Builder Says He Bribed Indian Leaders To Get Work

Posted: February 02, 1989

WASHINGTON — An Oklahoma builder testified yesterday that he provided about $250,000 worth of bribes - including cash, cars and travel - to Indian leaders to obtain construction contracts on reservations.

A Senate committee also heard testimony that Small Business Administration officials may have helped a Michigan firm improperly receive certification as an Indian-owned company so it could win government minority contracts.

The evidence of bribery and fraud came during the third day of hearings by a special Senate committee that has spent a year investigating allegations of widespread corruption and mismanagement in Indian programs.

Kraig Kendall, a Shawnee, Okla., builder, spent much of the morning telling tales of rampant graft among tribal leaders in Oklahoma. From 1975 to 1985, when Kendall handled about $30 million in building contracts on Indian lands, he only won one without a bribe, he said.

"In some cases, it took some gratuities, gifts and meals," he said. "In some cases, it just took some serious bribes."

Overton James, governor of the Oklahoma Chickasaw nation, received $94,000 worth of kickbacks alone in return for helping Kendall acquire about $14 million worth of construction work, Kendall said.

James could not be reached for comment.

Kendall said he had to provide gifts, including cars and University of Oklahoma football tickets, to members of tribal housing authorities to win the contracts, which were part of a federal housing program.

When building homes for a Shawnee tribe, Kendall simply paid tribal housing officials $500 per home, he said. He also said he flew housing authority officials to the Orange Bowl and provided one Indian leader a van for two years.

Kendall was convicted in 1986 of providing false information to officials of the Department of Housing and Urban Development. He has been cooperating with federal investigators. Several of the Indian leaders involved have been taken to court.

Kendall also explained how his wife, who is of Indian ancestry, was given 51 percent ownership of his company so he could take advantage of government contracts set aside for Native American businesses.

He described the practice of using an Indian "front" as common in the construction industry in Oklahoma. "We had conversations about our token Indians," he said.

Chairman Dennis DeConcini (D., Ariz.) said earlier that the committee had evidence that officials within HUD may have taken kickbacks.

But yesterday Kendall said he had never provided more than "turkeys and hams" to HUD officials as gifts. He said even that practice stopped when HUD tightened its ethics rules.

The committee investigation of HUD officials is continuing, and further evidence may be presented in a second set of hearings later in the year, DeConcini said.

The bribes of Indian leaders that Kendall described were often simple transactions. But the testimony presented about Kinross Manufacturing Co., a Michigan company, is a complicated story involving an "interlocking web of contractors, consultants and government employees," said Richard D. Ramirez, the principal witness.

Ramirez, a central figure in the Wedtech scandal, said some of the businessmen connected to Wedtech were involved in setting up the Michigan firm as an "Indian front" with the support of high-ranking SBA officials. Ramirez, a former high-ranking Navy official in charge of small- and minority- business contracts, agreed to plead guilty to charges in connection with obtaining defense contracts for United Chem Con Corp. and Wedtech Corp.

Ramirez testified in a private session under a grant of immunity. A five- page summary of his testimony was released by the committee.

He described how SBA officials helped Kinross win certification as a minority-owned company despite the objections of lower-level employees.

Richard Durkin, SBA regional administrator, approved the application despite the objections of members of his staff, Ramirez said. Robert Saldivar, then the SBA's number two official, also approved the application. Ramirez said.

Members of the now-defunct Washington firm Gnau, Carter & Jacobsen were behind Kinross, Ramirez said. They used the "close political ties" their firm had with Reagan administration officials to "ram the application through SBA, even over the objections of SBA's local offices."

Kinross eventually was awarded $18 million in defense contracts as a minority firm. Grand juries in Michigan and New York are investigating Kinross for allegedly defrauding the government.

The committee hearings, scheduled to continue over the next month, are also expected to take up child sexual abuse on Indian reservations and the infiltration of organized crime into Indian gambling.

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