Site of the Hissom Memorial Center in Sand Springs, Oklahoma, on February 23, 2010. The institution for people with intellectual difficulties closed in 1994 following allegations that staff abused residents. It remains on a list of shareholders in the Osage Mineral Estate.
Photographer: Stephen Pingry/Tulsa World
More than a century ago in what’s now Oklahoma, leaders of the Osage Nation negotiated with the US to put all the mineral rights to their reservation in a federally managed trust. Shares were distributed to a roll of Osage citizens.
Over the following decades, some one-quarter of the shares of the Osage Mineral Estate left Osage hands — some through violence, others via estates and sales — as part of a larger transfer of wealth from the Osage people to White settlers that is the subject of the podcast “In Trust.” Despite efforts by Osage leaders and citizens to determine where those shares went, the Osage Mineral Estate’s trustee — the US government — kept secret the names of non-Osage shareholders, and how many they held.
But the Bureau of Indian Affairs, part of the US Interior Department, provided Bloomberg with a partial list in response to a public records request. Asked to disclose the holdings of non-Osage individuals and entities, the BIA released the names of roughly 70 non-Osage entities and the portion of a headright held by each.
The list includes oil companies, churches, trusts and universities. Some of these organizations told Bloomberg they were able to determine the backstories of their shares. Others said identifying the provenance of their Osage mineral shares was virtually impossible. One organization said it didn’t know it even had a headright share.
One name on the list has raised significant concerns among some Osage citizens, who say it highlights how the BIA has fallen short in its duties to the Osage Nation and its citizens. Hissom Memorial Center, an institution near Tulsa for people with intellectual disabilities, closed in 1994 following allegations that its staff was abusing patients. The list obtained via FOIA shows Hissom Memorial Center currently holds 0.375 of a headright share.
A share of that size would have yielded about $200,000 since 1994, when the center closed, according to headright payment data published by the Osage Minerals Council. There is no public accounting of what happened to the funds listed as belonging to Hissom.
After the facility closed, its land and buildings were taken over by the Oklahoma Department of Human Services, according to Ronald Baze, the agency’s general counsel. But the agency didn’t have ownership of the headright share, according to Baze. He said that in conversations with a local BIA official, he learned that the royalty payments have been accumulating in an interest-bearing Individual Indian Money, or IIM, account held by the Interior Department since 2012, while the agency determines the rightful owner or owners. It’s unclear where that money went from 1994 to 2012.
“Certainly that’s a failure of the trust relationship,” said Wilson Pipestem, an Osage headright holder and attorney who has represented the Osage Minerals Council, including in a lawsuit brought against the US government alleging a breach of its fiduciary duty. “If you think about the systems that were created by the United States in 1906 and how those have evolved, it's kind of been a winding path of working and not working.”
A spokesperson for the Bureau of Indian Affairs declined to answer questions about the list obtained via FOIA and said the agency doesn’t comment on matters involving ongoing litigation.
Trust Relationship
For many tribal nations and tribal citizens across the country, the US government is more than just a regulator or bureaucrat. It serves as trustee, a relationship born out of treaties that were signed and often coerced more than a century ago. This obligates the US to the highest standard of duty when it comes to the money it manages. In the case of the Osage Nation, that obligation pertains to the mineral estate — all the oil and gas rights to nearly 1.5 million acres in Oklahoma. This dates to the 1906 Osage allotment act, which divided the reservation’s surface land into parcels distributed to Osage individuals while keeping all the subsurface rights intact for the Osage Nation.
The Nation has prevailed in previous cases alleging mismanagement against the US. In 2011, the federal government agreed to pay $380 million to settle Osage allegations that the US had breached its fiduciary duty by failing to get the best possible price for the oil produced from the mineral estate. The US didn’t admit fault in that settlement, which paid out to all headright holders, Osage or not.
Scrutiny of the BIA’s role has persisted. In 2014, the Interior Department’s inspector general found fundamental and systemic flaws in how the Bureau of Indian Affairs’ Osage Agency oversaw the mineral estate, flagging shortcomings in its management of data, accounting and the environmental impacts of drilling. Meanwhile, a separate lawsuit, this one brought 20 years ago by a group of individual headright holders, seeks a full accounting of the funds managed by the federal government.
Charles Pratt, an Osage headright holder, was one of the plaintiffs in that case. In March 2015, he told the Osage News that the BIA owed answers for headright holders like Hissom. “It goes to P.O. boxes, it goes to companies that have been out of business for years, it goes somewhere, but the bureau won’t tell us who cashes that check,” Pratt, who died shortly after his interview with the Osage News, was quoted as saying.
Over the last 100 years, one headright paid out the equivalent of almost $4 million in current dollars, a calculation derived by adjusting annual headright payment data for inflation. More recently, headright payments plunged after a period of low oil prices and a slowdown in drilling in Osage County. Last year, a headright paid out $15,790, down from more than $40,000 in 2012, though a spike in oil prices has lifted quarterly payments this year.
Headrights represent far more than a check in the mail for oil money. For decades, Osages couldn’t vote in tribal elections without them. They were also the motive behind a series of murders in the 1920s, when White men conspired to kill dozens of Osages in order to obtain their headrights. That era, commonly referred to as the Reign of Terror, is the subject of an upcoming Martin Scorsese film, based on the book “Killers of the Flower Moon” by journalist David Grann.
