North Dakota tribe's oil shale deals at center of federal probes

Friday, March 1, 2013  

The Internal Revenue Service and the Federal Bureau of Investigation are looking into oil shale deals made by former leaders of the Mandan, Hidatsa and Arikara Nation of North Dakota, The Wall Street Journal reports.

In one deal, the tribe leased the drilling rights to 85,000 acres for $14 million. A non-Indian company that was involved later sold the rights for $949 million, the paper said.

"Our tribe unfortunately has a history of getting shortchanged by the U.S. government," current Chairman Tex Hall told the paper, "and in this case, also by our own members."

The deal was negotiated by former treasurer Frank Whitecalfe, who defended the terms and denied that he benefited financially. But the IRS has demanded records related to the agreement and to the finances of past council leaders, the Journal reported.

The FBI has subpoenaed tribal records, including the finances of council members, and held grand-jury hearings on the matter, the paper added. Hall said tribal members have been interviewed.

The deal was orchestrated by Spencer Wilkinson Jr., a tribal member who was the manager of the tribe's casino. He declined to comment.

Get the Story:
Shale-Oil Boom Divides Reservation (The Wall Street Journal 3/1)

ProPublica: North Dakota tribe cheated out of energy riches (2/26)