Opinion ID: 757097
Heading Depth: 2
Heading Rank: 1

Heading: The Construction Conspiracy

Text: 6 In 1985, Congress enacted the White Earth Reservation Land Settlement Act (WERLSA). 25 U.S.C. § 331. The purpose of the WERLSA was to settle numerous claims involving large portions of land on the Reservation. Id. As part of the Act, the United States appropriated $6.6 million for economic development for the benefit of the White Earth Band of Chippewa Indians. Id. In 1991, the RTC authorized the use of approximately $5 million of this money for construction of a casino on the Reservation called the Shooting Star Casino (Casino). The Casino project involved approximately $24 million. 7 The RTC appointed Clark to oversee construction of the Casino. 3 The RTC also hired Indian-owned Gordon Construction, Inc. (Gordon) to act as general contractor for the project. Gordon subcontracted with Northern Drywall and Construction, Inc. (Northern) for installation of drywall and various painting services. Northern did not submit a formal bid for the subcontract. Prior to the subcontract in question, Northern had only worked on small construction projects, and in the years prior to the Casino project, Northern's gross revenues never exceeded $50,000. Clark owned Northern, and he served as its president. 8 Construction of the Casino began in mid-1991 and was completed within one year. The Casino was quite successful; it created more than 1000 jobs and generated millions of dollars in revenue. In 1993, for example, the Band grossed $50 million, a majority of which came from the operation of the Casino. The RTC had control over the Band's spending of all non-federal revenue such as the revenue from the Casino. 9 In 1993, the civil examination unit of the Internal Revenue Service (IRS) conducted an audit of Northern. During the audit, examiner Greg Nygren discovered Northern had made payments to Wadena totaling over $428,000. Northern made the first payment to Wadena in July 1991, about four months before the drywall subcontract was publicized. In response to inquiries about the payments, Clark and Wadena claimed Wadena held an undisclosed ownership interest in Northern, and the payments represented Wadena's share of profits from Northern. However, Wadena never mentioned this alleged ownership interest on his 1990 financial statements or on loan applications he submitted in 1990. Further, Northern's accountant did not know of Wadena's alleged interest. Later, Clark falsified and backdated Northern's corporate minutes and stock certificates in an attempt to document Wadena's ownership interest in the company. 10 In 1992, Northern also made a payment to Rawley in the amount of $15,000. Clark and Rawley claimed the payment was for consulting services. In reality, Northern made the payment to Rawley to secure Rawley's silence about Northern's payments to Wadena, who was Rawley's long-time political rival. 11 The government indicted Clark, Rawley, and Wadena on August 29, 1995. The Indictment charged defendants with eighteen counts arising from the construction of the Casino. Count 1 alleged that all three defendants conspired to misapply tribal funds, in violation of 18 U.S.C. §§ 371, 666, and 1163. The object of the conspiracy was to use tribal funds for personal gain in the construction of the Casino. Counts 2 through 18 alleged the defendants engaged in various acts of money laundering and misapplication of funds in furtherance of the conspiracy. 4 The jury convicted Clark, Rawley, and Wadena of all counts related to the construction conspiracy.