Directors sued for financial violations

June 9, 2006 by STEVE KADEL, H&N 

Some Modoc Point Irrigation District members are suing the district's board of directors for negligence and financial mismanagement.

Among issues raised in their lawsuit is an allegation the board put as much as $2 million in federal funds, intended for district use, into a private bank account.

Defendants are board members Pete Bourdet, Roy Gienger, Brian Allen, Daryel Zierke and Arthur Atchinson. The civil suit was filed in Klamath County Circuit Court.

Medford attorney Melinda Cauvin, who is both a plaintiff and attorney for the plaintiffs, said in court documents she heard Bourdet say federal funds meant for the irrigation district's Chiloquin dam removal project were deposited in a bank account that is not the district's account.

She said Bourdet controls or has access to the account holding the funds.

Cauvin downplayed her statement in court documents when interviewed Thursday, saying no one is blaming board members of wrongdoing. Instead, she said the lawsuit's goal is to find out if Bureau of Indian Affairs money has been misused.

BIA money would be used for an endowment to pay for running irrigation pumps after the dam is removed, Martinis said.

Bourdet declined Thursday to comment on an ongoing lawsuit. However, defense attorney Mike Martinis of Salem called the comments about his clients “serious allegations.”

“There was never any money paid out (by BIA),” he said. “Once it comes in it will go into a Modoc account.”

He said all charges in the lawsuit are untrue, and he is considering a defamation of character lawsuit against plaintiffs.

“Everything I have investigated shows there is no foundation in law or in fact,” Martinis said.

Martinis said he looked at more than 8,000 pages of documents plaintiffs have requested. Those include e-mails, correspondence, calendar entries and banking records related to the district's dam removal project.

The petition also alleges board members and the irrigation district breached fiduciary responsibilities and violated Oregon law by spending money for purposes other than allowed by statutes.

The lawsuit claims proper elections have not been conducted for district board positions, and board meetings are conducted in a way that “impairs meaningful participation by owners of land within MPID.”

Plaintiffs also contend the board has “conducted the affairs of MPID in a manner that would result in a disproportionate benefit to their own lands.”

Other plaintiffs to the lawsuit are Bill and Myrna Boyd and Loren Walch.