The Price of Doing Business

After eight years in federal prison, former Navajo Tribal Chairman Peter MacDonald has returned to the reservation.

Tucked amidst Bill Clinton's quid pro quo pardons last January was a tender mercy that drew little attention along the Beltway. But inside a humble building atop a tawny mesa worlds away, Peter MacDonald's sudden freedom sparked joy among an ancient people more accustomed to sober resignation.

"Whatever happened, happened ... It's time for healing," the former Navajo tribal chairman said to 500 elated supporters gathered at Tuba City's Tónanees'Dizí Chapter House.

"It's just amazing. I'm overwhelmed by the love," MacDonald told the rheumy old men and women, young parents and restless children squeezed into the undersized hall for this March homecoming. The silence between his words was met only by the rustling of velveteen skirts, as a gallery of former Navajo leaders gazed down from aging photos high on the wall.

Thus ended eight years in the gulag for a man once considered the most powerful Native American leader in the United States. And thus draws to a close a Shakespearean drama, done Indian-country style; a natural-born leader brings the sharp paradox of shining promise and deep pain to his people. He rises to great heights, and tumbles in humiliation. He was victim to personal avarice amid horrid poverty, and to powerful enemies rallied far beyond this remarkably insular land of 200,000 souls.

In a federal courtroom, his own son would be driven to testify against him.

This saga brought shame not only to MacDonald, but also to a parade of Anglo politicians and shysters--some of the most notable white men of our time. But today, in the Tuba City chapter house, all of that matters little. Everything of importance is ensconced within the thin 72-year-old speaking in forceful Navajo at the front of the room.

PETER MACDONALD GREETED this life on goat skin, amidst the most remote sandstone hills of a 17-million-acre reservation sprawling across northern Arizona, and parts of Utah and New Mexico. His birth name was Hoshkaisith, meaning "He Who Clasps With Power." His Anglo name was bequeathed by zealous teachers at dreary boarding schools Navajo children were forced to attend.

Raised among traditional sheepherders, groomed as a medicine man, shipped first off to school and then to World War II with the famed Navajo code talkers, MacDonald came back to earn an electrical engineering degree at the University of Oklahoma. His acumen landed him on the Polaris nuclear missile project with Hughes Aircraft Co. He returned to the Navajo reservation in 1963 and served as tribal chairman from 1971 to 1983, and again from 1987 until 1989, when he was ousted by a fractious tribal council.

As chairman, the unrepentant theme of MacDonald's rule was sovereignty, fierce self-governance for the Navajo people. In the early years that notion became vogue among American politicians, the late Arizona Sen. Barry Goldwater foremost among them. They promoted this well-spoken man as the new model of Indian leader--savvy, with a big world view and a knack for taking care of business.

On the reservation, he was called Big Mac. As tribal chairman, MacDonald was cutting deals with the largest corporations on the planet, and rubbing shoulders with heads of state. As it turned out, his own politics would eventually rub some the wrong way. And that would make all the difference in the world.

It would land him in prison. It would strip his family of their home, their car and their dignity.

This ferocious machine would spit him out nearly a decade later, returning to the reservation a frail man with an ailing heart.

But even today, he obviously retains a stunning gift for connecting to the most traditional of the Diné, the people. He is one of them. This simple fact always laid at the root of his power.

"Peter MacDonald is a Navajo, a traditionalist with the language and culture," says Ronnie Lupe, a member of the White Mountain Apache Tribal council, and a fellow tribal chairman during MacDonald's reign. "When you met him, you knew he was a Navajo. He spoke very fluent Navajo. He understood his community."

When MacDonald took a leave from his lucrative job with Hughes and first returned to the reservation, the ambitious War on Poverty was in full swing. Under the administration of Chairman Raymond Nakai, he took a job managing the Office of Navajo Economic Opportunity, or O.N.E.O., an anti-poverty program with a meager $900,000 annual budget.

