Native Americans on an oil-rich North Dakota reservation have been cheated out of more than $1 billion by schemes to buy drilling rights for lowball prices, a flurry of recent lawsuits assert. The suits claims the federal government facilitated the alleged swindle by failing in its legal obligation to ensure the tribes got a fair deal. Reservation lands are still held in trust by the U.S. government. As a trustee, the Department of the Interior has responsibility for overseeing the development of oil and gas on tribal lands, and for ensuring that any leases or sales of that land are made in “the best interest” of the Native Americans.
Since the late 1800s, the U.S. government has appropriated much of the original tribal lands associated with the Fort Berthold reservation in North Dakota for railroads and white homesteaders. A devastating blow was delivered when the Army Corps of Engineers dammed the Missouri River in 1953, flooding more than 150,000 acres at the heart of the remaining reservation. Members of the Three Affiliated Tribes — the Mandan, Hidatsa and Arikara — were forced out of the fertile valley and up into the arid and barren surrounding hills, where they live now.
But that last-resort land turns out to hold a wealth of oil, because it sits on the Bakken Shale, widely believed to be one of the world’s largest deposits of crude. The site sits on top of Bakken Shale, and up until recently, reaching the oil would have proven to be difficult, but because of hydraulic fracturing and the ability to drill sideways, a massive land grab rush has ensued.
Documents from two law suits mention the involvement of the New York based hedge fund Och-Ziff Capital Management Group but do not specify the firm’s role. The hedge fund is publicly traded and, according to its web site, has more than $33 billion under management.
The rush to get access to oil on tribal lands is part of the oil industry’s larger push to secure drilling rights across the United States. Recent estimates show that the U.S. contains vast quantities of oil and gas. A company purchases the right to drill for oil underneath an acre of land by paying a one-time upfront payment, and a percentage of the profits earned on the well. On Indian lands additional laws also apply, dictating who can negotiate for whom and how the government has to oversee the agreements.
Title: Land Grab Cheats North Dakota Tribes Out of $1 Billion, Suits Allege,
Source: ProPublica, February 23rd, 2013
Author: Abrahm Lustgarten
Student Researcher: Alejandro Tinajero, Sonoma State University
Community Evaluator: Teresa Candelaria, Santa Rosa, Native American woman