William Kemble resigns as Treasurer of the Osage Nation

Osage Nation Treasurer William Kemble resigned from office effective Feb. 9. The announcement comes in the middle of the 15th Special Congressional Session, which was called for investigating whether 11 allegations made against Kemble warrant a removal trial.

“I have accepted Mr., Kemble’s resignation today, with regret and best regards for his future. Michael Lewis, Controller, will supervise the day-to-day activities of the Accounting Department until a new Treasurer is appointed,” said Principal Chief John Red Eagle in a prepared statement. Chief Red Eagle is in Washington, D.C. attending the National Indian Gaming Association Legislative Summit for tribal leaders. “I will take the time necessary to properly consider qualified candidates for the position.”

This is the latest turn in recent events involving Kemble, whose Treasury office and recent accounting transactions and policy changes have been scrutinized by governing officials since last year. A Congressional committee conducted an investigation of the accounting practices and Kemble’s role in them last July.

A second investigation started Feb. 6 with the 15th Special Session, which is formally needed for the Select Committee of Inquiry to conduct its investigation. Congress voted to form the select committee last month after the 11 allegations were raised in a motion to form the select committee. Those allegations are a mix of the events raised during last year’s investigation and newer developments involving accounting/Treasurer practices.

Kemble submitted his written resignation to Principal Chief John Red Eagle and the Second ON Congress on Feb. 8 in which he lists objectives completed as Treasurer and responds to the 11 allegations in a 17-page letter.

Appointed in October 2010 by Chief Red Eagle as the Nation’s second Treasurer, Kemble opens his resignation letter stating that he hoped to work in “an environment of collaborative leadership” and referred to Chief Red Eagle’s dismissal of Executive Branch lawsuits (filed during former Chief Jim Gray’s administration) against Congress when he took oath in August 2010 as an example.

“I am content with the services that I have already provided and it has been my pleasure to serve within our tribal government,” wrote Kemble. “However, I do not agree with the direction and leadership in which our elected officials have taken with Constitutional provisions or appropriations that would expend from the Nation’s Treasury Funds (i.e. Savings). I appreciate the opportunity that I have had as the Nation’s Treasurer but wish to further my education and career toward other endeavors. Therefore, as of February 9, 2012, I am resigning from service as the Osage Nation Treasurer.”

The Select Committee of Inquiry has also yet to receive formal communication from Chief Red Eagle regarding Kemble’s resignation, said Congressman Daniel Boone who sits on the five-member committee. According to Congressional rules, the Congress must form a Select Committee of Inquiry (after a majority vote approving the motion is taken) to investigate any allegations raised against an elected or appointed government official to determine whether there are grounds for a removal trial.

Kemble, who spoke with the Osage News Feb. 6, said rumors of him resigning at the time were not true. That morning, he sent the Nation’s 2011 fiscal year quarterly reports to the Osage News, which was also addressed to Chief Red Eagle and Congress. The reports are also posted to the Treasury Department’s online page on the Nation’s Web site.

The Nation’s quarterly financial reports have also been an issue Congress raised because Kemble had yet to provide regular financial updates to the Legislative Branch as well as publish the quarterly reports in the Osage News, which is a mandate, listed in ONCA 06-02.

Kemble wrote when he started his post, he noted prior quarterly reports “did not encompass all the Osage Nation’s governmental programs and enterprises since they did not include information about our enterprises’ financial position and activities or about the Nation’s federal and state funded programs’ financial position and activities. Rather, the past quarterly financial reports only presented how tribally-generated monies funded our governmental programs… I knew I would need to focus on the accounting system, but did not yet have inside working knowledge of the accounting system.”

The Nation’s accounting department was using multiple software programs when Kemble started, which he said is not set up to report all of the Nation’s government and enterprise financial activities. To address the issue, Kemble said the Treasury Department planned to mitigate into a single accounting software last year, which was completed with the Nation’s 2012 fiscal year start.

Per Congressional rules, the Select Committee of Inquiry shall hold its meetings in executive session for the most part, but Kemble questioned the rule, telling the Osage News that he had nothing to hide and said the Treasury department is one of the Nation’s most transparent operations. “I… don’t understand (the committee’s rules of procedure) to hold their meetings in private when so much has already been publicized and I have mentioned that I have nothing to hide and promote transparency,” he wrote.

