[Senate Hearing 107-100]
[From the U.S. Government Publishing Office]
. S. Hrg. 107-100
INDIAN TRIBAL GOOD GOVERNANCE PRACTICES AS THEY RELATE TO ECONOMIC
DEVELOPMENT
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON INDIAN AFFAIRS
UNITED STATES SENATE
ONE HUNDRED SEVENTH CONGRESS
FIRST SESSION
ON
TO PROVIDE INFORMATION ON INDIAN TRIBAL GOOD GOVERNANCE PRACTICES AS
THEY RELATE TO ECONOMIC DEVELOPMENT
__________
JULY 18, 2001
WASHINGTON, DC
U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON : 2002
____________________________________________________________________________
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COMMITTEE ON INDIAN AFFAIRS
DANIEL K. INOUYE, Hawaii, Chairman
BEN NIGHTHORSE CAMPBELL, Colorado, Vice Chairman
FRANK MURKOWSKI, Alaska KENT CONRAD, North Dakota
JOHN McCAIN, Arizona, HARRY REID, Nevada
PETE V. DOMENICI, New Mexico DANIEL K. AKAKA, Hawaii
CRAIG THOMAS, Wyoming PAUL WELLSTONE, Minnesota
ORRIN G. HATCH, Utah BYRON L. DORGAN, North Dakota
JAMES M. INHOFE, Oklahoma TIM JOHNSON, South Dakota
MARIA CANTWELL, Washington
Patricia M. Zell, Majority Staff Director/Chief Counsel
Paul Moorehead, Minority Staff Director/Chief Counsel
(ii)
C O N T E N T S
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Page
Statements:
Campbell, Hon. Ben Nighthorse, U.S. Senator from Colorado,
vice chairman, Committee on Indian Affairs................. 1
Cantwell, Hon. Maria, U.S. Senator from Washington........... 9
Chambers, Ardith Dodie, councilwoman, Grand Traverse Band of
Ottawa and Chippewa Indians of Michigan, Suttons Bay, MI... 23
Cladoosby, Brian, chairman, Swinomish Tribe, Washington...... 19
Lee, Andrew, executive director, the Harvard Project on
American Indian Economic Development, John F. Kennedy
School of Government, Harvard University, Cambridge MA..... 28
Masten, Susan, president, National Congress of American
Indians, Washington, DC.................................... 15
McCaleb, Neal, Assistant Secretary for Indian Affairs,
Department of the Interior, Washington, DC................. 2
Reynolds, Jerry, associate director, Informational Services,
First Nations Development Institute, Fredericksburg, VA.... 30
Appendix
Prepared statements:
Chambers, Ardith Dodie (with attachments).................... 55
Cladoosby, Brian............................................. 50
Inouye, Hon. Daniel K., U.S. Senator from Hawaii, chairman,
Committee on Indian Affairs................................ 37
Lee, Andrew (with attachments)............................... 96
Masten, Susan................................................ 40
McCaleb, Neal................................................ 38
Tomhave, Jeff, executive director, Tribal Association on
Solid Waste and Emergency Response (with attachment)....... 123
Additional material submitted for the record:
Adamson, Rebecca L., Foundation News and Commentary
(articles)................................................. 125
Cornell, Stephen, Sovereignty and Nation-Building: The
Development Challenge in Indian Country Today (with
attachment)................................................ 137
Kalt, Joseph P., Sovereignty and Nation-Building: The
Development Challenge in Indian Country Today (with
attachment)................................................ 137
INDIAN TRIBAL GOOD GOVERNANCE
PRACTICES AS THEY RELATE TO ECONOMIC
DEVELOPMENT
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WEDNESDAY, JULY 18, 2001
U.S. Senate,
Committee on Indian Affairs,
Washington, DC.
The committee met, pursuant to notice, at 9:30 a.m. in room
485, Senate Russell Building, Hon. Ben Nighthorse Campbell
(vice chairman of the committee) presiding.
Present: Senators Inouye, Cantwell, and Campbell.
STATEMENT OF HON. BEN NIGHTHORSE CAMPBELL, U.S. SENATOR FROM
COLORADO, VICE CHAIRMAN, COMMITTEE ON INDIAN AFFAIRS
Senator Campbell. The hearing will come to order. We are
meeting today to discuss Indian tribal good governance
practices as they relate to economic development.
The economic and social statistics on the Indian
communities are well known. Unemployment is around 50 percent;
social problems like alcohol and drug abuse, poor educational
opportunities, ill health and many other things.
To reverse these trends, I believe there is no more
pressing matter than assisting the tribes in building Indian
economies that are strong and sustainable into the future.
Achieving this involves many different factors like physical
infrastructure, human capital and skill development, financial
resources and a host of other things.
In addition to these building blocks, it is increasingly
apparent that the kind of governing environment that a tribe
has in place will determine whether or not businesses will
prosper and jobs and income will flow.
The problems with undeveloped tribal economies do not all
originate in Washington, DC. I believe that tribal leadership
has a difficult, but critical role in making sure their tribe
is doing all it can do to create business friendly
environments. Some tribal leaders have done so and we will hear
from several of them today on what good governance means. By
``good governance'' I mean stable institutions with
administrative capacity, fair and effective dispute resolutions
with an appeals process, a separation of politics from business
management and transparency in government, to name a few.
Today we will hear from tribal leaders, researchers and
others about what good governance means and how it affects the
ability of tribes to attract and retain economic activity and
the benefits that 9come from that activity.
We will go ahead and proceed since we have a little bit of
limited time this morning. We will proceed with Neal McCaleb,
Assistant Secretary for Indian Affairs. Neal, I believe this is
the first time you testified before the committee since being
confirmed by the Senate. We are very happy to have you with us.
By the way, to all the people who are testifying, your
complete written testimony will be included in the record. If
you would like to abbreviate or change your oral testimony,
that is fine.
STATEMENT OF NEAL A. McCALEB, ASSISTANT SECRETARY FOR INDIAN
AFFAIRS, DEPARTMENT OF THE INTERIOR, WASHINGTON, DC
Mr. McCaleb. Thank you very much, Mr. Chairman. It is a
delight to be here this morning, especially on this subject.
I want to thank you for the opportunity to appear today to
speak about tribal government practices and how those influence
economic development in Indian country. The development of a
stable and responsive tribal government with a sound strategy
for and a deep commitment to economic growth is a prerequisite
for prosperity and economic opportunity in Indian country.
There are many contributing elements to economic success,
including access to markets, access to capital, natural
resources, human resources, governing institutions, and tribal
culture.
But there has been tribal success where there was a lack of
natural resources, minimally skilled human resources and even
poor access to markets. These successes have been in spite of
these economic liabilities and have been accomplished by
determined tribal leadership committed to building stable and
effective sovereign governmental institutions.
The policies contained in the Self-Determination and the
Self-Governance Acts have been the seedbed of growth for de
facto sovereignty and the development of strong and effective
tribal governments are essential for sustainable economies.
Even now, tribes are asserting their self-governance
influence through the Economic Development Subcommittee of the
Joint BIA Tribal Budget Advisory Committee by developing
strategies on how the BIA and other Federal agencies can be
more effective in encouraging prosperity and economic parity
for American Indian tribes within these United States.
Conversely, it requires a viable and vigorous economy to
provide sovereign governments with a tax base from which to
fund essential infrastructure and services required by their
constituents and businesses.
With that in mind, I would like to briefly talk about some
of the successful enterprises that exist in Indian country and
their vision in making things happen. I am not going to go into
great detail about each one of these, but I will just mention
them.
One of the more notable is the Mississippi band of Choctaw
Indians. The Mississippi Choctaws were federally recognized in
1945. By 1960, the tribal leaders were still unimpressed with
the improvement, despite over 15 years of effort by the BIA and
other Federal agencies to assist them.
The Mississippi Choctaws remained the poorest tribe in the
poorest county in the poorest State. The tribal leaders took
responsibility and initiated projects designed to create jobs
for the Mississippi Choctaw members.
The first enterprise was a tribal undertaking called the
Choctaw Development Company, a construction company to build
houses under Low-Income Housing Programs for a small profit,
while also training and employing tribal members.
From this modest beginning, the tribe began tackling other
ventures and in some cases seeking and obtaining Federal
assistance through the Indian Finance Act. The Mississippi
Choctaws are now a major economic engine in northeastern rural
Mississippi, providing a total direct and indirect impact of
over 12,112 jobs and $173 million in wages, $16.7 million a
year in taxes and $9.1 million a year in rent payments.
Currently, the tribe is engaged in the development of its
own natural gas-fired electrical generating plant. Williams
Energy is conducting a feasibility study. Based on the result,
they anticipate construction to begin shortly after the first
of the year.
Another success story is told by the Confederated Tribes of
the Umatilla Indian Reservation located in rural northeast
Oregon. Their original economy was based upon agricultural and
natural resources, primarily fishing, grain, and timber.
Today the tribe has diversified into commercial
developments such as a trailer court, a grain elevator, the
Wildhorse Casino, a hotel, a RV park, a golf course, and a
solid waste transfer station.
