Osage Nation Principal Chief Geoffrey Standing Bear took his pruning shears to the tribal enterprise board’s request for an infusion of cash that initially came in at $2.75 million, largely due to what he described as insufficient or total absence of supporting documentation.
On Oct. 3, the Osage Nation Congress attempted to override the chief’s veto of its slightly reduced appropriation for Osage LLC and its subsidiaries, but failed by an 8-4 vote. The only budget that was left unscathed was that for Skyway 36, which the chief agreed to fund to the tune of $597,000 for fiscal 2023.
By all accounts, relations between Osage LLC and the executive branch have been chilly in the past few months since the Nation terminated a $405,000 contract with its own enterprise, Osage Nation Environmental Services, for non-performance. Osage LLC is the umbrella LLC over several other tribal enterprises, except the casinos and the health clinic.
During a congressional committee meeting about the budget request, Assistant Principal Chief R.J. Walker was quizzed about an apparent communication breakdown between the LLC and the Office of the Chiefs.
Walker denied a statement that the only communication had been between the LLC’s lawyer and the Nation’s attorney general, but said Standing Bear had expressed a desire for more information about the LLC’s request for money.
The LLC’s request was submitted to Congress on Aug. 10, but not to the executive branch until more than a month later, on Sept. 14, and then only after it had been requested in a series of emails, according to Chief of Staff Jason Zaun.
Walker noted that when he was in congressional offices, he picked up a presentation binder about Lost Creek Ranch – which was asking for a $648,000 infusion – and had assumed that one had been sent to the chiefs’ office as well.
“It didn’t cross my mind that we hadn’t received that,” Walker said. “Then I saw five others that we didn’t receive. That didn’t go over very well with the chief.
“The chief wants all of our LLCs and enterprises to succeed. That goes without saying. But it’s a big request and we just need more information.
“The chief said that very matter-of-factly.”
The ‘ask’ far outstripped the ‘get’
Osage LLC had asked for $2.7 million to support four of its entities, one of which has yet to be formed. Congress whittled down some of those requests to a total of $2.28 million, and Standing Bear axed the appropriation further, to $1.02 million.
The final request submitted to the Chief contained the following “asks.”
- $648,000 for Lost Creek Ranch, the 2,000-acre spread near Okesa that was built by Major League Baseball pitcher Brad Penny and purchased by the Nation for $4.9 million in late 2021. Standing Bear reduced the appropriation to $173,000 to allow “for the immediate operations needs for the lodge, ranch and facilities” that were outlined in Osage LLC’s budget request submitted to Congress on Sept. 9. “The other requests for Lost Creek Ranch do not have sufficient supporting documentation to justify additional funding at this time,” the veto message says.
- $250,000 for Osage Government Services LLC. OGS was planned to be a new LLC to perform information technology as an 8(a) contractor under the Small Business Administration’s program for tribal business development. The company has not been formed but Russell Goff, CEO of all of the Nation’s 8(a) companies, said Sept. 29 that he intended to register it with the SBA within 90 days. Standing Bear reduced the appropriation to nothing. “This request had absolutely no supporting information, except a statement that the entity was not currently operational,” the chief wrote.
- $787,861 for Osage LLC itself. Osage LLC asked for the infusion so it could hire a chief executive and other officers to run the company. Standing Bear whacked the request down to $252,000. “This reduction allows for the CEO and benefits and for the Office Admin and benefits,” the chief wrote. What the chief allowed is just $25,000 more than the LLC had proposed paying a new CEO.
Congressional debate over the LLC budget was sharp and passionate, and the spending bill passed with an 8-4 vote. The “No” votes by congress members John Maker, Eli Potts, Whitney Red Corn and Joe Tillman held when Congress tried to override Standing Bear’s veto Oct. 3.
The LLC intends to turn Lost Creek Ranch into a high-end hunting lodge. Nancy Trumbly Benthien, a member of the LLC board, volunteered to spearhead that effort.
During congressional meetings, she said that an outfit out of Georgia called High Adventure Co., which offers safaris and other hunting expeditions worldwide, is interested in forming a profit-sharing partnership with the LLC and managing Lost Creek, also called the Nation’s “little ranch” to distinguish it from the 43,000-acre Osage Nation Ranch.
But the 9,000-square-foot lodge first needs some repairs; it has had a water leak and some other maintenance issues, and the grounds need some alterations. For instance, HAC has suggested that some facilities be converted from deer areas to quail, because quail are more lucrative than deer. By the board’s estimation, with the proper investment, Lost Creek would be able to start turning a profit within two or three years.
