News & Features

FBI Investigating Flathead Irrigation Organization

Flathead Joint Board of Control under scrutiny for potentially misappropriated funds

The governmental organization that represents roughly 2,400 irrigators in the Flathead, Mission and Jocko valleys is under federal investigation for potentially misappropriated funds.

The Federal Bureau of Investigation has taken over an investigation into the Flathead Joint Board of Control, a collective led by 12 elected board members and one full-time employee that represents irrigators in three separate districts as part of the state’s largest irrigation system, the Flathead Irrigation Project.

Johanna Clark, who served as executive manager of the FJBC starting in 2013, was placed on unpaid leave May 5 and was fired by the board on May 24 after a closed session. Board members interviewed for this story declined to comment on Clark’s firing, citing confidential personnel issues.

When reached for comment, Clark declined to elaborate on the situation or respond to any potential allegations.

“I think that as we work through and start answering the questions that everyone has posed, I think that we’re all going to emerge stronger from this,” she told the Beacon. “But at this point my attorneys have instructed me not to comment to press. At this point, I just respectfully ask that you let the folks charged with this do their jobs. As soon as we will be able to make a statement we will be happy to.”

The FBI did not comment on the active investigation, as per agency protocol.

FJBC board members confirmed the federal probe, which launched last month, but were able to provide few details.

“It was turned over to Lake County. Lake County gave it to the FBI. That’s about all we know,” FJBC Chairman Tim Orr said.

Bruce Fredrickson with Rocky Mountain Law Partners, the Kalispell-based law firm that is the FJBC’s general counsel, said a review of FJBC procedures found potential “areas of deficiency.”

“We had noticed some areas that we were concerned about with respect to procedures, office protocol and so forth,” Fredrickson said.

He continued, “There were some issues with some of the financials that were exposed a bit during the course of that report that led the board to take the steps to dig a bit deeper.”

The report looked back as far as Jan. 1, 2013 through May 4, Fredrickson said.

The report was also delivered to the Lake County Attorney’s Office, which began probing the FJBC’s finances and procedures.

The FBI, which has jurisdiction because the FJBC operates on the Flathead Indian Reservation and with the Flathead Irrigation Project, became involved in mid-May. The FJBC board is also conducting a separate forensic audit, which aims to provide a clearer picture of potential discrepancies.

Orr said the FJBC is currently rewriting the job description for Clark’s replacement and will begin searching for a new part-time office manager soon.

The FJBC represents private fee-paying irrigators in the Mission, Flathead and Jocko districts and oversees general administration, maintenance and repairs throughout the sprawling irrigation system, which covers 130,000 acres. The FJBC budget was $545,313 in 2016 and $553,930 this year, according to financial reports published on the FJBC website.

The FJBC is no stranger to controversy. The governmental organization was formed in 1982 under state law to serve as the central operating agency for the Flathead Irrigation Project. Amid the contentious debate over the Flathead water compact, the FJBC disbanded in 2013, leading to the Bureau of Indian Affairs to retake control of the irrigation system in early 2014. The FJBC regrouped and sued for control of the project again in federal court, which was denied in 2015. The FJBC has also challenged the legality of the water compact and has questioned water rights claims on the Flathead Indian Reservation.

Last year the FJBC board voted to cancel election results for three contested board seats, claiming some irrigators did not receive ballots or received improper ballots. The board vowed to ignore the votes. Lake County challenged the decision, saying the board had no legal reason or authority to deny the election results. The issue is in the hands of a District Court judge.