An audit conducted for the Quapaw Nation alleges its former chairman misappropriated millions of dollars in tribal funds. The tribe's newly-elected chairman is urging citizens to be patient with the audit process and is trying to win back trust.
After more than 20 years at the helm of the Quapaw Nation, former Chairman John Berrey was soundly defeated in July by Joseph Tali Byrd.
Now, following an internal audit and growing questions from tribal citizens, the new tribal administration is alleging Berrey and the tribe’s former secretary treasurer illegally doled out more than $34 million worth of pay raises, bonuses, severance pay and donations, including more than $4 million dollars to former University of Oklahoma football coach Barry Switzer.
"The Quapaw Nation confirmed today the tribe is looking closely into potential criminal conduct on the part of several former employees and tribal officials, including former Quapaw Nation Tribal Chairman John Berrey and former Quapaw Nation Secretary/Treasurer Tamara Smiley-Reeves,” Byrd said in a statement.
Quapaw Nation officials said they're fully cooperating with authorities. In a statement, they explained that "considerable amounts of evidence are being turned over to federal and tribal investigators for their prosecutorial efforts."
At the tribe’s annual General Council meeting in October, Chairman Byrd and newly elected secretary treasurer Guy Barker released an audit performed by Innovative Gaming Solutions, a consulting firm that specializes in identifying fraud and training casino employees and outside agencies on how to spot financial crimes inside the industry.
The audit found both Berrey and Smiley-Reeves spent the money in their role as Downstream Development Authority (DDA) members and without the approval of the business committee, which is required by Quapaw Nation code.
"I will say that some of the things you are going to see and hear today are shocking," said Byrd at the start of the October meeting at the tribe's Downstream Casino. The full meeting https://youtu.be/5M-VzLr1f1I" target="_blank">was made available online in late December.
Berrey, a 20-year incumbent, lost 544-325 in July’s general election. Smiley-Reeves, also an incumbent, lost to Barker 550-319. Both were removed from the DDA last July after losing their seats. The audit, which originated from a whistleblower complaint before the election, found that the misspending occurred within a three-year period, a claim Berrey denies.
“It’s just a bunch of numbers with no supporting documentation,” Berrey said. He has so far not provided evidence to contradict the claims if the audit, but continues to refute the findings.
The forensic audit alleges that Berrey personally received more than $17 million dollars in bonuses and pay raises and funneled another $2 million to three people on the DDA. An additional $10 million in donations were made in violation of the tribal nation's laws. Hundreds of thousands of dollars were donated to the University of Arkansas' Razorback Foundation, Berrey's alma mater, including $25,000 per year to redo the University's baseball dugouts.
The audit found all of this was done in violation of tribe’s legal code, which requires compensation and bonuses be approved by the business committee.
Berrey counters that any pay raises he received were all done with approval.
"The meeting made several allegations that are totally untrue," Berrey said in an emailed response. "Salaries, bonuses and donations all were approved using the exact same methodology from 2008 to my departure.”
Other allegations in the audit include abuse of credit cards and compensation, including a $8,000 spa visit for a DDA member's friends and family and tickets to University of Arkansas baseball games in an exclusive skybox arrangement worth tens of thousands of dollars.
According to sources close to Berrey, the money paid to Switzer was part of a marketing campaign to attract people to Downstream and Saracen, the tribal nation's new luxury resort and casino in Pine Bluff, Arkansas. In one video, Berrey and Switzer stood side by side, along with Arkansas state officials, for the groundbreaking of a new casino.
"You can count on us to be part of the community," Berrey said. Switzer made the audience laugh with his tales of getting in trouble growing up in Arkansas.
Switzer maintains that his contract with the Quapaw Nation was above board and legal. He says he was hired by the tribal nation to promote the Downstream and Saracen casino through speaking engagements and has done so for the last 13 years.
According to the Innovative Gaming Solutions audit, additional invoices were paid to Switzer's personal LLC, and other organizations for $300,000. The audit, which included a review of cell phone data and accounting records, indicates private jets were provided for numerous trips, totaling an excess of $100,000, including flights to Nevada, Oklahoma and Arkansas for concerts, hunting trips and other personal trips and gifts up to $200,000.
John Berrey and I stopped in Little Rock on the way to the Derby to pick up @Keithjackson88 and Larry Lacewell! pic.twitter.com/kP8N4nNQ43
— Barry Switzer (@Barry_Switzer) May 1, 2014
Berrey called the allegations “slanderous” and “without merit” and maintains that spending money in Arkansas was important to the tribe's business interest.
"We spent about $30 million dollars a year at Downstream for marketing. Arkansas is a very important market and we have been the only casino resort advertising with the Razorbacks," he said.
Court records show Berrey, Switzer and others filed a lawsuit in Cleveland County District County on Monday against Byrd, Barker and the head of Innovative Gaming Solutions, claiming slander and libel.
The amount of tribal funds the audit alleges were misappropriated left several Quapaw Nation citizens shocked. Lloyd Buffalo, a 40-year business committee member said he was saddened by what he learned from the audit. "Think of this, how many houses could we build for tribal members? How many children could we educate?”
"My heart aches for the Quapaw people," said Byrd, who has promised transparency, but is also asking citizens to be patient and trust the investigative process.
