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.
An SEC investigation is far from over, Reynolds said.
CNI is wholly-owned by the Cherokee Nation. The tribal council is parallel to the U.S. Congress, and “I wasn’t going to lie to Congress,” Reynolds said Tuesday as a reason for his July 27 answers to councilors.
Alleged pressure from CNI officials about Reynolds’ comments are reflected in Reynolds’ July 31 e-mails to those officials.
He wrote if officials couldn’t handle the truth, they needed a new CFO at CNI.
“I will not be a party to rewriting the Muskogee Phoenix article (July 28), as directed by our chairman, David Ballew, or possibly even the chief. I stand by what I said 100 percent,” Reynolds wrote July 31.
Reynolds also wrote he was there to “clean this mess up” but would neither hide documents nor lie.
Ballew, through Miller, earlier denied asking Reynolds to change his comments to councilors, saying a CNI official merely asked Reynolds to make sure any statements about CNI in the Phoenix article were correct.
In response to Reynolds resignation, CNI Acting CEO Bryan Collins issued a written statement Tuesday that CNI has more than 35 years of proud success behind it, “and we think the best years are ahead of us. It is unfortunate that Mr. Reynolds has chosen not to be part of that success and growth.”
Reynolds’ resignation letter said he found very few highly experienced business people in the Cherokee Nation.
“It is my hope that the Nation will take some of their excess cash and provide for education so that this can be changed,” he wrote.
“The amount of money they have and the lack of (business) experience they have astounds me — it really does,” Reynolds said.
Reach Donna Hales at 684-2923 or email@example.com.
Cherokee official steps down after remarks over business loss
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