Plan Would Let Osage Set County’s Standards
By Tony Thornton, Staff Writer
May 30, 2007
PAWHUSKA — Rancher Dick Surber has trouble pinpointing what troubles him most about an Osage Nation proposal to create and regulate environmental standards for all of Osage County.
Is it that the bill would override state and federal rules?
Is it that non-Indian landowners would be forced to comply with tribal standards?
Is it the provision to settle disputes in tribal court?
Is it the proposed use of federal money to implement the plan?
Surber and numerous other county property owners are concerned about the bill.
However, they plan to boycott a series of public meetings scheduled by the tribe to discuss the measure.
The cattlemen’s reasoning: “We thought by going there to argue with them, we would somehow legitimize it or believe they had a leg to stand on.”
The bill’s author, Osage Congresswoman Faren Revard Anderson, said the measure was tabled Tuesday due to negative comments and an apparent lack of congressional support. However, the public hearings will still take place.
Anderson said she introduced the bill at the request of the tribe’s executive branch.
Osage Chief Jim Gray didn’t return calls seeking comment Tuesday.
Tribe would have sole jurisdiction
A few Oklahoma tribes have applied to the U.S. Environmental Protection Agency to be treated equally with states on certain environmental matters. The Pawnee Nation is the only one granted that status, and it is only for certain nonregulatory aspects of the Clean Water Act.
The Osage proposal goes far beyond any other tribal environmental policy in Oklahoma.
It would allow the tribe to set standards for Hulah Lake, Birch Lake, Bluestem Lake, Skiatook Lake, several municipal lakes and parts of Kaw Lake, Keystone Lake and the Tallgrass Prairie Preserve.
It also would establish procedures for issuing environmental permits, enforcing orders and conducting hearings on violations. It affects not only Osage County, but any land outside the county over which the tribe asserts governmental authority.
The bill extends to anyone who lives or conducts business in Osage County.
“All persons shall be deemed to have consented to the jurisdiction of the Osage Nation,” the bill states.
The tribe’s court system would have sole jurisdiction for settling disputes and alleged violations.
The Osages still claim all of Osage County as their reservation, and at least one federal agency agrees.
In 2005, the National Indian Gaming Commission determined that the Osages, unlike any other Oklahoma tribe, still maintained a reservation.
EPA spokesman David Bary said his agency is unsure whether the Osages have a reservation.
Plan faces hurdles
If Anderson’s bill passes, the plan faces a likely court battle.
That’s because tribes must obtain the EPA’s permission to run their own environmental programs.
In addition, Oklahoma tribes must receive permission from the state of Oklahoma to receive treatment-as-state status, thanks to a so-called “midnight rider” that U.S. Sen. Jim Inhofe placed on a transportation funding bill in 2005.
Miles Tolbert, Oklahoma’s secretary of the environment, declined to comment on the Osage proposal, citing a federal lawsuit concerning the tribe’s jurisdictional boundaries.
That lawsuit, filed by the tribe in 2001, asserts the tribe’s contention that Osage County is its reservation, and that its employees who live in Osage County are exempt from paying state income taxes.
Light pollution claimed
The first page of Anderson’s 53-page bill sets out several purposes for creating the Osage National Environmental and Natural Resources Act. One is to “protect the dark nights in order to see the stars.”
Surber finds that language hypocritical. After all, he claims, the tribe’s own casinos cause more light pollution than any other business in Osage County.
Surber owns 2,500 acres and leases about 7,000 additional acres, all in Osage County. He and other Osage County cattlemen met Tuesday night to discuss what Surber called a “defense strategy.”
The tribe has scheduled three hearings on the proposal. The first, set for 6 p.m. Thursday, is for tribal members.
A second will be July 14 for county landowners, and the final one will be July 26 for oil and gas operators. Each will begin at 6 p.m. at the Wah-Zha-Zhi Cultural Center in Pawhuska.
The High Cost of Success
By Ray Carter, The Journal Record
November 10, 2003
The exponential growth of Native American financial and political clout in Oklahoma may come with a high price for state government, according to critics.
