Cherokee members threaten to sue over raises, back pay for elected officals

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Cherokee members threaten to sue over raises, back pay for elected officals

fr cherokeecouncil When the Cherokee Tribal Council voted to give itself a hefty pay raise last fall — $10,000 extra a year plus tens of thousands in backpay for the years when it supposedly should have already been receiving those extra dollars — the decision aroused the ire of a staunch contingent of tribal members who deemed it illegal.

Now it’s possible the issue could go to court.

The argument has been ongoing ever since the budget resolution creating the raises passed on Oct. 4, 2014, with no discussion and only one nay vote, from Wolfetown Councilmember Bo Crowe.

But the aftermath involved discussion aplenty, with subsequent council meetings running long as tribal members voiced their anger and councilmembers Teresa McCoy, of Big Cove, and Albert Rose, of Birdtown, introduced resolutions to get rid of the raises and back pay. McCoy, along with Snowbird representative Brandon Jones, had been absent at the initial vote, and Rose said he didn’t realize that the proposed budget contained allegedly illegal raises until after it passed.

Council wound up voting 7-5 to not even hear the protests from Rose and McCoy, and at the end of that long, circular discussion Nov. 6, tribal member Peggy Hill asked council, frustrated, “Where do we go now? What do we do now?”

“If you choose to bring a lawsuit against the tribal council, you have the right to do that,” responded Chairwoman Terri Henry of Painttown.

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Since then, that’s just what Hill and the other members of the newly formed grassroots group calling itself the The Eastern Band of Cherokee Indians for Justice and Accountability have been working on.

“Some of us are very spiritually oriented and we prayed until we got the answer and we kept waiting and waiting,” said Amy Walker, one of the group’s leaders, on the process of finding the right person to take the case. “Late February the answer came who we needed to go see. We went to visit her and we knew we’d chosen right.”

On April 20, each of the 12 tribal council members and interim attorney general Hannah Smith received a letter in the mail from Meghann Burke, an attorney at the Asheville firm Brazil & Burke.

“My clients are deeply troubled by this Tribal Council’s flagrant disrespect for the law … The Eastern Band of Cherokee Indians for Justice and Accountability are prepared to challenge Tribal Council’s actions in court,” the letter reads.

All told, the raises, back pay and associated benefits total about $1 million, Burke wrote. If Tribal Council does not rescind the budget resolution that included the raises at its upcoming May 7 meeting, Burke says she will file the lawsuit against the Tribal Council as a whole, as well as against each individual member who voted for the resolution. That’s everybody except for McCoy, Jones and Bo Crowe.

In an email, Burke said that more claims or defendants could be added if the complaint is filed.

Mum’s the word

The unexpected letter threw Tribal Council for a loop, spurring an emergency closed-door meeting April 21 to discuss the issue.

The Tribal Council has not been willing to discuss the issue in the open, though. The Smoky Mountain News attempted to contact each of the 12 councilmembers. Nine of them did not answer or respond to a voicemail requesting comment. Jones’ cell phone number had been changed at some point in the last few months. Big Cove representative Perry Shell called back to say he could not comment on this issue, as it is an “open case.” To clarify, according to the attorney no suit has yet been filed and will not be unless council fails to comply with the requirements of the demand letter. A request for comment to Chief Michell Hicks’ office yielded only a three-sentence statement averring that the raises are part of a budget already in effect but that tribal council “recognizes the concerns raised by some tribal members regarding compensation changes.” Smith did not return a call to her office requesting comment.

Of the 14 tribal leaders The Smoky Mountain News attempted to contact, McCoy was the only one to give an interview.

Since the issue came up, McCoy has been on the side of people like Hill. Though not present at the initial budget vote — at the time, she said she had not been aware there would be a vote that day, as the meeting was scheduled only as a work session — McCoy later introduced a protest against the raises and continually voiced her opinion that they were illegal.

