Hank Bolman: Thank you.     




REPORT OF THE TRANSITION TEAM

Submitted to

Chairman Tex Hall

Mandan, Hidatsa and Arikara Nation

February 25, 2011

TABLE OF CONTENTS

SECTION                                                                                PAGE

I.    Tasking of the Transition Team                                        5                

II.    Data Collection Process                                                   5

III.   Findings of the Transition Team                                               6

IV.   Review of Small Loans & Independence Program           7        (Under separate cover)

V.    Housing Program                                                            8

                   a.  Fort Berthold Housing Authority                    8

                   b.  Dreamcatcher Housing Program                     8

                   c.  210 Home Project                                            9

                   d.  HIP Program                                                   10

                   e.  Elder Homes                                                    10

VI.    Law and Order                                                               11

VII.   Oil and Gas and IMDAs                                                 11

1.     Williams Oil                                                    13              

2.     Arrow Pipeline                                                          14

3.     Mineral Leases on Allotted Lands                             14

4.     Taxation – State vs. Tribe                               15

5.     Right-of-ways                                                  16

VII   Travel Costs                                                                    16

1.     Airfare and Perdiem                                        16

2.     Local Mileage                                                  17

3.     Tribal Vehicles                                                17

VIII  Cell Phones                                                                     18

IX     Grants, Honoria, Financial & Medical Assistance                   19

X       Health and Human Services                                           20

XI      Review of Tribal Business Council Actions                            21

XII    Tribal Budget                                                                 22

XIII   Tribal Debt                                                                    22

XIV   Tribal Business Enterprises                                           23

XV    Transparency of Tribal Government                             23

XVI   Constitution – Separation of Powers                                      24

XVII Tribal Boards                                                                25

XVIII Tribal Vision                                                                      25

XVIV Summary                                                                            25

          RECOMMENDATIONS                                               28

1.     Audit                                                                         28     

2.     Develop a Vision for the Fort Berthold Reservation 28

3.     Constitution Revision                                                         28

4.     Convert All Tribally Owned Fee Land To Trust                28

5.     Oil and Gas Task Force                                            28

6.     Internal Audit Board                                                 29

7.     Taxation                                                                             29

8.     Oil and Gas Lines                                                     29

9.     Housing                                                                    30

10.             Law and Order                                                              30

11. Travel                                                                      31

12. Tribal Vehicles                                                                  31

13. Cell Phones                                                              32

15. Health and Human Services                                              32

16. Transparency                                                           33

17. IPAs                                                                         33

18. Right-of-Ways                                                                   34

19. Building Tribal Financial Capacity and Infrastructure 34

20. Tribal Businesses                                                     34

21. Department of Public Works                                   34     

22. Government Capacity                                              35

          23. Zoning                                                                     35     

I   TASKING THE TRANSITION TEAM

On November 13, 2010, Chairman Tex Hall announced the appointment of a Tribal Transition Team and tasked them to (1) gather information and supportive documents, (2) to conduct a review of several key areas in Tribal financial administration and management of Tribal programs, (3) to report their findings to him, and (5) to make recommendations for addressing each issue raised in the report.

II.      DATA COLLECTION PROCESS

The Team collected and reviewed financial records, minutes of the Tribal Business Council (TBC) meetings and TBC resolutions that were available, tribal communication media i.e.: MHA Times, KMHA Radio, comments posted on the elbowoods.com web site, heard their concerns and recommendations for improving the delivery of the Chairman’s Action News and other news media.  The Team met with individual tribal members and tribal employees and program directors and tribal services to the members of the tribe.

The major issue for this report was the tracking of tribal funds.  The Team accessed the tribal finance system and compiled data on expenditures by the Council and individual Council Representatives. This report is included in the exhibits and it clearly shows how funds have been expended.   

The TAT have far too many programs and businesses to review in the time allowed for this project, however, the Team was able to review the key program areas we felt were most vulnerable to mismanagement under the present system of government. 

It has been extremely difficult to obtain dependable information without the authority to subpoena or obtain testimony under oath.  Therefore, our first recommendation is to refrain from releasing the names of individuals who are either a part of this review, or are under review, until investigators empowered with authority to subpoena data and obtain testimony under oath are able to verify or disagree with our findings and/or obtain credible evidence of any charges of wrongdoing.

III     FINDINGS OF THE TRANSITION TEAM

The Team found numerous financial transactions that appear to be in

violation of standard government business practices.  There are instances where we have identified ethical violations and suspect criminal activity based on our review of “Principles of Ethical Conduct for Government Officers and Employees” , the U.S. Code for Offense Against Public Administration” and the .  

Significantly, several Tribal Programs appear to be lacking operating policies and procedures and there are other programs that fail to comply with the policies and procedures that are in place.  There appears to be no usable property management system or fiscal controls that assure accountability of tribal property.   There are no records of requests to purchase, advertisement for competitive prices, cost, funding source, location of property or identification of the person responsible for the property.  A functional property management system is mandatory to prevent waste fraud and abuse of tribal property. 

There does not appear to have been consistent enforcement of any policies or procedures established by the council.  The entire operation of the Tribe, in fact, whether it involved the leasing of valuable tribal minerals, the hiring of qualified individuals to carry out the business of the Tribe, the determination of employee wages, the awarding of houses, the use of tribal property and equipment, the disbursing of funds for financial and medical assistance, borrowing or spending limits or the purchasing of goods and services appears to have been conducted on a day-to-day, micromanaged, politically-driven process dominated by the TBC, either as individuals, committees or the Council as a whole. 

We cannot find any evidence of attempts made to institute workable procedures in any aspect of the Tribal management structure.  This chaotic system amply allowed for theft and misuse of Tribal property and resources, as well as self-enrichment by the members of the Tribal Business Council and their families, upper management and/or politically well-connected Tribal employees. 

Based on the budgeting process where there is no official adopted budget for the tribe and therefore no control of spending, it appears that the Tribe has been spending tremendous amounts of money without a reasoned, informed vision of where we want to go in the future.

Nepotism in hiring by the TBC has been an accepted practice.  Nepotism is demoralizing and causes tension and ill feelings that divide our tribe and tribal staff and is disruptive to the work place.

