MHA citizens seek accountability in a suit against their Tribal Business Council

Their lawsuit in the Fort Berthold District Court challenges the council’s assertion that the doctrine of sovereign immunity grants it the authority to invest People’s Fund money without public input. The suit further seeks court action to bolster the referendum process, the lever enshrined in the tribe’s constitution for tribal citizens to demand a vote “on any proposed or enacted ordinance or resolution of the Tribal Business Council.”

First filed a year ago, the suit was dismissed in January and then appealed. A panel of judges is set to rule on the appeal by early October.

The plaintiffs are Carol Good Bear and Terry Fredericks, represented by attorney Steven Kelly.

They remember when the tribal council used to seek advisory votes before making big financial decisions.

“We just want to go back to a participatory democracy,” said Kelly, who was a tribal attorney under a previous Three Affiliated Tribes administration.

A sizable transfer

In a closed session on Aug. 6, 2024, the six-member MHA Nation Tribal Business Council, led by Tribal Chairman Mark Fox, voted to transfer $250 million from its federal Bureau of Trust Fund Administration account to the private equity firm TWG Global. A major player on the international finance scene, TWG Global touts partnerships with Mubadala Capital of Abu Dhabi and xAI, the artificial intelligence firm owned by Elon Musk.

Since its creation in 2012, the People’s Fund has remained in its tax-exempt federal trust account. Disbursements are paid annually to tribal citizens. The fund was valued at $890 million at the time the council transferred the $250 million, or 28% of the fund. The Tribal Business Council stated that the investment in TWG Global guarantees an 8% rate of return, compared to the 3% that the money earns in the federal account.

In their complaint, Fredericks and Good Bear called the Aug. 6 meeting “underhanded.”

The agenda “did not put tribal members on any meaningful notice whatsoever that the council was going to act on the People’s Fund or withdraw $250,000,000 from it,” they charged. “The agenda was intentionally vague on these points so that the council would not have to answer any questions or tolerate any comment on the matter,” according to the complaint.

On Aug. 22, 2024, the TAT Tribal Business Council then held a public meeting and took a second vote, reaffirming the decision to transfer the funds.

The meeting was held at the office of MHA Nation Treasurer Mervin Packineau in Parshall, North Dakota, 25 miles away from the tribal headquarters in New Town, where public tribal council meetings are typically held. Kelly said he found an agenda on the MHA Nation website after the meeting took place. It did not include an opportunity for public comment.

Lawyers for the council argue that the council held the public meeting for transparency’s sake and that any assertion that it was a secret meeting is unfounded.

In early September 2024, the plaintiffs learned that the Tribal Business Council had completed the funds transfer to TWG Global.

“This massive withdrawal of trust funds was approved without prior notice to the general membership, without any public hearing or input, and without a referendum or other form of direct tribal member approval,” Kelly wrote in the plaintiffs’ filings. “Only after the fact did tribal citizens learn of the quarter-billion-dollar depletion of the People’s Fund principal, sparking widespread concern in the community.”

“At stake,” added Kelly, “is the fundamental right of tribal members to participate in decisions affecting their communal assets.”

A matter of property

The case is playing out amid immense tribal wealth yet persistent poverty on the Fort Berthold Reservation. The tribe has invested millions of dollars in oil and gas revenues to develop housing, community spaces and services that, in turn, have created hundreds of jobs. Yet, according to the 2020 U.S. census, in the four segments of North Dakota counties that make up Fort Berthold (Dunn, McKenzie, McLean and Mercer), the percentage of people living below the poverty level ranges from 9.6% in Dunn County to 67% in Mercer County. As many tribal citizens continue to struggle, the tribe’s affluence only heightens tension around the council’s management of the people’s money.

Fredericks and Good Bear argue in their suit, first filed Aug. 28, 2024, that the People’s Fund is the people’s property, protected by the Indian Civil Rights Act.

They say that deciding to move the money without consulting the people is a deprivation of property entitling the people to “due process of law,” including sufficient notice of meetings and the opportunity to comment.

The plaintiffs further note that while the tribe’s constitution gives the tribal council sovereign authority to make decisions on behalf of the tribe, it also offers tribal members the right to bring a referendum on the council’s decisions.

The people, argues Kelly, not the tribal council, are the source of sovereignty. The council is the agent of the people.

In this case, a referendum would not claw back the money from TWG Global, Kelly explained. It would “send a message” to the tribal council, discouraging future withdrawals from the People’s Fund without first consulting the people.

“The right to referendum is an absolute, fundamental right that the people of the Three Affiliated Tribes reserved onto themselves,” Kelly argued in court filings, noting that this right is referenced four separate times in the tribe’s constitution. “It is their check and balance on the council.”

Taking the matter to the people

Over Labor Day weekend in 2024, the Red Owl Group, a grassroots advocacy group founded by the plaintiffs, circulated a petition to allow for a referendum on the tribal leaders’ decision to transfer the funds without public input. They collected 248 signatures.

But when tribal citizens learned that the funds had already been transferred, many believed a referendum was moot and signature gathering stalled. The plaintiffs claim that the tribe’s actions thwarted the right to bring a referendum.

“The constitution of the Three Affiliated Tribes guarantees due process and reserves to the people the power to veto council resolutions through referendum — a right rendered illusory if major financial decisions are finalized in closed meetings and kept from public scrutiny until irreversible actions are taken,” wrote Kelly.