Through his post, MacDonald began building a political machine. The annual O.N.E.O. budget grew to $12 million, and he deftly spread that money around the reservation, bringing electricity to remote villages, helping build new homes for destitute Navajos and expanding social services.

In 1970, he was elected tribal chairman. And he quickly displayed skills learned from running the O.N.E.O., particularly the absolute need to pull Navajos from under the jackboot of the federal Bureau of Indian Affairs. (Here it's interesting, if sadly foretelling, to note that the BIA, a patrician and inept federal agency charged with managing the reservations, was created in 1824 by none other than the U.S. Secretary of War.)

MacDonald's favorite BIA story spans several pages in his autobiography, The Last Warrior. It happened in the tribal council chambers, when he was head of the O.N.E.O. Those chambers were tribally owned. But Glen Landbloom, then the BIA's superintendent for Navajos, controlled the only key.

"One day I was attending a council meeting at which the members were debating a proposal brought to them by the BIA." MacDonald writes. "Landbloom was upset that it was taking them so long to come to a decision, so he walked up to the lectern, angrily pounded his fist until there was quiet, and then told us we were acting like a bunch of kids. If we continued to act that way, he would throw every one of us out, put a padlock on the council chamber, and not let us back in until we learned to behave like adults.

"I was flabbergasted, not only by what he had done and said but also that the council had deferred to him. They were like a group of rowdy second-graders who had been scolded by their teacher."

When he was catapulted to the chairman's seat, MacDonald placed the agency on notice. "It was 1971 before I could reverse our relationship with the BIA officials," he writes. "I had just been elected tribal chairman. I went to see the BIA area director and demanded the keys to the council chambers, explaining that no meetings would be held until I was in full control of Navajo property. Naturally, I then changed all the locks.

"When I opened the first council session in the chambers, the BIA staff entered the room in force. I looked at the area director and said 'These are the Navajo Nation council chambers. What we do here is sacred because here assembled are the elected officials of the Navajo people. And the Navajo people's vote means something. It is sacred to us. It means sovereignty. So I don't want any disrespect whatever here.'"

Despite stepping on federal toes--or perhaps because of it--MacDonald's maverick reputation steadily grew. As a nascent politician, his speeches rang with tribal sovereignty, independence from the federal government, the need to gain control over the reservation's educational, judicial and financials resources.

He also passionately fought against the Navajo and Hopi Land Resettlement Act, an endless feud involving 1.8 million acres claimed by both tribes. According to the Hopis, the Navajos had been advancing onto their turf for nearly a century. For the Navajos, the act's boundary adjustments would force thousands from their traditional homes. Fanning the fires were Anglo businessmen eyeing the region's coal reserves, and placing their alliances accordingly.

The battle spilled into Congress in 1972. At the time, MacDonald had become an auburn-skinned Golden Boy in national Republican circles. He had served on Richard Nixon's Committee to Re-Elect the President, and was scheduled--at the urging of Goldwater--to speak during that year's nominating convention.

But sensing Nixon's tepid support for Navajos in the land dispute, MacDonald met with George McGovern, the Democratic presidential candidate, and chair of the Senate Subcommittee on Indian Affairs. When McGovern pledged to back the Navajo position, MacDonald toyed with supporting McGovern's presidential bid. As tribal chairman, he could rally a solid block of votes across the reservation.

When this news reached Republican headquarters, Goldwater came unglued. That rage would only harden two years later, when MacDonald delivered 9,006 out of a total 10,274 Navajo votes to help elect Raul Castro, a Democrat, as governor of Arizona.

It was a white-knuckle squeaker; Castro triumphed by a mere 4,113 ballots. It suddenly had become clear that MacDonald's Navajos could control tight statewide races.

That was an awful lot of power to reside with one outspoken Indian.

Not surprisingly, Goldwater supported the Hopis in the land struggle, sparking what would become the hemisphere's most immense forced mass emigration. Thousands of Navajo families were banished from their homes, cementing the caustic rift between Arizona's senior senator and the leader of Arizona's largest tribe.