Citizens and current leaders say part of the problem was the structure of the DDA, which was formed in 2007 to develop and build the Downstream Casino, a destination hotel, spa and casino that borders Oklahoma and Missouri. According to Quapaw law, DDA members must have their salary approved by the business committee. Current leadership said that has not happened and that breach has led to deep distrust and anger.
Citizens cheered when it was announced at the general council meeting that the tribe would be dissolving the DDA. The business committee will now assume the duties of the DDA.
"So, everything will be open to the public and there will not be anymore underhanded deals or bonuses and raises," said Lauren Coussatte, a 28-year-old Quapaw citizen currently working at O Gah Pah Coffee Roasting company, another tribally owned business, who recently ran for a seat on the business committee.
Deep Distrust
Betty Gaedtke served with Berrey on the business committee from 2013-2017. In 2018, she filed a grievance stating that DDA members were not following the charter created by the business committee. She claimed the body wasn’t notifying business committee members when meetings were held and it was approving pay raises and bonuses without the approval of the business committee.
If the allegations are true, “the DDA members should be forced to resign and the BC members that are on the DDA should be forced to resign from the Business Committee,” Gaedtke said.
Berrey was the subject of another complaint filed in 2010 with the grievance committee alleging misspending. This time, the Bureau of Indian Affairs got involved when the grievance committee wrote to them asking the BIA to make Berrey hold a special meeting to address concerns.
For tribal citizens like Coussatte, frustration and distrust in the Quapaw tribal government have been building for years. In 2018, a former vice chairman for The Quapaw Nation was sentenced to 10 years in prison for attempting to engage in sexual activity with a minor. Another former vice chairman resigned from his post on the board of the Downstream Casino after allegedly sending a sexually explicit email to a fellow female employee.
"I think it's just really a culture that we need to get away from," said Coussette. "It's going to take time."
After Byrd won the election in July, Coussatte said there was a sigh of relief and an expectation that things were going to get fixed right away. She was there on election night when Berrey lost. Immediately, she said, citizens wanted to see change. "They were like, we have to get in there and stop the bleeding from the previous administration."
Sense of Entitlement
The sign off on all of Berrey's emails is "Do Good Things and Feed People." He'd been involved in Quapaw politics since the 1990s and ran for office and won in 2001.
Many like Gaedtke acknowledge the good he's done for the tribal nation. He's developed three casinos for Quapaw Nation, secured a multi-million dollar contract with the EPA to clean up a nearby superfund site in Picher and helped open numerous businesses like the meat processing plant in Miami that serves as a certified USDA business.
When Berrey lost last summer by more than 200 votes, he posted a congratulatory note to his opponent.
"Congratulations to my opponent and the new Chairman of the Quapaw Nation, Joseph Byrd. He is young, smart, capable, and we are proud to be leaving things for him in a much better way than when we found them," Berrey said.
But, many believed he was in disbelief over his defeat.
"Flabbergasted. That's the only word I could use," said Gaedtke.
Berrey said he has questions about the validity of Innovative Gaming Solutions, a consulting firm based in Liberty, Missouri, despite having employed it himself in 2017 to perform an audit. He said they're not "real accountants."
While it is true that Michael Crump, the head of Innovative Gaming Solutions is not an accountant himself, he employs CPAs to do the work. At the general council meeting, Crump told the citizens in the audience that many of his employees are citizens of tribes.
Berrey admitted to denying Gaedtke's 2018 grievance against him. The tribal chairman has the authority to deny any grievance against a tribal employee.
"The Grievance Committee receives all kinds of crazy letters but none of the grievances during my term were moved forward,” Berrey said.
Barker, Quapaw Nation's current secretary treasurer, said there were questions about spending even before a whistleblower complaint about salaries.
"Every time the issue of compensation has ever been raised in the past, it has generally been met with kind of a very feverish attitude to quash any questions, you know, avoid answering any direct questions regarding any of this compensation," said Barker.
They are hoping that with a dissolution of the DDA and a new constitution, these issues and questions of compensation will be dealt with.
Chairman Byrd knows there is distrust and knows people are angry, but is promising a new era of transparency and honesty.
"There was always this air of question surrounding the compensation of the board, and the board was always quick to shut it down," said Byrd.
Moving On
The Quapaw Nation government is in the middle of restructuring. They've created a committee to draft a new constitution. They're trying to put in place more checks and balances - one of which was dissolving the DDA and putting those responsibilities back in control of the business committee. Leadership is talking about term limits and creating a committee that can handle grievances more effectively.
Innovative Gaming Solutions said the tribe can recoup some of the money through insurance claims.
Despite the allegations, current leadership said "profits are up the previous two quarters and gaming operations are leaner than ever."
Gaedtke said she thinks Byrd is the right person for the job and is currently working on the committee to draft a new constitution. She said that when she saw how much was misspent, she was so angry and was in tears as were many of the citizens who attended the general council meeting.
"You know, the Quapaws were taken advantage of by the government to begin with. And we expected that," Gaedtke said of her mother and grandmother's experience, which was an era of brutal government policies. "But, you turn around and to be screwed over by your tribal leader hurt so much more because it's like being turned on by one of your own."
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