The tribe is now the second largest employer in Umatilla
County, following only the State of Oregon. Their operating
budget has increased from $7.6 million to $94.2 million in the
last 9 years.
The Southern Ute Tribe, which you are very familiar with,
Mr. Chairman, which is located, for those who don't know, in
rural southwestern Colorado and northern New Mexico, provides
another model of economic success. The tribe has taken control
of its own oil and gas extraction activity.
In 1992, the tribe established a tribal production company
called Red Willow Cooperative. In 1994, it acquired a majority
interest in the gathering pipeline system called Red Cedar. In
addition, the tribe has expanded by investing in other oil and
gas properties in the West and investing its energy fuels
revenues into other commercial enterprises.
Using the knowledge gained from managing and operating its
own reservation companies, the tribe has acquired additional
production properties in Texas that produce 20 million cubic
feet of gas a day.
It has invested in an offshore well in the Gulf of Mexico
and has entered into a partnership with northern Ute and the
Dominion Oil Company to explore and develop their oil and gas
reserves.
The tribe is evaluating the purchase of shopping malls and
a drug store chain in Texas and Arizona. The tribe has not
released its financial information, but it is reported that the
income of the tribe is in excess of one-quarter of a billion
dollars, that is with a ``b,'' billion dollars a year.
The Wall Street rating houses that rate debt, Standard &
Poor and Fitch, have given the Southern Ute Tribe a triple A
rating for their proposed development bonds.
I submit that is an historic first for Indian enterprises.
I also submit that the successes that I have just gone over as
well as many others are not primarily the result of initiatives
of the Federal Government, or the BIA.
They are the result of initiatives and leadership by the
tribal governments themselves and the determination that they
have had.
The role of the Federal Government should be to remove
obstacles to economic development, especially those that we
have created ourselves through our own rules and actions. We
need to create incentives and provide technical and financial,
and other assistance to tribes and tribal members and public
and private investment businesses that are willing to promote
economic activities in Indian country.
The initial priority for the Federal Government is to come
together with the tribes to develop a straightforward approach
on how we can all work together on the integration of program
services and coordinate activities in the pursuit of economic
parity for Indian country.
Congress has provided us the mandate and the authority
under the Indian Employment, Training and Related Services
Demonstration Act of 1992, the Native American Business
Development, Trade Promotion, and Tourism Act of 2000, and the
Indian Tribal Regulatory Reform and Business Development Act of
2000, from the 106th Congress.
The goal of the subcommittee that I mentioned earlier,
which is working in conjunction with the BIA and the Tribal
Budget Advisory Committee is to develop a strategy to
coordinate and integrate all available resources from the
tribal, Federal, private and public sectors into one
comprehensive approach that will provide a business resource
for enterprises and tribal government services and ultimately
provide a living wage and employment in Indian country.
The subcommittee has identified 10 major tasks to be
accomplished. Each of these tasks is to be examined by the
subcommittee from past studies and recommendations. They are
currently working models, available resources, legislative and
regulatory authorities, budget and resource coordination and
integration.
These subcommittees are named for the general subject
matter and are as follows: Tribal Business Development
Corporations and Tribal Venture Capital Funds; Taxation and
Incentives; Tribal Economic Development Models; the Indian
Finance Act; Tribal Courts; Federal Set-Aside Procurement;
Technical Assistance Centers; Natural Resources and Energy
Development; and Tribal Infrastructure and Employment
Development.
The first of these working meetings of the subgroup was
held this week. The first action was to contact representatives
from all Federal programs, including HUD, SBA, ANA, Census,
EPA, Energy, and others that provide economic development
assistance to tribes and invite them to participate in this
effort. The meeting was extremely well attended by all the
Federal agencies.
The subcommittee is planning on providing its initial
findings and recommendations to the full committee and the
participating tribes in October.
The BIA's Office of Economic Development is committed to
economic enterprise that enhances the lives of Indians and
stabilizes the future of Indian tribes. In the more successful
tribes in Indian business enterprises around the country, the
BIA has observed some common elements.
The BIA has also noticed some themes where Indian economic
development is lacking or has failed, and with study and
consolidation with tribal leaders, we believe that a few
initiatives would significantly improve the current disparity
between the few American Indian tribes that have had success
and the many that have not.
Ultimately, the relative economic success and vitality of
any nation is the public-private effort that combines the
resolve of government policymakers and the imagination and
appetite for risk of independent entrepreneurs to create a
healthy environment for enterprise and respect for each other's
unique point of view.
The Government will always be focused on the ``common
good,'' while the entrepreneur has to be driven by an
anticipation of profits as a reward for his risk.
Thank you again for the privilege and the opportunity to
speak on this subject that is near and dear to my heart. I will
be happy to answer any questions that you may have.
[Prepared statement of Mr. McCaleb appears in appendix.]
Senator Campbell. Thank you, Neal.
I have a couple of questions. Before I go to them, I would
like to yield to the chairman if he has some comments.
The Chairman. Mr. Chairman, I have a statement. If I may, I
would like to submit it for the record.
Senator Campbell. Without objection.
[Prepared statement of Chairman Inouye appears in
appendix.]
Senator Campbell. Neal, you mentioned the Southern Utes.
Since I live there, I saw you on the plane the other day, in
fact, coming from the Southern Utes to your new job in
Washington, that Standard & Poor rating, the three-star rating,
I understand the Southern Ute Tribe is the only tribe in the
Nation that has that rating. Is that correct?
Mr. McCaleb. That is my understanding, both Standard & Poor
and Fitch.
Senator Campbell. They have also become, through their
success in energy and a number of other things, the largest
employer in the Four Corners area of Colorado, larger than the
school districts, the hospitals, literally any business.
But the interesting thing to me is that probably half, of
the employees of their enterprises since they have grown and
developed, are non-Indian. So, the success of that tribe, like
many other tribes, is a shared success.
When they are successful, it is amazing how it helps the
whole area. So there is more than one facet of why we need to
help Indian tribes become successful, because they have this
terrific history of sharing that success in terms of jobs.
Let me ask you just two or three things. In tribal self-
determination contracting, Indian tribes who provide services
to their members by way of the 638 contracting and self-
governance compacting have been found to be more effective. We
know that. Yet, some tribes are somewhat reluctant to do it.
I have heard some of them in private saying they worry
about whether it will erode the Federal trust responsibility.
Do you have any ideas how we can make incentives for the
tribes to try that? I would like to know your views about that
and realize that you are just getting settled in your job.
Mr. McCaleb. Well, I am familiar with the fact that there
are a number of tribes that we call direct services tribes that
still want to rely on the BIA to provide direct services to
them rather than contracting or compacting for those who take
over those services themselves.
Clearly the Self-determination Act and the Self-governance
Acts provide for them to make that decision. That doesn't
answer your question about what we can do to incentivize them
to take a more assertive role in that area.
In fact, there are a number of incentives under the Self-
governance Act. I think, in my mind, there are still a certain
residual anxiety that these two acts and these two provisions
are an attempt to step back from the trust responsibility, the
Federal responsibility and a lot of the direct services tribes
hold tenaciously to that.
That is their judgment and that is the decision that they
make. Under the provisions of Self-determination, I guess we
should allow them to do that, notwithstanding the fact that
might not seem the best in our judgment.
Senator Campbell. Well, my interest in it is how we
actually encourage them to do it.
Mr. McCaleb. I understand. I probably danced around that
answer because I don't know the answer, Mr. Chairman.
Senator Campbell. I don't either. If you find it, share it
with us. Because we know it is a much better use of Federal
money, obviously, if we can send that money through compacts or
contracts directly to them rather than through the bureaucracy
in Washington, they are going to get more bottom line dollars
to use toward the problems they are trying to address.
Mr. McCaleb. Absolutely. More importantly, it is a more
effective use of the money when it gets there. They place it,
as all local governments do, where they perceive the need to be
the most urgent and they are the best judges of that.
Senator Campbell. That is right.
Maybe one other question. I am sure you, like all
Americans, are aware of the energy crunch, whether it is
electricity in California or hydrocarbon fuels in the rest of
the country. It kind of goes up and down. Right now gasoline is
going down a little bit, but it is only a matter of time before
it goes back up. It is kind of a roller coaster, but the roller
coaster, little by little over a period of years, the valleys
are higher and the peaks are higher, too. So, it is little by
little going up.
I happen to think that puts Indian tribes that have
resources, coal, oil, oil shale, natural gas, coalbed methane,
and so on, really in an opportune situation in this country
because they have the resources that can help us get away from
foreign dependency on energy.
We need to find a better way of helping them help develop
their resources. In any of the discussions you have had so far,
and I know it has been a very short period of time, have you
found any ways to perhaps streamline or eliminate some of the
Federal regulations that impede tribes in energy development?
Mr. McCaleb. I can't cite any particulars in that area. I
can cite a bright spot in this area of energy development. That
has to do with the Three Affiliated Tribes that are looking
very seriously right now, to moving toward the development of a
refinery near Fort Berthold.
Senator Campbell. The Three Affiliated?