It is our opinion that the tribe has many talented individuals who would like to do a good job but are demoralized because of the poor atmosphere in the work place. It is also frustrating for the programs when they cannot pay their vendors due to insufficient funds in the general fund.  In addition, it is difficult to obtain quality work from employees who have no job security and whose jobs are threatened if they question TBC actions. There are many well qualified tribal members who are reluctant to work for the tribe for fear of becoming involved in a political situation where they may be fired.

Several of the program directors stated their program was overstaffed due to appointments made by former Chairman Levings.  Overstaffing is costly to the tribe and again contributes to low morale among the staff.

The Team met with a member of the audit firm, McGladrey & Pullen, LLP

and discussed audits in general.  From our discussion the Team feels that the audits sampling methodology is not sufficient to identify and report wrong doings.  The auditors do not know family relationships and therefore do not recognize conflicts of interests as the Team members do.  Marcus Levings boasted of a clean audit during the recent campaign, yet the Team has identified several transactions that are very questionable.

The Team submits the following comments and recommendations on items reviewed.  We also submit, under separate cover, a file of documents indexed to assist the reader to readily find documents that support the findings.  

IV.     REVIEW OF SMALL LOANS & INDEPENDENCE PROGRAM

The review of small loans and the Independence Program was a major project and is submitted under separate cover.

V.   HOUSING PROGRAMS

Members of the Transition Committee met with Barb Pegg, Acting Director, Fort Berthold Housing Authority and Lawrence Baker, Acting Director, Housing Improvement & 210 Home Initiative. Our findings in the housing programs are as follows:

Housing on the Ft. Berthold Reservation is administered by the Ft. Berthold Housing Authority (FBHA), the Dream Catcher Program, the Housing Improvement Program (HIP), the 210 Homes Program, and the Tribal Housing Program.  These programs are all under the control of the TBC.  During the years of November 2006 to November 2010, we found widespread evidence that the TBC has micromanaged them all.  Further, from the evidence our Team was able to obtain, they are all in turmoil.

1.  Fort Berthold Housing Authority:

The FBHA Director has written a letter to the TBC stating that the program only had enough funding to operate until the end of February 2011.  There is also concern that NAHASDA funds may have been misapplied by the TBC.

Upon consultation with FBHA Acting Director, it has been determined that this program currently does not have the management expertise and ability to properly manage and account for the 34 Dreamcatcher Units in the Northern Lights Subdivision due to the complexities of mortgages and the unique financing package the program was created under.

2.  Dream Catcher Program

Just before the 2010 election, Former Chairman Levings issued a notice to residents of the Dream Catcher housing program which stated that the paperwork was completed to reduce their payments to $400.00 per month.  We could find no evidence (minutes or resolution) authorizing this action; such behavior lends the strong impression that Tribal resources (the reduction of the payments for the houses) were used to garner votes.

Monthly mortgage and homeowner insurance payments are being made by the Tribe in excess of $1,000.00 per month per house.  Property taxes are paid annually by the Tribe on the entire Northern Lights subdivision.  The $400 per month payment falls far short of paying for the homes and the Tribe may yet be liable for the entire payment for these homes.  We understand that a number of homeowners in this program are in arrears.

Further, it is unclear who is administering the Dream Catcher Program for the Tribe at this time.

3.  210 Home Project

The 210 Home Initiative Program is in shambles.  The committee is aware that only a few of these houses were constructed under this program.   However, we have been unable to gather files, resolutions of authorization, promissory notes, contracts, or leases, or any other necessary documentation for the homes that were built under this 210 home program initiative.  We were advised that the former Director had removed the files and the computer from the office and refused to return them.  Further, the current Director informed the Team that he could not obtain any signed mortgages or agreements with the potential homeowners.  Also, there is no master plan that includes the landscaping, access roads or streets and leases, rights-of-way, and there appears to be no quality control for the project.

The awarding of homes to home owners was strictly a political process.  The first announcement by Levings’ office regarding these homes said they would total 200 homes, would be paid for with the Tribe’s oil income, and that each Segment Representative on the Council would ‘get’ 30 homes to award at their discretion, and Chairman Levings would ‘get’ 20.  TBC members are quoted in the Tribal and local newspapers as referring to “their” 30 homes, and former Chairman Levings is quoted as stating that the awarding of these homes was strictly at the discretion of the TBC.  The total number of homes was increased to 210, according to the MHA Times story, which also quoted the former Director as saying she had found resources to build 10 extra homes, as former Chairman Levings ‘deserved to have 30 homes’ (to award) just like the other members of the TBC.

Several members of the TBC selected family members and/or relatives to receive a home under the 210 and HIP projects.

There is no documentation as to how the normal pre-construction activities, such as selection of home owners, design of floor plans, specifications, advertisement for bids, TERO requirements, environmental or archeological clearances were carried out, or if they were carried out at all.  It also appears that the manager of this program was not qualified for this assignment.

4.  HIP Program

With the separation of the Housing Improvement Program, under the administration of Jackie Jackson, we have not been able to gather files of the H.I.P cliental, budgets, program correspondence, 638 contract files and computers owned by the federally mandated program.  Thus, it’s recommended that court action be taken to redeem all federal property.  This situation may place the Tribe and FBHA in violation of federal record keeping regulations and laws.

Here again, it appears that the selection process for home recipients was strictly a political process, and the Director clearly failed to follow regulations set forth by the Home Improvement Program of the Department of Interior.

5.  Elder Homes

The selection of homes for the elderly has also been political and homes have been given to elders who have limited time remaining and the homes has been constructed on their property.  This practice does little to serve the housing needs for the elderly since once the elder passes on, the house passes on to their family and is not available for another elder.  Homes have been constructed for those who can well afford to buy their homes while those in dire need go without.

VI  LAW AND ORDER ISSUES

The Team met with Elmer Four Dance from the Aberdeen Regional Law and Order program and he informed the Team that his office was conducting a review of the Law and Order Program on the reservation and it would be completed in the near future.  A report of his review will be provided when it is completed. 

From discussions with the general public, police officers and former police officers and employees of the tribal court, we submit the following comments:

·        Totally inadequate number of police officers, who are able to pass background checks, to provide police protection to the people of Fort Berthold.  There is a need for police officers who can pass background checks, for our protection in order to provide assurance that we are being served by properly qualified, trained professionals.

