Former employees and board members of at least one of the Osage Nation’s independent limited liability companies allege that hostile management has run off Native American employees, has engaged in nepotism and retaliatory behavior, and has made poor business decisions that could endanger tribal enterprises’ standing with the federal government.
Ousted officers and enterprise board members allege that Osage LLC Chairman Frank Freeman:
- Abruptly redirected health insurance business to a relative’s company when he was elevated to his position late last year;
- Hired his sister as office manager and supervises her in that position;
- Hired the wife of his main chief executive to perform human resources work for which she was not qualified;
- Often delays signing contracts and leases for so long that it jeopardizes the contracts or delays payments to Osages;
- Has failed to pay ousted board members and some terminated employees their final stipends or paychecks; and
- Fails to consult with people who have proven track records in their fields, whether it be in cattle ranching or fulfilling federal contracts for environmental and other work.
Historically, Osage enterprises – except the casinos – have struggled to turn a profit, but former offices and board members say that Osage Nation Environmental Solutions was poised to make money last fall when the Osage Congress voted to do away with enterprise boards and put them all under the umbrella of Osage LLC, creating a super-board led by Freeman. Freeman is a recently retired insurance agent from Broken Arrow and a son of longtime rancher and former Congressman and tribal councilman Mark N. Freeman Jr., who died in 2015.
Within months of Freeman taking over, he fired ONES’ small staff – President Paul Yates
(Osage), Vice President Michelle Holley (Delaware), and environmental scientist Jeff Watts (Osage) and declared the enterprise to be an utter mess – an accusation that both Yates and Holley dispute, as do members of the board that formerly oversaw their work.
“We had a clear plan, we had a timeline, and we were on target,” said Holley, who chairs the Delaware tribe’s trust board. “Once Frank took over leadership of the company, he essentially created this narrative that there were issues, that there were problems that needed to be fixed.
“There were none. There was nothing to be fixed.”
The Osage News sent Freeman an email asking for his comment on Aug. 4, posing questions raised in this article, and asked him to revisit 19 related questions the newspaper posed after he fired the Osage Nation Ranch advisory board in June.
He did not respond.
In June, after receiving the 19 questions, he referred the newspaper to Osage LLC’s attorney Adam Marshall, who replied that he was without sufficient knowledge to answer them.
Eddy Red Eagle: Eight years on the board, no one asked him a question
Eddy Red Eagle Jr., who chaired the ONES board before Freeman “excused” him, was also adamant that any characterization that ONES was struggling was a fiction.
“We were hitting all the bases,” Red Eagle said. “We were about to start paying dividends back to the tribe. I wish we could have got there faster, but it was a start-up and start-ups take time.”
Red Eagle served on the ONES board for eight years. In late 2021, when the ONES and other enterprise boards were dissolved by congressional action – legislation to which Principal Chief Geoffrey Standing Bear acquiesced – Freeman told him he could interview for a new board seat, presumably on the Osage LLC.
“I said ‘OK, that really sounds like fun’ and soon after that I hung up,” recalled Red Eagle, a former Osage Nation Congress member who has served on business boards for decades, including the Osage County Industrial Authority and the Osage County Health Board.
Since then, Red Eagle said that Freeman has never sought any advice or input from him or his fellow ONES board members Chuck Hessert and Anthony Webb about the company’s operation or finances.
“I never talked to Frank after that day we were dismissed,” Red Eagle said. “He didn’t even ask where the pencils were.”
Nor, Red Eagle added, did anyone else seek input from him or the other two board members.
“That’s the part that twinges a little bit,” Red Eagle said “Not a call. Not a ‘sorry.’ Not a ‘thank you.’ I mean nothing. Nothing from Executive. Nothing from Congress.
“Whatever.
“Then they want our vote when it comes time for the election.”
Red Eagle said that Yates, Holley and Watts “were a tremendous team” that had brought ONES to the point where it was poised to be a thriving business. He said that he advocated for a slower transition to having Osage LLC running the show because he viewed it as poor business practice to suddenly shove such diverse businesses as a cattle ranch, the nascent droneport Skyway36, a broadband company, a construction outfit and an environmental business under one LLC board.
“I told them they were rushing it,” Red Eagle said. “They didn’t listen. I said we can help you align that; your infrastructure isn’t able to support multiple entities. It fell on deaf ears. Deaf ears.”
Hessert said he served on the ONES board from the time it was created by Principal Chief John D. Red Eagle. He has watched its staff and all their work get eviscerated with dismay.
He was succinct: “I think there’s some real crap going on over there.”
No consulting, just orders
Several former employees, board members and others familiar with Freeman’s management style described him as unwilling to seek the counsel from those who are more experienced than he is.
“He never asked questions,” said Yates, the former president of ONES. “He was making decisions for us, and he didn’t understand the ramifications of those decisions.”