Mr. McCaleb. Yes; in North Dakota. Historically, tribes at
best have been like Third World Countries exporting a
commodity, that being the raw crude. The refinery is a value-
added activity in which they would increase the employment, as
well as the capital investment on the reservation and who has a
big multiplier in terms of the economy, as well as the
experience in managing this kind of facility.
They are developing a management contract to give them
experience. I think that is the route, where tribes become
value-added enterprises instead of just exporting a commodity.
Senator Campbell. Well, last week in a committee hearing,
just by chance, we heard that the Three Affiliated Tribes have
also entered into an agreement with the manufacturers of wind-
collecting systems, and with these great big fans, to build
some on the reservation. The estimate is that they may make as
much as $1 million a year from wind that is always in the
Dakotas.
So, there are a lot of opportunities if we can figure out a
way to make it a little easier for them to get through the
permitting process.
Let me yield to the chairman.
The Chairman. Mr. Secretary, I am sorry I wasn't here to
receive your testimony, however, I have a few questions from
reading your prepared statement.
You speak of the BIA noting that among Indian nations are
lacking in economic development there are common themes. I
think that is the phrase you used. You said that the disparity
between the ``have'' and the ``have-not'' nations can be
addressed by ``a few initiatives.''
What are these common themes you speak of?
Mr. McCaleb. Well, I think one of the common themes is that
the tribes that are doing well economically have strong, well-
developed, de facto sovereign governments. They have taken
possession and built the government institutions and mechanisms
that create an environment that is attractive to industry so
that entrepreneurial people or investors are able to make an
investment in that area with the expectation of a reasonable,
if not handsome return on their investment.
It has to do with the court systems, judicial systems, the
overall nation building. I think the tribes that have done well
economically have been successful in nation building. That is
one of the first ones.
The Chairman. You have touched upon a theme that many
business people are quite concerned about, the constant
turnover in tribal governments. Do you have any suggestions
about how to bring about greater stability in tribal government
administration?
Mr. McCaleb. Well, I think my answer is probably kind of a
circuitous answer in that when you have economic stability and
economic growth, we also observe that people are ready to re-
elect their tribal leaders in anticipation of the projection
and extension of that tribal expansion and tribal growth.
There is the greatest turnover in tribal governments, I
think, where the poverty and the economic deprivation is the
greatest. You know, it is the chicken and the egg conundrum;
how do you get started? Well, you get started, I think, by
building strong, sovereign tribal governments.
That is clearly a local initiative. That is not something
that is done from Washington.
The Chairman. What are the initiatives that you suggest to
bring about less disparity?
Mr. McCaleb. Well, I think we can assist in the area of
making capital investment more attractive by expanding the
Indian Finance Act, for one thing. We have a loan limitation of
$60 million a year, which is fully subscribed now and has been
every year for some time.
There is an appetite for Indian businesses to fully utilize
that and more. So, I think probably that it is time to expand
the cap on the Indian Finance Act, the Loan Guarantee Program.
Another is to secure the tax incentive for rapid write-
down on capital investment that is due to expire here in two
years because industry is just now becoming acquainted with
that and beginning to make use of it. It is one of the things
that attracted this refinery that I was talking about, that
they are able to write-down their capital investment rather
rapidly.
That is due to sunset here in the next couple of years. I
think that we should look at other tax incentives to attract
capital to Indian country. So, there is money, strong local
governments and education, I think. Those are the three things.
Education is largely in reservation country Indian education.
We need to strengthen that. One way we can do that is by
expediting the construction program for Indian schools.
The Chairman. Would you also consider, Mr. Secretary, the
necessity for a land base for these nations?
Mr. McCaleb. Yes; I think that you state the obvious that I
did not state, that most of the tribes that have done very well
economically have a well-established land base.
The Chairman. Well, I ask this because, as you know, there
are many Indian nations that have been denied and deprived of
land bases, especially in California, for example, because of
the number of treaties that we in the U.S. Senate have either
refused to ratify or have just bypassed the ratification of
treaties.
Therefore, these nations are now coming forth seeking your
assistance in having these lands taken in trust. How can we
expedite this process?
Mr. McCaleb. Well, first of all, I would like to point out
that just having a large land base is not a formula for
success. I think it is important to point out that we have a
number of tribes with large land bases. Some of them are direct
service tribes that we were talking about earlier, that have
some of the poorest economies.
So, although I think it is important, I don't think it is
the essence or absolutely essential ingredient for the economic
dollar. The question is: How do we expedite the land under
trust.
I think the new regulations that have been imposed that are
under review currently provide for expediting land under trust
for lands that are immediately adjacent to or within the
reservation boundaries. I think it clearly expedites that.
Those regulations are a little more deliberate about taking
land into trust that is removed from the reservations.
That is directly tied to the whole gaming issue. I think
the regulations, proposed regulations, do in fact expedite
taking land into trust that is within or immediately adjacent
to the reservations.
The Chairman. Do you have sufficient staff to process these
claims and applications?
Mr. McCaleb. Mr. Chairman, I really can't answer that
question, give you an enlightened answer on that. I have just
been on the job 2 weeks now. It is kind of like taking a drink
out of a fire hydrant. I hope I can give you a more enlightened
answer on those kind of staffing questions later on.
The Chairman. Then, if I may, Mr. Secretary, I would like
to submit for your consideration questions that you can answer
for the committee.
Mr. McCaleb. Thank you very much, sir. I will do that
promptly.
The Chairman. I appreciate that. Thank you very much.
Senator Campbell. Well, the Senator touched on some of the
things that have stymied us for an awful long time. We know
that in order to increase economic opportunities we have to
have stable tribal governments. Yet, in order to have stable
governments, we have to have better economic opportunities.
Our troubles are obviously how to get them both improved.
But you are going to have a plateful. Do you still want the
job?
Mr. McCaleb. Yes, sir.
Senator Campbell. Now I will yield to Senator Cantwell.
Senator Cantwell is new to our committee from the State of
Washington. She has a very large Indian constituency; I believe
maybe 27 or 28 tribes.
Senator Cantwell. We have 28 tribes.
Senator Campbell. Twenty-eight tribes. We are delighted to
have her with our committee.
STATEMENT OF HON. MARIA CANTWELL, U.S. SENATOR FROM WASHINGTON
Senator Cantwell. Thank you. Thank you, Mr. Chairman, I
guess. I have an understanding that the committee works in a
very cooperative manner here. I appreciate that.
Senator Inouye, thank you for the opportunity to ask
questions of Mr. McCaleb. I guess I would say I am very
fortunate to be on this committee. I appreciate the assignment.
There are 28 tribes in the State of Washington. As the only
member from the Pacific Northwest on the committee, I hope that
I can bring some insights to the challenges that we are facing
throughout the entire Northwest in that population.
There are very important issues we need to work on,
obviously, with health care, job training and economic
development, some of the subjects that you were talking about
this morning. I look forward to working with the committee on
those issues.
Mr. McCaleb, I apologize, too, for not being here to hear
your testimony, but I have reviewed it. Congratulations on your
recent swearing in, as well.
I had a couple of questions about economic development as
it relates to some of the subjects that you brought up. First
of all the area of human resources and job training. You
mentioned the Indian Employment Training and Related Service
Demonstration Act that was passed in 1982.
Can you update us on how you think the workforce
preparedness issues are being addressed by the agency and
whether we need to significantly enhance that at a time when
our economy is changing drastically and even the most prepared
people are finding that they need to upgrade their job skills.
So, how are we doing on the issue of job training and access to
resources?
Mr. McCaleb. Our whole economy is in a transition, as you
stated, from an industrialized economy to a knowledge based
economy. To be frank, I don't think our BIA-operated school
systems, known to be consistent with most rural described
systems, have been able to keep pace with the velocity of
change and the acceleration and training needs for a knowledge-
based economy.
We could start with computer skills. I think there needs to
be a focused effort in math, science, and communication skills.
In fact, that is the goal of the BIA, to bring our students and
our educational system up to a minimum of a 70-percent
proficiency in math and science and also communication skills.
We are not there. We are probably at 50 percent efficiency
at this time.
The other programs that are for adult education need to be
rifle-shot focused on computer literacy and on the ability to
operate in an economy that is going to be driven by computers,
is driven by computers, whether you are buying an airline
ticket or checking out at the grocery store; it is computers
that handle the transaction.
Those are the kinds of skills and understandings that I
think will be essential in the future.
Senator Cantwell. So, you were say that we have adequate
programs or in adequate programs?
Mr. McCaleb. I would say our programs need to be improved.
We are focusing on the need for math, science, and
communication skills. But I am also saying that our results are
well below our goal. So, they need to be improved. Our results
need to be improved. We have set the goal well above the mark
where we are right now.
Senator Cantwell. Given the number of the locations of the
reservations throughout the country, and sometimes they are
adjacent to urban areas, sometimes they are more remote, does
the BIA have any kind of policy on the delivery of high speed
access to Indian reservations?
Mr. McCaleb. Definitely we do. We are trying to optimize
the high-speed access, first to our schools and then to the
reservation in general. It is going to require some work with
the Federal Communications Commission [FCC] and private
investment, to attract private investment to wire the
reservations, if you please, for high-speed access.
One of the problems that has held reservations back in
economic development is the lack of access to markets. With few
exceptions, they are largely rural and remote. That makes them
remote to the large markets.