“In the real world, people appreciate a raise. That’s a good thing,” she said. “Here, you have five out of 12 councilmembers, almost half the Eastern Band, saying ‘No, stay away from us. It’s a sick feeling. It’s a bad feeling.”

McCoy said that she, along with Jones, Bo Crowe, Henry and Rose, refused to sign a conversion sheet acknowledging the raise but were told they would receive the money anyway.

“We didn’t do this. You did this to us and we don’t appreciate it,” she said of herself and the other council members who did not vote for the budget. “Three of us are not named because three of us did not vote to pass [budget resolution] 261.”

The backstory

The tumult over council’s fattened paychecks stems from language in the tribe’s Charter and Governing Document — the highest law of the land, legally speaking — that plainly states that “no pay raise [for Tribal Council is] to take effect until the next council is seated.” The conventional understanding of that had been that council can approve a pay raise for itself but cannot begin receiving the higher salary until after the next election has been held and the winners seated.

“Any argument to the contrary,” Burke wrote in her demand letter, “strains credibility.”

According to Hicks’ statements to council Nov. 6, the $10,000 was not a raise. It was a pay adjustment.

In 2004, he explained, council passed a resolution saying that its members should receive incremental raises in keeping with the cost-of-living raises that tribal employees receive. But during the recession, council had not been receiving its incremental salary bumps, so the lump sum raise and back pay were necessary to bring council salaries back up to where they should have been all along.

But even rookie councilmembers received hefty retro pay checks — representatives who had only sat on council for one year received $10,800 in retro, according to documents from a public records request completed by Burke’s clients. In Cherokee, only tribal members can make public records requests.

Freshman councilmembers received such large checks, Smith explained in a council meeting, because raises are given to individual seats rather than to the people in them. The discrepancy between the value of the seat and what the person occupying it was being paid was highest during the most recent year, thus justifying the retro checks the freshman members received.

That said, some former seatholders were included in the retro payouts, with four checks for amounts between $13,600 and $23,600 cut to people who no longer serve on Tribal Council, according to documents from the public records request.

It should also be noted that council voted itself a $10,000 raise in 2007. In that instance, they waited for the next council to be seated before enacting the raise, but Burke believes that its size still outstrips the limit of the law.

“There is no credible evidence to support a pay increase in the amount of $10,000, given that we know salaries preceding the pay increase were roughly $70,000,” Burke said of the most recent raise. “There is frankly no foundation in law whatsoever for giving former Tribal Council members a lump sum increase.”

Apparently, Smith at one time had something of a similar opinion, judging by a September 2014 memo she sent to Hicks and Deputy Finance Director Kim Peone.

“Tribal Code states that pay increases for Tribal Council … shall not take effect until the next elected legislative body is seated,” the memo reads. “The law does not specify how the salary increases are to be budgeted, but the law implies that salary increases for the Tribal Council accrues each year if accrued for tribal employees and at the same rate as tribal employees.”

“The application of this law,” Smith wrote, “will eventually work the opposite effect on tribal council salary increases than what the spirit of the Resolution intended.”

That was before council heard the budget resolution that created the pay increases and before the fallout of that decision dominated months of Tribal Council sessions. During those discussions, Smith had a different take.

“In my opinion it is not in violation of the charter,” she said in the Nov. 6 Tribal Council session.

Currently, Tribal Council members are receiving paychecks based on a salary of $80,600 per year, with the council chair receiving $86,400 and the vice chair $83,500. Councilmembers also received retro checks in amounts ranging from $10,600 for first-year members to $33,500.

Hicks and Vice Chief Larry Blythe benefited from the budget bill as well, with Hicks receiving $42,500 in retro pay and Blythe a much smaller $5,100.

It wasn’t the first extra bit of cash Hicks and Blythe had come by in recent years.

In 2013, the tribe commissioned a study from Compdata, a national firm that specializes in compensation surveys and consulting. Basically, Compdata helps clients figure out how much people in their organization should be getting paid.