MacDonald remained defiant in following years, obsessed with strengthening the Navajo's bargaining power against the non-Indian world. His fierce rhetoric had rebellious substance: At one point, he threatened to bring in Arab advisors to negotiate the tribe's coal and uranium leases with U.S. companies. Those leases always had been negotiated, at deplorable terms, by the BIA. And when the Fairchild Camera and Instrument plant in Shiprock, N.M., was seized by members of the American Indian Movement in 1971 in a dispute over poor wages, MacDonald refused to eject the militants. The factory soon closed.

"We were just a Navajo tribe run by the Bureau of Indian Affairs," he remarked to a New York Times reporter. "I wanted to make us a government that's respected."

At the same time, MacDonald's controversial stance was frightening some investors away from Navajo land. It also was providing ammunition to his enemies, both on and off the reservation. While Goldwater was biding his time, many Navajos were becoming outraged by the chairman's growing penchant for high living, including chauffeured cars and chartered flights.

It was 1976 and the dawn of MacDonald's second term when Goldwater finally roared back. At the Senator's request, the federal General Accounting Office audited Navajo tribal coffers. "There is uncertainty and confusion among the Navajo people themselves as to the actual fiscal position of the tribe," Goldwater wrote in a letter to the U.S. Comptroller General.

The probe infuriated Navajo leaders. "Why is Goldwater doing these things?" asked Daniel Peaches, an Arizona state representative from Tuba City. "Only Goldwater knows, but we suspect Goldwater is mad at the Navajos because he realized they can think for themselves."

Within a few months, the GAO audit resulted in an indictment of MacDonald for filling false travel vouchers and tax evasion.

The chairman hired celebrity lawyer F. Lee Bailey, who quickly made Goldwater's reputed bloodlust a defense mantra. The claim was far from outlandish; one government prosecutor later told The New York Times that he was "'extremely uncomfortable' about the case," and that "I've always wondered if we (prosecutors) were the dupes."

The trial resulted in acquittal for MacDonald, who immediately played up his David versus Goliath victory back home. Traveling the reservation, he would speak to remote, traditional Navajos of worldly affairs, always drenched in brilliant parables. But he also grew resentful. "When that happened to me in 1976," he told the Times, "I lost complete faith in the American justice system."

In politics, however, MacDonald's lavish ways had tested the faith of many followers, leading to his electoral defeat in 1982--by a reformer named Peterson Zah, who made a point of tooling around the vast reservation in a battered pickup.

By 1986, Big Mac had won back his followers, and his office. But had he truly been humbled? This question would spark hot debates in dusty hogans and creaky chapter houses across Navajo country for the rest of his term.

Publicly, he was vowing to build a First World economy while bolstering Navajo sovereignty. Privately, he was rumored to have become a Third World shakedown artist, eagerly accepting "gifts" for helping companies navigate the copious red tape of tribal government. During this period MacDonald promised 1,000 new jobs yearly on the reservation, and pursued a joint venture with the Bechtel Group, Combustion Engineering and Public Service Co. of New Mexico to build a $4.7 billion power plant on Navajo land.

His business campaign culminated with the splashy Navajo Economic Summit in July 1987, which drew everyone from the president of General Dynamics to clothing designer Oleg Cassini. President Ronald Reagan was to address the group by videotape.

"Four years on the outside gave me a different perspective," MacDonald enjoyed telling reporters. "I decided if I had another chance, I would make strong economic development a program for the Nation."

Unfortunately, that perspective would not have long to prosper.

THE BIG BOQUILLAS ranch, or "Big Bo," spreads across 491,000 acres of desolate scrub land west of Flagstaff. And the rugged piece of real estate had long been on the radar screen for Bud Brown, a Scottsdale businessman and a friend of McDonald. Eventually, Brown invited the chairman on a trip to Hawaii, where over a golf game he suggested the tribe purchase Big Bo, to compensate for any land it might lose in the Navajo-Hopi land dispute.

