OSGC: Too Big; Too Fail

Here’s a copy of Oneida Law Office Chief Counsel Jo Anne House’s legal opinion regarding Frank Cornelius’s July 9, 2013 petition for General Tribal Council to direct the Business Committee to dissolve Oneida Seven Generations Corporation:

The Chief Counsel’s new legal opinion admits on page 2 that previous legal opinions (February 15, 2011 re: Genskow petition and March 12, 2013 re: Dodge petition) erroneously referred to the Oneida Business Park as the “Oneida Industrial Park.”

The new legal opinion also claims that in the February 15, 2011 legal opinion,

the chart on page 8 erroneously refers to an earlier version of the proposed reporting format that the Oneida Business Committee did not adopt. The financial and disclosure reports are confidential, non-public documents to protect the business activities of the corporation because of the specificity of information the corporation is required to present.

To start with, there’s no chart on page 8 of the February 15, 2013 legal opinion so we have to assume the Chief Counsel is referring to page 6, but Chief Counsel House fails to note that her February 15, 2011 legal opinion also states in writing at the bottom of page 5 to the top of page 6 regarding GTC members’ access to Disclosure Reports (Section 3 of the Corporate Report Model),

The confidential report can be viewed by members; however it will be maintained in a confidential manner.

The Chief Counsel’s new legal opinion fails to explain how GTC members having access in a confidential manner – or even publicly – to the following information could harm the legitimate business activities of a corporation:

(A) Disclosure Reports Defined: Disclosure reports financial and familial relationships and connections between the Corporation and other entities, as well as members of the Corporation’s Board and key management personnel. Any financial or legal relationship, ownership interest, or any blood kinship within the Corporation and its financial practices or partnerships shall be detailed in a structured and easy to understand format.

(B) The Disclosure report shall include, but not be limited to, the following detailed information:

a. Names and title of all of the Corporation’s Board members’ names, time in position, and date when position shall be up for renewal or replacement (if applicable).

b. Names and title of all of the Corporation’s key management personnel, with length of service in that position, and if under contract, when that position is up for renewal or expiration of the contract term.

c. Summary of any financial or familial relationship between any of the people in part a. or part b. in this Section, as well as any relationship, financial or familial with any current member of the Oneida Business Committee or any member of any regulatory body within Oneida such as a board committee or commission charged with regulating the Corporation’s industry or activities.

d. Names of any other person, whether it be a business in any legal form or an individual, doing business with the Corporation for purposes of mutual enterprise (i.e. including but not limited to: joint ventures; membership in an LLC together; acquisition of a subsidiary; partnership).

e. Summary of the financial transactions or relationship between those listed in d. above in this Section and the Corporation, including the purpose of the mutual enterprise, legal relationship, or other connections between the Corporation, its Board or its key management personnel and this other named entity or person.

(C) Disclosure Report Due: An annual report to the Oneida Business Committee is due concurrently with the narrative report, as well as whenever there is a change to the Corporation’s Board membership, turnover to key management personnel, or a business venture creating a new partnership, LLC, subsidiary, or any other legal entity connected to the Corporation for any purpose.

(D) Disclosure Report Access: Disclosure reports are proprietary and considered confidential information owned by the Oneida Tribe ofIndians of Wisconsin, to be retained by the Secretary’s office. Disclosure reports are submitted to the Oneida Business Committee and accessible only to those authorized officers, officials and personnel of the Oneida Tribe of Indians of Wisconsin with a legal or legitimate need to know such report information. 

What we do know is that the one Disclosure Report that OSGC did inadvertently submit to the Tribal Secretary to be published failed to fulfill even those meager reporting obligations, which raises the question: Just who is the Disclosure Report supposed to be for since it seems the Business Committee couldn’t care less if OSGC provides the information they’re obligated to disclose?

The Chief Counsel’s new legal opinion states on page 4 that OSGC created Oneida Energy, Inc.,

as a corporation to allow it access to various financing and tax incentives and currently carries a $2 million loan from Wisconsin Economic Development Corporation and the $2 million grant from the State of Wisconsin.

However, the latter is a conditional ‘grant’ and must now be repaid, so,

the corporation is attempting to reduce the potential liabilities of not meeting the requirements.

On page 6 the Chief Counsel’s new legal analysis also relies on examples of financing documents that were cherry-picked by OSGC management which supposedly represent “typical loans” with the highest interest rate being 5.35% despite the fact that it’s mentioned further down the page that,

A review of the 2012 fiscal year audit by the external audit firm BDO… identifies that the corporation maintains eight long term notes totaling approximately $8 million. …In addition to these loans, the corporation is a guarantor on approximately $12.5 million in the various business relationships described above[,]

…but according to page 20 from that BDO audit, OSGC will wind up paying 16.67% interest on $8,854,000 principal for a total of $10,330,000 due over the next 10 years:

Given that 16.67% is more than three times higher than 5.35%, what exact percentage and amount of interest will be due on the additional $12.5 million of debt that OSGC and its subsidiaries have racked up?

[Oneida Eye previously cited a higher interest rate based on the Chief Counsel’s estimate. We regret relying on her error.]

GTC members have sought to be kept informed as to what OSGC has been up to and instead have been lied to and been denied access to relevant information, resulting in what appears to be the Chief Counsel’s suggestion that OSGC is simply ‘too big to fail.’

Yet OSGC has failed, miserably and in multiple ways, and now the question is this: What is GTC willing to do to guarantee that going forward OSGC and other Tribally-chartered corporations are not allowed to further encumber the Tribe with even more unaccountable liabilities?

The root of the problem seems to be this: Currently the Tribe has no corporate laws, and Charters and By-Laws are no substitution for real legislation, and the most logical explanation is that GTC is being intentionally kept in the dark not for their own good nor for the health of the Tribe or the corporations GTC deserves more information about, but seemingly to prevent GTC from preventing failures that appear to benefit a few at the expense of the many.

When Tribal executives cost the Tribe dearly due to misconduct or negligence they need to be held personally responsible, not promoted or transferred to other positions in the Tribe.

GTC is the supreme governing authority of the Tribe and as such is asked to vote on matters regarding OSGC, which means that GTC members do have a legal and legitimate right to not just have access to the Disclosure Reports that the Chief Counsel’s February 15, 2013 legal opinion assured them they would, but also to determine whether a Tribally-chartered corporation should come into existence, be allowed to create or curtail a subsidiary, or be dissolved due to nonperformance or malfeasance.

Once again, just like before, the Business Committee isn’t minding the store and have been allowing OSGC to poison the well – literally and figuratively – and now OSGC executives & Board members alike are flying the coop.

It’s time for GTC to take the wheel and, just as it did on May 5, 2013, GTC must now continue its self-defense against both gross incompetence and dangerous corruption.

The GTC Meeting to vote for self-defense is scheduled for 1 p.m. Sunday December 15, 2013 at the Radisson Hotel & Conference Center in Ashwaubenon, WI.

 

This entry was posted in General Tribal Council, Green Bay Renewable Energy, Incinerators / Pyrolysis / Gasification / Waste-to-Energy, Nature's Way Tissue Corp. LLC, OBC Chief Counsel Jo Anne House, Oneida Business Committee, Oneida Energy Inc., Oneida Law Office, Oneida Nation of Wisconsin / ONWI / Oneida Tribe of Indians of Wisconsin, Oneida Seven Generations Corporation, Oneida-Kodiak, OTIW / ONWI and tagged , , , , , , , , , , , , , , , , , , , , , , , . Bookmark the permalink.

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