·        Jurisdiction issues between Tribe, County, City, State and Federal create a law enforcement nightmare.  This is a critical issue that needs immediate resolution in the best interest of the people and not the best interests of a government entity.

·        Here again intervention by Council members in the arrests and court actions has been a problem that law enforcement personnel for fear of retaliation.

·        The general consensus was that the Law and Order Program should be retroceded back to the BIA

VII   OIL AND GAS AND IMDAs

The discovery of the Bakken oil and gas reserves is one of the great events in the history of our reservation.  It can be a blessing or a curse depending on how we manage the development of this resource.  It can be our once in a lifetime opportunity to have financial resources to exercise our sovereign rights and develop our tribal government to enable us to terminate our dependency on others.  Or it can be an opportunity for the State to establish their authority to tax and extend their jurisdiction over the reservation.

President Barack Obama announced U.S. support for the U.N. Declaration on the Rights of Indigenous Peoples at the White House Tribal Conference on Dec. 16 which says “Indigenous peoples have the right to determine and develop priorities and strategies for the development or use of their land or territories and other resources.”  This endorsement opens a new era in Tribal/US Government relations at a time when Congress is proposing serious reductions in federal dollars for Indian country.  The TAT need to take advantage of this new relationship and exercise their sovereignty to develop their resources, eliminate their dependency on federal dollars and enjoy the quality of life they have all dreamed of.

The UN Declaration states that indigenous people are entitled to free, prior and informed consent (FPIC).  Free is consent that is given freely, by people fully informed of the consequences, prior to any decision being made, and according to their own decision-making processes. 

Prior means that indigenous people understand and are involved in a decision making process and have the opportunity to give or withhold their consent during the early planning stages (for example, before auctioning exploration concessions) before a project becomes an economic or political inevitability, and the participation and consent process continues through the design and implementation phases of the project. 

The FPIC process was certainly not implemented for the oil and gas development on Fort Berthold Reservation and we find ourselves deeply in debt with a dysfunctional tribal government. 

Unitizing and flipping of leases has and is occurring without the mineral owners consent and much to their disadvantage.

The IMDA’s must be scrutinized to ensure that all companies are fulfilling their drilling commitments.  Spotted Hawk, for example, has 37,000 tribal acres, has drilled 1 well in 2 years.  This means the rest of acres are held hostage and undeveloped by a company that has no real expertise in drilling or financing to support an increased drilling plan.  One well in two years is not in the best interests of the Tribe or the Allottees. 

1.  Williams Oil

On November 16, 2010, the Tulsa World published an article stating that the Williams Cos. Inc. is purchasing 85,000 acres of mineral leases from a private owner on the Fort Berthold Indian Reservation for a price of $925 million. This was startling and disgusting news to the tribal members who are the owners of the minerals.

A major share of the 85,000 acres of mineral leases is the acreage awarded to Spencer Wilkinson by the TBC.  How did a tribal manager, who was under contract to generate money for the tribe, convince the TBC to award him mineral leases to make $925 million for himself instead of the tribe? He was obviously a front for investors who intended to exploit our minerals for self-gain and they have done just that.  How did the TBC turn a blind eye to the Mandan, Hidatsa and Arikara Nation Ethics in Government Ordinance and approve this lease without question, without consultation, and without expert advice?

This is the largest exploitation of tribal minerals in the history of this country and the sad part of this whole deal is that we did this to ourselves.  Our cultural ways of sharing have been overtaken by greed and self-interests. 

What are the options for the Tribal members, who are the owners of the

minerals, to address this transgression?  Should they demand 80% of the $925 million as a TBC resolution states?  Should they demand the whole $925 million since Spencer was under contract with the tribe and did not have a waiver from the code of Ethics to permit his self-dealing?  Should they exercise their right under Article VI – Powers of the Constitution and Bylaws of the Three Affiliated Tribes that states: “any power exercised through the Council shall be subject to a popular referendum” and demand a referendum on the TBC resolution approving Spencer’s IMDA?

The TAT must demand that from here forward, all deals involving Tribal minerals, have a fair and open consultation process with the tribal members to ensure that the arrangements for production are in our best interests and that we are genuinely maximizing our interests & resources. Gone are the days of passive leases. 

2.  Arrow Pipeline

TBC has approved a number of pipelines without a comprehensive plan to provide a coordinated gathering system serving the reservation oil and gas industry in a safe, regulated and sustainable.  Arrow Pipeline being an example.  The TBC entered into a business arrangement and approved an exclusive right-of-way, called a “no compete clause”.  Is this legal under our Constitution?  The oil companies invite competition to give the owners; the Allottees & the Tribe a choice.  

From the limited date available, our observation is that this arrangement was

entered into by the TBC without a thorough legal review of the contract or

analysis of the financial structure and business projection normally

associated with multimillion dollar investments.  The tribe has already

defaulted on millions of dollars required in the agreement.  They have not

provided the tribe any assurance that they will have a significant/sufficient

number of producers utilizing this pipeline to ever generate revenue where

we can recover any of our monies or see new revenue.   Without a properly

 planned oil and gas gathering system (s) and or a pipeline, these open flares are lost revenue for the owners and a hazard to our environment.  It leads

immediately to the traffic safety issue we are all faced with every day.  A

pipeline, or pipelines, would significantly reduce truck traffic.

Two of the TBC members; one is no longer on TBC, are Managing Partners of Arrow Pipeline.  This is another violation of the Ethics Ordinance.  An elected official cannot own interests in or conduct business with any oil and gas company.  Again, why is Spencer Wilkinson Jr., who was the Casino Manager, also a Managing Partner of Arrow Pipelines?      

The Formation of Arrow Pipeline, LLC is very controversial and needs to be

investigated. 

