, Muskogee, OK

Local News

August 15, 2006

Tribal business CFO resigns

Cherokee official steps down after remarks over business loss

The chief financial officer of Cherokee Nation Industries resigned Tuesday.

The resignation came as fallout from CFO Tom Reynolds’ candid remarks about $6.3 million in CNI losses he made to tribal councilors June 27.

Reynolds wrote in his letter of resignation that he was told his position would be political, “but I didn’t know that you meant covering the (Cherokee) Chief’s rear was job one, and business was job two! This is not a situation I am comfortable with. I am a businessman, not a politician.”

Cherokee Nation spokesman Mike Miller said Principal Chief Chad Smith never talked to Reynolds, never met him and “doesn’t know what he’s talking about with that reference.”

Seven tribal councilors have sued Smith, suspended CNI CEO Jim Majewski of Tahlequah and Cherokee business advisor Benny Dixon of Haskell in federal court in Muskogee. The suit claims violations of security fraud, corporate waste and mismanagement and breech of fiduciary trust.

The internal legal squabble involves CNI’s multi-million losses in connection with the 2005 purchase of Global Energy Group and related companies from venture capitalists.

The tribe’s attorney general has since sued the seven councilors in tribal court, stating they have no right to file suit on behalf of the Cherokee Nation.

Reynolds wrote Tuesday that he didn’t go to CNI to get involved in a fight and play hide and seek with documents.

Reynolds, a retired CEO of a Fortune 500 Company, said he was bored with retirement when he took the CNI job May 15.

“I feel like it was 10 years ago,” he said Tuesday.

Stockholders who were venture capitalists got most of CNI’s multi-million investment instead of it going into operation of the companies, Reynolds told councilors. Security and Exchange filings by GEG reflect it never made a profit and accumulated losses of $12 million since its inception in 1998. Records reflect a $6 million indebtedness to preferred stockholders.

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