Winona LaDuke is denying allegations that she made unauthorized loans to family members for non-business purposes while executive director of Honor the Earth, an environmental nonprofit investigated by Minnesota Attorney General Keith Ellison.

In a Jan. 31 court petition for an "assurance of discontinuance" order, Ellison alleged that LaDuke frequently authorized transactions between Honor the Earth and family members who worked for the nonprofit "for purposes that did not benefit the corporation." The petition alleges several interest-free loans were made without board approval, and often without proper documentation, to family members for "large purchases" such as vehicles and to pay for rent and bills.

The petition also alleges that LaDuke and the organization mishandled claims of sexual harassment by employees, and notes that the nonprofit admitted it lacked a systematic recordkeeping procedure.

Ellison said in a statement last week that the investigation found that Honor the Earth "did not meet the expectations that Minnesotans have for all charitable organizations."

LaDuke denied many of the allegations in a statement Wednesday to the Star Tribune, as did her attorney Bruce D. Nestor in a letter to the Attorney General's Office.

"There are some inaccuracies in the Attorney General's notice regarding Honor the Earth, which should be corrected," LaDuke said — inaccuracies which, according to Nestor, "harm Ms. LaDuke's reputation."

According to LaDuke's statement, any loans given to her biological children were the same loans that went to other employees, and were repaid with payroll deductions.

"I did not approve any loans to my children nor did I supervise their employment," she stated.

Nestor rejected the allegation that the loans did not benefit the program, saying they were necessary for employees to do their jobs.

"Many employees of Honor the Earth were low-income and would encounter unexpected expenses which would limit their ability to perform their jobs or travel to meetings," he said, adding that LaDuke's children qualified for the program.

Ellison's petition states that LaDuke's daughter, two sons and a sister worked for the nonprofit, but LaDuke said her sister was never associated with the nonprofit or received a loan. LaDuke said about 15 payroll advances went to employees in the last two years, and that two of her children received loans.

Spokesman Brian Evans said that that Attorney General's Office stands by the allegations in the petition.

LaDuke co-founded Honor the Earth, along with Indigo Girls Amy Ray and Emily Saliers, in 1993. She resigned as executive director in April 2023, shortly after Honor the Earth lost a sexual harassment case in which a Becker County jury awarded former employee Margaret Campbell $750,000 for lost wages and emotional distress.

Ellison's petition says that documents show LaDuke issued memoranda to the group's board dismissing additional complaints of sexual harassment and misconduct without investigating. But in her statement, she denied allegations that she failed to properly handle internal complaints of sexual harassment and misconduct.

Nestor said Honor the Earth was a "relatively small organization which did not have the internal structures or capacity to deal with human resource issues which may be considered standard in larger corporations." LaDuke said in Nestor's letter that the complaints were "appropriately investigated in light of the information known to her and Honor the Earth at the time."

Honor the Earth officials declined to comment on LaDuke's response. They issued a statement last week noting that none of LaDuke's family members were still employed there.

"We welcome this assurance as it signifies a new phase in Honor [the Earth]'s development, one that allows us to redirect our focus to the important issues at hand — fighting for our rights as Indigenous peoples, while continuing to develop ways to repair harm within our community," Executive Director Krystal Two Bulls said.

LaDuke was paid an annual salary of $88,500 in 2021, and Honor the Earth received more than $7 million in contributions and grants that year, according to the Attorney General's Office.

Honor the Earth's tax filing for 2017 reported a loan approved by the board of $4,999 from the nonprofit to assist someone with "short-term emergency need," and listed LaDuke as an "interested person." The filing reported that the nonprofit had a "board-approved policy" at the time so that loans under $5,000 did not need board approval.

The 2019 tax filing reported three "employee advance" loans of $4,000, $1,100 and $700, the last of which listed LaDuke's daughter as an "interested person." Those loans were not approved by a board or committee, according to the filing, though the $4,000 loan had a written agreement.

LaDuke acknowledged there were times when Honor the Earth failed to maintain all required filings with the state and complete financial records. But in his letter, Nestor said those issues were due to circumstances "beyond the control" of LaDuke and the nonprofit, including an accountant passing away and the impact of the COVID-19 pandemic.

The "assurance of discontinuance" from Ellison includes a number of changes the nonprofit is required to make, some of which have already happened. One was that the nonprofit must fully separate from Anishinaabe Agricultural Institute and Akiing 8th Fire, which LaDuke founded and with which Honor the Earth partnered before 2023.

Nestor said that Honor the Earth's protests against the Enbridge Line 3 pipeline in 2020 and 2021 "substantially" expanded demands on the nonprofit. "For over thirty years, Honor the Earth has done good work for the communities of Indigenous people with which it works," he wrote.