3.  Mineral Leases on Allotted Lands

The Bakken hit the Fort Berthold Reservation like a tsunami.  Oil companies hired local tribal members, who were not educated in the leasing business, to obtain signatures of individual tribal members on a BIA form that authorized the BIA to sign a mineral lease that contained the terms of the lease without any further consultation with the mineral owner.  The mineral owners were never provided the actual lease document.  Those who solicited signatures had no formal training on the terms of the leases or the consequences of signing the consent form.  There was again, no consultation with the owners of the minerals by anyone who was well informed on the legality or terms of the lease document which was never provided to the owners.  This wave of action came at a time when many were living on the edge of poverty and were vulnerable to signing for dollars without asking technical questions about the process.  For instance they were not informed on the unitization and flipping of leases which are to their disadvantage or the taxes and implications of roads and oil and gas lines on their land.

Where was the Trustee of the land during this process?  The Trustee has had eight different Superintendents serving the Fort Berthold Agency during the past eleven years. What was their knowledge of oil and gas?

4.  Taxation - State vs. Tribal

Marcus Levings signed an “Oil and Gas Tax Agreement between the Three Affiliated Tribes and State of North Dakota” on January 13, 2010. 

We are all aware that State and Tribal agreements such as this set precedence for Indian Tribes nationwide.  We are also aware that “The exercise of state jurisdiction over activities occurring entirely on Indian lands is an infringement on inherent tribal authority and is contrary to principles of self-government and tribal sovereignty”.

The Team can find no evidence that Marcus Levings had any consultation with any of the other tribes in North Dakota relating to state taxation on Indian reservations. 

At the very least, Marcus should have negotiated a consent to support gaming on the lake and return of the shoreline excess lands which the Governor has been opposed to.

5.Right-of-Ways

The rights-of-way for roads and oil and gas lines are a major issue that will have major consequences. The projected development of roads on the reservation shows that they will open up our reservation to the public trespass, destroy the landscape of our scenic reservation and create safety and environmental issues. What forces and authority does the state have to monitor trespass, safety and environmental violations on trust land?  

As we mentioned earlier in this report, “The exercise of state jurisdiction over activities occurring entirely on Indian lands is and infringement of self-government and tribal sovereignty.”  All the oil and gas lines owned by the Oil and Gas Companies will be taxed by the state.

This is a major issue that demands immediate attention by the TBC.  Tribal members are being asked to sign ROW documents without being informed of the full consequences by the Tribe or the Trustee. 

It may be in the best interests of the Oil Companies and the Tribe to negotiate an agreement that would relieve the Oil Companies of their problems of obtaining right-of-ways and also benefit the Tribe.

VII   TRAVEL COSTS

1.     Airfare and Per Diem

Our review of travel costs for the TAT reveals that the TAT has been paying enormous amounts for travel for many years.  Council members and staff have taken advantage of our loosely run government to enjoy unlimited travel.  The records show the TAT has also paid for family members to travel with the council members.  Certain council representatives and friends have traveled to national events such as the Indian National Finals Rodeo and other major events where the TBC is conducting no business on behalf of the membership.  Tribal staff has traveled extensively to questionable places and the Tribe has paid certain individuals to travel for family matters such as attending boot camp graduations.

Travel costs by segment for the past four years are as follows:

West Segment ………………………..26,942.46

Chairman…………………………….658,283.53

North Segment..………………………70,980.16

South Segment………………………327,966.55

Northeast Segment……………………73,418.37

East Segment………………………...218,012.87

Four Bears Segment…………………..91,604.36

          TOTAL…………………….$1,467,208.54

The Tribe paid Satrom Travel Agency approximately $747,725.64 for travel cost during the period of 07 through 10 and $214,253.11 to Auto Club for travel costs during the years of 08 and 09. 

The cost of new vehicles, vehicle insurance, mileage, vehicle repairs and operating expenses, credit card purchases and charge accounts at gas stations must also be added to the overall travel costs.  The tribe is paying an enormous cost for travel.

2.     Local Mileage

The Tribe is paying a very large amount of money for local mileage.  Here again the Team did not have the time or access to verify requests for mileage.  However; it appears that several employees and councilmen have received unreasonably high payments for mileage.  

3.  Tribal Vehicles

The council uses Resolution #95 - 179 - DSB as authorization for the Tribal Treasurer and Chairman to purchase vehicles and it appears as though Council members are purchasing vehicles with without properly advertising for bids or utilizing standard procurement regulations.  This practice results in purchasing expensive vehicles where a much cheaper vehicle would serve the same purpose.  The tribal property and supply office reports their vehicle inventory is not reliable and they are in the process of updating it. 

Council members have purchased expensive vehicles with tribal funds and registered them in their personal name rather than the Tribe’s.   The records are not clear how the council members are making payments to the tribe for these vehicles and whether they are paying interest and insurance or whether the tribe is listed on the title and insurance for collateral purposes. This practice would not be allowed in any other government. 

The ND Motor Vehicle Division reports a total of 268 vehicles registered to the TAT under 83 different owner records.  Several Tribal programs have vehicles registered in their names and have license plates that do not begin with TAT.

The Tribe’s insurance providers report 358 vehicles insured while the Tribal Property and Supply Office reports 220 vehicles in the tribal vehicle inventory.  Obviously there is a discrepancy in these reports, however, these figures show that the Tribe may be paying for insurance on vehicles they do not have.

The records show that the Tribe paid over $962,000.00 for vehicle insurance

During the past four years.

The maintenance and operating costs of Tribal vehicles considerable and must also be factored into the cost of operating Tribal vehicles.

VIII  CELL PHONES

The use of cell phone appears to be out of control.  The tribe paid $1,538,996.71 for cell phone use during the years 2009 and 2010.  Too many phones are issued to employees and it is manifestly evident that several employees are using their cell phones for private purposes.  This is costing the tribe huge amounts of money and constitutes fraud and waste. 

IX   GRANTS, HONORIA, FINANCIAL & MEDICAL ASSISTANCE

Under the line item of “Other Operating Costs Donations & Grants” the  TBC and council members have spent the following amounts during the past four years from their accounts.

