Members sue over tax payment
Tribe’s action angers members, who say leaders abuse system
By Melvin Claxton and Mark Puls / The Detroit News
For three years, Sylvia Miller tried to get her Washington State tribe to pay the income tax and penalties she owed the Internal Revenue Service stemming from her 1995 and 1996 tax returns.
The Puyallup Indian Tribe Council refused.
But in July 2000, less than two months after Miller was elected to the Puyallup seven-member council, the tribe paid approximately $19,000 to cover her taxes, according to a lawsuit in Puyallup tribal court.
The decision to pay Miller’s taxes was reached in private by her fellow tribal leaders who have refused to discuss the exact amount of the payment or say why they made it.
The Puyallup tribal members who filed the lawsuit say Miller’s case highlights how council members look out for themselves by abusing a system that gives them power to act in secret with little accountability. It is a common criticism of tribal governments nationwide, many of which have resisted pressure from members to make government records and all council meetings public.
The members behind the lawsuit want tribal leaders to remove Miller from the council and have her repay the money. If the council won’t do that, the group wants it to give $19,000 — the amount given to Miller — to each of the tribe’s 2,800 members.
Miller, a former tribal employee, has argued that she was owed the money because the tribe mishandled her 401(k) payments in 1996, forcing her to file taxes late and incur penalties. But the group contends it was Miller’s failure to file taxes over a two-year period, not anything done by the tribe, that led to her IRS problems.
From the beginning, those behind the lawsuit faced an uphill battle. The original lawsuit was dismissed in tribal court because under Puyallup law complaints of ethics violations against council members must be filed with the tribal council first.
“We thought it futile to file a complaint about a decision taken by the council with the council itself,” says Charles Hostnik, the lawyer for tribal members filing suit. “But after the judge ruled that we had failed to exhaust our administrative remedies, we filed our complaint with the council.”
The council’s rules call for it to schedule a hearing within seven days of the filing of an ethics complaint and to give a written decision within three days of that hearing.
Hostnik said after filing the complaint with the council, his clients heard nothing from tribal leaders for nearly two months.
Fifty-two days after filing the ethics complaint with the council, Hostnik went back to court to force tribal leaders to schedule a hearing and deal with the matter. That’s when the council announced that it had indeed met and decided to dismiss the complaint.
The council didn’t notify Hostnik’s clients of the hearing. Tribal leaders say they weren’t obligated to.
Under rules adopted by the council, says tribal attorney John Bell, those who file ethics violation charges are not entitled to be present at the hearings, can’t submit supporting arguments and don’t have to be notified of the council’s decision.
“The council followed the tribal ordinance,” Bell said. “At no time did the council act beyond the law.”
Hostnik’s group has gone back to court to force the council to appoint an independent group to hear the ethics complaint, something which Hostnik said the ethics code allows. A tribal court judge has been reviewing that motion for more than a month.