During the congressional Commerce Gaming and Land Committee meeting on the LLC’s budget requests, LLC Board Chair Frank Freeman said that “great, exciting things are happening out there” at Lost Creek Ranch, and that he had met Osage Casinos Chief Executive Officer Byron Bighorse and Chief Operating Officer Kim Pearson, who were “very excited” about using Lost Creek in conjunction with the casinos, apparently as an attraction for high rollers.
With its funding request slashed, it is unclear what the next step for Lost Creek will be. During the Commerce meeting, Freeman and Benthien were asked that question by Congressman Joe Tillman.
“What happens if this doesn’t get funded?” Tillman asked.
After a long pause, Benthien responded: “We’ll have to go to Plan B.”
Tillman: “Do you have a Plan B?”
Benthien: “Not really.”
Freeman interjected: “Yes, we do.”
Benthien replied: “We do?”
Freeman explained that the LLC has $1 million in the bank that it wanted to keep as a cushion, but said it could be spent to cover the “downfalls.” “So, we do have plans,” he said.
Congresswoman Paula Stabler was sympathetic to the LLC board and supported investing in Lost Creek. The Nation bought the ranch, she said, without a specific plan for it, then turned it over to the LLC without any funding.
“They were given the keys and told to sign a lease with the Osage Nation,” she said. “We knew that one day we’d be asked to invest to get them running. That board did what it was asked to do, made their assessment and brought forward a plan.”
Congresswoman Brandy Lemon was also a fervent supporter of Lost Creek, and, like Stabler, of the other plans presented by the LLC board.
“If we don’t fund this – let’s talk about that,” Lemon said. “Lost Creek ranch, with that big, fancy, beautiful lodge, is going to deteriorate – or executive is going to come back and ask us to fund it. “
The four members of Congress who voted no on the bill largely echoed each other. They said they don’t trust the Osage LLC board to competently operate the enterprises it oversees.
“I wish all of our businesses success,” Congressman John Maker said. “Our whole Nation wants that. But there’s a lot of people who don’t have faith in that board. I’ve got calls from all over the United States about what’s going on.
“I haven’t had very many calls at all saying everything’s going great.”
Congresswoman Whitney Red Corn echoed Maker.
“I’m the newest member here, and I don’t know if you’d call that an advantage or a disadvantage,” she said. “I’m going to pull from my experience as a constituent. I see potential in Skyway 36. I see potential in Lost Creek. But I have a hard time trusting our LLC to do this well for us. This is a lot of money that belongs to the people.
“My trust isn’t there.”
Tillman: Salaries too high
In his comments, Tillman also took aim at the LLC’s salary proposals that Standing Bear subsequently reduced by two-thirds, from nearly $790,000 to $252,000.
The LLC proposed paying a new CEO $225,000, a development officer $200,000 and a CFO and human resources director at about $150,000 each, Tillman said.
“The LLC gave us a $155,000 return on investment two months ago yet they turn around and ask for $2.3 million two months later,” Tillman said.
“I don’t care if you’re a banker, judge or jury. It must be nice to just come to the Nation and ask for money and promise you won’t come back and ask for more.
“It’s time to close the door.”
Maker said that the salaries were too high. Congressman Eli Potts was also dismissive of the request.
“There’s money in the bill for a CEO,” Pott said. “CEOs are paid out of profits but that’s not what we’re seeing here. They need to pay out of profits like other businesses.
“I don’t know how many times we’ve been told, ‘We’re not coming back here to ask for money.’”
Stabler: Board performing well
Stabler, the sponsor of the bill, weighed in with the last word during the Congressional debate on Sept. 26.
She told her no-voting colleagues that everything they were talking about dated from before the time the current board members had taken office.
“All of the things you’re talking about, all of the things you’re addressing are with all of the old boards, with all of the old information,” Stabler said.
“This team of people had to dig and scrape to pull information from every entity we had. That’s what bad shape they were in.
“But they took it and got it running in the black. Not the old boards. This new one. And it’s the one getting hit, much like politicians when they get ready to get out of office – everybody gets down on them.”
Stabler noted that no LLC had ever paid a dividend to the Nation before the new board came into place and paid out $155,000 from in July.
“This is a team we can count on,” she stated. “I understand everyone is operating off what they’ve seen on their cell phone and read in the newspaper but we know things those entities don’t know. If you don’t know and if you can’t read the financials and if you can’t read a business plan and if you can’t understand how you make money, then you’re right, I can see your point.
“We finally have a professional team working for us, working for this Nation and working for the people to bring money forward.
“Those are the absolute facts and we have the documentation to back it up.”