Because tribal entities are essentially treated as separate states, Oklahoma government does not receive direct benefit from much of the economic activity generated by the state’s 39 tribes. As a result, critics say the profits generated by tribal businesses are essentially subtracted from the revenue of non-tribal businesses, leading to a significant and growing loss in state tax collections.
The consequences of that shift could be far reaching.
“We don’t know for sure, but some officials at the Tax Commission estimate up to a half a billion dollars in losses from tribal activities,” said
Jeramy Rich, director of governmental relations for the Oklahoma Farm Bureau. “It’s a huge impact.”
Rich’s estimate includes all forms of tribal activity from the loss of property tax to the tribes to the loss of taxable dollars to tribal casinos
and smoke shops.
But if that $500 million estimate is correct, the loss of state tax revenue to tribal governments could account for nearly all of Oklahoma’s state
budget shortfall in the 2003 legislative session.
When legislators convened in February, they began the session with $677.7 million less to spend than the amount originally appropriated in 2002 and $328.9 million less than the amount actually spent once reductions were implemented due to declining tax collections.
In addition, critics say the shift of revenue from state government to tribal governments indirectly increases the tax burden faced by Oklahoma’s non-tribal residents.
“That’s like saying 7 percent of our population is exempt immediately,” said Rep. Forrest Claunch, R-Midwest City. “Doesn’t that increase the burden to pay for those roads and all those other things on the remaining 93 percent? Sure it does.”
But the tribes also have many defenders in Oklahoma who say tribal businesses have a positive if indirect benefit to the state.
“There’s kind of an offset here because they obviously create a number of jobs that otherwise wouldn’t exist in that part of Oklahoma and that creates a tax revenue stream,” said Sen. Jay Paul Gumm, D-Durant.
“There are income taxes that get paid that otherwise wouldn’t because the jobs wouldn’t be there. I’m certainly sensitive and understand those
concerns but I see them as a net benefit throughout my area. The investments they make in the communities improve the quality of life.”
Impact on non-tribal business
Critics argue that the tribes are aggressively exploiting the advantages of their sovereign status and threatening the continued existence of many non-tribal businesses in the state.
“They don’t have any of the same problems or tax constraints or oversight generally speaking that ordinary businesses do, so it’s just an absolutely unfair situation,” Claunch said. “If they want to use our roads to get back and forth to places, I think they ought to pay our taxes. They can be a sovereign state all they want to, but there has to be reciprocity in this.”
“We believe any entity who could go out and start any type of business and do so unregulated and untaxed could probably be successful and employ people,” Rich said. “But that’s not what keeps pavement on our roads, textbooks on school desks, teachers paid, prisoners incarcerated, those kinds of things.”
Since tribal tobacco retailers provide state payments equal to only 25 percent of the state tobacco tax, tribal smoke shops and convenience stores have a huge price advantage over non-tribal competitors. That small distinction has had a multimillion-dollar impact in Oklahoma.
“Most people, including QuikTrip, believe that the tribal entities have around 43 (or) 40 percent of the cigarette business in Oklahoma,” said Mike Thornbrugh, governmental affairs manager for Tulsa-based QuikTrip Corp. “That’s a huge market share.”
Rich noted that only $10 million of the $70 million collected in state tobacco taxes come from tribal outlets – creating a significant loss of tax
funding for the state.
State health officials also believe the price advantage enjoyed by tribal tobacco retailers has a large price tag for Oklahomans in the form of health care expenditures.
“Oklahomans smoke more cigarettes,” said Richard Barnes, chairman of the Oklahoma Alliance on Health. “We don’t have a higher percentage of the population who smokes than the national average, but we’re way out front on the number of cigarettes that each of our smokers smoke, which has a significant adverse health impact because the disease caused by cigarette smoking is in most cases dose responsive. In other words, if you smoke more cigarettes, you’re going to get the disease quicker and it’s more likely to be a more serious disease.”