In a knowledge-based economy, the distance doesn't really
matter, as long as you are hard-wired to your customers.
Computers, fiber optics, wireless communications, I think,
present literally a world of opportunity for economic
development, in rural America in general and on reservations in
particular.
Senator Cantwell. So, you would say that, again, the
percentages of reservations having that kind of access----
Mr. McCaleb. It is low. I think that is not
uncharacteristic with rural America in general. In my own
experience in my home State of Oklahoma, most of our rural
towns do not have good access to the high-speed broadband
communications system, fiber optics, if you please. I think
that is characteristic of rural America. The tribes fall in
that communication area.
Take basic communications, like the telephone, there are
fewer Native Americans who have telephones in their homes
percentage-wise than the rest of the larger economy.
Senator Cantwell. Mr. Chairman, if I could, one more
question. Perhaps we can follow up with some additional
questions about those programs, both for job training and for
high-speed access.
I am curious, given our experience in the State of
Washington where the Tallalah Tribe had a joint effort on
economic development with their adjacent city, the city of
Marysville. They both had a desire to develop land in an
industrial way, requiring huge investments of sewer and water
that were not currently there in the community.
So, they worked jointly on that from an economic
development perspective and then later created the Tallalah-
Marysville Chamber of Commerce. So, they joined together in an
economic development effort.
Are there other instances of that around the country where
the formal economic development mission has been, you know,
joined with other organizations?
Mr. McCaleb. Well, I am personally aware of a few in
Oklahoma that are, the Chickasaw Nation in the city of Ada and
the Industrial Development Authority of Ada cooperated in
industrial development activities.
This business of making a joint effort where you actually
finance major capital improvements for infrastructure, that is
the first time I have heard of that. That is remarkable and it
is very important.
When tribes and local governments can cooperate like that,
a lot of the other barriers will melt away.
Senator Cantwell. Thank you.
Senator Campbell. Thank you, Neal. You know, I might
mention before you leave that the people on this committee all
serve because every one of us is trying to make things a little
bit better for Indian people.
But, as a Government, we are doing a poor job of networking
our different agencies. Too many times, in my view, the left
hand doesn't know what the right hand is doing. Maybe you are
following this huge question. In the last couple of days there
is a hearing going on, in fact, right now here on the Hill
dealing with the access for Mexican trucks and drivers to the
United States under the NAFTA agreement.
We are going to face a big, billion dollar fine if we do
not allow them access in the United States. Well, when we
signed that NAFTA agreement, we knew, according to the American
Trucking Association and a number of other groups that we are
short of drivers, between 250,000 and 300,000 drivers.
We have unemployment on reservations between 60 and 70
percent and we can't seem to put it together that we have
people that need the jobs in this country, and yet we are going
to open access to foreign drivers. I am not against foreign
drivers.
What I am saying is that we are doing a better job for them
than we are doing for our own people. It just seems to me that
we have a long way to go in trying to make sure that our
agencies recognize and in our international trade agreements
and things of that nature that we have people that need the
jobs.
These are good jobs, $50,000 a year jobs. A lot of Indian
people would love to have those jobs, and yet we are just
bypassing them. That is an example of some of the dumb things
we do here in Washington when we are trying to make things
better.
I do appreciate your being here this morning. If any other
committee members have questions, they may send them in
writing.
Mr. Chairman.
The Chairman. Mr. Secretary, if I may ask one question
before we proceed, the prepared statement of the president of
the NCAI is a very interesting one. I hope you will read and
study that statement. She speaks of devolution or the
decentralizing of policy on the part of the United States.
Devolution is the philosophy that by providing assistance
to States you might bring the activities closer to the people.
Well, it happens that history has shown us that whenever we
call upon the States to provide services to Indian country the
services are not forthcoming. They are rather lacking at times.
For example, just a few days ago a court issued a judgment
in which it is stated that the tobacco payments will be made to
States and tribal governments will not receive any payments, on
the premise that the States will be responsible for all the
people living within the borders of that State.
Would the BIA make certain to monitor this so that Indian
nations and the Native Americans will get their fair share?
Otherwise, I think that just the non-Indians will get the
tobacco benefits.
Mr. McCaleb. Mr. Chairman, that is a large task that you
just carved out there for the BIA. You know, I come from a
State that has maybe the second or third largest Native
American population in the United States. I was privileged to
serve in the legislature there for a number of years. They had
a large number of Native American members in the legislature.
Fundamentally, States historically have not been responsive
to Indian interests. I agree with the principle of your
statement. I am not sure how the BIA can regulate or
incentivize the States to better perform their role with people
who are already their constituents.
The fundamental problem here is that the larger portion of
the population does not understand nor respect the sovereignty
of the several American Indian nations of this country.
When I served in the legislature, I remember our Organic
Act clearly provides that the treaty rights will be protected
when we became a State. Of course, part of the treaty rights
were basically unrestricted hunting and fishing.
I brought the modest bill to exempt Native Americans with a
Certificate of Blood card, from having to buy hunting and
fishing licenses, which I thought, was already provided for in
the Organic Act. I worked for four years trying to get that
bill passed and I never did. I don't think it was because of
racism. I think it was because of insensitivity to the
fundamental rights of Native American people that are provided
in the Constitution of the United States.
That is a huge education job. I would certainly see the BIA
assisting in whatever effective way we can in seeing that
Indian people and Indian tribes get their appropriate share of
Federal moneys that are dispersed directly to the States.
But that, in my judgment, is a huge job and one; again,
that I think most effectively will be done in partnership with
the local tribal sovereign leaders because they are the ones
that understand those issues the best. They are the voters of
the legislators. They are becoming more influential in every
State.
I have been observing this now for over 30 years; 30 years
ago Indian interests were totally disregarded in most State
legislatures. If they were regarded at all, it was one of
hostility.
That has changed. It has changed for the good. It has
changed largely because of the policies of the Congress through
the Indian Self-Determination Act and in many ways the
subsequent amendment titles in the Self-Governance Act. We are
developing strong tribal governments with articulate and
thoughtful leaders who are able to present their cases most
eloquently and most forcefully with their State legislators.
So, notwithstanding, you know, we kind of drown in the
negative statistics that we have, and they are dismal and they
are disheartening, but we have made great progress in the last
30 years. It has not been a straight line.
Starting 30 years ago, our progress plotted against time
was flat and almost nothing was happening. It began to pick up
and it is going up almost vertically. Our challenge is that it
doesn't become an S-curve and level off at a plateau and
doesn't go further.
One of the reasons that I am very pleased to have the
position that you all have confirmed me in is the opportunities
that I think are present in America today.
The Chairman. Just one final question, if I may, Mr.
Secretary. Whenever I enter into discussions with tribal
leaders, certain words come up most frequently. One is
sovereignty. Another is trust reform. Another is consultation
and also economic development. These are the four words and
phrases that the come up more often than anything else.
According to the testimony of the president of the NCAI,
tribal leaders have been advised by BIA that whenever they ask
for consultation on trust reform the response has been ``These
are internal matters, therefore we need not consult with you.''
Do you have any response to that?
Mr. McCaleb. Well, I reject that premise, Mr. Chairman.
Trust is about communication. You can only have trust when
people can openly address or discuss issues that are of mutual
concern to them. The trust issue is not just whether some money
has been misplaced or not distributed appropriately.
The trust issue, to me, is much deeper. It is about the
whole issue of the competence of the Indian community in the
larger sense with the BIA. I am not trying to say anything
negative about the BIA, I am just saying that I trust the count
at the bank is dangerously low and we have overdrawn it, if you
please.
Trust, like respect, can only be given. It can't be
demanded. We have to rebuild that trust. It is going to be a
long and arduous climb. We will take it one step at a time. But
the first step is open, unrestricted communication. I am trying
to say in many words that I agree wholeheartedly.
The Chairman. I am certain that Indian leaders would be
most pleased to hear that, sir.
Thank you very much.
Senator Campbell. I am also delighted to hear that because
in my view, agreements between the Federal Government and
tribes are like Federal government and States or the Federal
Government and other nations. You can't have a good agreement
if only one party sits at the table.
You have to have trust built on the fact that both of them
are there to provide input. I might mention just for your own
information, on the tobacco settlement, we have a bill that
collapsed of its own weight around here.
The question Senator Inouye posed might be better posed to
the Department of Justice. But there were very, very good
Indian sections in that bill when it was here in the Senate and
primarily because of your boss, Secretary Norton, who was the
Attorney General of Colorado in those days. She came in and
testified several times to make sure that Indians had language
in that bill that would enable them to receive some of the
settlement money that would have gone to health care, to
education to different kinds of ceremonial use and things of
that nature. It obviously fell apart, but you might dig that
old bill up and look it up.
Mr. McCaleb. I will go to school at my boss's side on that.
Senator Campbell. Thank you.
Our next panel will be three witnesses: Sue Masten of the
National Congress of American Indians; Brian Cladoosby,
chairman of the Swinomish Tribe of Washington; and Ardith
``Dodie'' Chambers, councilwoman of the Grand Traverse Band of
Ottawa and Chippewa from Michigan.
