North Dakota’s upcoming gubernatorial election is raising concerns over the potential conflicts of interest related to Republican candidate Kelly Armstrong’s deep financial ties to the state’s oil and gas industry. If elected, Armstrong would lead two keyboards responsible for regulating energy policy: the North Dakota Industrial Commission and the Land Board.
His extensive involvement with oil and gas companies, including both income from hundreds of oil wells and direct relationships with major oil producers, could present significant conflicts of interest. His dual role as a regulator and a financial stakeholder in the industry would place him in a position of nearly unmatched control, with the ability to influence decisions that affect the companies in which he holds financial interests.
Armstrong’s financial ties to the oil and gas industry are well-documented. His 2022 federal financial disclosure showed that he earned substantial royalty income from major oil companies like Hess Corp. and Conoco. Additionally, Armstrong’s family business, The Armstrong Corp., which he still owns a stake in, has been involved in oil exploration for decades.
His father, a veteran oilman, has long been connected to oil ventures in North Dakota. Armstrong himself has increased his holdings in the industry during his time in Congress, which raises questions about the potential for conflicts when making regulatory decisions affecting these companies.
North Dakota’s regulations around conflicts of interest are notably lax compared to other states, experts say. The state’s ethics rules allow board members to self-police conflicts, meaning they can decide for themselves whether a conflict exists.
The North Dakota Ethics Commission, established only recently, has limited authority and no enforcement powers to address potential conflicts. This makes it difficult to hold officials accountable for unethical conduct. Ethics experts have expressed concerns about Armstrong and others voting on matters related to companies from which they personally benefit.
Kelly Armstrong
North Dakota’s lax disclosure laws contribute to the problem. Unlike other states, North Dakota only requires financial disclosures from officials when they run for office, and those disclosures are not updated regularly. They also lack detailed information about stock ownership and asset values, making it harder for the public to evaluate potential conflicts.
In contrast, federal disclosures, which are required for congressional candidates and officials, are far more stringent, offering a clearer picture of Armstrong’s financial ties to the oil industry. Still, these disclosures were only made public due to political circumstances, not through a transparent process.
North Dakota’s system allows for boards like the Industrial Commission to make decisions with little oversight, and decisions are often made even when there is a potential conflict of interest. For example, both current Governor Doug Burgum and Agriculture Commissioner Doug Goehring have participated in votes involving companies in which they held financial interests.
While both have disclosed these conflicts, the system in place allows for these officials to continue voting unless their fellow board members decide otherwise, which critics argue is problematic.
Armstrong has expressed that his knowledge and experience in the oil industry would benefit his ability to serve as governor. He sees his financial interests in the industry as an asset, claiming they provide him with a unique understanding of the state’s energy sector.
He has also stated that he does not believe his financial interests would affect his ability to make impartial decisions, though this view has been challenged by ethics experts. Critics argue that even the appearance of a conflict of interest undermines public trust in government decisions.
Kelly Armstrong
North Dakota’s ethics framework, including the “neutral reviewer” process, allows conflicted officials to vote on matters unless their colleagues determine otherwise. This is viewed as a flawed system, with experts pointing out that there is little accountability when conflicts are not automatically disclosed or addressed.
In practice, board members often rely on informal discussions and consensus rather than formal votes to determine whether a conflict exists. This method has led to concerns about pressure on other board members to allow their colleagues to participate in decisions even when they have clear conflicts of interest.
The issue of disclosure has also been highlighted by the recent revelations about Governor Burgum’s financial interests in oil companies. His family holds mineral rights and stock in several energy firms that do business in North Dakota, and he has participated in decisions that affected those companies.
However, the public was largely unaware of these holdings until Burgum ran for president in 2023 when he was required to disclose them federally. Even then, critics argue that he did not fully disclose all relevant financial interests, including his family’s mineral leases.
The lack of comprehensive financial disclosure rules in North Dakota contributes to the opacity surrounding the financial interests of public officials. Unlike many other states, North Dakota does not require public officials to update their disclosures regularly, and the filings that are available are often incomplete.
For example, Burgum and Armstrong failed to disclose certain business interests or assets in previous reports. These omissions have raised questions about whether North Dakota’s system of transparency is sufficient to hold elected officials accountable for potential conflicts of interest.
The future of conflict-of-interest regulations in North Dakota remains uncertain. The state’s Ethics Commission, which was created to address concerns about conflicts, has not been particularly effective in implementing or enforcing its rules.
The commission is currently working to draft new financial disclosure rules, but these reforms may take time to implement. Many experts believe that North Dakota’s lack of transparency and enforcement will continue to create ethical challenges in the state’s governance, particularly if Armstrong is elected governor and continues to have financial ties to the oil industry.