Barnes said the impact of tribal smoke shops on cigarette consumption in Oklahoma is “hard to say” but he said the low prices offered by tribal outlets undoubtedly play a role. “I guess you could extrapolate from that that it has had a negative impact on consumption to have the Indian smoke shops have a price advantage plus enjoy over a third of the sales of cigarettes in Oklahoma,” he said. The cost borne by the state as a result of smoking is significant. Health officials estimate smoking has an annual impact of $2 billion in Oklahoma through the direct cost of treating smoking-related illnesses and lost productivity. An estimated 7,500 Oklahomans die each year from smoking-related illness.
The advantages enjoyed by tribal outlets selling cigarettes also impact other sales at non-tribal outlets.
“If you don’t draw people to go inside for inside sales, you’re sure not going to get them for your outside sales on gas and that’s a key component,” Thornbrugh said.
Tribal officials are also becoming more sophisticated in their business development, using a cluster approach that incorporates several businesses at one location – a smoke shop next door to a gaming center next door to a tribal-owned hotel. By utilizing a one-stop approach, tribal officials hope to receive a greater share of each customer’s disposable income that would otherwise go to non-tribal outlets.
“Obviously, anybody who’s a retailer that sells tobacco products is a little nervous at this point,” Thornbrugh said.
He noted that the Osage Nation has announced plans to open a $2.5 million gaming facility in Tulsa that will also include a convenience store. Other tribes are also planning similar expansions.
“The Creek Nation is making huge investment on the Arkansas River,” Thornbrugh said. “Again, I’m sure it’s for gaming purposes but there also
will be gasoline outlets and I’m sure the ability to buy cigarettes. So you walk outside the door of some of our stores and just turn to the right, to the left or whatever, and there’s a smoke shop right next to it. So yeah, we are concerned.”
Tribal dominance in gambling also threatens non-tribal jobs and state tax revenue sources, according to critics. For example, as the number of tribal casinos has jumped to more than 70 in the state, money once spent at Oklahoma’s four racetracks has shifted to casinos. That change in spending habits has left one racetrack in bankruptcy and the others teetering on the edge.
Officials estimate the horse industry has a $1.6 billion impact in Oklahoma and directly employs 6,000. Horse industry officials say a large share of that tax base may soon be lost to untaxed tribal gaming.
Even if no jobs or industries were directly threatened by tribal gaming, its impact on state revenue is still significant since the state cannot tax the activity.
“Obviously, we have no ability to accurately determine what the tribes’ take is in gaming, but we believe it could be as much as $4 billion,” Rich said. “But it’s very difficult for us to estimate what the full take is and the tribes certainly aren’t going to tell you, but we know there are billions in untaxed revenues going into the pockets of tribes at this point, some of which is resurfacing in political contributions.”
According to the National Indian Gaming Commission, the number of tribal gaming facilities in the United States increased from 297 in 1998 to 330 in 2002, an 11 percent jump. The growth rate in Oklahoma since 1998 is closer to 100 percent, according to estimates.
Although the number of tribal casinos in the nation increased only 11percent from 1998 to 2002, gambling revenue increased even more, growing 70.6 percent. In 1998, tribal casinos generated $8.49 billion in revenue according to the NIGC. By 2002, revenue had surged to $14.49 billion.
Gov. Brad Henry has been attempting to negotiate gambling compacts withOklahoma tribes that would give the state a cut of gaming profits, but critics worry that those compacts will simply remove federal oversight of tribal gambling with little benefit to the state.
“We don’t get to audit their books. We don’t know what’s going on,” Claunch said. “No businessperson would enter into a contract like that.”
And like tobacco sales, revenue generated by tribal gambling has social costs that critics believe offset the economic benefits. Claunch noted that gambling involves a business strategy to “prey upon the weakest among us” and said tribes have done little to pay for the damage the activity creates in society.
“Those that become addicted, they don’t have any plan to try to do anything about it,” he said. “They’re just fallen soldiers. This is a war, I guess, and they’re going to shoot the wounded and just go on.”