          Segment                                  

          Fund 300 Four Bears                        479,513.01

          Fund 310 Mandaree                          402,066.43

          Fund 320 Parshall                                    1,164,181.76

          Fund 322                                          424,269.60

          Fund 330 White Shield                    2,866,313.51

          Fund 340 Twin Buttes                      888,490.51

          Fund 350 Executive-Chairman                 3,499,020.65

          Fund 360 New Town                        796,902.00

          Fund 380 TBC Actions                  25,694,994.91

          Fund 8060 Medical Emergency                   692,436.92

                   TOTAL                               $36,908,189.30       

Financial and Medical Assistance grants have been misused by certain tribal members and members of the TBC.  Example:  An employee in 2010 received $11,909.00 in financial assistance while that employee and their spouse’s annual salaries totaled $114,483.00.  Other individuals have received large amounts up to $15,870 in one year.

The financial assistance that is given out to certain families during the months prior to the election clearly demonstrates why incumbents are difficult to defeat in tribal elections.  It also reveals how the council representatives have given assistance to members of their family and office staff.

Another costly item for the tribe is funeral assistance.  In addition to the wake fund, several members of large families each receive financial assistance for funerals and some funerals become very expensive.

X  HEALTH AND HUMAN SERVICES

The Committee met with several of the social programs who expressed their concerns that the people issues were increasing with the development of oil on the reservation and that Human Resources Programs should be a high priority for the tribe.

Families in need of counseling and support services, do not receive those services when they go directly to their council representative for assistance. The money being handed out by the TBC for financial and medical assistance could be much more effective if it were budgeted to the Human Resource Programs who have the professionals to interview and most effectively assist those individuals.

The statistics provided by the programs demonstrate a real need for more dollars to provide services such as family counseling for domestic violence offenders, follow up services for those who are released from treatment for drug and alcohol abuse, shelters for abused women and foster care for children.

The Minne Tohe Health Center is burdened with many issues that need immediate attention:

·        Clinic is micro-managed by 3 Council Members who do not understand health care management.

·        Clinic is over-staffed with “non-medical”, “non-professional” people.  It is used as an “employment source” for those political favorites who are given a place to work and have a salary with no concern about their function, or the needs of the clinic, or whether their being hired takes away from the clinics main mission of providing quality health care, or the effect on staff morale.

·        Contract health care is critically affected by politics and not by

medical need.  There is a very serious credit problem with all vendors because of unpaid bills, including hospitals and clinics that we refer patients to.

·        The Clinic does not have its own financial system, therefore all income generated from 638 contracts, third party billing or any other source of revenue from the clinic goes into a TAT General Fund. This money is then dispersed as needed thru out the organization and not necessarily used for health care.

·        The new clinic building is a disaster, and if allowed to be completed as such will create a “health deliver” nightmare.  We are probably better off with keeping the current clinic situation as it exists.

XI  REVIEW OF TRIBAL BUSINESS COUNCIL ACTIONS

From our review of the council minutes there appears to be a special relationship among the 7 council members where they all support each other on their motions and special interests.  There appears to be no regard for ethics in the daily operations of TBC proceedings.  The tribal council minutes reveal that there has seldom been a dissenting vote or discussion on motions and votes are generally unanimous.  The minutes only state that a discussion took place on an issue and do not describe the discussion so the reader can understand what the discussion was.  In addition, there have been far too many closed sessions since all tribal business should be open to the public.

There have been several instances where council members have made motions, seconded motions, and voted on motions involving members of their family.  This appears to be a conflict of interest that needs to be addressed.

The TBC passed a resolution to approve the hiring of individuals with felony convictions in management positions.  It is not normal for any government or business to allow felons to be in management and control of financials responsibilities.  This practice needs corrective action immediately.

The politics in personnel issues is costing the tribe thousands of dollars.  Motions have been approved to give an employee a salary increase of $10.00 per hour.  There are employees that have been reassigned with an increase in salary and no job description.  This practice is quite frequent and there are several employees filling in positions that are unproductive.

There appears to be a lack of council actions to develop tribal capacity to govern commerce, develop tax codes, and develop a zoning ordinance or any laws for long term governance of the tribe. 

There have been votes taken on important issues where two or more members of the council participated by phone.  There is no provision in the constitution approving voting by phone and these votes should be challenged.

We must remember that all tribal funds belong to all tribal members and we expect the council to spend it judiciously, responsibly and in the best interest of the tribal members.  The excessive spending on grants, loans, housing, telephones, travel, claims by terminated employees, the LSA law suit and vehicles by the past administration has been very costly.

XII  TRIBAL BUDGET

Based on the budgeting process where there is no official adopted budget for the Tribe, no requirement for a balanced budget and no penalties for overspending, it appears that the tribal deficit will continue to increase.

The committee was unable to obtain an approved budget for the council or the segments.  It appears that the tribal council is operating on continuing resolutions and does not have a balanced budget based on projected income to the tribe.  There evidently is no limit on what each councilman can distribute for financial assistance, medical assistance, etc.

The Team has summarized expenditures for each segment and included those summaries in the exhibits.   This review shows a dramatic increase of financial assistance grants prior to the election which leads us to believe that there was widespread vote buying. 

XIII  TRIBAL DEBT

The Team was advised by the tribal finance office that the tribal debt is over $100 million and there appears to no plan in place to retire that debt.

XIII  TRIBAL BUSINESS  ENTERPRISES

Over the years, the tribe has invested large amounts of money in business enterprises that have failed to generate income for the Tribe.  Management and accountability have been the major reasons for failure.  Yet the Tribe has recently started another venture called MHA Holding Co.  It is unclear what the purpose of MHA Holding Co. is but there is a council motion to award them a mineral lease.  Our question is; where did they get the money for the bonus and who is the manager and what is their experience, expertise or qualifications for such a job.  Where did the TAT advertise for a manager? How did the TAT select the manager for this company?  Is this just another opportunity to lose money for the tribe?  There was another motion to dedicate future oil revenues to MHA Holding Co.  This all needs to be reviewed. 

The management contracts for Mossett Bay and Pouch Point were reviewed and there appears to be some suspect of irregularities in the collection of rent and services.  These operations need to be included in the audit.

The Team did not have time to review 4 Bears Casino other than to obtain a listing of their capital assets.  This listing shows the Casino has purchased houses, boats and vehicles from a council representatives, casino employees and tribal members which seem to be a serious violation of ethics and conflict of interests. 

There is also a report on the condition of the 4 Bears Lodge that describes the poor condition of the housekeeping.  There is no justification for this.

