Lessons From a Botched Investigation

Hubbell Trading Post National Historic Site has an unusual distinction among the collection of national parks, monuments, sites, etc – it is not just a recreation of a trading post; it is an actual working trading post. It was established in 1878 by John Lorenzo Hubbell. In 1965, the Hubbell family made an agreement to turn the entire operation over to the National Park Service. This was with the unusual stipulation that the trading post be maintained as a true, working Indian trading post. This resulted in the need for an authentic Indian trader to run the post.

From 1965 to 2004, three different individuals held the post as Indian trader for Hubbell. The individuals were as unique as the situation, each having previously succeeded (for a number of years) with their own trading posts, and having built a reputation as honest traders with the Navajos in the area. The last of these three, Billy Malone, was the trader at Hubbell for 24 years and all indications were that he was very successful in his role. His tenure ended with search warrants, a raid, confiscation of vast amounts of Indian artifacts, and the beginning of a multi-year investigation.
With that as the background, you might think that Paul Berkowitz’s book The Case of the Indian Trader is the story of the frauds that were perpetrated, how they were discovered, and how justice was served. Well, justice was eventually – kind of – served, and this is, indeed, the story of lies and malfeasance. However, the errors and omissions are those of the investigators. And Berkowitz makes the case that Malone was an innocent man who suffered because of politics, a botched investigation, and years of obfuscation and lies intended to cover up the inadequacy of that investigation. 
How does Berkowitz know so much? Because he was the investigator called on in the middle of the investigation to clean up the mess and to prove there was cause for prosecution. (And that last comment – to prove there was cause for prosecution – should tell you all you need to know about the wrong way this investigation was handled.) Berkowitz is the individual who eventually turned his investigation over to the Office of the Inspector General to try to right the wrongs he felt had been perpetrated.
The book is fascinating to any auditor/investigator because it is an excellent case study of how an investigation based on little or no predication which is then poorly planned and poorly executed can go wrong. Here are just a few of the important lessons that come from this book:
1)      Never underestimate the power of politics. Berkowitz paints an investigative group working within the NPS that is unable (or unwilling) to do its job because of the politics that can drive any federal agency.
2)      Never assume guilt will prove itself out. Corollary: Never assume you don’t have to worry about following proper investigative procedures because you think it is an open and shut case.
3)      Never underestimate the culture. (And this may be one of the great lessons.) Running an Indian trading post is not like running a regular business. It is steeped in a tradition of trust and verbal agreement that would send any accountant running for his or her ledgers. Handshake deals for thousands of dollars, commissions pulled from government issued checks, and handmade tags used to maintain millions in inventory are just a few of the “idiosyncrasies” that are every day practices within a historic trading post. But, according to Berkowitz’s account, those doing the investigation never understood the environment, and didn’t properly take into account those differences. And so, not understanding the environment led to a complete misunderstanding of what problems might actually exist.
Berkowitz has an insider’s knowledge about what occurred in this investigation, but supports it with substantial documentation (and footnotes.) Berkowitz comes into this with an axe to grind, but it is quickly evident why that grinding might be appropriate.
And no matter what prejudices he may bring to this book, there are lessons galore for the auditor and for the investigator. If you read this book you will get an excellent appreciation for the different culture that exists in the Navajo Nation (the trading post culture, in particular), some interesting insights into how the National Park Service operates, and example after example of how not to run an investigation.

Posted on Aug 12, 2011 by Mike Jacka

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