As gambling revenue has skyrocketed, tribal governments have become active participants in the political process. In Oklahoma, the Chickasaw Nation and the Choctaw Nation of Oklahoma were two of the largest single contributors to state political campaigns during the 2002 election cycle, according to data compiled by the Institute on Money in State Politics.
When candidate self-financing is excluded, the Chickasaw and Choctaw tribes were the second- and third-largest contributors to state candidates during the 2002 election cycle, according to the IMSP. The Chickasaw donated $121,775 and the Choctaw contributed $101,400.
The Chickasaw gave 89.3 percent of their contributions to Democratic candidates while the Choctaw gave 68.1 percent of their money to Democrats.
But even if the figures touted by tribal critics are accurate, supporters say the benefits of tribal activities easily offset any losses created.
“I think anybody you talk to here where we’re at in Tahlequah or eastern Oklahoma would say the Cherokee Nation’s nothing but a positive impact on the economy,” said Mike Miller, communications officer for the Cherokee Nation. “The Cherokee Nation government where I work has 2,000 employees and each one of us pays the state income tax. It comes right out of my check and I kiss it goodbye every two weeks. And it happens to all 2,000 of us and I can’t think that’s bad for the state of Oklahoma.”
He said tribal businesses employee another 2,000 individuals, further contributing to the local economy and state tax collections.
“The idea that anybody that employs 4,000 people in Oklahoma is bad for the economy is a fallacy just on the face of it,” Miller said.
Scott Meacham, director of the Office of State Finance, noted that the growth of tribal casinos has generated tourism in the state that aids both state and tribal economies.
“Those dollars aren’t spent just at the tribal casino,” Meacham said. “They’ re spent at various points along the way. Typically, when people come in they’ll buy gas; they’ll eat at restaurants and maybe spend the night in a hotel. So these casinos as destination points are bringing in new dollars from outside of state and thereby helping our overall state economy.”
“In my area, the Choctaw and the Cherokees both have been partners in our communities, helping us with infrastructure, replacing roads that need to be upgraded, helping put water lines in areas where we don’t have access to rural water,” said Sen. Kenneth Corn, D-Howe. “They’ve been contributing to schools, sending young kids to college.”
The Cherokee Nation has provided $70,000 grants to several public schools in Oklahoma this year to pay for fitness programs, according to the tribe’s Web site. The Cherokee Nation has also provided $1 million in total grants this year to 17 area schools for diabetes prevention programs and the tribe is also paying for road projects in Delaware County, Cherokee County, Sequoyah County, and Adair County.
A financial report issued by the Chickasaw Nation on Sept. 30 showed the tribe had spent more than $2.2 million on education and more than $2.5 million on health care in the previous 12 months. The Chickasaw have also provided millions in home loans to hundreds of recipients in recent years.
Officials say the tribes also partner with local authorities to attract non-tribal business to Oklahoma. For example, Miller noted that the Cherokee Nation helped recruit American Woodmark to Tahlequah. That company is employing 200 today and expected to hire 300 more.
In Stilwell, the tribe joined local officials to lobby Schwan’s to maintain a plant in the community that was facing closure. The company has now committed to expanding the facility, Miller said.
“Those aren’t tribally owned businesses and those aren’t businesses that are going to benefit the bottom line of the Cherokee Nation businesses at all,” Miller said. “They are just good for the community.”
Meacham said critics of tribal governments often overstate the negative impact of tribal businesses on non-tribal retailers. He suggested the
disparity in tobacco pricing has less impact than many imply.
“These compacts have been in existence for 10 years,” Meacham said. “I think that any market impacts or shifts have already occurred by this late into the compacts. We think the market has built that in over the last 10 years and the dust has pretty well settled.”
Miller said critics also overlook the fact that state and local governments routinely provide enormous tax breaks to non-tribal businesses. He noted that Tulsa recently put together “multimillion-dollar packages to get businesses to come to Tulsa that don’t employ 4,000 people” – Boeing and American Airlines – and suggested the tax advantages enjoyed by tribal businesses are similar to the tax incentives given major companies. “Communities all over Oklahoma would be thrilled to offer up tax incentives and the state would be thrilled to offer up tax incentives to bring a business that employed 4,000 people to the state,” Miller said.
