Tribal member defends receiving hidden payments

HELENA, Mont. (AP) – The former head of the Chippewa Cree’s lucrative online payday loan operation defended hidden payments he received for about two years Tuesday, saying they were part of a compensation package offered by the company’s board of directors.

Former Plain Green Loans executives Neal Rosette said Billi Anne Morsette received 5 percent of the company’s revenues from 2011 to 2013. The payments were made through a management company called Encore Services LLC in such a way as to conceal them from the rest of the tribe, an arbitrator ruled in July.

Encore was ordered to repay the tribe more than $1.1 million that was passed on to Rosette and Morsette. That arbitration award, which was included in a federal lawsuit filed by the tribe against Encore this month, also revealed that former tribal health director James Eastlick Jr. was paid 2 percent of Plain Green’s revenues because of the influence he had in the tribal community.

Rosette said he and Morsette did not ask for the payments. Plain Green’s board of directors offered to pay them 5 percent of revenues because Rosette and Morsette had started a consulting business that the board feared would allow other tribes to open their own lending companies and compete with Plain Green’s business.

Rosette compared it to retention plans offered to executives in the corporate world and said he thought he would receive much less than he did.

But Plain Green was a booming success. The company charges online borrowers annualized interest rates of up to 379 percent, and the tribe’s status as a sovereign nation allows it to ignore a Montana law that caps interest rates of 36 percent.

The tribe’s lawsuit against Encore says Plain Green has made at least $25 million for Rocky Boy’s Indian Reservation since 2011, though Rosette said he believes the Chippewa Cree’s profits from the business are much higher.

“No one in their wildest dreams thought this would take off the way it did,” Rosette said. “I don’t feel ashamed about the money I was getting from that place. I didn’t ask for it. I was offered it.”

But aside from the board and some tribal leaders, other tribal members who might have objected were kept in the dark about the payments, the arbitrator found in the July decision.

“Tribal members here get envious and jealous of people when they make money like that,” Rosette said. “If you get a little bit ahead, someone is going to try to bring you down.”

Testimony by Encore’s executives during the arbitration hearing backed up Rosette. “It was my understanding that the board of directors did not want the rest of the community to be aware that Neal and Billi Anne were getting the extra money,” Encore’s managing member, Zachary Jones, testified.

The Associated Press has not been able to reach Morsette for comment.

Rosette resigned from Plain Green in January 2012, but he continued to receive the payments as part of a severance agreement. They did not stop until August 2013, when the tribe sought to end its agreement with Encore.

Rosette is now suing the tribe, Encore and another Plain Green partner, Think Finance, in tribal court to resume the payments.

He said he was not aware of the separate deal to pay Eastlick 2 percent of Plain Green’s revenues, though Rosette acknowledged he and Morsette cut Rosette in on a share of their 5 percent for providing them with cash to help start their consulting business.

Eastlick has pleaded guilty to bribery and theft in a separate tribal corruption scheme on the reservation. His attorney, Vernon Woodward, did not return a call for comment.