XV  TRANSPARENCY OF TRIBAL GOVERNMENT

Based on the comments received from individuals during this study, we conclude the lack of Transparency in our tribal government is the major reason that many enrolled members are confused and uninformed on major developments such as the mineral leasing and the housing program on the reservation.  There have been no publications of the tribe’s plan of operation for these programs or progress.       

The tribe has spent over $200,000 during the past three years to publish the Chairman’s Action News that was limited to documents selected by the Chairman.  Our tribe has also spent over $623,000 over the past four years to publish the Mandan Hitatsa Arikara Times that did a good job of reporting on tribal events, however; neither of these publications published the tribal council minutes or resolutions to inform the public on important tribal council issues.  The tribe has also spent over $774,000 on the tribal KMHA radio station that does not have a regular news hour to report on reservation news worthy items.   

There is no reporting of the police activities or court proceedings as is normal in other societies.  Transparency of our tribal finance and programs probably would have avoided many of the issues we are finding today. 

XVI   CONSTITUTION - SEPARATION OF POWERS & RECALL

The TAT government operates under the authority of a constitution that was adopted in 1932 and has had minor amendments since.  This constitution does not require the separation of powers but gives our seven member council full authority to govern on our behalf.  It does however state under ARTICLE VI – POWERS, Section 1.  “The Three Affiliated Tribes of the Fort Berthold Reservation, acting through their Tribal Business Council, shall have the powers granted by this Article; but any power exercised through that Council shall be subject to a popular referendum as provided by this constitution.

Without separation of powers, there are no checks and balances to assure the membership that our tribal resources are managed in their best interest.  In stead our government system may best be described as a “Spoils System” where elected representatives can serve themselves before the needy who voted them in their position.   

We have gone through five administrations since the TAT were mandated to develop provisions for Recall as part of the JTAC settlement and it has not happened yet.  This needs to be included in the revision of the constitution.

XVII  TRIBAL BOARDS

At the present time all governing Boards are appointed by the TBC.  This practice extends the micromanagement by TBC members to all activities on the reservation.  Boards need to have autonomy from the TBC to govern the activity they are responsible for in the best interest of the membership without fear of removal or abolishment of the board.  The TBC has had closed sessions on board issues and have removed members and disbanded boards at will.  This practice needs to stop.  All boards should be required to attend training on the board’s duties, responsibilities and authorities.

XVIII  TRIBAL VISION

There is currently no plan or vision for the future of the reservation.  As with any project, it is critical that the tribe have a vision and a blueprint of how to achieve that vision.  In discussion with the Director of Planning, she has stated that that office will propose a reservation wide planning effort to develop a vision for the Tribe. 

XVIV  SUMMARY

During the years leading up to the 2010 election, our Tribal membership was mired in great turmoil and suspicion; in many ways this continues to be the case today.  Much of the turmoil has its source in fear of retaliation if one speaks up to address injustice, fraud or corruption.  This fear of retaliation is not only for oneself, the individual, but for one’s entire family.  Tribal goods and services once open freely to all, have been restricted and made available only to those who are politically connected.  Tribal jobs, financial resources, land leases, houses and other Tribal property and wealth has been blatantly used to purchase votes in such a ruthless and unconscionable manner that it has become expected, even commonplace, in our society and this must be eradicated from our Tribal government if Tribal leaders are ever to regain the trust of the members of our Tribe.  This can only be done by public, open and transparent discourse with Tribal membership.  Only then will healing occur, and only then will our people begin to move forward.

The ancient cultures of the Nueta, Hidatsa and Sanish Peoples have always held that our chiefs are required to put themselves last; they are required to lead sober and responsible lives, to have nothing but kind words for the people, and to provide for those who are least able to provide for themselves.  To be asked to serve is an honor, not an occasion to become arrogant, abusive and self-serving. 

Instead, many of our modern elected leaders have exploited the Tribe’s resources to provide for themselves and their families, they have become bullies and retaliators, and they have forgotten or ignored their duty of kindness, humility and selfless leadership.  When such behavior is modeled by our leadership, it stands to reason that the membership will follow, if only because this seems to be the only way to get ahead in this world.  Our cultural values must be taken seriously and modeled by our leaders once again – a return to humility and a regard and respect for the office one holds is critically necessary today.

These same values and instructions must also guide the behavior of our Tribal employees, especially those that work in and represent the offices of the Chairman and other Council members.  There have been concerns expressed to various members of the Transition Team about Tribal members’ treatment by some members of the staff.  In order to restore and regain the trust and faith of our people, a sense of professionalism must be coupled with our Tribal values of humility when one has been given the honor of serving the people.  Our people are demoralized and embittered; we must recognize this and lead the way for our recovery by modeling good behavior ourselves.  

Our people look at the social dysfunction running rampant in all of our lives: the poverty, the substance abuse and addictions, the violence; the abandonment, abuse, neglect, suicide and even homicides among our children; the poor performance of our education systems.  Our people are living in all of this while watching our Tribal leaders spend their money irresponsibly on travel, expensive vehicles, buying votes and purchasing non-essential items and they feel enraged.  If we continue to ignore these widespread feelings, we do so at our own peril, and invite further disaster for our generations yet unborn.

In this dire time of trial mismanagement and ethical lapses, transparency for all Tribal decision is essential, especially regarding our current financial situation.  Tribal members, or stakeholders, have an inalienable right to know the true financial status of our Tribe and we also have a right to provide input on any direction the Council may consider taking with respect to our collectively owned Tribal resources.

The oil development on the reservation is enriching many of the tribal members who will be living a very different life style than they have in the past. Many of these individuals would benefit from a program that offers financial and investment counseling and/or private entrepreneur advice.

It is the hope of the members of the Transition Team that our research and investigation will assist in bringing these matters to attention for correction, resolution and justice.  The members of our Tribe are depending on the current administration to restore their trust and faith in Tribal government, and to fulfill the hopes of our membership that all will have an equal share in the wealth accrued from our jointly-owned Tribal minerals.

The members of our Transition Team thank Chairman Hall for the honor of being asked to serve our People, and hope that the trust you placed in us has been well served and fulfilled.