We give a great deal of latitude to the administration
witnesses. We ask other witnesses, though, to keep their
comments a little more brief. So, if you would like to proceed.
STATEMENT OF SUE MASTEN, PRESIDENT, NATIONAL CONGRESS OF
AMERICAN INDIANS, WASHINGTON, DC
Ms. Masten. Good morning, Chairman Inouye and Vice Chairman
Campbell.
I want to thank you for the opportunity to address you this
morning on this critical issue.
For the record, I am Susan Masten, president of the
National Congress of American Indians, the oldest and largest
organization representing tribal government. I also serve as
the chairperson for the Yurok Tribe, located in Northern
California.
I am here today to present testimony on the relationship
between tribal governments and economic development on Indian
reservations. As you know, economic development is perhaps the
leading concern in Indian country today.
It is heartbreaking, as a tribal leader, not to be able to
address the social problems that plague our communities. Our
people are still dying of preventable diseases. We still have
substandard housing, high dropout rates, substance abuse,
suicide, teen pregnancies, and there is a high rate of crime
against our people, all of which is relative to the
overwhelming poverty on reservations.
Reducing unemployment rates as high as 80 percent,
eliminating homelessness, decreasing dependence on welfare and
increasing education opportunities are all linked to building
economic activity within our communities.
Tribes face many obstacles to economic development,
including lack of infrastructure, poor access to training and
technical assistance, the shortage of equitable financing
mechanisms, remote locations, and dual taxation, to name a few.
Although many tribes have found ways to remedy these
problems through creative means to overcome the barriers to
economic development, the incomparable structural and legal
obstacles that tribes face are simply too large.
NCAI is poised to make the issue of economic development in
Indian communities paramount in our work to promote and defend
the concerns of our people. As such, my testimony today will
focus on policy changes that we believe Congress should
consider in order to reduce the barriers we face.
Successful economic development in Indian country is
directly tied to strong, independent, culturally appropriate
tribal government structures. Congress has the authority to
support tribal authority or to impede it. All too often our
authority is limited in ways that impede our ability to
effectively contribute to economic development.
By passing sound Federal Indian policy, Congress will
provide us with the key to create change in our communities.
There have been many examples of positive and progressive
Federal Indian policy, most notably Public Law 93-638. It is
through self-determination and self-governance that tribes have
been able to prioritize funding to meet our community's needs.
It is through these policies that tribal leaders and tribal
staff have gained valuable management experience in
decisionmaking while becoming accountable to our people through
sound governmental procedures.
While self-determination has been a successful form of
decentralization in matter involving the BIA and the Indian
Health Service, there is still much to be done. For example, we
are concerned about the recent actions taken by the Department
of the Interior regarding reform efforts which may result in a
departure from the policy of self-determination. By moving
trust records away from tribal governments, this limits our
ability to access information regarding our land and our
resources.
Tribes own four-fifths of the trust property. We have the
greatest interest in ensuring that there is proper accounting
and management. If there is ever going to be trust reform, we
must be actively involved by consulting with those who are
making the decisions that impact us, as it is at the heart of
our sovereignty.
NCAI would welcome the opportunity to assist and facilitate
the government-to-government relationship between the
Department of the Interior and the tribes on this critical
issue. We also seek the committee's continued guidance to
ensure that BIA and the Office of Special Trustee proceed with
full respect for tribal self-determination in every area of
trust reform.
NCAI is also greatly concerned about the Federal policies
that are outside the scope of the BIA and Indian Health
Service, including commerce, agriculture, taxation, human
services, education, energy transportation, and environmental
protection.
In general, there is a trend for the Federal Government to
decentralize and to devolve many Federal authorities to State
and local governments. Unfortunately, this trend has often
negatively affected tribal governments. Most often, we are not
recognized as units of government with authority to directly
receive programs and funds.
Even when tribes are authorized to administer programs
directly similar to States, often we are afforded
proportionately fewer resources and are subject to greater
oversight than the States are.
Devolutionary policies also raise questions about
diminishment of Federal treaty and trust responsibility to
tribes and a reduction of Federal responsiveness to tribal
needs. State governments do not have the same legal obligations
and it is of great concern that States will simply overlook the
tribe's interest in their administration of Federal programs.
We also note that when State governments receive dollars
they often do not regard tribal governments on a government-to-
government basis, but view tribes merely as a part of the
service population or as local interest groups.
If Congress is to fulfill its responsibility to Indian
tribes by supporting tribal self-government, it must create
Federal policies that support tribal government's authority and
protects tribal self-determination.
There must also be clear definition of the roles of the
Federal Government, the State government and the tribal
government. Tribes are supportive of devolution that provides
for increased authority and flexibility to tribes in the
context of a respectful government-to-government relationship.
As devolution of programs to tribe is one of the surest
ways to engage tribes in capacity building and economic
development, NCAI believes that the following principles may
serve as a starting point for the development of sound Federal
policies.
No. 1, as a basic exercise of tribal sovereignty, tribal
governments should have the option to control any programs,
functions, services or activities that are intended to benefit
tribes and tribal service populations at the same level of
authority and control as State governments.
No. 2, Federal policy should preempt the application of any
State law that imposes a dual burden to comply with both tribal
law and State law within the boundaries of Indian country.
No. 3, duplicative State regulation or taxation will drive
economic development away from Indian lands.
Where tribal governments opt not to administer particular
programs and functions, service and activities, State or county
governments or private contractors who administer the programs
must consult with tribes over the delivery of services to
tribal members.
States must be encouraged through Federal policy to relate
the tribal governments on a government-to-government basis, as
do contractors. Federal policy should encourage the use of
negotiated agreements between States and the Federal Government
or State governments so that each tribe can address its unique
needs.
Federal standards must give tribes enough leverage to reach
a successful and enforceable agreement. Tribal governments
should have a right to all documentation or studies held by the
State governments or other institutions that are relevant to
the sustainability, fairness and safety, et cetera.
Tribal governments should have their own independent
experts present at the table as needed during negotiations and
assessment processes. Tribal governments must be provided with
adequate technical and financial support for administration of
programs. Policies should protect Federal treaty and trust
responsibilities.
Unfortunately, Indian country still lives in Third World
conditions, lacking basic infrastructure in this time of
prosperity. We have little hope of economic development unless
funding for projects for future development becomes a priority.
The creation and maintenance of a viable infrastructure is
the first step tribes must take to foster a positive business
environment that will attract outside sources of investment as
well as local business partners.
As such, Congress needs to work with us to develop policies
that include infrastructure development. We need projects that
construct or upgrade our roads, water and sewer systems,
utility systems and electrical grids, commercial codes,
licensing programs, phone systems and technology improvements.
All too often Indian nations are prohibited from receiving
training and technical assistance to conform with new Federal
statutes, while some appropriations have provisions for such
measures, most are under funded.
If a tribe is not provided with the knowledge and expertise
to administer a program, it is usually doomed to be
unsuccessful. There is a funding shortfall in the
administration's budget that impacts technical assistance,
feasibility studies, business infrastructure and research for
legal code issues that creates a gap that Indian country is
often unable to fulfill.
Technical assistance can also address other important
issues, for example empowerment zone technical assistance is a
great example of a successful process. During the course of the
program, implementation that technical assistance provided for
grass roots structure to communities to talk about governance.
Community members involved provided much needed input to ensure
stability within their own government, furthering the idea that
good governance is a result of good policy.
The premise of providing equity in opportunity to financial
resource is also imperative for self-determination. Tribes
often are left out of opportunities for obtaining bond
financing and loan guarantee components.
State and local governments have long enjoyed the authority
under Federal tax law to use tax-exempt bonds to fund a variety
of governmental projects. We need to remove restrictions
imposed on tribal governments to provide the same opportunities
that other governments enjoy.
Loan guarantee components are vital for the success of
tribal businesses, as many of our tribal members do not have
the collateral for fully funded, fully secured loans during the
start-up period of a business.
Economic development in Indian country requires not only
successful tribal government businesses in economic development
initiatives, but efforts to foster successful small businesses
for tribal members also.
The problem that most banking institutions face when
dealing with tribal members who reside on the reservation is
the uncertainty of enforcement jurisdiction if the borrower
defaults on the loan. To address this recurring issue, NCAI
encourages hearings and briefings to be arranged between Indian
nations and off-reservation commercial banks, as banks are
reluctant to lend in this high-risk environment.
Good governance is not dependent upon quick fixes. Rather,
good governance is dependent upon good policy that promotes
long-term solutions. The application of these tenets, among
others that will be uncovered in the policy consultation
sessions that will occur before the drafting of legislation
create a secure environment for tribal governments and
investment.
By enacting these policies, the government is not only
fulfilling their trust and treaty obligations, but is also
giving the tribes some of the tools they need to build their
own capacity to govern.
It has been the experience of NCAI that tribes who are best
able to address the issues of economic development in their own
communities are the ones who have comprehensive strategies that
incorporate all the resources that the tribe has at its
disposal.
Tribal plans that engage all the key players in their
communities, capitalize upon the interests and strengths of
community members is a key way to jumpstart economic
development on Indian lands and ensure that economic
development is spread throughout all public and private sectors
of the tribal economy.
