This is a tribute to Bud Mason, who was a former chairman of the Three Affiliated Tribes. In the Fall of 2007 Bud Mason was at an Oil Mineral  Lease bidding meeting and found out that our Tribal lands were being leased out to Oil companies for  far less than what they were worth. One Company in particular was Dakota 3 which received 44,000 acres of Tribal land at 50 dollars an acre when the going rate was 700+ an acre. Bud wrote a letter to the Secretary of the Interior explaining that this was unfair to the Tribal Membership because of the amount of money this company would receive if they would sell these leases to a bigger oil company. Bud later found out that this company was being sued by their investors and the story was published in the New Town News. Bud then decided to inform the people of the reservation of what was happening by going to each community and holding meetings to let everyone know what was going on with the Tribal lands.  Buddy wanted the people to know about the possible government corruption and conflicts of interest that were obvious to him. Bud died of cancer this year. Bud believed in beneficial tragedy and it was his hope that this type of corruption would bring the people together and the people would develop a government that is fair for everyone.  Rest in Peace, Russell “Buddy” Mason.


Click to view Bud's letter to the Secretary of the Interior

Lawsuit, countersuit over reservation minerals published in the New Town News on March 7, 2008.
By Theodora Bird Bear (New Town News & Mountrail County Record)

With mineral leasing going full tilt on Fort Berthold, a civil case filed in the Ward County District court has generated a counterclaim, which describes an alleged conspiracy among business partners to defraud loan lenders. Oil industry companies and individual working with approval of the tribal business council are included in the counterclaim.

The filed civil suit and counterclaim results from a joint venture plan between Dakota 3, LLC, Capital Minerals Company, Capital Minerals Group, and Roseland, Lee, and Nesdahl (RLN) Mineral Group.

Dakota 3’s plan was to lease and develop over 35,000 mineral acres of tribal and individual allottee lands within the reservation. According to the countersuit, the second part of Dakota 3’s plan was to also lease and potentially develop 1,500-plus mineral acres in the “tobacco field” area of McKenzie County.

Originally, Kevin Mattson of Minot filed a complaint alleging among other things that he was not re-paid a $1 million loan he provided to the RLN Mineral Group for one or both of Dakota 3’s leases. RLN is owned by Ervin Lee and Orville Nesdahl, both of Minot, and Kurt Roseland of Des Moines, Iowa.

In their countersuit, RLN alleged a number of countercharges against Mattson, and the other joint venture partners. RLN’s counterclaims are against Richard ‘Rick’ Woodward as vice-president of Dakota 3,LLC and owner of Capital Minerals Group; Spencer Wilkinson, as an owner and president of Dakota 3; and Spencer Edwards Investment, Inc., of Englewood, Colo. Wilkinson is also the general manager of the Four Bears Casino and Lodge.

RLN’s counter complaint also includes two other joint venture partners, Mark Guttormson, a Minot securities broker and Gordon Dihle, believed to be a Colorado resident.

Any silent partners or unknown co-owners of the companies are listed in the counterclaim as ‘John Does,’ and are described as co-conspirators and legally liable. If or when they are identified, RLN plans to request an amendment of their counter-complaint in order to state the true names and capacities of the ‘John Does.’
The counterclaim cites tortious interference by RLN’s former business partners of an expected billion dollar profit from the leasing and development of minerals both on and near the reservation, and lists multiple breaches of contract claims, misapplication of funds, and other charges.

According to RLN’s counter-suit, financial projections “placed the present value of Dakota 3’s share of the “Fort Berthold Play” between $452 million and $1.3 billion.”

In the counter-suit, Irvin Lee alleged that Woodward initially approached him about leasing mineral acres from the “MHA Nation” around March, 2006. Woodward also reportedly offered a finder’s fee and part of Dakota 3’s oil income if any funds were secured to help Dakota 3 with the leasing of both tribal and allottee minerals.

A copy of a tribal council resolution approving a lease of 15,720 tribal acres to Dakota 3 was also provided to Lee. Correspondence from Schlumberger Oilfield Service, which indicated the company was interested in a joint venture with Dakota 3, was also provided.