Added Holley, the former ONES vice president: “He didn’t understand the scope of anything because he didn’t ask any questions. He just assumed.”
Reactionary decisions often led to problems, both Yates and Holley said. For instance, they both said Freeman told them that ONES would not engage in any more joint ventures, apparently without realizing that joint ventures are an integral facet of government contracting under the Small Business Administration’s 8(a) program that is the basis for ONES’s existence. (It currently has four environmental staffing contracts at three military bases.)
As Red Eagle put it, the 8(a) program centers on a mentor-mentee relationship; in ONES’s case, it has a joint venture with an experienced contractor called Whitetail Environmental out of Jay, Okla. The tribal-private partnership is advantageous for both: The tribal business and its employees learn the ropes of a business, and the private company benefits financially. Ultimately, relationship shifts so the tribe starts controlling more of the operation – and getting more money – as it gains experience.
Holley said that she views workforce development – training and educating Natives in new fields to improve their lives – as a tribal enterprise hallmark.
Freeman, she said, turned workforce development into workforce destruction: “He replaced all of the Native employees with non-Natives and all of the workforce development went away.”
Yates concurred. When he was the Bureau of Indian Affairs superintendent at the Miami Agency, he said, he had a dictum: “I want to be the whitest-looking employee in this agency. I shouldn’t have said that – but my position is that I take Osage and Indian preference very seriously. If you can’t get a break from your own people, where are you going to get it?”
The Whitetail contract, delayed
Yates and Holley said that the joint venture with Whitetail was supposed to be renewed in January, but wasn’t because of Freeman’s order – which could throw the ONES out of compliance with the 8(a) program. They said that the ONES is now scrambling to renew the contract but the delay came at a cost: ONES should have been getting more than half of the revenue that the 8(a) contract is producing, but it is getting less because it is still operating under the old joint venture agreement.
There have been many other delays across the LLCs for which Yates lays the blame at Freeman’s feet. “He took months to sign leases for restricted land within the ranch, and that delayed payment to Osages,” Yates said. Similar delays have occurred within other LLCs, he added.
Yates added that 8(a) contracting is not only complex but constantly changing, but Freeman had told Whitetail owner Jason Tanner at a meeting in Tulsa that it was easy and that he felt as if he had mastered it.
“That’s like saying ‘I understand the Old Testament like nobody’s business,’” Yates said. “Really? Have you even read it?”
Added Holley: “It’s impossible to know everything about 8(a) because it’s constantly evolving.”
Doing business with relatives
Other allegations center on what critics view as inappropriate business relations, something that two of the three members of the Osage Nation Ranch advisory board also talked about after Freeman canned them in June.
In June, ranch board members Hank Hainzinger and Galen Crum alluded to second-hand knowledge that Freeman had abruptly transferred the health insurance for all LLC employees to a company called Sterling Management Group, a subsidiary of Loftis & Wetzel, a large insurance broker based in Ponca City and Blackwell.
Previously, each tribal LLC had insured its employees separately, so consolidating all employee insurance into one policy made sense to take advantage of the economy of scale.
But Yates and Holley said that the move was made suddenly, without being put out to bid or being analyzed. They said that Freeman told them Loftis & Wetzel had been his uncle’s company. Freeman’s nephew – the son of his sister Rebecca Freeman Leonard, Osage LLC’s office manager – is a producer for Sterling. The son, Clay Leonard, did not return a phone call seeking comment about whether he benefitted from the policy transfer, and it is unknown whether he did. Loftis & Wetzel is a large company and could have been the best alternative regardless of any personal ties.
“We had our policy at Dillingham Insurance (in Oklahoma City),” Holley said. “Frank said his uncle had started Wetzel. It was not given to us as an option to see if they had better rates. It was a demand. It was a must.”
And it caused problems: Because of the haste of the move to a new insurance provider, there was a 30-day gap in premium coverage for employees. To be in compliance with its Department of Defense contract, ONES had to foot the entire bill for the premiums that month – an expense Osage LLC never reimbursed ONES for, Holley said.
Nation fired ONES
On July 19, Osage Nation Attorney General Clint Patterson issued a stern letter to Freeman and ONES saying the Osage Nation intends to terminate a $405,000 contract with ONES for an environmental study of the 43,000 acres Osage Nation Ranch, a study required as part of the putting the land into trust. The study was key, Yates said, to the Nation getting tens of millions of dollars from the United States to clean up oilfield damage to the land.
Patterson’s letter said that not only has ONES failed to perform, but it violated the terms of the contract by hiring a subcontractor without the Nation’s written approval.
Yates said that when he was in charge, the study was going well and nearing completion with the assistance of an Oklahoma City firm called Reagan Smith. Reagan Smith was fired by Freeman, and replaced by a Connecticut company called TRC, which Yates and Holley said had a relationship with Russell Goff, who Yates hired at ONES and who Freeman recently elevated to chief executive over three of the Nation’s LLCs.
