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Referendum advances as Three Affiliated Tribes go to polls with doubts about $250M payout
The Tribal Business Council’s controversial $250 -million withdrawal from the Mandan, Hidatsa and Arikara People’s Fund took center stage during campaigns for primary elections Sept. 17. (Photo credit/ Jodi Spotted Bear)
Council chairman: ‘It is not being spent on a casino’
The Tribal Business Council’s controversial $250 million withdrawal from the Mandan, Hidatsa and Arikara People’s Fund took center stage during campaigns for primary elections on Tuesday. New candidates railed against incumbents’ lack of transparency and accountability in the decision. Several demanded explanations – to no avail. One filed for a court order to prevent the money movement – also to no end. Eventually, the challengers joined petition drives to place a referendum on the November ballot that would limit future tapping of the fund.
The flap conjured a media release from Business Council Chairman Mark Fox on Sept. 11. He wanted “to reassure our membership that the TBC is making sound and sometimes difficult decisions to continue to enhance our Nation’s investment and financial capabilities,” he wrote in a statement to the MHA Times. “This is necessary to counter the typical and deliberate dissemination of misinformation by some groups and individuals who are perpetuating their own personal agendas for their own benefit, political or otherwise.”
The chairman’s position is not open on this year’s ballot, but half of the council seats are up for renewal in Tuesday’s polling at Fort Berthold Indian Reservation. Residents of North, White Shield and Mandaree segments can vote for one representative in each council district. During the Three Affiliated Tribes’ next election cycle, registered voters living in Parshall, Twin Buttes and Four Bears segments can choose their representatives.
After the quarter-billion-dollar withdrawal in August, the People’s Fund “still has a balance of approximately $640 million,” according to a petition for a referendum. The People’s Fund is “an annual distribution to all duly enrolled members of the MHA Nation.” It channels money from oil companies operating in the reservation’s rich Bakken deposit “to benefit the members of the Three Affiliated Tribes for many generations to come.”
In closed session Aug. 6, the business council approved this year’s conveyance of $17.5 million from the People’s Fund to the Three Affiliated Tribes “for disbursement to enrolled members in accordance with the 2023 General Fund budget and resolutions.”
The TBC, via Resolution 24-252-FWF, authorized the federal Bureau of Trust Fund Administration to “relinquish” the money. The BTFA office, housed in the Interior Department’s Bureau of Indian Affairs, manages $8 billion of savings for tribal governments nationwide.
The council directed the Bureau of Trust Fund Administration to immediately pay another $250 million from the People’s Fund. Resolution 24-248-FWF stated that the drawdown was “for the purchase of protected common units in TWG Global LLC.”
The document characterized the limited liability corporation as “a diversified financial services holding company with estimated 2024 net earnings exceeding $4.5 billion and estimated value of $32 billion.” It said, “TWG Global is estimating annual total returns of over 20%.”
“The toothpaste is out of the tube”
Steve Kelly, petition coordinator
Questioning the purchase, the three candidates challenging North Segment Councilwoman Monica Mayer hand-delivered two joint letters to TBC Chairman Mark Fox on Aug. 20. One letter called for a special council session so tribal citizens could air concerns before any withdrawal. The other letter requested disclosure of North Segment’s expenditures and receipts. It also went to Treasurer Mervin Packineau and Mayer.
The council called a special session Aug. 22 specifically to address the quarter-billion-dollar deal. However, until the TBC Secretary certifies the minutes, no written record of proceedings is available to the public.
Buffalo’s Fire received no response from inquiries to Chairman Fox, Mayer and Chief Financial Officer Whitney Bell. Amid the secrecy, long-standing conjecture flourished that the $250 million would pay for casino operations on land the Fox Administration purchased in Las Vegas.
Fox’s statement to the MHA Times refuted the notion. “It is not being spent on a casino or used in any way other than as an investment that is expected to gain substantially more earnings to the MHA Nation than what it would otherwise earn if it remained with the BTFA,” he wrote.
Simply put, the transfer aims to diversify the tribe’s portfolio, he told the MHA Times, which serves as the communications organ for his administration.