It’s been illegal to transfer a headright share to a non-Osage person or group since 1978, when the law was amended to prevent more shares from leaving Osage hands. Today, Osage headright holders can leave their share to a non-Osage person in their will, but only for a “life estate” — the headright has to return to Osage hands once that person dies.
Names and Numbers
The BIA has long withheld information about non-Osage headright holders, as it does for Osage holders, saying these details constitute personal or commercial information. However, in 2009, a list of 1,744 names of non-Osage headright holders was made public in a surprise turn in the suit brought by Pratt and others.
“This was the first time in over a hundred years — since 1906, when the allotment roll and the whole headright system got implemented — that we as Osages were able to see in black and white an official list from the government,” said Tara Damron, a niece of Pratt who took his place as a plaintiff in the lawsuit.
Yet that list, republished in a local newspaper called The Bigheart Times, didn’t disclose the fraction of shares that each person or group held.
In response to Bloomberg’s FOIA request for non-Osages’ headright holdings, the BIA declined to release the names and headright holdings of any individuals. It also declined to provide names and headright shares of any entities that objected to the BIA making that information public. What the agency disclosed was a list of trusts, organizations and other entities that either did not object to having the information shared or didn’t respond to the BIA’s inquiries.
That list — some six dozen entities holding just under 39 headrights in total — represents a small slice of non-Osage headright holders. About a quarter of headrights are no longer in Osage hands, according to the BIA, representing roughly 550 of 2,229 shares.
Some of the organizations on the list were able to provide information about how they came to own a headright. The Oklahoma Historical Society received its 2.31666 shares through an Osage estate, a spokesperson told Bloomberg. The money goes toward funding the White Hair Memorial, an Osage learning center, at the request of the person who bequeathed them, the spokesperson said.
The University of Oklahoma said it inherited 1.72916 headrights from a woman who left them in her will and requested the money be used for a scholarship fund in memory of her foster son.
The Natalie W Bryant Cancer Center, Catholic Charities of Oklahoma City, and Animal Aid of Tulsa said they received their shares from estates and use the money to support their respective causes. ConocoPhillips, which acquired Burlington Resources in 2006, said a subsidiary holds the share it’s listed as having and that it obtained it through a series of acquisitions in full accordance with the law.
Some entities had less information. Sabine Royalty Trust, which pays investors quarterly for mineral rights it holds across the country, said it didn’t know how it had come to own 2.32036 shares.
Learn more: Listen to episode two of the podcast In Trust.
Others said they weren’t aware they had a share. Robert Hefner V, a member of a prominent Oklahoma family, said his family’s firm, The Hefner Company, hasn’t received payments for the 0.528 share the BIA said it has.
Houston Oil and Minerals Corp., which is listed as having 0.125 of a headright, was sold more than 40 years ago to another oil company, Tenneco. A spokesman for Tenneco referred Bloomberg to Kinder Morgan, which acquired a company that acquired Tenneco's oil and gas business in 1996. When Bloomberg contacted Kinder Morgan, a spokesman for that company said it sold its business in Osage County to another company, Osage Midstream LLC. The owner of Osage Midstream LLC said his company doesn’t receive payment for any headright shares.
Representatives of several organizations, including the Catholic Archdiocese of New York, said they were unfamiliar with Osage headrights. The Baptist Foundation of Oklahoma, which is now named WatersEdge, declined to comment. Stanford University didn’t provide comment. The University of Texas said it was trying to track down more information. Many of the entities, including churches and trusts in the names of individuals, couldn’t be contacted because the information provided by the BIA was too vague to determine their identity.
Osage Nation Request
The Osage Minerals Council, which oversees the mineral estate, has asked for headrights held by non-Osages to be returned. Last year, the council announced it was seeking federal legislation to make the process for transferring shares to the Osage Nation less cumbersome. Everett Waller, the chairman of the council, said multiple non-Osage headright holders have said they attempted to return their shares but found the process too logistically complicated.
Devon Energy Corp., an Oklahoma-based oil company, would welcome such legislation and would be interested in returning its share, said Lisa Adams, a company spokeswoman. She said Devon acquired 0.5 of a share when it bought Santa Fe Snyder in 2000, but the transfer didn’t come with a historical record of how Santa Fe Snyder got the headright.
“Typically, when we acquire land or leases, there's a historical record and you can have a paper trail,” she said by phone. “And in this case, we don't have that.”
Current law requires non-Osage headright holders who want to return shares to go through a tiered process, starting with trying to locate heirs of the original owner. But limited information and poor record keeping make that difficult.
“It’s easier for a non-Osage headright owner to transfer their share to anyone than to return it back to the tribe,” said Pipestem, the attorney who has represented the Osage Minerals Council. He says it's a struggle for federal officials to manage the Osage Mineral Estate when there's limited resources and antiquated laws, referring to the 1906 Act.
Though it was legal for headrights to be transferred to non-Osages, Waller said the US should’ve prohibited it.
“That should have never have left my peoples’ hands,” he said. “When the first Osage original allottee died, any of their possessions should have been held in trust for the Nation.”
Allison Herrera, a contributing reporter on In Trust, is the indigenous affairs reporter for KOSU in Oklahoma.
Non-Osage headright holders
No comments:
Post a Comment