RECOMMENDATIONS: The Transition submits the following recommendations for improving the delivery of services to the MHA Nation:

1.     Audit – Immediately, request the U.S. Attorney General to conduct an

audit of all tribal programs for compliance with “Title 18, Part 1163, Embezzlement and theft from Indian tribal organizations”, accepted “Principles of Ethical Conduct for Government Officers and Employees”

2.     Vision for Fort Berthold Reservation:  The TBC should immediately

authorize funding for the Tribal Planning Office to develop a Vision for the Fort Berthold Reservation.  The planning process must include an assessment of the Tribe’s capacity to achieve the vision and identify what our government needs in their constitution to effectively and efficiently manage our government to achieve that vision.

3.      Constitution Revision - The TBC appoint a six member board to

complete the revision of the Tribal Constitution:  The board can update the draft constitution that was developed by the prior constitution committee and meet with the Segments to update and/or modify that draft for presentation to the TBC for a referendum vote of the people.  It is critical the new constitution provide for separation of powers, accountability, demand transparency and freedom of information and return the power and authority to the people.

4.     Convert all Tribally Owned Fee Lands to Trust - All Tribally owned

fee land should be converted to Trust under the 25 U.S.C. 465 and 25 CFR 151.  After the land is acquired in Trust for the Tribe, taxes will no longer be assessed and the land will be under the jurisdiction of the Tribe.  On July 2, 2010, the Director of the Bureau of Indian Affairs issued a “Dear Tribal Leader Letter” stating that that BIA “Strongly supports those fundamental tribal government initiatives including the fee to trust process.” A copy of this letter is included in the Exhibits.

5.     Oil and Gas and Tax Task Force – The TBC appoint a Task Force to

study and recommend a strategy to address the development of oil and gas on the reservation to maximize Tribal benefits from all energy development on the reservation.  The membership of this committee must include professionals who have experience in the Oil and Gas and Wind industries as well as tribal and federal trust relationships: Attorneys, tax consultants,  financial consultants, engineers, business advisors, and others as deemed appropriate.

6.     Internal Affairs Board - The Team recommends the establishment of an

Internal Affairs Board.  This board should be composed of three members to be appointed by and established under the supervision of the Chairman.  The board would review and assist the tribal auditors perform the annual audit of all tribal programs similar to the tasks of the Transition Team.  The Board would assure that all programs are toughly audited for accountability and performance and provide the tribal members a vehicle for reporting suspected wrongdoing and or abuses with tribal government. The cost of the Internal Affairs Board can be realized from the savings in time spent by the auditors who will benefit from the personal knowledge of the board.  The Team further recommends the Board be established immediate and function until a constitution revision is adopted.

7.     Taxation - The Team recommends that taxation be included in the Task

Force study recommended in item 5. The tribe needs to develop tax codes that will generate funding to support tribal government services and exercise the tribe’s sovereign rights. 

The Tribal Tax Commission must include professionals in the tax field

and be tasked with developing a working tax structure whereby our Tribe

reclaims 100% of taxes generated by our own minerals and other taxes

normally collected by other governments.

8.     Oil and Gas Lines - It is the opinion of the Team that all pipelines on the

reservation should belong to the Tribe to avoid state taxes, generate taxes for the Tribe and provide employment opportunities for enrolled members.  The control and safety of the pipelines should belong to the Tribe.  A creative approach to accomplish should be explored by the Task Force as recommended in item 5.

Develop a comprehensive plan to provide a coordinated gathering system

serving the reservation oil and gas industry in a safe, regulated and efficient manner should be developed as a part of a transportation plan that is needed to design a road system that will serve the reservation in the best interests of the residents.

9.     Housing – Consolidate all tribal housing initiatives under the Fort

Berthold Housing Authority and overhaul and implement a binding, fair and just selection process, based on demonstrated need, of all available Tribal housing.  This new selection process must be also be used in the awarding of FEMA trailers. Our Tribe must seek legal relief for the repayment of all illegally awarded housing, and for any arrearages.

A subpoena should be sought and issued to require the return of all

Tribal records, computers or other Tribal property now in the custody

of former employees.  Our Tribe should also consider pressing

criminal theft charges to show such behavior will not be tolerated.

The TAT should immediately institute policies and procedures which

require the application of current industry standards in the Tribe’s purchase, construction or appraisal of homes and commercial buildings.  The same should apply to all TERO requirements.

All Directors of Tribal Housing Programs must be qualified by

education and experience in the industry, and must possess a record

clear of any wrongdoing or questionable past practices.

The task force recommends a forensic audit on this program, and that court action is taken in order to resurrect any possible documentation associated with the homes built under this initiative.

Establish a “One Stop” Mortgage Center - to streamline affordable housing opportunities and the mortgage lending process for the Mandan, Hidatsa, & Arikara Nation, respectively.  (The concept will be submitted under separate cover.)

10.              Law and Order – The Aberdeen Regional Office report of their review

of the Law and Order program on Fort Berthold will be completed in the near future.  The Team recommends that the TBC carefully review and take whatever action the report recommends to improve the public safety on the reservation. 

11.            .  Travel – The TBC must institute travel regulations that allow travel

expenses only for those TBC members or Tribal employees that are necessary to furthering a goal on behalf of the membership.  All travel must be directly related to the professional requirements and betterment of the Tribe as a whole, and must have undergone a rigorous review that applies to all elected leadership, all Tribal employees, and all Tribal consultants with no exceptions.

The regulations must demand that all travelers complete a trip report showing what was accomplished while on travel.  Travel reports must be on file and available for auditors and tribal members who care to know how their money is being spent.

The Tribe must hire an independent audit team to review all tribal

travel expenditures from 2006-2010, calculate those which do not

adhere to Tribal travel reimbursement rules, and seek legal relief to

recoup illegal travel expenditures.

12.            Tribal Vehicles - Reduce the vehicle inventory to accommodate those

programs where a vehicle is essential to service delivery and advertise the remainder for sale.  Establish a motor vehicle pool to assure efficient utilization and maintenance of vehicles to avoid wasteful spending. 

Require medium or economy sized models for all future vehicle

purchases.  Set a spending cap on vehicle purchases and ensure

uniform compliance with this spending cap – no exceptions for

anyone.  This will be effect a huge savings in gas mileage, insurance

costs and purchase price.