In fact, the resolution states its purpose is to “generate a greater return on investment.” The public didn’t have access to the language of record when first approved.
The resolution now shows that “Federal regulations allow the BTFA to invest only in lower-yield securities such as government-backed bonds, … yielding a total return of approximately 3.2% as of July 30, 2024.”
The MHA Nation had nearly $1 billion in the People’s Fund when it passed the resolution — “over $891 million,” according to the resolution. That was up from its initial balance of $100 million and its approximately $290 million at Fox’s election in 2014, he stated. The principal remains untouched and the interest only went toward the typical $17.5 million yearly citizens’ distribution during his tenure, he said.
Placing money in more lucrative stock market instruments is not new to the business council. The MHA Nation had about $100 million deposited through two investment firms by the time of his inaugural, Fox said. After he took office, the council put the money into the 150-year-old Goldman Sachs asset management firm, where it now amounts to $250 million, he added.
However, the recent repositioning of nearly 30 percent of the People’s Fund is “to become an equity partner in TWG Global LLC,” the resolution explains. An equity partner owns a stake in a business, sharing in annual profits and losses. “TWG Global is estimating annual total returns of over 20%,” the resolution states.
The resolution is too vague, according to Steve Kelly, coordinator of two petition drives for a ballot referendum allowing voters to rein in this and future resolutions of similar nature. Formerly the tribes’ legal consultant, he told Buffalo’s Fire that the terms of the TWG Global LLC partnership should have been included in the resolution.
The first petition garnered signatures for a referendum to immediately rescind the resolution. Then petition carriers found out the parties involved had already moved the money. “We got the signatures but the toothpaste is out of the tube,” Kelly said. The new petition objective is a ballot measure to restrict distributions “to the people only” and keep the fund’s remainder in trust management.
The severed part represents close to 30% of the fund’s assets, according to a financial advisor in the securities industry who spoke on condition of anonymity. The risk is high, he told Buffalo’s Fire. “That’s pretty concentrated investment in one company and the returns on it are speculative,” he said. Claiming the investment will make 20% a year is “cavalier,” he added.
Unlike Goldman Sachs, which is a venerable public company, TWG Global LLC is a little-known, privately held operation. The tribes might have been better off to lodge only 1% of the fund in the venture “because, worst case scenario, $250 million could be 0 in this situation.” he said.
The TBC “has been advised” on the strategic value of partnering in a “financial services holding company with estimated 2024 net earnings exceeding $4.5 billion and estimated value of $32 billion,” the resolution states.
References:
Resolution 24-252-FWF
https://static1.squarespace.com/static/5a5fab0832601e33d9f68fde/t/66be5e47ca3fff0a4ee30540/1723752008791/24-252-FWF.pdf
Bureau of Trust Fund Management
Https://www.bia.gov/btfa
Resolution 24-248-FWF
Aug. 22 Special Council Session
Statement from MHA Nation Chairman Fox
https://www.mhatimes.press/statement-from-mha-nation-chairman-fox/
‘Mom in moccasins’ running for Mandan, Hidatsa, Arikara Nation council seat, Buffalo’s Fire, Sept. 5, 2024
https://www.buffalosfire.com/mom-in-moccasins-running-for-mandan-hidatsa-arikara-nation-council-seat/
Petition for Referendum to Restrict Use of People’s Fund, Sept. 13, 2024, https://www.documentcloud.org/documents/25139531-petition-package-for-petition-for-referendum-to-restrict-use-of-peoples-fund?responsive=1&title=1
“Request for a Special Council Meeting so Tribal Members Have an Opportunity to Receive Information and Comment on Resolution #24-248-FWF Withdrawing $250,000,000 from the People's Fund.”
https://scontent-iad3-1.xx.fbcdn.net/v/t
“Request to Review Receipts and Expenditures of the North Segment for FY 2021-2024” https://www.facebook.com/photo/?fbid=122125563032351381&set=pcb.122125563710351381
Motion for a restraining order–People's Fund. MHA Nation
. https://www.mhanation.com/peoples-fund
Dateline:
SPEARFISH, S.D.