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Former Alaska tribal leader headed to jail for siphoning funds

Jill Burke
A federal judge on Tuesday sentenced a former president for the Native Village of Tatitlek to 18 months in prison for her illegal spending sprees fueled by tribal funds.
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Lori Clum, 46, wasn't in power long as tribal president for the Native Village of Tatitlek, located south of Valdez, where the Trans-Alaska Pipeline ends its overland trek from the North Slope oil fields and meets the waters of Prince William Sound. But she was in power long enough to create a lot of damage and generate lasting heartache in the place dozens of people call home. On Tuesday, she was sentenced to a year and a half in prison for her crimes.

On Jan. 22, the mother and grandmother must turn herself in to U.S. Marshals and begin her 18-month prison sentence for misapplication of tribal funds, including double-dipping into the village's bank accounts, wrongful and inflated payments to herself, and outright theft of the village's money. She must also repay $150,000 to Tatitlek, a traditionally Alutiiq community of fewer than 100 people. It closes one of several chapters in a long, sad struggle over power, made even more difficult by Clum's compulsion for narcotics and booze, and driven by her own personal tragedies.

“While we can list the damages from not having money to operate our community the damage done to the residents emotionally is something that cannot be fully described in words,” current village president David Totemoff told the court in a letter that he wrote to ensure the hurt he and his community have endured didn't go unnoticed. “The fear that you will be without your job to create income for feeding your family or the threat of not having fuel to heat your home is devastating.”

Prosecutors argued Clum -- also known as Sue Clum and Sue Johnson -- installed herself as president after calling for a new election in 2007 during the first term of David Totemoff, who had just taken over after the death of a man who'd held the position for more than 30 years. Further elections to try to unseat Clum were unsuccessful, not because Clum won, but because she refused to cede her seat and took steps to ensure none of the presidents-elect could have access to the village bank accounts.

As the months wore on, Clum managed to transfer approximately $112,000 of the village's money to herself, and got the village into other financial trouble from which it is still digging out. A $40,000 IRS bill and another $40,000 fuel bill had the village facing stark consequences. The IRS was threatening to shut the tribal council down. The fuel company was threatening to refuse to bring fuel to the community, which exists off the road system and is accessible only by boat or plane. In Alaska, many rural residents warm their homes with stoves that generate heat by burning oil. A lack of the fuel needed to fill those tanks is a big deal, especially considering the state's harsh winters.

Clum's attorney, Michael Dieni, argued that his client didn't set out to commit a simple theft, but that the crime evolved from “the rough and tumble of a difficult political situation, and a misguided attempt to control power by controlling the money.”

That, and the woman who had never earned a high school degree and whose job experience before becoming village president amounted to running an unprofitable ice cream and tanning parlor “had no obvious skills from which anyone could predict that she was prepared for the job.”

Family connections and personality are what got Clum elected, not skill, he told the court.

Clum, who will spend time in prison while her 18-month-old son reaches developmental milestones and marks birthdays, has the support of many friends and family members who say she's a changed woman. She's found God and is repairing relationships that had previously been strained. Her current husband, mother-in-law, adult daughter, neighbor and a pastor all wrote letters on her behalf, describing a woman who was caring to a fault.

Dieni also brought up that painful memories haunt Clum, enough so that she may need mental health counseling to deal with her grief. The child of parents who abused drugs and alcohol, Clum has suffered the loss of many family members in her lifetime, including younger siblings, her nephew and her son.

And she's succumbed to the same substance abuse demons that affected her parents; the federal court case for misuse of tribal funds isn't her only legal problem.

A year ago, she was charged with bootlegging along with a pile of drug crimes. An indictment with 21 charges accused her of selling vodka in the dry village, weapons violations, and possession of heroin, oxycodone, methadone, crystal meth and other drugs. 

Meanwhile, Totemoff and the Native Village of Tatitlek are working to restore relationships done in by Clum, and restore sources of income, like grants, lost during the mess.

Had the IRS shut the village council down, it could have ruined the village, Totemoff asserted, as the council and the jobs it creates are lifelines for the small community.

“With no money to pay wages there were minimal jobs without adequate pay. In addition, we lost our summer youth program that provides job training and income to our youth. Being able to provide jobs and income is one of the main functions of the IRA (tribal) office and essential for survival,” he wrote in his letter to the court.

“The impact of her actions goes beyond what we as a community can describe in words,” he wrote.

Contact Jill Burke at jill(at)alaskadispatch.com