Suspended Navajo vice chairman Johnny R. Thompson says he watched Peter MacDonald push for the tribal purchase of the Big Boquillas Ranch, a July 1987 transaction which prosecutors charge MacDonald backed for profit.

However, Thompson also said during testimony Thursday that he was not close to MacDonald, who was sworn in for his fourth term as chairman in January 1987, suspended in February 1989 and now is on trial for bribery and conspiracy."We did not communicate as one would have expected to see," Thompson said.

The day ended with Thompson still on the witness stand.

MacDonald pushed hard for the acquisition of the 491,432-acre property in northern Arizona, including ousting tribal employees who opposed the idea, Thompson said.

Some employees were "reassigned to lower-level departments and . . . wound up unemployed," he added.

Earlier Thursday, Judge Robert Yazzie of tribal District Court refused to force Peter "Rocky" MacDonald Jr. to testify against his father and co-defendant.

The judge rejected without explanation a motion by special prosecutors to dismiss the single conspiracy count against Rocky MacDonald and to compel him to testify against his father.

The two are on trial on charges stemming from the tribe's purchase of the ranch for $33.4 million hours after it had been sold to a third party for $26.2 million. Prosecutors allege the senior MacDonald divided up the profit with the middleman, Tracy Oil Co. of Scottsdale, and a broker.

The elder MacDonald is charged with single counts of bribery, fraud and conspiracy and 10 ethics violations stemming from the purchase.

MacDonald showed no emotion during the testimony by Thompson, who was a tribal councilman from Pinedale, N.M., and Iyanbito, N.M., before MacDonald chose him for a running mate in 1986.

The Tribal Council suspended Thompson on March 10, 1989, the day it appointed Leonard Haskie as interim chairman for MacDonold.

Thompson said MacDonald chose Ninibah Cahn, executive director of tribal land administration, to spearhead the purchase of the ranch early in 1987. Throughout the year, MacDonald lobbied for pet projects with the tribe's Budget and Finance Committee, Thompson said.

Yazzie agreed Wednesday to dismiss election-fraud charges against Thompson and grant him immunity from prosecution in exchange for his testimony against the chairman.

However, he rejected the same type of deal for Rocky MacDonald the next morning, refusing to dismiss the single conspiracy count against the junior MacDonald or to compel him to testify against his father.

The trial had been halted while Yazzie studied the prosecution request.

Special Prosecutor Robert Rothstein told the court Wednesday that Assistant U.S. Attorney Wallace Kleindienst had agreed to honor a grant of immunity and not use Rocky MacDonald's testimony in Window Rock to prosecute him in federal court.

A federal grand jury in Phoenix has been investigating the MacDonald administration but has not returned any indictments.