Tulsa County voters approved an increase in the local sales tax to provide $350 million in subsidies to Boeing. At the state level, officials provide over $2 billion in tax exemptions to a wide range of businesses, particularly manufacturing and service industries, to aid those companies.
In some instances, the tax breaks given to lure businesses to the state have had short-term benefit, Miller noted.
“The thing about Indian tribes and the Cherokee Nation and all the tribes in Oklahoma is we’re not going anywhere,” he said.
Few alternatives for the state
Supporters of the tribes also say there is little state government can do to change the advantages enjoyed by tribal governments.
“There’s no way the state of Oklahoma can level the playing field,” Corn said. “That is a federal issue. Anything that deals with the tribes and
their sovereignty is all federal and state government has no authority over them. They’re sovereign in comparison to us in our sovereignty and that’s an issue for members of the U.S. Congress.”
But critics of existing state-tribal compacts believe Oklahoma government could receive a larger share of tribal revenue to offset the losses to state government.
“There’s no reason that the tribes should be able to get in a comparable, retail business as any other citizen in this state, collect taxes on
non-tribal members and then not remit it to the state of Oklahoma,” Rich said. “We believe that’s contrary to what the Supreme Court has said. The Supreme Court has clearly said the tribes do not have the authority to tax non-tribal members.”
The Oklahoma Farm Bureau is one of several groups that have banded together to form One Nation, a coalition advocating a stronger state stance in compact negotiations to increase the financial contributions of tribes to Oklahoma government.
But Meacham said it’s unrealistic to seek a larger share of tribal revenue.
“There’s really no good enforcement mechanism to collect the tax on the sales to non-tribal members,” Meacham said. “That’s why states enter into compacts providing for a percentage of the total to be paid, which 25 percent is fairly typical.”
Other officials see little benefit from engaging in a protracted state-tribal government feud.
“I don’t think we should set out to beat the tribes,” said House Republican Leader Todd Hiett. “You’re not going to beat the tribes. I think we should find out how they can complement Oklahoma.”
The Kellyville native said better coordination of state and tribal efforts could ultimately benefit both groups. “If we try to operate the state of
Oklahoma versus the tribes, or the tribes versus the state of Oklahoma, we are damaging our competitive edge to the extent that we will have major problems into the future,” Hiett said. “We should recognize that the enemy of the tribes is not Oklahoma and Oklahoma’s enemy is not the tribes. Our competitors are other states around us that are working in unison to move forward and Oklahoma should do the same.”
Gumm also said coordinated efforts may be the key to successful economic development in Oklahoma. “I believe we can either work together or work separately,” Gumm said. “Oklahoma is a state that doesn’t have the population a lot of our neighbors have. If we can focus resources and work together, I think we are a stronger state in the future than if we fracture off.”
“I think the tribes understand that their prosperity is tied into the prosperity of the area,” Meacham said. “And to the extent that they can help
build up the infrastructure of the areas that they are in, then that helps their economic growth and development.”
Tribal supporters also raise one other point: The state has a moral obligation to Oklahoma’s Native American population.
“The federal government signed these treaties and we’ve got to honor the word that we had throughout these years,” Corn said. “I’ve always been raised you’re only as good as your word and we can’t continue to go backtracking.”
Copyright © 2003 The Journal Record All Rights Reserved
Oklahoma City, OK, 73126-0370
Gaming Issues Are a House of Cards
June 6, 2002
THE MURKY area of law involving Indian gaming will probably get cloudier before it clears up.
Tribes are under fire for operating casinos on land not eligible for such enterprises and for using gambling machines that are supposed to be illegal in Oklahoma. The National Indian Gaming Commission is attempting to enforce the law, but tribes are just one or two court decisions away from turning Oklahoma into a state that’s wide open for gambling.
Already, Indians can do what non-Indians can’t — operate casinos on land held in trust for the tribes. There are some restrictions, though. Only Class II gaming is legal in Oklahoma. This class includes bingo but not slot machines.
