is apparent that a loss to the Government did not result from Mr. Chaves' wrongful conversion thereof. Hence, there is no debt due the Government by the employee at the present time. So far as concerns his liability to the individuals who suffered the loss, it has consistently been hold that there is no authority to apply amounts in possession of the United States in satisfaction of claims of private individuals against the employee. See 5 Comp. Gen. 6; 9 id. 353; 31 id. 363. Accordingly, the salary, lump-sum payment for annual leave, and the amount to Mr. Chaves' credit in the retirement fund may not be applied against the involved shortage.

Sincerely yours,

Lindsay C. Warren Comptroller General of the United States