Board members of the financially troubled Seattle Indian Services Commission have filed a lawsuit to stop a takeover by the city of Seattle.
The takeover was prompted by string of bad reports from the Washington State Auditor, including a 2011 audit that revealed $70,000 in unaccounted expenditures.
The audit also noted that the Seattle Indian Center, which is operating in one of the commission’s two buildings, is behind on its rent.
The city council authorized Mayor Mike McGinn to intervene, and McGinn removed the board members from the Health Board and Indian Center to eliminate a conflict of interest. The board members McGinn removed would have set the rent and represented organizations paying the rent.
McGinn also placed his own director of Finance and Administrative Services, Fred Podesta, as the board’s chair.
But three members of the board — including one still on the mayor’s reconfigured board — have hired a lawyer and are suing, saying McGinn does not have the legal right to make those changes.
The lawsuit states that the mayor and city council do not have the legal authority to remove or place people on the board. It also contends that the city intends to transfer ownership of the buildings to the Indian Health Board.
The city, however, established the commission and is also the guarantor on its bonds. If the commission defaults, the city pays.
The lawsuit has stalled the city’s efforts to address the commission’s financial trouble. The commission owes $6.7 million in bonds on the two properties it owns, the Leschi Building at 611 12th Ave. S., and the Pearl Warren Building at 606 12th Ave. S.
The commission was supposed to meet Oct. 16 for the first time in its new configuration, but Podesta cancelled the meeting because of the lawsuit.
Two of the ousted board members, James Louie and Jim Price, met with board member Andrina Abada and answered questions from the public, but did not make any formal decisions. Abada held the meeting claiming that she is still the commission’s chair.
All three have signed on to the lawsuit.
Podesta said he will schedule another meeting soon, but Abada said it will not be an official meeting of the commission.
“I’m not going to [Podesta’s] meeting because I don’t recognize his authority,” she said.