The former head of the Helena Indian Alliance is scheduled to be sentenced in federal court in Missoula Friday after pleading guilty last year to stealing about $40,000 from the nonprofit organization.

Donald “Louie” Clayborn is the former executive director of the Helena Indian Alliance. He faces up to 10 years in prison and/or a $250,000 fine for “theft from an organization receiving federal funds.”

In a letter, Clayborn’s attorney, Michael Donahoe, asked U.S. District Court Judge Donald Molloy for leniency at the sentencing, saying Clayborn has “learned his lesson and won’t be a repeat offender,” that he doesn’t present a danger to the public and that a prison term would only be punitive.

“… Given defendant’s long history of good works and his ability to overcome tragic childhood beginnings, a slight (sentence reduction) is warranted here,” Donahoe wrote in the memorandum to the judge.

Clayborn’s three children, as well as Donahoe, outlined his difficult upbringing in letters to the judge. They wrote that he was forced to watch a man beat his mother to death while he was tied up with his siblings at age 8, and his father committed suicide when Clayborn was 11.

“He lived in poverty when he had someone to live with, and lived on the streets alone when he didn’t. By all rights, he should probably be dead by now,” Mickey Kunnary, Clayborn’s eldest daughter, wrote. “But instead, he finished high school and college, married our mother and became one of the most successful people in Montana’s Indian Country today.”

Clayborn, now 51, was working for Gov. Ted Schwinden as coordinator of Indian affairs when his wife died of a brain tumor, leaving him with three young children. He took the job as head of the Helena Indian Alliance in 2003.

According to court documents, during the four years Clayborn was executive director, the organization received more than $3 million in federal funds from the U.S. Department of Health and Human Services.

The books of nonprofit groups that receive federal funding are audited on a regular basis. In early 2007, the Alliance’s board of directors was given a draft audit of 2005, which found various problems with their finances.

Clayborn allegedly would tell co-workers or the Alliance board that he needed extra money for work-related travel expenses. He wasn’t actually making any trips, yet still obtained cash advances and reimbursements for official travel.

“The offense is serious and (the) defendant admits that it is something he should have never done,” Donahoe wrote in court documents. “But through a combination of poor management and greed on (the) defendant’s part it just got easy to plan to take a business trip, have it pre-funded but get distracted doing something else intending to take the trip later.”

The Alliance’s policy was that any checks for more than $500 had to be approved, so Clayborn wrote himself numerous ones for $490. Typically, the Alliance’s annual traveling costs were around $2,000, but during the times of the alleged thefts they jumped to about $20,000 per year.

Clayborn resigned his position in February 2007.

A recent accounting put the loss of federal dollars at $42,130, and the government is asking for restitution of $35,303.

Nicholas Vrooman was appointed director of the Alliance in January 2008, after having served as interim director since the previous July. He’s expected to testify Friday as to the services the Indian Alliance couldn’t provide to clients due to the embezzlement by Clayborn.

The Alliance, which has served the Native American community since 1969 in the greater Helena area, has changed some of its accounting practices and made cuts in its programs to stay afloat, including laying off the medical director of the Leo Pocha Health Clinic. It’s also paying back $117,000 on debts from years of deficit spending under Clayborn.

Clayborn was allowed to remain out of jail pending sentencing.

Reporter Eve Byron: 447-4076 or eve.byron@helenair.com