On Feb. 6, four committee members present at the initial meeting elected Congresswoman Alice Goodfox as committee chairperson during the first few minutes of the select committee meeting held in public. Other members are John Free, Daniel Boone, Raymond Red Corn and Geoffrey Standing Bear who was absent for the Feb. 6 meeting. The committee also scheduled a meeting Feb. 8.

The select committee convened after the Congress held its Day One session that morning. There were no opening statements from Principal Chief John Red Eagle (who was absent) or Congressional Speaker Jerri Jean Branstetter who typically give opening messages on behalf of their respective government branches at the beginning of a session.

The four select committee members also voted to hire Crowe & Dunlevy as the law firm representing the committee with attorneys Gerald Jackson and Michael McBride who will work with the committee, before voting to enter executive session.

The special session will run its course while the select committee holds meetings as needed, which are announced in advance. Congress voted to recess until Thursday Feb. 9 at 10 a.m. because Congress may not adjourn more than three days during a session, according to the Constitution.

Kemble, who faced an initial Congressional committee investigation last summer, said he  was “looking forward” to the latest Congressional investigation because it raised issues of “separation of powers” between the legislative and executive branches.

For example, Kemble noted that some tribal laws (including ONCA 06-02 creating the ON Department of Treasury) require Congressional approval of policies and procedures, which he said he finds “interesting. It’s been my knowledge that policies and procedures are used to follow the law,” he said of organizations using policies and procedures that are not set into law.

The policies and procedures issue has been a sticking point since the Congressional Committee on Government Operations conducted an investigation of Kemble’s office and accounting transactions last summer.

Congress received tips of potential problems with the office and transactions, called a July 2011 special session and issued subpoenas for testimony from Kemble, 10 accounting staffers and documents/records for the investigation. The investigation revealed that Kemble made policy and procedure changes without Congressional approval as required in ONCA 06-02, according to a September 2011 written report by the government operations committee.

According to the report, the government operations committee found: “The Treasurer has implemented new policies and procedures, in the absence of an emergency, without submitting them to (Congress) for approval in violation of the Treasury law; has failed to adhere to the existing approved policies and procedures; and has moved Minerals Council funds without the knowledge and authorization of the members.”

The report refers to instances where the Nation’s funds deposited into a Pawhuska bank were uncollateralized because the fund balance was over the collateralization limit set by the bank. If the bank were to fail or be damaged by a criminal act or severe weather, the uncollateralized money would not be protected. Kemble responded by moving money to another bank in June 2011, which raised another issue because Osage Minerals Council account money was also moved without the council members’ notification.

The bank at issue, First National Bank of Pawhuska, asked Kemble to temporarily move money out of accounts to make the total deposit of all ON accounts under the $2 million collateralization limit, according to the report. Chief Red Eagle, Assistant Principal Chief Scott BigHorse and Kemble met with FNBP officials and requested a higher collateralization limit, but the bank declined.

Kemble maintains the money was moved to safeguard it, adding there was no money lost. He said the collateralization issue has been addressed by reducing the amount of tribal funds kept at FNBP and those funds are kept in other accounts at Citizen’s Bank of Oklahoma and Osage Federal Bank, both in Pawhuska. “It’s no longer an issue, we’ll stay under $2 million (collateralization limit),” he said.

Kemble also took issue with the mandate that Congress must approve policies and procedures in his letter. “From another perspective, if the Treasurer were to develop (policies and procedures) that were inappropriate or insufficient but were approved by the legislature; any policy and procedure hearings upon the Treasurer by the legislature would seem like a ‘conflict of interest’ since the legislature should ultimately be held responsible for the (policies and procedures).”

Several Congress members have publicly stated the Legislative Branch has responsibilities to provide oversight to enhance government accountability since the July 2011 investigation started and publicly raised questions regarding the Treasury operations.

Before leaving office, Kemble wrote that he has provided Chief Red Eagle with a drafted policy and procedure manual for his consideration, which exceeds 120 pages. He closed the letter with: “From the bottom of my heart, I wish and pray for success and prosperity upon our tribal government and for the health and well-being of our Osage People and culture.”