MacDonald warmed to the idea rather quickly; at 9:50 a.m. on the morning of July 9, 1987, Brown and an associate named Tom Tracy bought the land for $26.2 million, and by 9:55 a.m. had resold it to the Navajo Nation for $33.4 million.

In barely five minutes, Brown and Tracy had flipped the ranch for a nifty profit of $7.2 million. The deal would have gone unnoticed, if not for an anonymous tip slipped to a reporter from the Gallup Independent in New Mexico.

It broke as a short story on the morning of July 23, 1987.

Now, for MacDonald, ominous clouds were brewing on the windswept horizon. The Boquillas transaction had sparked rampant suspicions of a juicy kickback for the chairman, but details were sparse. That he was seen traversing the reservation in a shiny BMW--not the standard vehicle for an official making around $55,000 a year--did nothing to staunch the rumors.

Soon, the web of secrets began to unravel. And the way it happened could not have been more ironic for Big Mac.

By the summer of 1988, Indians leaders from across the nation were converging in Washington for long-sought Senate hearings on the BIA's mismanagement of tribal affairs. Finally, thought MacDonald and his colleagues, the despised agency would be taken to task.

Co-chairing the subcommittee were Arizona senators John McCain and Dennis DeConcini. And though he'd retired a year earlier, Goldwater's presence was palpable.

In June 1988 MacDonald spoke to a meeting of the Arizona Newspaper Association. The BIA, he said, "is standing in the way" of the Navajo's economic progress by delaying, sometimes for years, approval of new business start-ups on the reservation. "The biggest obstacle (to economic progress) is our relationship with the federal government, BIA principally," he said.

MacDonald mentioned his own special request: "I have asked Sen. DeConcini to allow me to give the first testimony, when his special committee holds hearing to look into the charges."

As summer turned to fall, however, the subcommittee suddenly took aim at allegations that MacDonald was milking potential investors on the reservation. By early February 1989, contractors were telling senators how they were expected to provide the Navajo chairman with free flights and substantial loans never repaid. "It was something I felt like was expected on the reservation," testified Franz Springer, head of an Albuquerque construction firm.

"In other words, you thought it was the price of doing business?" asked McCain.

"Yes, sir," Springer replied.

Brown would be granted immunity in exchange for his testimony. He also would reveal how, when approached by the feds, he agreed to wear a hidden microphone to record conversations with MacDonald.

Played before the subcommittee were tapes of a discussion between himself, Peter MacDonald and his son, Rocky MacDonald, over ways to cover up the Big Bo deal.

At one point in the tape, Peter MacDonald says, "If it's anybody's ass they're trying to hang, it's me. Because if they get over the Big Boquillas bullshit and the BMW and any other things like that, I'm sure they have got 10 or 15 more things. I'm the No. 1 target, and that's the sad truth."

Brown testified that when he first approached the chairman about the property in 1987, the chairman "smiled and said 'I assume I'll be taken care of.'"

Assisting in the cover-up, Brown said, was Rocky MacDonald.

Offered a plea bargain, Rocky then described how, in phone conversations between himself, his father and Brown, payments to the elder MacDonald were called "golf balls."

When asked why he agreed to cooperate with the Senate investigation, the younger MacDonald replied, "Because I love my father."

Fait accompli.

A few days later, Peter MacDonald fiercely defended himself over the airwaves on the tribe's radio station, KTNN. He described his habit of accepting gifts as a Navajo tradition, and compared them to far more grandiose favors lavished on Washington politicians. "I don't need designer dresses loaned to me like Nancy Reagan," he said. "Nobody is offering me $5,000 a night for speaking engagements."

But the remonstrations proved useless; he was now just running up the score in a game that already was over.