By creating policies that will enable tribes to use all of
their resources together, the committee also creates an
environment that is good for development in general. While it
is good that the governmental agencies have programs that offer
incentives for business or companies who subcontract with
tribes, these programs need to be evaluated for effectiveness.
Tribes have voiced concern that programs such as the
Department of Defense 5 percent tribal incentive programs lack
clear goals to ensure that the Department markets and promotes
the program in the same manner as other incentive programs. We
recommend that the committee commission evaluations of programs
such as this to make sure they are proficient in serving the
needs of Indian country.
Public Law 106-447, the Indian Tribal Regulatory Reform and
Business Development and Public Law 106-64, the Native American
Business Development Trade Promotion and Tourism Act of 2000,
need to be implemented as soon as possible to help reduce the
barriers that Indian country faces for economic development.
In closing, capacity building is the first step toward good
governance. Only when Indian tribes have the ability to
administer our programs and manage our affairs for our people
will we be able to move to the path of self-determination by
allowing tribes to engage in economic development initiatives,
by enabling the expansion of tribes' capacities to govern is
directly linked to tribal sovereignty and self-determination.
The establishment of clear policies that define the roles
of Federal, State, and tribal governments that give tribes
authority to self-regulate, that develop infrastructure and
human resources, eliminate disincentives to investment such as
dual taxation, create programs that are designed for the long-
term direct resources to set a high standard of action and that
preserve the Federal trust and treaty responsibilities is the
most effective means by which the Federal Government can
support good governance with tribal nations.
There is a need to work with Indian communities to develop
comprehensive policies and analyze existing programs. NCAI is
always available to cultivate the government-to-government
relationship between tribes and Federal Governments. We are
ready to help you facilitate any discussions that will need to
take place in order to create effective Indian policies.
Thank you for this opportunity.
[Prepared statement of Ms. Masten appears in appendix.]
Senator Campbell. Chairman Cladoosby.
STATEMENT OF BRIAN CLADOOSBY, CHAIRMAN, SWINOMISH TRIBE,
WASHINGTON
Mr. Cladoosby. Chairman Inouye, Senator Campbell, members
of the Committee on Indian Affairs, guests and staff: I am
honored to have the opportunity to appear before you and share
my thoughts on good governance and economic development in
Indian country.
I would also like to take this opportunity to welcome
Senator Maria Cantwell to the Senate Committee on Indian
Affairs. We in Indian country, especially those of us from the
great State of Washington, look forward to working with her in
her new capacity and thank her for her support that she has
shown us thus far.
For the record, my name is Brian Cladoosby. I am the
chairman of the Swinomish Indian tribal community. I am also
the president of the association of Washington tribes.
Our tribe is located about 70 miles north of Seattle. We
have about 800 members in our tribe. My tribe is composed of
descendants from the Swinomish, Samish, Lower Skagit, and
Kikialus Tribes, which lived in the Skagit Valley region and
the islands that are now Woodby Island and Camano Island.
We are a treaty tribe. I am proud to say that my
grandfather's grandfather signed the treaty for our tribe in
1855. His Indian name Washington Kalkultsic and his x appears
in the Point Elliot Treaty.
Our reservation was set aside by Executive order in 1873
and it has been the homeland of the Swinomish people for many
generations. However, today, as a result of the General
Allotment Act of 1887, also known as the Dawes Act, our
homeland has been reduced to just over one-half the area of the
reservation. Our exclusive homeland is now also home to more
non-Indians than tribal members.
You are all familiar with the devastating impacts of this
ill-conceived legislation. Other tribal leaders have told you
of the multiple problems created by the checkerboard lands
within the reservations across the United States, the
fractionated ownership of Indian allotments and the
jurisdictional conflicts generated by this failed strategy of
assimilation.
We have heard these accounts of lost lands, unmanageable
resources and eroded sovereignty on many occasions. The
Swinomish people have lived it on a daily basis.
Over the years the Swinomish people have been involved in a
variety of conflicts and confrontations over fishing and
hunting rights, criminal jurisdiction, taxation and gaming
issues and the regulation of reservation land use.
Our inherent right to exert jurisdiction over the lands we
reserved in our treaty is constantly being questioned and
threatened.
Recognizing that the your hearing today is about good
governance and economic development, I would like to turn my
remarks to my tribe's efforts to make the best of the
challenging context in which we now live.
In recent years the Swinomish Tribe has viewed inter-
governmental cooperation as an important vehicle for increasing
tribal self-determination and expanding our capacity for good
governance. We truly believe that cooperation and communication
go a lot further than confrontation and litigation.
We have entered into a number of agreements with
neighboring jurisdictions for the provision of major public
services. There are two major water purveyors in Skagit County,
the city of Anacortes and the Skagit County public utility
district. They used to be the main purveyors of water within
the Swinomish Reservation. We signed an agreement with them and
they agreed that the Swinomish Tribe would be the only purveyor
of water within the reservation's boundaries.
We signed a wastewater treatment agreement with the town of
LA Conner. We have a police cross-deputization agreement with
the Skagit County Sheriff's Department. We have a first- of-
its-kind in stream flow water agreement with the Skagit County
PUD and the city of Anacortes.
As many of you are aware, there are many disputes involving
water issues with Indians and non-Indians across the United
States. Of course, we have the Swinomish Cooperative Land Use
Program, which I am here to talk about today.
We have a long history of working well with our neighbors
and believe firmly that respectful cooperation and coordination
with other governments are central to our expansion of self-
determination.
Like many of you, our tribe spends countless hours in
deliberations, negotiations and policy development to devise
dynamic forms of conflict resolution. Perhaps slightly
different than many of you, most of our work is focused on the
complex and often contentious historic divisions existing
between jurisdictional interests operating within or around the
boundaries of the Swinomish Indian Reservation.
An important outgrowth of these efforts has been the
Swinomish Cooperative Land Use Program. The program provides a
framework based on a memorandum of agreement between the tribes
and Skagit County for conducting activities within the
boundaries of our checkerboard reservation and a forum for
resolving conflicts that might arise during the process.
Land use issues confront virtually every tribe that has
been impacted by the Allotment Act. This program provides a
potential model for resolving those issue through a
collaborative and cooperative process. Our Cooperative Land Use
Program received a high honors award from the Honoring Nations
Program administered by the Harvard Project on American Indian
Economic Development.
We are grateful for the recognition of the Harvard Project.
In addition to providing encouragement to other governments
with whom we might negotiate future agreements, participating
in the Honoring Nations Program has given us the opportunity to
learn about the great work being done by Indian communities all
across the country.
We believe this MOA is a first of its kind between tribal
and county governments in the United States. Whether it is the
first of its kind or one of a proud few, we hope that it
indicates a growing belief in the benefits of working together
rather than against each other.
Establishing a viable, self-sustaining reservation economy
is a primary goal of our tribe. Unresolved jurisdictional
issues arising from checkerboard land tenure patterns can be a
serious obstacle to economic development by deterring
investment and limiting the tribe's ability to achieve our
development goals.
These conflicts impede our tribe's ability to use our land
and natural resources effectively and in a manner that fully
benefits our tribal members and indeed benefits all members of
our reservation, Indian and non-Indian alike.
Only when our sovereignty is supported by sustainable
economic development can the goals of self-government be fully
realized.
The Cooperative Land Use Program is still a work in
progress with a long history, and hopefully, with more effort
and continued cooperation from Skagit County, a bright future.
The work actually began in the mid-1980's when the tribe
and the county found themselves in the midst of a
jurisdictional conflict. Both governments were administering
zoning, permitting and regulation enforcement programs that
affected non-Indian fee simple owned lands within the
reservation's boundaries.
The resulting confusion over jurisdiction and allowable
land use engendered skepticism, anti-Indian and anti non-Indian
sentiments, a litigious atmosphere and serious difficult in
attracting investment. Rather than litigating these
jurisdictional issues, the tribe and the county agreed in 1986
to attempt to resolve the conflict by embarking on a joint
planning program.
The philosophy guiding the effort was to overcome
inconsistencies through mutually agreed land use policy for the
reservation. Assisted with funding from a northwest area
foundation and a facilitator from the Northwest Renewable
Resources Center, representatives from the tribe and county
began discussions on the issues of mutual concerns related to
land use.
We agreed that it would be mutually advantageous to avoid
costly litigation by resolving differences under a formal
government-to-government relationship. While the talks
proceeded slowly, they proved useful. Ultimately, our
governments were able to craft a series of agreements,
including a 1987 Memorandum of Understanding recording our
commitment to work together on a comprehensive land use plan.
In 1990, we created a draft Comprehensive Use Plan, which
was the first comprehensive planning effort, attempted by a
tribe and a county. In a 1996 Memorandum of Agreement between
the Swinomish Tribe and Skagit County, which delineates a set
of procedures for administering the Comprehensive Land Use
Plan, in particular the MOA requires joint reviews of
proposals, provides dispute resolution mechanisms and affirms
that cooperative problem solving is the preferred means of
decision making. A copy of the MOA is attached to the text of
my comments.