By Burke’s estimation, the study was but “a master scheme” to bring Hicks and Blythe a bigger paycheck. The study recommended that Hicks’ pay increase from $142,500 to $185,000 and Blythe’s from $129,500 to $135,000, hikes of 30 percent and 4.2 percent, respectively.

A resolution adopting those recommendations was introduced on Sept. 3, 2013, and approved unanimously Sept. 30. Hicks signed it into law Oct. 4, according to documents in the public records request.

What’s next?

At that point, tribal council members were up for re-election but Hicks was not. When the raises for councilmembers and retro pay for council and the chiefs were passed in 2014, it was an off-year for elections in Cherokee.

But all 12 council seats, as well as the chief and vice chief positions, are up for election this year, with the primary election scheduled for June 4. Hicks is not running for re-election, though two current councilmembers — David Wolfe and Gene “Tunney” Crowe — are vying to take his place.

Potentially, anger over the raises could turn into a lawsuit running concurrently with the political races. But not necessarily.

“The thing that council has received right now is a demand letter, but it lays out what they did was wrong and we’re asking them to repay that money back, every bit of it,” said Amy Walker, one of the leaders of EBCI for Justice and Accountability.

It’s impossible to say what councilmembers will do at the May 7 meeting, as none but McCoy was willing to comment. However, Burke said, if they do not rescind the part of the resolution enacting the raises and retro, and also repay any money they received, her clients plan to sue the council and its members to force them to do so.

To be sued as a body, council would have to vote to waive its right to legal immunity. If the council does not vote to waive its immunity, each member can still be sued as an individual and would have to pay for legal representation out of their own pockets.

The legal effort has wide support on the Qualla Boundary, Walker said. A meeting EBCI for Justice and Accountability set up for Burke to speak with tribal members attracted about 60 people, she said, and many “people have spoken to us and let us know that they’re glad we’re doing this for them.”

It’s simple, she said. Council told them that court was their only recourse, “so by golly, that’s what we done.”

Web Extras

The 12 members of Tribal Council and Interim Attorney General Hannah Smith received this demand letter April 20 from Asheville attorney Meghann Burke. The letter informed them that if they did not rescind the legislation granting them hefty raises and backpay checks — and repaying any money already received — on their May 7 meeting, she would file the draft complaint.

The Eastern Band of Cherokee Indians for Justice and Accountability obtained these 74 pages of documents in response to a public records request, which in Cherokee can be made only by tribal members. The documents include dollar amounts, ordinances, voting records and inter-office communications regarding the chiefs and council raises given in 2013 and 2014.

What they got paid

Pay hikes for council (enacted Oct. 2014)

•Chairwoman Terri Henry, from $75,000 to $86,400

•Vice chair Bill Taylor, $72,500 to $83,500

•Other councilmembers, $70,000 to $80,600

Pay hikes for chiefs (enacted Oct. 2013)

•Principal Chief Michell Hicks, $142,500 to $185,000

•Vice Chief Larry Blythe, $129,500 to $135,000

Retro pay

•Chairwoman Terri Henry, $33,391

•Vice Chair Bill Taylor, $33,496

•Perry Shell, Gene “Tunney” Crowe, Tommye Saunooke, Adam Wachacaha, David Wolfe, Alan “B” Ensley, $32,931

•Teresa McCoy, $19,037

•Albert Rose, Bo Crowe, Brandon Jones, $10,637

•Four councilmembers no longer serving received checks ranging from $13,594 to $23,565.

Salaries for comparison

•President of the United States, $400,000

•U.S. Senator, $174,000

•North Carolina Governor, $141,265

•Average county manager salary for seven western counties, $97,875*

•Median household income in Swain County, $36,094

*Compiled from University of North Carolina’s School of Government report with Graham County not included due to missing information in the report.

All salary and retro pay amounts for councilmembers are taken from documents that were part of a public records request made by tribal members. Comparison salaries are compiled from various sources.

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