Toward the end of former President Joe Biden's time in the White House, a $50 million chunk of the $1 billion in grants that were awarded to nonprofit groups went to a New Mexico charity, the Tribal Energy Consortium, and now tax experts say the grant must be vetted because of the group's ties to another grant recipient.
The Trump administration is investigating the grant, along with other Energy Department grants made under Biden, and the TEC hasn't yet gotten the money, reports the Washington Examiner.
The probe will include an examination of the TEC's ties with a federal grant recipient who reportedly has a record of mismanaging finances, a source told the publication.
According to federal records, the TEC is led by former Enron Corporation manager Roger Fragua.
The TEC was formed in 2023 to advocate for energy and mineral development. It is located in Jemez Pueblo, which is on federally recognized Indian tribal land where about 3,400 people live.
Members of the consortium include the Navajo Nation Oil and Gas Company, based in Arizona, along with Missouri River Resources and tribes in Oklahoma, New Mexico, Colorado, and other states.
The TEC was awarded the $50 million after the Energy Department posted a funding notice online through the Office of Fossil Energy and Carbon Management.
The grant, which is only for a one-year term, was awarded to allow the TEC to empower tribal communities to reduce methane emissions on tribal lands, according to federal records.
Meanwhile, Fragua is the founder and executive director of the Flower Hill Institute, also based in Jemez Pueblo. The charity focuses on climate change and agriculture initiatives.
In 2022, the organization was determined, through a government-ordered audit to have "material weaknesses in internal controls."
The audit showed that the Fragua group did not test to determine if anyone else but three companies tied to its board members had fit criteria to be contractors.
One of the companies, Cota Holdings, shares its address with the Flower Hill Institute and the TEC, the entity winning the $50 million grant.
Meanwhile, tax experts say it's a conflict of interest for charity leaders to award contracts to their own companies, and Cota Holdings was paid in 2022 as a contractor, even though Fragua was not being paid.
"A board member voting to end their own lucrative, multiple six-figure contract with the same charity they are responsible for overseeing seems unlikely, even if it would be in the charity's best interest for them to do so," Laurie Styron, the CEO of Charity Watch, commented. "Unless the consultants are offering some kind of incredible discount for services and these services could not be reasonably obtained elsewhere from a disinterested provider, charities really shouldn't engage in these kinds of contracts. It just looks bad. It damages public trust."
The audit documents also showed that Flower Hill overbilled the Department of Agriculture, which awarded it more than $10 million in 2022.
The other independent contractors tied to board members were also paid hundreds of thousands of dollars combined, tax forms show.
"Flower Hill has been billing the U.S. Department of Agriculture 100% of its annual expenses in
equal monthly amounts whether the total amount billed was expensed or not," the charity stated in IRS documents.
The Department of Agriculture told the Washington Examiner it reviewed a corrective actions plan by the Flower Hill Institute to address its management issues.
Fragua did not respond to a request for comment, nor did Flower Hill or the TEC.
Sandy Fitzgerald ✉
Sandy Fitzgerald has more than three decades in journalism and serves as a general assignment writer for Newsmax covering news, media, and politics.
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