Controller says he refused override in ZenniHome fund dispute, warns of ARPA repayment risk

Sean McCabe told Navajo Nation investigators he would not overrule financial controls to push $24 million directly to ZenniHome, warning that the tribe faced a serious risk of having to pay the federal relief money back. His testimony turned the long-running housing fight into a sharper question of fiscal accountability, with millions in ARPA funds, and the potential repayment burden, hanging over the Navajo Nation.

McCabe, the Navajo Nation controller, testified under oath on June 11 and said the $24 million ARPA allocation was, in his view, “a completely unallowable cost.” He also said there was “very significant risk” the Nation could be forced to repay the money. According to KJZZ, he was the first subpoenaed ZenniHome witness to testify after the Navajo Nation Department of Justice advised government staff not to take the stand.

The testimony comes as the Navajo Nation Council probes whether the Executive Branch followed Executive Order No. 06-2023, which President Buu Nygren signed on August 18, 2023, to require timely review of documents needing presidential action or council and committee approval. The council’s investigatory Legislation No. 0174-25 was introduced on July 12, 2025, after lawmakers said they wanted to examine compliance with Navajo law, procurement rules and public trust in ARPA-funded housing deals.

The dispute traces back to the ZenniHome initiative announced by the president’s office in March 2024, with an early plan for 160 homes at a cost of $44 million. That project was later cut to 80 homes for $22 million on July 3, 2025. ZenniHome then shut down its LeChee operations in July 2025, saying more than 210 employees were affected and that it had lost more than $47 million.

For Apache County families, especially in and around Tuba City and other Navajo communities tied to the regional housing shortage, the stakes are practical as much as political. If the federal money must be repaid, less cash would remain for homes, services and other priorities already stretched thin. The hearing has also exposed deeper concern inside Navajo government about whether senior officials, the council and the controller’s office can keep large development deals inside the safeguards meant to protect public dollars.

McCabe also told officials the $24 million grant did not fit the federal spending category the Nation was using to report it. That accounting dispute now sits at the center of a broader test of whether the Navajo Nation can manage major economic-development spending without leaving taxpayers exposed.