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Bakken Oil: An Elder Speaks To Power

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Tribal Data Base

This is one reason Marilyn Hudson wants to establish an online database of anything and everything that the Bakken Oil boom brings to the reservation so that tribal members know more about what their representatives on the Tribal Council are doing. She would also like to see more access to data on health and education issues. The community college is under threat of losing its accreditation, roads are a mess, people are sick, and the tribe takes in over $8 million a month from oil leases. The Landowner's Association of Fort Berthold needs more than a database. It needs the exabytes of the NSA Utah computer storage facilities.  

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On the surface, recent allegations and lawsuits filed in Federal and District Courts involve patterns of greed and swindling that could have been taken from the pages of the script for the movie "Promised Land." Starring Matt Damon and Frances McDormand, the movie is a moral tale as old as time involving conveniently intersecting political and economic interests.  

A 2011 reservation audit charged that there was corruption, nepotism and "ethical violations and/or criminal activity" among the tribal officials who arranged sweet oil deals.  

In 2011 a team of elders audited the tribal council's activities. They found widespread financial inconsistencies that they said indicated systemic misconduct. "We saw millions of dollars going out and hardly anything coming back" to the Three Affiliated Tribes, said Tony Foote a forensic auditor who chaired the team. "We're not just talking about cash. It's rooms, food, travel, donations, and there's only a handful of people that can get all this stuff."

But who was responsible? Was the USA culpable for not exercising its duty as caretaker of the "sovereign nation" of Fort Berthold? Or does blame fall squarely on the shoulders of tribal leaders and business associates who allegedly schemed to defraud Tribal members of fair compensation for oil leases? What about the Bureau of Indian Affairs that literally rubber-stamped unfair lease sales?

BIA Rubber Stamp by Georgianne Nienaber

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Are the Tribes a Sovereign Nation or is the USA King ?  

In November 2012, a Class Action Complaint filed in the US District Court of North Dakota by Ramona Two Shields and Mary Louise Defender Wilson (Case 4:12-cv-00160-DLH-CSM) accused tribal middlemen and others of a lease swindle that flipped 42,000 Indian Trust Land acres of mineral interest acquired at well below market prices. The Trust Land was sold for a paltry $50 an acre to an entity known as Dakota-3, which subsequently sold the drilling rights to Williams Companies for an eventual $925 million. Dakota-3 was a shell company, set up with no value for the sole purpose of purchasing and flipping leases.  

Two players who were working for the reservation allegedly organized the swindle. The Four Bears Casino manager (Spencer Wilkinson--as alleged in the complaint) had access to casino funds for influence and also served on the board of directors for the tribal-owned Fort Berthold Development Corporation (FBDC). Rick Woodward was hired as a consultant for the FBDC to obtain government work contracts for minority-owned businesses.  

The complaint alleges that Wilkinson and Woodward began to implement their land grab scheme as early as 2006, when the extent of the extractable oil was enhanced by horizontal and fracking drilling techniques. The plan was to lease a large amount of tribal acreage at the Fort Berthold Reservation "from the Tribal Business Council (TBC) while at the same time leasing a large amount of individual allottee acreage" on the reservation.

85,000 acres of tribal and allottee mineral leases on the Fort Berthold Reservation eventually changed hands. The payoff in the final flip was $10,000 per acre and "not the $110 per acre lease bonus that most individual Native American mineral interest owners were paid, according to the complaint." ("Indian allottee" means any Indian for whom land or an interest in land is held in trust by the United States)

The "Two Shields" case is still alive and will be argued on Sept 20,2013 by all parties, including an Amicus argument by the US government, in US District Court in Bismarck. "Amicus" means a party not directly involved, but considered a friend of the court. While the US government was not specifically named in the original lawsuit, the original class action complaint contains page after page of how the Bureau of Indian Affairs did not exercise its duty to oversee lease sales, and instead rubber stamped the sales to the benefit of middlemen.

Two Shields vs. USA Rubber Stamp

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In a separate case in Federal Court (Case #1:11-cv-00531-LB), filed in August 2011, Two Shields and Wilson sued the USA for $400,000, "alleged (ing) that the United States mismanaged their non-monetary trust assets, namely that the United States breached its fiduciary obligations to Plaintiffs by entering into certain oil and gas leases on allotted land within the Fort Berthold Indian Reservation between 2006 and 2009."  

The suit charged that speculators took advantage of a 1999 amendment to the Mineral Leasing Act of 1938 that allowed them to get each lease from individual allottee lands with the approval of a simple majority of the mineral interest owners and the approval of the BIA "rubber stamp."  

As early as March 26, 2008 a letter from the Fort Berthold's Elder's Association to the BIA raised a huge red flag.  

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Georgianne Nienaber is an investigative environmental and political writer. She lives in rural northern Minnesota, New Orleans and South Florida. Her articles have appeared in The Society of Professional Journalists' Online Quill (more...)

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