TigerSwan case costly for North Dakota regulatory board
BISMARCK, N.D. (AP) — A North Dakota board that regulates private investigators and security firms is dipping into financial reserves and delaying payment of some legal bills after an expensive battle with a company that handled security for the heavily protested Dakota Access oil pipeline.
The Private Investigative and Security Board acknowledges it has spent an unusual amount of money in its battle with North Carolina-based TigerSwan, but says its financial woes are short-term and won’t affect daily functions or its long-term future.
The board has spent $54,000 on attorney fees and other costs since June 2017 — about half of its budgeted income for 2017 and for 2018 — pursuing sanctions against TigerSwan for allegedly operating without a license in the state, according to records The Associated Press obtained through an open records request.
The board’s difficulty is important because the governor-appointed group is mandated by state law with regulating the industry, which currently includes 79 security and private investigation firms and more than 1,300 people. The board relies on fees and receives no taxpayer money.
Because of that, the Legislature is not likely to become involved in the board’s financial matters, according to Sen. Jerry Klein, R-Fessenden, chairman of the Legislative Audit and Fiscal Review Committee, which reviewed the board’s most recent audit.
“If they followed the law there’s nothing we could be alarmed about,” he said, adding that he had no opinion on whether the amount the board spent was excessive. “Generally, we don’t meddle.”
A state judge dismissed the board’s case earlier this year, saying a ban was moot because TigerSwan was no longer present in the state and any decision on possible fines was the board’s to decide.
The $3.8 billion Dakota Access pipeline has been moving North Dakota oil to Illinois for more than a year. During its construction, thousands of opponents who fear environmental harm flocked to southern North Dakota to protest, resulting in 761 arrests in a six-month span in 2016 and 2017.
The board sued TigerSwan following criticism by pipeline opponents that the company used heavy-handed tactics including dogs that bit protesters and also propaganda against protesters. TigerSwan said it did not directly handle on-the-ground security and it was the victim of a smear campaign.
Draft minutes from the board’s Aug. 31 meeting show it dipped into reserves for about $40,000 to cover legal expenses and has delayed paying about $13,000 in legal bills. The board’s assets are down about 20 percent since the beginning of the year, and the minutes show the board operating at a loss of more than $39,000 as of July 31 due mostly to legal fees.
TigerSwan has also said it plans to pursue attorney fees.
Board Executive Director John Shorey III and board attorney Monte Rogneby reject the notion that the board is struggling financially. Rogneby said the reserves are kept for just such an eventuality, and the litigation is unusual. Shorey said the board has no plans to seek higher fees or to take any more money out of reserves.
The board is appealing to the state Supreme Court, which will add to its expense. Rogneby said the panel has a duty to protect the public from unlicensed operators, and it also wants the high court to clarify the board’s ability to seek relief in lower courts.
“The issues involved are significant,” he said. “They affect not only this case with TigerSwan but could potentially affect other circumstances where out-of-state companies are coming into North Dakota.”
The board also plans to pursue tens of thousands of dollars in fines against TigerSwan through an administrative process — which the state judge said was the proper forum. Rogneby said that avenue wasn’t used initially because the board wanted a court order banning TigerSwan from the state.
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