Few walked away untarnished from the tawdry spectacle. Many participants felt the Senate hearings had devolved into little more than a political witch hunt, with Goldwater lurking in the shadows. And in a disproportionate show of force, the Senate inquiry tapped a top FBI investigator, a battery of lawyers, and Kenneth Ballen, chief counsel to the House Iran-Contra Committee. Testimony was sought from a small army of experts, including scholars on Native Americana, petroleum production scientists and Indian law theorists.

Several of those experts, brought to Washington for a probe of the BIA, resigned in protest when the spotlight turned on MacDonald.

"It was the Big Easy," one Senate investigator later said. "The chief counsel was only interested in a big hit. This was Watergate in Indian country. The media were all primed .... And it only made the Indians look corrupt."

In a subsequent KTNN radio address, MacDonald painfully described Rocky's testimony. "They used my own baby against me, my people," he told his nation. "They said they were going to investigate the BIA, and yet they lied. Instead, they have been investigating me. The reports of the conspiracy--they are lies, my people. This you should remember."

But after Rocky's testimony, even MacDonald's most ardent Navajo supporters began to waiver, with many calling for his resignation. Those who had always opposed the chairman started protesting outside of his offices, displaying buttons that read "Mutton Yes! Golf Balls No!"

On February 17, a ferocious and factionalized Tribal Council placed MacDonald on administrative leave. But the chairman refused to step down, leading to a five-month stand-off. By March, the council appointed an interim chairman. Remaining MacDonald supporters--hardcores known as "Peter's Patrol"--replied by occupying the leader's offices.

Nor did the BIA fail to display its characteristic arrogance. On March 14, 1989, James Stevens, the agency's point man for the Navajos, blocked the tribe from accessing federal funds. The freeze, Stevens said, was to "put the tribe on notice" that the dispute must be resolved posthaste.

Rising tensions across the reservation were capped on July 20, when MacDonald ordered his former police chief to "reassume the position of Chief of the Navajo Police," and "assist with the orderly restoration ... of the Navajo government."

That same day, Peter's Patrol gathered at the tribal headquarters in Window Rock, some brandishing baseball bats and two-by-fours. A Navajo cop was beaten and tied up, and his weapon taken. The scene quickly descended into anarchy, and the police opened fire; when it was over, two MacDonald supporters were dead.

Several months later, MacDonald, still under indictment, would run a close second to Peterson Zah in the tribal primaries.

In February 1990, a Navajo tribal judge scheduled three separate trials for MacDonald on 107 criminal counts, ranging from accepting kickbacks on the Boquillas Ranch and other deals, to taking illegal campaign contributions from non-Navajos. Rocky MacDonald likewise faced a trial related to the Boquillas Ranch. The tribal court eventually sentenced the former chairman to six years in a tribal jail; his son was sentenced to 18 months.

A year later, the former chairman also would be indicted by a federal judge on bribery and racketeering charges. The trial would take place in Prescott, where jurors heard testimony about how he repeatedly defrauded his people, and incited the deadly riot.

The prosecution team would include Joe Lodge, a former military prosecutor with a reputation for courtroom hardball. Leading the team would be Pamela Gullett, at the time married to McCain's former top assistant, Wes Gullett. (Perhaps coincidentally, perhaps not, it was Wes Gullett who had arranged for the initial Senate hearings on the BIA which ensnared MacDonald.)

Questions abounded over why the case landed in federal court, instead of continuing the series of trials before a Navajo judge. Many saw the specter of Goldwater looming large.

For his testimony, Brown was granted full immunity--and the right to keep his $4 million profit from the Boquillas land deal (In his Senate testimony, Brown revealed that MacDonald received a mere $55,000). But in a pre-trial hearing nearly a year earlier, visiting U.S. District Judge John C. Coughenour presented his own assessment of the Scottsdale businessman.

"The government argued that it thought it was bargaining for a witness who was 'minimally culpable,'" Coughenour reported, "but got a witness who is a 'liar' and a 'professional briber.'"

In December, MacDonald appeared, a broken man, in the Phoenixt courtroom before another judge who would decide his fate.