Goff did not return a call seeking comment for this article. When the termination letter was issued July 19, he told the Osage News that he would defer comment to Freeman.
Holley said that such shuffling of contracts undermined a slew of work and defied both common sense and the contract. The Nation has paid $266,000 to ONES, and did receive documents the Nation demanded – Reagan Smith work product, Patterson said.
“ONES failed to provide any update or notification that the relationship was discontinued with our approved subcontractor Reagan Smith,” Holley said. “There’s a whole process that you have to go through. You can’t just hire your best friend over on the East Coast who happens to have an environmental company.”
Relatives working together
Past officers in the companies also raised questions about nepotism.
Yates said that when he hired on Goff, Goff asked him to hire his wife.
“Russ is a good employee,” Yates cautioned. “He did a lot of good things, and I offered him $150,000 – twice what me and Michelle were paid – because he was bringing enough contracts with him that they more than covered his salary.
“But I didn’t feel comfortable hiring his wife and wouldn’t do it. Our relationship went south when he realized I wouldn’t hire her, but Frank would.”
Goff did not return a phone message Aug. 5. It is likely, however, that Andrea Goff worked for the umbrella company Osage LLC, not ONES or the other LLCs Goff heads, so she would not have been under his direct supervision.
Brother and sister
Early on in his tenure on the Osage LLC board, Freeman hired his sister, Rebecca Leonard.
Kay Bills, the former chair of Osage LLC, said that he initially hired Leonard to make sense of a jumble of records and that she did a good job. Bills said at the time she was paid $15 an hour. Subsequently, Leonard was elevated to manager, a job she continues to hold. What she is paid is not a public record; the Nation’s LLCs all operate opaquely and few of their records are public.
The Osage Nation code specifically bars any official from appointing or directly supervising anyone related by blood or marriage within the second degree and adds that such relatives should be assigned to positions “in strict compliance with the current provisions of the Personnel Policies and Procedures of the Osage Nation and its entities.”
Some members of the Osage Nation Congress told the Osage News that they believe Bills had hired Leonard, but she denied that.
“No, I did not,” Bills said. “Frank brought her on early on. We’d received unmarked boxes of receipts and Frank brought her in to sort. She sorted and sorted and sorted.”
The relationship between Freeman and Bills soured soon after he was appointed to the ONES board in 2018, and Bills said ultimately, she relinquished the chair to him because Freeman was so unpleasant. Freeman then filed an ethics complaint against Bills, alleging she had spent money without board approval. The Attorney General dismissed the complaint last year because the LLC had no bylaws prohibiting her actions.
Bills described Freeman much as Yates, Holley, Red Eagle, Crum and others have: Temperamental, accusatory and generally difficult.
“He doesn’t understand, and he doesn’t listen,” Bills said.
When she left the board, Bills said Freeman refused to pay her the final stipend she was due for her service; she said that two employees Freeman fired when he became chair were similarly stiffed.
Former ranch board members Crum and Hainzinger said they, too, were not paid their stipends for the partial month they served before Freeman fired them.
“I’m not an expert because I’ve never been fired before,” Crum observed. “But I have had to fire people before, and I’ve even had people just walk off the job. But I’ve always paid them what they were due, for the work they did.
“It just seemed really petty to me.”
Ruing the reality
Hainzinger, the former ranch advisor who was fired in June along with Crum and retired veterinarian Ladd Oldfield, said he was saddened by all controversies surrounding not only the ranch but the other LLCs, even though he is unfamiliar with them.
At the ranch, he said, “We was a well-oiled machine. Our only fault may be that we messed up was that we didn’t pay a dividend, but we was building a ranch. We was making the ranch more money, building new fences, new barns, fixing up houses, buying more cattle and spraying. We was creating more assets for the Nation by making that ranch better.”
The recent news that the Osage LLC board had voted to issue a dividend of about $155,000 to the Nation – the first ever paid by an enterprise except the distributions issued by the casinos – left Hainzinger and others befuddled.
“To me that was like somebody giving you a dollar and paying back a penny,” Hainzinger said.
Others were more cynical.
“Has it actually been paid?” asked Holley.
Yates looked upon the payment as being nothing more than a diversion created to steer attention away from management shortcomings and other problems.
Red Eagle, the former chair of ONES, said he was frustrated by the inability of the tribal enterprises to get down to business.
“This is really one bad trait of Osages,” Red Eagle said. “We have a wonderful culture, but we do not possess a business culture. We have to nurture that. Otherwise, we throw a lot of money around and it disappears. Not criminally. It just disappears.
“There’s no 10-year plan. No 20-year plan.
“God, at least get a five-year plan!
“Just get a plan. That’s my advice.”