Things get murky when trying to define what is and isn’t Indian land and what is and isn’t a slot machine. Lawsuits are pending to determine if tribes can buy a piece a land and put a casino on it, in apparent violation of the law, and to determine if certain electronic game machines qualify as Class II devices.
The state is saturated with Indian gaming even though Vegas-style gambling remains illegal in Oklahoma. As of late last year, a new report on Indian gaming says, 24 tribes in Oklahoma were operating 49 casinos and had plans to open six more. There are more than 9,000 electronic gambling machines in these casinos, and the tribes offer nearly 18,000 bingo seats.
With so many gambling opportunities so close to home, is it reasonable to expect that a state lottery would bring in anywhere near the money that supporters promise? We doubt it.
Tribal gaming operations have largely appeared in just the past eight years, with a third of them opening in the past three years alone. Despite the saturation, some tribes want the right to open additional casinos on land they specifically purchase for that purpose. That’s supposed to be against the law. As we said, though, a favorable court decision could rewrite the rules in an instant.
Gambling opponents can do little to stop the spread of gaming operations in a state once known for prohibiting virtually every vice known to man. Only a state- sponsored lottery remains elusive. Indian sovereignty, not the morality of gaming, is the underlying issue in the expansion of casinos.
This gray area of the law is developing and may one day become more black and white. Indian casinos are not yet as common as McDonald’s outlets and Wal-Mart stores, but their growth rate has been phenomenal.
A crackdown on an alleged illegal gaming operation in southeast Oklahoma City has raised the profile on Indian casinos. If tribes are free to use gaming profits to purchase land at premium locations and then build new casinos on that land, there’s little to stop the tribes from expanding.
The courts will try to sort this out. Any bets on the outcome?
© 2002, Produced by NewsOK
Indian Land Creates Jurisdictional Maze
By Penny Owen, The Oklahoman
December 17, 2001
Let’s get one thing straight: Oklahoma does not have Indian reservations.
What it has is Indian country — 400,000 acres of it.
• Politics hinder cross-deputization
The General Allotment Act of 1887 parceled out Oklahoma’s reservation land to individual tribal members and tribes.
Indian country is changing, depending on deaths, sales, repossessions and other property- related issues. For instance, if a tribal member dies and his descendants don’t have enough Indian blood to hold Indian land, that land is technically no longer Indian country.
Some Indian land is owned by tribes, while other parcels are owned by individuals.
Indian land isn’t marked. Even long-time residents have a hard time telling where it begins and ends. It is most often described as a checkerboard. One Pryor housing addition is half Indian country, half not.
Some tribal entities, like the Cherokee Nation’s Hastings Indian Hospital, do not sit on Indian land. It’s on county land. It is in dispute whether some others, like the Cherokee Tribal Courthouse in Tahlequah, are on Indian land.
Indian country is a jurisdictional nightmare. A non-Indian who commits a crime on Indian land cannot be prosecuted by the tribe; that’s a matter for county or federal officials. Prosecution can depend on who owns the land and what kind of crime it is.
The maximum punishment in a tribal court is a $5,000 fine and up to a year in jail. So if, for instance, an Indian commits murder on Indian land, that crime will likely fall into federal court hands.
“You just don’t have that complex of a scheme in any other area of law,” said Robert McCarthy, a field solicitor for the U.S. Interior Department in Tulsa.
Double jeopardy also doesn’t apply when prosecuting a crime that can apply both in and out of Indian country, McCarthy said, because they involve two sovereign countries. Although it rarely happens, an Indian could be prosecuted in two, or possibly three courts: tribal, state and federal.
Adair County Sheriff Charles Hartshorne said he wasn’t too happy when he responded to a fight at a smoke shop on Indian land. The culprits were not Indians, so the tribe couldn’t prosecute them. But neither could he.
“We couldn’t arrest them because they were on Indian land,” he said. “They got away. What can you do?”
Cross-deputizing is one solution, but not all agencies want to join. Still, working together has helped alleviate many jurisdictional headaches.