Lee reportedly contacted a number of individuals about joining with Dakota 3. However, the potential investors withdrew because of their previous experience trying to conduct business with an Indian tribe. “They found…. the various Indian Tribes would rescind their commitment due to Tribal politics and/or the Bureau of Indian Affairs.”

According to the counter-suit, in January 2007, Woodward encouraged Lee to invest in the leasing of “Tobacco Field” area in McKenzie County by telling him the rancher-owned mineral acres would be easily leased and could then be “…released for a substantial profit to one of Woodward’s former partners…”
RLN maintains that with Schlumberger’s involvement, Dakota 3’s revenue over the next 20 years was projected to be approximately $2 billion and because of the joint venture, “…approximately $1 billion was (to go) to RLN.”

When Roseland asked why Wilkinson was not contributing any funds to the business venture, Woodward reportedly said that Wilkinson’s role “… was to keep the MHA Business Council happy…” According to the counter claim, Wilkinson’s role with the council, Schlumberger oil company’s reported interest in Dakota 3, and Woodward’s “extensive knowledge of the oil and gas industry” was the implied rationale for joining in with Dakota 3.

Apparently convinced, Roseland, Lee, and Nesdahl participated in a joint venture with Dakota 3 by forming a corporation, RLN Mineral Group. Through a local securities broker, Mark Guttormson, RLN also secured a $1 million loan from Kevin Mattson in February 2007. At Guttormson’s recommendation, Spencer Edwards Investment, Inc. was brought in to facilitate the joint venture’s plans.

According to the counter-suit, Woodward told RLN that the McKenzie Play or the Tobacco Field would repay $450,000 on or before July 2007 and income from the play would start around September 2007. It apparently didn’t happen. Reportedly, Woodward went behind both Lee and Nesdahl’s backs and talked with Mattson, Roseland, and others about having RNL invest in Dakota 3’s lease of the “Fort Berthold play” involving tribal and allottee minerals.

In order to proceed with the leasing, Dakota 3 needed money for environmental students and the IMDA (Indian Mineral Development Agreement) bonds required by the Department of Interior. RLN’s counter-complaint alleges that Guttormsom misled Lee into believing Mattson would provide another $200,000 to RNL around June, 2007 for the leases. Guttormson also indicated that this additional amount would also demonstrate Dakota 3’s financial capabilities to the tribal council, the Bureau of Indian Affairs, and to another company, Och-Ziff.

RLN believed they were 50 percent owners in any income stream from both the McKenzie Play and the Fort Berthold Play. According to the counter-suit, by the end of June 2007, Dakota 3, CMC, or Woodward would not return calls or either misrepresented the true circumstances of the McKenzie Play by saying that things were going well.

In July, Lee reportedly learned that Woodward provided a gift share in his company, Capital Mineral Company to Mattson, Guttormson, and Dihle. Despite earlier assurances, Woodward then told Lee that the shares of the two partners, Nesdahl and Lee, did not include Fort Berthold and were only confined to the McKenzie Play.

The countersuit alleges that Rick Woodward, failed to complete the leasing for the McKenzie Play and damaged the interests of RLN. Because of Mattson, Guttormson, and Dihle’s alleged complicity and conspiracy with the other business partners, RLN was prevented from fulfilling their responsibilities in the lender’s agreement.

RLN also maintains Dakota 3, CMC, Woodward, Wilkinson, and ‘John Does’ failed to honor their contractual obligations in the Fort Berthold Play. Based on statements made by Wilkinson and Woodward, RLN maintains that “substantial sums of money have been wrongly diverted….for the personal use of Dakota 3, CMC, CMG, Wilkinson, and/or John Does…”

Finally, RLN requested that the parties be ordered to fulfill their obligations under the agreement and that RLN be awarded damages, attorney fees, cost for this action, and as-of-yet unspecified punitive damages.
RLN also requested a jury trial on all issues and claims.

When called on Tuesday of this week, the Ward County Clerk’s office informed New Town News that the case was assigned a file number and has been transferred to Williams County.
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