In their complaint, the plaintiffs asked the court for three things: to prevent the council from prohibiting the public from attending council meetings unless it goes into closed session, to prevent the council from passing resolutions involving tribal expenditures in closed session and to issue an order restraining the council from withdrawing any money from the People’s Fund for 120 days, so the plaintiffs could have time to circulate a petition for a referendum.

The question of sovereign immunity

The tribal business council pushed back firmly, asserting that the Indian Civil Rights Act grants it sovereign immunity to invest the tribe’s money and that the tribe’s constitution further supports this immunity.

“The Indian Civil Rights Act (ICRA) does not provide Appellants, or any other tribal member, a due process right to direct the investment strategy of the Tribe. The MHA Nation Constitution confers that authority upon the Tribal Business Council,” wrote the council’s attorneys, Timothy Purdon and Timothy Billion. “The Tribal Business Council properly exercised that authority in passing (the resolution), which authorized part of the People’s Fund to be moved to a new investment account.”

Purdon is a former U.S. attorney for North Dakota and now a partner with the Robins Kaplan law firm, where Billion also practices.

In court filings, the council acknowledged the right of tribal citizens to bring a referendum and denied that the council’s actions precluded citizens from exercising that right.

On Oct. 7, 2024, they filed a successful motion to dismiss the case. On Jan. 24, District Court Judge B.J. Jones rejected the plaintiffs’ argument that investing a portion of the People’s Fund in a private equity firm results in a deprivation of property under the Indian Civil Rights Act.

“[T]here is no proof that the transfer will deprive the people of the future benefits from that investment,” Jones wrote.

He added, “How to invest monies generated by oil and gas revenue paid to the tribe…for the benefit of the people seems to the court to be an exclusive issue for the Tribal Business Council to decide and not for this court to second-guess.”

Appealing to a higher court

On April 22, the plaintiffs appealed to the MHA Nation Supreme Court.

The tribe launched the appeals court in 2013, withdrawing from the Northern Plains Intertribal Court of Appeals, citing a lack of timely response to TAT appeals. The TAT Tribal Business Council appoints the MHA Nation Supreme Court judges.

Appointed Justices Michelle Parks, Kelly Stoner and James Maxson heard oral arguments on Good Bear and Fredericks’ appeal on Aug. 5 at the Fort Berthold District Court in New Town.

The plaintiffs requested that the judges remand the case back to the district court. They argued that the council’s move to dismiss the case last fall robbed them of the chance to prove in court the people’s property interest in People’s Fund investments.

As an alternative to remanding the case, Kelly asked the court for a 60-day injunction to prevent the tribal council from further withdrawals from the People’s Fund to provide time for a renewed attempt to gather signatures for a referendum.

He said an injunction would lend credibility to the referendum process, signaling to tribal citizens that it was not too late to censure the tribe and dissuade future attempts to transfer People’s Fund money without their input.

Purdon, meanwhile, reiterated the TAT Tribal Business Council’s position that the transfer of funds is not a property rights violation and so the council’s actions were protected under sovereign immunity. He further told the judges that the plaintiffs can still vote on a referendum to rescind the council’s decision — that nothing the council has done has taken that right away.

The judges seemed hesitant to get involved. “The court doesn’t want to be in the position of managing investments,” Parks said.

“We are not asking you to manage anything,” Kelly responded. “We are just asking you to give us 60 days …We need to get the ball rolling. It would be nice to have the court’s involvement to get us through the petition.”

Parks acknowledged the case is complicated and said the panel would take the time needed to issue a decision. “We recognize this is an important case,” Park said. “It is important to tribal members and important to the tribe.”

Mixed reactions

After the hearing, Purdon was clear.

“Judge Jones got it right here,” Purdon said of the council-appointed TAT District Court judge who’d dismissed the case in January. “The tribe has sovereign immunity. The plaintiffs have the right to address their issue by referendum.”

The plaintiffs and supporters in attendance expressed their ire.

Good Bear said that with her years of policy and political work, she is committed to advocating for the people. “That’s what I want,” she said, “justice.”

“The way the tribe operates, it affects everybody. There are things done behind closed doors. There’s no transparency,” said Fredericks. “All I want to do is hold people accountable and try to hold on to our constitution. It’s all about the kids down the road. As an elder, I have a responsibility.”

Good Bear is a veteran policy staffer and grassroots organizer whose “mom in moccasins” slogan animated her campaigns for tribal office. Fredericks is a retired business owner of a construction and trucking company.

Meanwhile, tribal citizen Benjamin Good Bird, who attended the Aug. 5 hearing in New Town, North Dakota, spoke of family members who have struggled with homelessness on the reservation at the same time the tribe is building fancy buildings. When it comes to investing the People’s Fund money, Good Bird had a simple question for the tribal council: “Why aren’t they asking the people what they think?”

Tribal Chairman Mark Fox issued a written statement to Buffalo’s Fire.

“The MHA Nation Tribal Business Council’s action to diversify the investments of the People’s Fund was well within the TBC’s constitutional authority to administer the funds and property of the Tribe,” the statement said. “The people of the MHA Nation have chosen, through elections and their existing constitutional form of government, to allow this TBC to take exactly this sort of action. “The ability of the TBC to administer funds for the benefit of the Tribe and its members is rightfully protected by sovereign immunity so that the MHA Nation’s government and people can function effectively, free from undue interference.”