"Standing here, asking for mercy," MacDonald said, "it is difficult to express the sorrow and remorse for what my family has had to go through these last three years. My people know it is not my nature to harm anyone. They know me best, because I have traveled among them for 30 years. They knew me when I was growing up hungry as a sheepherder.

"There is so much bewilderment from my people," he continued. "I was the chairman. Now I have been put on display like an animal, and treated like a subhuman."

The government attorney then approached the bench, and asked that MacDonald's pending sentence be lengthened.

Instead, Judge Earl Carroll ordered the former chairman to a term concurrent with the one he was already serving in the Navajo Jail.

It was either the finest hour of justice in Arizona, or the abysmal worst.

Ensuing years would see Goldwater pass into the afterlife. McCain and DeConcini would be implicated among the "Keating Five," a cadre of congressmen who tried to help Phoenix financier Charles Keating evade the law.

The price of doing business: Keating had earlier contributed $112,000 to McCain's campaign coffers, and another $70,000 to DeConcini's. He would later be convicted of swindling countless senior citizens out of their life savings.

When DeConcini retired from the Senate in 1993, he was worth an estimated $25 million, much of it made in questionable real estate deals.

In March of this year, MacDonald returned to the Navajo reservation where he was born.

Forecasts of forgiveness are mixed, said Duane Beyal, formerly an aide to MacDonald nemesis Peterson Zah and now editor of the tribal newspaper, Navajo Times. "It's really hard to read how people feel about the release," Beyal said. "Some people are indifferent. But the families of the police or of those injured in the riot, they still carry some psychological problems related to that."

According to Beyal, many of those relatives and cops have fallen into despair, into alcoholism. As for his own feelings, "It doesn't matter to me," he says. But he's not among those who consider MacDonald a victim: "I think if anyone set him up, it was himself and his own greed."

Others take a longer view. "Out of this came a stronger Navajo Nation," says Manuel Begay, director of the Udall Center's Native Nations Institute and himself a Navajo. "You now have a clearer delineation of the separation of powers, and a stronger semblance of checks and balances.

"But the Peter MacDonald episode also strongly suggests that we must assert sovereignty first and foremost, because he was an advocate for that," Begay says. "I think we've learned from his leadership that this is critical to economic development. And the challenge rests with current leaders to figure out the boundaries of that."

According to Lupe, of the White Mountain Apaches, MacDonald's fate was shared by other tribal leaders "who were very strong fighters for the Indian cause."

When asked whether MacDonald was targeted for his high-profile advocacy of Indian sovereignty, Lupe pauses. "There have been rumors," he says slowly, deliberately. "In many cases, outspoken Indian leaders have to look over their shoulders all the time. There's been a feeling of that. And Peter MacDonald was a very strong leader, very outspoken.

"Listen, there are pockets of poverty, of unmet need on our reservations. And sometimes we, as leaders, get so frustrated, and we more or less aim for the heart with our words and our stance. Sometimes that rubs individuals on the outside the wrong way.

"But in this modern world of today, there should be forgiveness. We should let lie what has happened. It should be a brand new dawn from now on among Indian peoples."

That new dawn is apparently at hand for MacDonald. Inside the chapter house, a steady stream of well-wishers are still queued up to shake his hand. Outside, old ladies totter away from a banquet table heavy with steaming pots of beans, rows of cupcakes, and glistening bowls of mutton stew.

The mood is one of peace and reconciliation. Forgiveness for one Indian--or for the habitually shabby treatment of all Indians--does not begin and end with Big Mac. Nor does hypocrisy.

Or so it seems.

In the dirt parking lot, a scruffy hound rambles among the legs of Peter MacDonald's faithful, sniffing after scraps before loping out through the gate, and off into the dramatic hills of an incredibly foreign land where sometimes what happens is all too familiar.

Still, this is a place where even the smallest gifts promise great returns. It is, after all, the price of doing business.