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Tribe sues to control $900K in grant funds

BARAGA – The Keweenaw Bay Indian Community has filed a lawsuit in Tribal Court against the Keweenaw Bay Ojibwa Housing and Community Development Corporation (CDC), its board of directors and Executive Director Eddy Edwards, who also serves as a KBIC Tribal Council member. The KBIC alleged Edwards “illegally removed funds from the KBIC reservation,” according to the complaint filed with the court, and demanded that nearly $900,000 in grant money, notes and mortgages be returned to tribal control.

The tribe is also demanding a full accounting of the “status, distribution and location” of funds from a $250,000 community development grant the CDC received and is administering. The complaint says the grant legally required a KBIC Certificate of Good Standing, which was never granted due to deficiencies in the CDC’s reporting.

According to the complaint, Edwards incorporated the current CDC in 2013 as a Michigan-licensed nonprofit, then merged it with an existing CDC with the same name that had been incorporated under tribal law – a merger the complaint says is illegal under both state and tribal law – with the cooperation of board members.

Earlier this year, when the tribal council repealed an ordinance creating the Ojibwa Housing Authority (OHA), which Edwards had also directed and which was the original CDC’s parent organization, Edwards maintained control of the new CDC and moved it physically off the reservation to downtown L’Anse.

According to attorney Joseph O’Leary, who is handling the tribe’s case alongside Assistant Tribal Attorney Danielle Webb, the main question before the court is whether the funds were transferred improperly, “outside the purview of the council.”

He’s confident the transfer was improper.

“The money was meant to be operated by and for the (KBIC) government,” he said. “The grants were given to KBIC in partnership with the housing authority.”

O’Leary is Baraga County’s prosecuting attorney but is working privately on the tribal litigation.

Edwards maintains the financial transfers were legitimate, and the existing CDC is fulfilling the original’s intended role.

“The loan funds discussed in the lawsuit are all active and currently deployed in the form of loans to tribal members, as per the grant agreement and MOU (memorandum of understanding),” he wrote in an email. “The KBOHCDC is actively assisting mostly low-income tribal members and other community members in building their assets and increasing their self sufficiency.”

Edwards has not yet filed a response to the tribe’s complaint, but said he’s spoken to several lawyers interested in taking the CDC’s case.

Prior to its dissolution, the OHA had been operating as an autonomous tribal organization that received grants and did business under tribal auspices but was not under direct tribal council control. Just how much power the council should have over the OHA became a bone of contention in 2013 when the council asked for an OHA audit, and Edwards and the OHA board allegedly refused to provide full disclosure.

Edwards resigned from his role leading the OHA around the time it was dissolved, and the organization became the KBIC housing department, with most of the same staff and duties, but under direct council control.

Edwards is also involved in two other cases against the tribal council, both as the plaintiff. In one, he’s suing the council on behalf of the CDC for mortgage payments he says the Rez Stop, a tribal-owned business, stopped making to the CDC after the CDC broke away from the tribe.

In the other case, he’s suing individually to compel the council to hold tribal referendums to approve any expenditure greater than $10,000. The KBIC’s constitution states such referendums are required, but the rule has largely been ignored for decades.

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