A se­nior

Exit comes af­ter neg­a­tive re­port on loan guar­an­tee pro­gram he over­saw

The Washington Post - - FRONT PAGE - BY JULIET EILPERIN juliet.eilperin@wash­post.com More at wash­ing­tonpost.com/ news/ en­ergy-en­vi­ron­ment

Bureau of In­dian Af­fairs of­fi­cial ap­pointed in June re­signed af­ter a scathing re­port about a loan pro­gram he over­saw.

Gavin Clark­son, a se­nior Bureau of In­dian Af­fairs of­fi­cial ap­pointed by In­te­rior Sec­re­tary Ryan Zinke in June, re­signed Mon­day af­ter the depart­ment’s in­spec­tor gen­eral is­sued a scathing re­port on the loan pro­gram he over­saw.

Clark­son, who served as deputy as­sis­tant sec­re­tary for pol­icy and eco­nomic de­vel­op­ment, ran a pro­gram that guar­an­tees loans for tribal busi­nesses. When Zinke ap­pointed Clark­son on June 11, he said in a state­ment that his “ex­per­tise in the ar­eas of law, fi­nance and eco­nomic de­vel­op­ment are a valu­able as­set . . . we work to­gether with tribes to in­crease eco­nomic op­por­tu­nity and pro­mote self-de­ter­mi­na­tion through­out In­dian Coun­try.”

Be­fore join­ing the Trump ad­min­is­tra­tion, Clark­son served as a con­sul­tant for tribes that re­ceived loans un­der the pro­gram, in­clud­ing a con­tro­ver­sial $22.5 mil­lion loan for the Lower Brule Sioux Tribe that helped fi­nance the pur­chase of a bro­ker­age firm that even­tu­ally went un­der. As a re­sult, the In­te­rior Depart­ment is be­ing sued over its re­fusal to guar­an­tee the re­main­ing $20 mil­lion bal­ance on the loan.

Clark­son’s deal­ings with the tribe were the sub­ject of a de­tailed re­port pub­lished by Hu­man Rights Watch in 2015, as well as nu­mer­ous news re­ports. The in­spec­tor gen­eral’s re­port scru­ti­nized how the loan pro­gram was run un­der the Obama ad­min­is­tra­tion, for which Clark­son worked as a tribal eco­nomic con­sul­tant.

Arvind Ganesan, who heads Hu­man Rights Watch’s busi­ness of hu­man rights di­vi­sion and wrote the group’s 2015 re­port, said in an in­ter­view Tues­day that Clark­son’s de­par­ture sug­gests that in­ves­ti­ga­tions of the loan pro­gram had made an im­pact, but it also raises ques­tions about why he was hired.

“It ap­pears to be a real fail­ure of due dili­gence. He’s be­ing hired at a time when the BIA is be­ing sued for mil­lions of dol­lars for a deal he ar­ranged,” Ganesan said. “It’s not as if a Google search wouldn’t have worked.”

The in­spec­tor gen­eral’s re­port, which was re­leased Nov. 9, found that the BIA’s di­vi­sion of cap­i­tal in­vest­ment (DCI), which falls un­der its Of­fice of In­dian En­ergy and Eco­nomic De­vel­op­ment (IEED), “did not have ad­e­quate con­trols in place and man­aged the [loan pro­gram] with lim­ited over­sight from IEED, cre­at­ing un­nec­es­sary risk for an al­ready risky pro­gram.”

While the probe did not specif­i­cally name Clark­son, it listed the li­a­bil­ity in­curred from the loan he worked on as one for which tax­pay­ers could end up shoul­der­ing the bur­den.

The in­spec­tor gen­eral’s re­port noted that, on at least two oc­ca­sions, the act­ing DCI chief ap­proved loan-guar­an­tee ap­pli­ca­tions over the ob­jec­tions of the pro­gram’s credit com­mit­tee with­out pro­vid­ing any writ­ten jus­ti­fi­ca­tion for the move.

Clark­son could not be reached for com­ment Tues­day. At the time of his ap­point­ment, which did not re­quire Se­nate con­fir­ma­tion, he said that he would “bring new ideas and meth­ods to In­dian Af­fairs for tribal busi­ness and en­ergy de­vel­op­ment.”

In an email, In­te­rior press sec­re­tary Heather Swift said of his res­ig­na­tion: “The depart­ment can­not com­ment on per­son­nel mat­ters.”

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