Because of time, I will spare you the reading of the MOA,
but I hope you and your staff have an opportunity to review it.
Where the Cooperative Land Use Program has succeeded, one
of
the fundamental reasons for the success of the program is
that it has institutionalized a process of collaboration. We
truly believe that we need to institutionalize these agreements
because we know that elected officials come and go.
So, in closing, I would just like to thank you for allowing
me to share with you a little bit of the work that the
Swinomish Tribe has done in trying to work out cooperative
agreements with other governments in trying to create an
economic development base.
In closing I would also like to thank you for bringing up
the issue of how the recent court decisions are affecting
Indians in Indian country. I hope we can work with our
representatives to figure out a way that we can look at those
decisions.
Thank you.
Senator Campbell. Thank you.
Ms. Chambers.
STATEMENT OF ARDITH ``DODIE'' CHAMBERS, COUNCILWOMAN, GRAND
TRAVERSE BAND OF OTTAWA AND CHIPPEWA INDIANS OF MICHIGAN,
SUTTONS BAY, MI
Ms. Chambers. Good morning. I want to thank the chairman
and the vice chairman for inviting the Grand Traverse Band to
speak today.
The issues we are going to talk about are tribal courts and
issues of separation of power.
My name is Ardith ``Dodie'' Chambers, the treasurer of the
Grand Traverse Band of Ottawa and Chippewa Indians,
Peshabestown, MI. I have served our tribe all of my adult life.
I was one of the original group of people to bring our petition
for Federal recognition to Washington in 1978.
On May 27, 1980, the Grand Traverse Band of Ottawa and
Chippewa Indians became the first tribe in the United States to
successfully petition for Federal recognition under the new
process. Shortly thereafter, I became our tribe's first tribal
chairperson.
I am a descendent of Chief Peshabe, who founded the village
of Peshabetown in 1852, along with other groups of Ottawas. The
Grand Traverse Band consists of 3,682 members. One-half of our
members live in our six-county area. The others are scattered
nationwide and worldwide, because we have some members in
Germany, as well.
Today, I will speak on the issue of separation of power in
our tribe's governing structure. But keep in mind as I testify,
that I am neither a judge nor an attorney. By a vote of 376 to
47, tribal members ratified our constitution on February 24,
1988.
The U.S. Secretary of the Interior, Donald P. Hodel,
approved our constitution on March 29, 1988. In chapter 6 of
our tribe's history book, chapter 6 is entitled ``Tribal Courts
and Law Enforcement.'' Our history book is called the Mem-ka-
weh, Dawning of the Grand Traverse Band of Ottawa and Chippewa
Indians by George Weeks. That chapter 6 defines our judicial
system.
Significantly, the Grand Traverse Band is one of the few in
the country that has mandated a separate branch for it's tribal
court system. It is the only one in Michigan that mandates that
the appellate structure be part of the independent judicial
system. Our appellate court consists of three judges.
Article V, section 6 of our tribal constitution states:
The tribal judiciary shall be independent from the
legislative and executive function of the tribal government and
no person exercising powers of the legislative or executive
function of government shall exercise powers properly belonging
to the judicial branch of government.
Two opinions from our tribal court will demonstrate the
separation of power and the independence of the judiciary.
Opinion no. 1. Tribal councilor removed from office,
conflict of interest. In Re: Referral of John McSauby, Tribal
Councilor to Tribal Judiciary for Removal from Office. A tribal
councilor was ordered removed from the tribal council for
misconduct in office.
In the GTB constitution, article VII, section 2(a)(3),
which is your exhibit C, Mr. McSauby sold a piece of his
property to the tribe while he was a member of the tribal
council. The judiciary meeting en banc found that he violated
the constitution, article XII, and section 1 in that his
personal financial interest in the property sale amounted to a
prohibited conflict of interest.
While the judiciary ordered him removed from office, it did
allow reasonable attorney fees and costs to be awarded to
Councilor McSauby's attorney.
Opinion no. 2. Due Process Required Before Disenrollment
Tribal Membership Upheld. In this appellate decision, Angus A.
DeVerney, Sr., et al, exhibit E, the court affirmed the lower
court's decision that a member, once enrolled, is entitled to
due process before he can be disenrolled. There is no automatic
disenrollment.
Mr. DeVerney enrolled himself and his children as minors in
1982. An adult child attempted to enroll at a later date. The
membership office discovered that Mr. DeVerney and his children
had been enrolled with another tribe since 1976. In 1996, the
membership office attempted to automatically remove the family
from the membership rolls.
On appeal, the court found that the lower court's decision
was not a violation of sovereign immunity as a direct grant of
right under the constitution was involved. As persuasive law,
the court looked into the 6th Circuit Court of Appeals, Bartell
v. Lohiser.
The court also found that the lower court's ruling to pay
the per capita funds to the DeVerneys did not violate sovereign
immunity because the money was not damages, but rather it was
an entitlement under the Claims Commission docket funds to
members.
In reaching its decision, the court cited tribal
constitution article II, section 2, Dual Membership
Prohibition, in tribal ordinance 7 GTBC, section 202(b),
Incorrectly Enrolled Members.
The Peace Makers Court. In 1999, Harvard University, John
F. Kennedy School of Government, sponsored Honoring Nations: An
awards program that identifies, celebrates and shares
outstanding examples of tribal governance. The program
conferred an award on our tribal court, Exhibit H. The group
specifically mentioned our Peace Makers Program.
In the materials I have submitted with this testimony, I
have included a description of our Peace Makers Program. That
is in your exhibit I. The Peace Makers work with children and
juveniles who are at risk or who commit criminal offenses. The
unit is a division of our court system.
The Peace Makers utilize alternative conflict resolution
strategies to assist young juveniles to accept responsibility
for their actions and to restore to society what is due it.
Community service and restitution are important. A recent
report from our Chief Peace Maker, Paul Raphael dated June 1,
2001 indicates that he works with 42 youths a week. There were
seven referrals from the court of tribal prosecutor.
The Peace Makers have been called to the local public
school to help resolve conflicts between native and non-native
students. Young couples with marital problems utilize the Peace
Makers. Landlord and tenant issues are also resolved.
For the period of January 2000 through January 2001, Peace
Maker handled 14 court referrals involving four retail fraud,
five assaults and two minor in possession. A sample Peace Maker
agreement is attached as exhibit L.
I hope this brief summary has informed you of the workings
of our court. We seek, as a people, to serve justice and to
promote dispute resolution in a cultural context. Thank you.
[Prepared statement of Ms. Chambers appears in appendix.]
Senator Campbell. Thank you. I have a couple of questions.
Let me start by telling you that we do hearings for two
purposes. We do them to try to define the problem and the
second is to try to find some solutions. Boy, since Senator
Inouye and I have served together, we have heard the problems.
We know there are a lot more problems than we have solutions.
You deal with them in the sense of sovereign and good
governance and self-determination and jurisdiction and all
those things. They are great big pictures.
We can pass, I mean with the help of other people in
Congress, literally any bill that helps Indian people. Getting
it through the whole process, through the Senate and the House,
as Sue knows, is a little tougher.
If we have a friendly administration, we can get it signed.
But that doesn't mean our job is finished, because the agencies
sometimes don't implement it in the way we meant. We face that
all the time. Or they will say there is no money to implement
it and we come back and we have to go through the whole thing
again to provide the money so they can implement the darn
thing.
Sometimes they don't have the will. Sometimes they don't
have tribal input. Sometimes they don't notify the tribes of
the opportunities there under the bill. But we are trying.
Susan, you spoke of a lot of the problems that we have
heard many, many times. But in your capacity at NCAI, I would
really challenge you to try to find specific language to help
us resolve the problems.
We have a great staff. Senator Inouye does and I do, too.
They work together. We are desperate, literally, to try to find
specific language to resolve some of the things that Indian
country faces.
We have had a great few years, the last few years, when I,
Senator Inouye, and the other members have passed a lot of
legislation in this committee. You mentioned some of it in your
testimony.
There is still a lot more to be done. But come up with
specific language, if you can, about how we can fix things.
I certainly was interested in hearing Chairman Cladoosby's
comments because I think we have to go a long way in looking at
the effective models that some tribes are already doing.
Sometimes they are doing it totally without the help or input
of the Federal Government. They are doing it almost in spite of
the Federal government and sometimes they are doing it because
we opened an avenue with some legislation where they have taken
advantage of it.
We need to have a better way that we can share those
things. We hear about it when you come in here. But we don't
have a real good way of sharing those opportunities or those
success stories, so to speak, with other tribes.
Two days ago, I had a meeting with the Northern Cheyenne,
where I am enrolled. I told them about the successes of the
Southern Utes that our assistant secretary mentioned. They are
going to make a trip this October and spend time with the
Southern Utes to study some of their successes. Some of the
experiences might not be transferable, but I think some of them
are.
We can't really do that here in Washington. That has to be
done tribe by tribe and it has to be done with some kind of an
intermediary agency like NCAI that will help network where the
tribes who have the needs can benefit from the experiences that
have been successful with the tribes that have already done it.
That has to be played more on your ball field.
