Appointee to Bureau of Indian Affairs resigns after report slams loan program he oversaw
WASHINGTON - Gavin Clarkson, a senior Bureau of Indian Affairs official whom Interior Secretary Ryan Zinke appointed in June, quietly resigned Monday, Nov. 13, 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 . . . as we work together with tribes to increase economic opportunity and promote self-determination throughout Indian Country."
But before joining the Trump administration, Clarkson served as a consultant for tribes that received loans under the program, including a $22.5 million loan for the Lower Sioux Brule tribe that helped finance the purchase of a brokerage firm that eventually went under. As a result, the Interior Department is now being sued over its refusal to guarantee the remaining $20 million balance on the loan.
The IG report, which was released Nov. 9, found that BIA's Division of Capital Investment (DCI), which falls under its Office of Indian Energy and Economic Investment (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.
"Between 2010 and 2016, DCI paid approximately $12.4 million in claims resulting from defaults, and received an additional claim for approximately $20 million, which had not been paid at the time of our review," states the report, which notes that as of Sept. 30, 2016 the program was "potentially liable" for $606 million in loan guarantees." Should any of the borrowers default on these loans, it is ultimately taxpayers who would carry out the burden of bailing out the lenders since their obligations are guaranteed by the U.S. government."
The IG 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. In one case, involving a $16 million loan guarantee for a film project, the chief "approved the application without formally documenting his rationale for disregarding the recommendation" of the credit panel.
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. I am excited to help tribal nations and tribal entrepreneurs create the conditions under which they can build, expand and sustain their economies."
In an email, Interior press secretary Heather Swift said of his resignation, "the department cannot comment on personnel matters."