Exhibit - "Scandinavian American Bank": IVA Bank Crusade

In early 1922, with control of the Attorney General's office, the Independent Voters Association (IVA) began its crusade against the Scandinavian American Bank (SAB) and those connected to it. Leading the charge were Sveinbjorn Johnson (the new IVA Attorney General) and George F. Shafer (IVA Assistant Attorney General). The actions of the Attorney General had the full support of R. A. Nestos (the new IVA Governor). The NPL accused the IVA of political prosecutions, which Nestos denied.

The IVA's crusade against the SAB began with John J. Hastings (former SAB Vice President). On January 23, 1922, it was announced that authorities would travel to Seattle, Washington, to bring Hastings back to North Dakota to face a charge of embezzling $3,000 from the SAB for the United States Sisal Trust when he was serving as a vice president of the bank (equivalent to roughly $60,000 today). Hastings had been taken into custody a couple of days prior by Seattle police. However, before the North Dakota authorities arrived, Hastings was released. Then he disappeared.

Toward the end of 1921, A. C. Townley (leader of the NPL) was serving a 90-day jail sentence in Jackson County, Minnesota, for violating a state war-time act (or "conspiring to discourage enlistments"). At the end of January 1922, Townley was scheduled to be released. However, before his release, a warrant was issued in Fargo for his arrest. He was charged with influencing Hastings in the embezzlement of the $3,000 from the SAB for the United States Sisal Trust.

Upon his release from jail in Minnesota, Townley was granted a week's respite so he could spend time with his family in St. Paul. He surrendered himself to Fargo authorities on February 6, 1922, and was released on bond.

After he disappeared in Seattle, it was rumored that Hastings had fled to Canada. However, two weeks after his disappearance, he surrendered to police in Sacramento, California. But, after surrendering himself, Hastings decided to fight his extradition back to North Dakota. Assistant Attorney General Shafter traveled to California to argue the case for the state.

The case made its way to California Governor William D. Stephens. On February 15, 1922, Gov. Stephens sided against Hastings and granted North Dakota's request. Hastings was extradited back to the state to face the embezzlement charge.

The IVA and the Attorney General's office then turned their attacks onto O. E. Lofthus (former State Examiner) and Myron W. Thatcher (head of the Equitable Audit Company). When the SAB first closed in 1919, Lofthus and Thatcher conducted their own review and declared the bank to be financially stable. They submitted affidavits stating this to the North Dakota Supreme Court to help the bank reopen. On March 14, 1922, warrants were issued for the arrest of Lofthus and Thatcher on a perjury charge for submitting false reports. Within two days, the men surrendered themselves without incident.

To complicate the issue of the SAB further, which had primarily been an NPL versus IVA issue, there was animosity within the NPL. F. B. Wood, a leader of the NPL and one of its founders, filed a lawsuit against the receiver of the SAB to pay back over $90,000 (equivalent to over $1,500,000 today). Wood, representing dozens of other NPL farmers and SAB stockholders, claimed they were deceived because the bank's officials knew the SAB was insolvent but lied about it.

The embezzlement case against Townley and the perjury case against Lofthus and Thatcher were dismissed on March 30 and April 5, respectively. Attorney General Johnson announced he would focus instead on calling a grand jury investigation into the wrecking of the SAB. In this case, the term "bank wreckers" was used to describe the individuals who were responsible for the SAB's insolvency and collapse.