Tide Turning Against Tribes’ Immunity
By Mark A. Hutchison, Staff Writer
June 6, 2001
When the Kiowa Tribe bought a western Oklahoma aircraft maintenance company, the tribe promised to pay $285,000 to the non-Indian owners. The sellers haven’t squeezed a dime.
Workers at a Sac & Fox Nation defense clothing plant were owed $117,000 in wages when the business folded. They had no remedy.
Sovereign immunity was the shield the tribes used. It’s a doctrine that’s been around for centuries and has been used and abused by Indian tribes. It is also getting a closer scrutiny by the U.S. Supreme Court.
The term “sovereign immunity” was coined in medieval days when kings reigned supreme over their subjects. There was no recourse for anyone who felt they had been wronged by royalty.
Now, the term applies to autonomous nations or governments, which cannot be sued unless they agree.
Indian tribes enjoy this immunity, and it even extends to issues that occur off Indian land. The Kiowa aircraft maintenance plant case established that.
In 1990, the Kiowa Tribe bought shares in the Burns Flat business, Manufacturing Technologies Inc., and agreed to pay five other investors $285,000. The tribe never made any payments and the investors sued the Kiowas separately.
The tribe never waived its sovereign immunity in negotiations, but attorneys for the investors claim the tribe shouldn’t have immunity because the business wasn’t on tribal property.
In May 1998, the Supreme Court ruled that tribes are immune from civil lawsuits over contracts, even if the business was conducted off Indian land.
It was a 6-3 vote, with justices suggesting that it may be time for Congress to write “explicit legislation” limiting the scope of the immunity.
The court now seems to be limiting that immunity.
Supreme Court justices in April ruled against an Oklahoma Indian tribe, the Citizen Potawatomi Nation, in a case involving a roofing contract for the tribe’s bank building.
The court ruled that the Citizen Potawatomi Nation surrendered its sovereign immunity by signing a construction contract requiring arbitration to settle disputes.
The roofing contractor, C&L Enterprises, sued after the Potawatomi decided to change construction materials in the project and pick another company to install a roof on a bank building in Shawnee.
The tribe said the materials were not right for the job, and that C&L had not spent any money yet.
“This could have significant impact on tribal business contracts,” said Dawn Pratt Harrington, president of the American Indian Chamber of Commerce’s Tulsa office. “It’s clearly a wake-up call to tribal business.”
In short, if non-Indian entities want to do business with tribes, they should get the tribes to waive their sovereign immunity. That is something the Citizen Potawatomi Nation normally does, tribal Chairman John A. “Rocky” Barrett said.
“If we have a $50,000 contract with a business to do something for us, we agree to $50,000 in sovereign immunity,” Barrett said. “This way, people are not afraid to do business with us.”
Nate Young is a Delaware Indian and a lawyer. He has been on both sides of the sovereignty issue and represented the Kiowas in the Burns Flat fiasco.
Young said tribes enjoyed several years of favorable court rulings, but the tide has turned.
“We found the golden calf in gaming and taxation,” he said. “But now it appears that golden calf is melting on us.”
Young said a Republican White House and recent Supreme Court decisions mean a chipping away of tribal sovereignty. He thinks tribes could help themselves by sharing their business revenue with states and local governments.
“We need to ignore our past feelings that we were abused and mistreated by the surrounding community,” he said. “We have to live in a sea of 285 million American taxpayers, so we should pay our fair share and work on public relations.”
Joel Thompson, head of the Cherokee Nation Housing Authority for the past ten years, has been convicted of 21 counts of mail fraud, false statements, and misapplication of funds. Thompson was found guilty of pocketing housing funds obtained through fraudulent travel claim payments.
In a separate action, the U.S. government has taken over responsibility for managing Cherokee tribal funds on a month-to-month basis “until the tribe restores its financial credibility.” In October, Interior Department auditors reported that the tribe improperly charged the agency $88,000 for legal services and submitted an inaccurate financial report. The tribe also transferred $16.1 million in federal funds to its own depleted operating fund without proof the transfers were reimbursements.