Develop travel reimbursement regulations that will eliminate the waste, fraud, and abuse of the program.  Our Tribe must seek legal relief to recoup all costs arising from fraud and abuse of Tribal vehicles; this must include purchase, insurance and mileage costs.

Require TAT plates on all tribal vehicles, 10” tribal decals on the doors of each vehicle and restrict the use of tribal vehicles for official use only.  Employees of the Tribe (including members of the TBC) who persist in the illegal use of Tribal vehicles, insurance or mileage costs should be sanctioned or prosecuted to recoup costs associated with their actions.

All vehicle purchases should be justified and executed by the property management office to assure compliance with policy and regulations.

Management must audit all tribal programs annually to assure compliance with policy and regulations.

The TBC must hire an independent audit team to review all local mileage costs, calculate those which do not adhere to Tribal mileage regulations and seek legal relief to recoup illegal mileage expenditures.

13.             Cell Phones - Cell phones should be restricted to programs that can

justify them for performing their official business and limited their use for official business only.  Management needs to monitor this practice since it is costing the Tribe considerable amounts of money.

14.             Health and Human Services - The Human Resource Programs should

have a dedicated space in MHA Times to inform their clients of their services. The MHA Times should also publish the Tribal Court and Police arrests as they are normally reported in cities across the country.  This has proven to be an effect deterrent for police disorders.

TAT should explore developing a Human Resource Division to oversee and coordinate all of the human resources programs with a one-stop approach to coordinate and serve those in need.  A qualified administrator that has the skills and ability to manage this Division should be hired, with full authority and autonomy from the TBC.  This person should be well qualified to unite all of the Tribe’s Social Services in the Division to eliminate current turf problems.  This would relieve the council representatives of those pressures so they can concentrate more on tribal government issues.  A major share of the funds budgeted for financial and medical assistance should be budgeted for the social programs.

15.            Transparency - Develop a way to improve communications and

consultation with tribal members in order to develop positive solutions

for issues affecting the welfare of the membership. The goal should be a

comprehensive, transparent and effective policy on which the tribal

members can rely.  We must have a policy the embodies the best

consultation practice available that responds to the needs of the tribal

members to be more engaged in policy development and promotes more

responsible decision–making on issues affecting tribal members 

Meaningful, good faith consultation makes tribal operations and governance practices more efficient and effective.  Forging a strong role for tribal members’ involvement at all stages in the government’s decision making process will benefit tribal policy for generations to come. 

The tribe should employ a qualified Court Reporter to record and publish unedited minutes and resolutions of all tribal council meetings on a weekly basis in the MHA Times. 

The Tribe should adopt a consultation policy similar to the policy adopted by the federal government and practice it earnestly.  Transparency of government operations and Consultation with the tribal membership is critical for the survival of our tribe. 

16.             IPAs - The most efficient way for the MHA Nation to improve the

operations of the Tribal Government is to develop Policies and Procedures for program management systems using the knowledgeable federal employees who have training and experience in the programs to work for the tribe under IPA (Interagency Personnel Act) assignments.  The IPA's are usually 2 year agreements, with one additional extension of 2 years and the salary is paid by BIA. All it takes to initiate the processing of an IPA is a formal request from the Tribe to Director of the BIA.

The FY 2011 BIA Budget (Green Book) illustrates that they have appropriated a million dollar annual funding increase for the processing of oil and gas leases on the Fort Berthold Reservation and Federal Employees are willing to serve on an IPA to the MHA Nation to assist in the development of energy resources.  They already have the proper security clearances and access to TAAMS to fully participate in Self-Determination and the management of the Tribe’s energy resources.  They can facilitate the full development of the entire Real Estate Services program for the Tribe.  Further, they will have immediate access to TAAMS to assist the Tribe in obtaining reports to analyze the best action necessary for the management of the Tribe's trust land.

Federal Employees are also willing to serve on IPA assignments to develop property and personnel management systems.

17.             Right-of-ways - The Tribe needs to explore the possibilities of

developing a tax code for oil and gas lines and ownership of all roads and oil and gas lines on the reservation.  This would avoid State taxation, provide employment for tribal members and provide income for the tribal government.  Negotiations with the oil companies may show that this would relieve them of many issues they encounter in obtaining right-of-ways and give them a comfort level to do business on the reservation.  The ownership of the roads and pipelines should not be a concern for the oil companies, their interest is to get the oil and transport it. 

18.  Building Tribal Financial Capacity and Infrastructure - Having reviewed s of pages of documents and evidence of questionable financial transactions, the Team has concluded that only a thorough reorganization of our Tribe’s methods of conducting business can prevent further abuse of travel, mileage, financial assistance, over staffing and loans.

19. Tribal Businesses - A forensic audit of all tribal business enterprises needs to be conducted immediately to identify mismanagement and feasibility of continuing the enterprises.  Corrective action must be taken to stop the financial drain on the tribe.  This includes all tribal enterprises.

20.  Department of Public Works - The facilities management program has grown and will continue to grow.  There is a lot of responsibility to manage tribal offices that are scattered throughout the Newtown area.  The tribe has purchased old buildings that were moved into Newtown from Sanish and Vanhook and are paying a fair amount of taxes on these building. Planning and development of new commercial facilities on trust land would have been a much better investment.

21.  Government capacity:  The tribe needs to conduct a self-assessment to determine what tribal laws, codes or ordinances are needed to guide them in achieving their vision of the future. 

22.  Zoning:  Zoning is critical for orderly development of the reservation and can avoid costly mistakes to the tribe.  Zoning codes developed to accommodate a vision is definitely needed.  Commerce Codes are necessary for the protection of the entrepreneur as well as the tribal government.  Commerce codes and tax codes will benefit the economy of the reservation.

Engineering:  There is a great amount of engineering services needed here on the reservation.  The tribe has paid over $12 million during the past two years for Consultant Engineering firms and at the present time, the Tribe does not have an office to retain the as-built plans for the entire infrastructure.  Consultant firms take all the data with them.  It is also important to know who the consultants clients are to assure loyalty to tribal interests.  The Tribe could support a full service Department of Engineering to serve all tribal programs for much less than $6 million per year.