Ms. Masten. Senator, if I might, we did have some success
with developing a tribal-State relations brochure that
showcased best practices. Maybe that is something that Harvard
and us could partner up with for showcasing the best practices
in Indian country for economic development. I would be
interested to talk more about that and possible funding sources
to support that initiative.
We would be happy to step forward. I personal am committed
and our new executive director, Jackie Johnson, has a similar
commitment to prioritize economic development and
identification and reduction of barriers in working with the
agencies to ensure that, you know, those that we can remove
without legislation, we do, and identification of the barriers
so that we can pursue legislation to remove those that still
exist.
Senator Campbell. I would encourage NCAI to do that and
share with us specific information that we can try to put in
bill form.
Senator Inouye, may I yield to you?
The Chairman. I thank you very much, sir.
About 15 years ago, I believe tribal leaders throughout
this land looked upon the U.S. Supreme Court as the court of
last resort and believed that they could depend upon the
justices sitting there to uphold their rights.
Their rights were denied or abridged, tribes believed that
they could always go to the Supreme Court and get some relief.
In recent days, we have noted the development of a trend in
court decisions that would suggest that this has changed. For
example, several weeks ago in Nevada v. Hicks, the Supreme
Court held that tribal courts are not courts of general
jurisdiction and are not vested with authority to determine
whether State law enforcement officers who come on their
reservations to search tribal members homes located on trust
land are acting within the scope of their authority.
This is a dramatic departure from what we have considered
to be the sovereign powers of Indian nations. They also
declared that exhaustion of tribal court remedies is not
required before proceeding to Federal court. Now this has been
the rule for many years, that before you can go to Federal
court you have to exhaust all remedies before the tribal court.
But now, the Supreme Court says that, that is no longer the
case.
Several weeks ago, in the Atkinson Trading Post case, the
Supreme Court held that the Navajo Nation has no authority to
impose hotel occupancy taxes even though the Navajo Nation
provides fire and police protection and emergency medical
services to the hotel and its patrons.
You know, that is a real departure from accepted principles
of sovereign rights. I could go on and on because there are
other cases, and these are not cases from 50 years ago. These
are just cases within the last several years.
I think the time has come for the Congress to address these
rulings of the Supreme Court because we are at a very critical
juncture, and therefore I welcome the nine principles that the
NCAI has enunciated in their statement. I think that this could
be a basis of a discussion between tribal leaders and this
committee to come forth with a comprehensive law setting forth
basic standards or principles because, if not, this trend will
continue.
If this trend continues, then Indian country will no longer
be Indian country.
So, I commend the NCAI for coming forth with the nine
principles. I would like to arrange a meeting soon with Indian
leaders to begin discussing this because I think time is of the
essence.
Mr. Vice Chairman, I have many questions.
I would like to commend Chairman Cladoosby on receiving the
high honors from Harvard.
I will be submitting a question to you, asking your opinion
on how we can apply your principles on bringing about better
relations.
Mr. Vice Chairman, before I relinquish the Chair I would
like to note the presence of the assistant secretary. I do not
know if the witnesses realize that he has been sitting here
listening to all of you.
In all the years that I have been a member of this
committee, I think this is the first time that the Assistant
Secretary of the Interior in charge of Indian Affairs has
stayed to hear testimony of Indian leaders without being urged
to do so.
I wish to commend you, Mr. Secretary.
[Applause.]
The Chairman. I believe that you can tell by the applause
that they appreciate your presence here, sir.
So, Mr. Vice Chairman, I would like to submit questions to
the three witnesses and ask them to respond with their thoughts
on my statement here. I think it is very urgent that we get
together.
Ms. Masten. Senator, I just wanted to add that we are
planning for a forum with tribal leadership the week of
September 11 to do just that. So, we welcome you. We will have
further discussions. We have had initial discussions with your
staff with regard to that. We will continue to keep them
informed on our progress toward that.
Senator Campbell. Did you have something final to say,
Chairman Cladoosby?
Mr. Cladoosby. Yes; two things. Our program that we have
initiated with Skagit County is a model. I cannot thank Harvard
enough. I think these models need to be proven to the Indians
and non-Indians around the United States that it can work. Like
you said, Senator Campbell, it might not work for your tribe
exactly how it works for ours, but it is a start. It is a basis
and a foundation.
In response to Senator Inouye's remarks about the recent
Supreme Court decisions, they do seem out of step with the
support that we have received recently from Congress and in
recent Executive orders for tribal sovereignty and self-
government.
When courts do question tribal regulatory authority on our
reservations, they do undermine the economic vitality and
social development that has emerged from tribal self-
government. So, those are very, very serious cases.
We look forward to working with you to ensure that the good
governance that we celebrate today will be strengthened and
that economic development, so long coming in Indian country,
will continue. We need to work together somehow to try to look
at these cases.
I agree with Senator Inouye that a meeting with leaders is
needed.
So, I thank you for the time that you have given the
Swinomish Tribe today. I appreciate all your comments.
Senator Campbell. We thank you. We will submit some
questions in writing, too.
We will now go to the last two people testifying. That will
be Andrew Lee of the Harvard Project and Jerry Reynolds,
associate director of Informational Services, First Nations
Development Institute, Fredericksburg, VA.
Go ahead, Mr. Lee.
STATEMENT OF ANDREW LEE, EXECUTIVE DIRECTOR, THE HARVARD
PROJECT ON AMERICAN INDIAN ECONOMIC DEVELOPMENT, JOHN F.
KENNEDY SCHOOL OF GOVERNMENT, HARVARD UNIVERSITY, CAMBRIDGE, MA
Mr. Lee. Good morning, Mr. Chairman and Mr. Vice Chairman.
Thank you for the opportunity to be here with you today. My
name is Andrew Lee. My Seneca name is Ono-dah-geyh. I have the
pleasure of serving as the executive director of the Harvard
Project on American Indian Economic Development, which is
housed at the John F. Kennedy School of Government at Harvard
University.
For the past 15 years, the Harvard project has been working
to understand the conditions under which sustained, self-
determined social and economic development is achieved on
American Indian reservations.
Collaborating with the Udall Center for Studies in Public
Policy and the Native Nations Institute, both at the University
of Arizona, our activities include research, advisory services,
and executive education for tribal leadership.
Additionally, the Harvard Project administers Honoring
Nations, a national awards program that identifies, celebrates,
and shares outstanding examples of good governance.
Mr. Chairman, I believe the most ambitious challenge facing
the Indian country today can be posed in a single question: How
can tribes build and sustain healthy, prosperous Indian
nations?
Certainly there are no easy answers, but the Harvard
Project's research points out very clearly that successful
Indian nations assert the right to govern themselves and
exercise that right effectively by building capable and
culturally appropriate institutions of self-governance.
Governance goes a long way toward explaining why some
tribes are able to break poverty, dependency and their related
social ills while other languish. Fortunately, a growing number
of tribal success stories are emerging from Indian country.
As director of Honoring Nations, I have witnessed the
astonishing success that tribes achieve when they put
themselves in the driver's seat for decisionmaking. I have been
inspired by those tribes that stop insisting others are
responsible for solving their problems and instead craft
sovereign solutions.
I have seen how program success hinges on such attributes
as accountability, performance-based tracking and
institutionalization. In sum, Honoring Nations' 32 award-
winning programs give us many reasons to be optimistic about
the future of Indian country.
Now, in discussing economic development specifically, the
importance of tribal governance cannot be overstated. Let me
explain. In our work at the Harvard Project, we often encounter
two different approaches to economic development. The first is
a ``planning and projects'' approach, grounded in the idea that
economic development is about getting the next big Federal
grant or picking the one winning project that will magically
solve the reservation's economic problems.
This is approach is destructive and shortsighted. It
encourages tribes to become expert grant-seekers. It engenders
institutional dependency whereby tribal governments become mere
appendages of the Federal apparatus.
And history demonstrates that this approach produces
economic development failures.
The second approach is a ``nation building'' approach.
Nation building tribes recognize that economic development is
first and foremost a political challenge and that the task is
to create an environment where businesses and people can
flourish. These tribes displace the role of Federal agencies,
focus on the exercise of sovereignty and create capable
institutions of self-governance.
Critically, these nation-building tribes are the ones that
are breaking away from the pack economically, socially,
politically and culturally.
So what institutional attributes characterize nation
building and serve as the underpinnings for economic
development? Our research points to at least five. First,
tribes must have stable institutions and policies. The
experience of the developing world demonstrates that unstable
institutional environments fail to attract investment both
within and outside the nation. The same holds true for Indian
country.
Second, tribes need to establish fair and effective dispute
resolution mechanisms. We find that the unemployment rate among
tribes with independent judicial systems is on average five
percentage points lower than those tribes that don't have
independent judiciaries. Why? Investors tend to look for court
systems that will give them a fair shake. They tend to shy away
from places where court decisions are arbitrary or the courts
are controlled directly by politicians.
Third, economically successful tribes tend to have a clear
separation of business and politics. Tribal enterprises that
are formally insulated from political interference are four
times as likely to be profitable from those that are not.
Fourth, tribes must have capable bureaucracies. Contracting
and compacting place a premium on efficient bureaucracies that,
at the most basic level, can get things done.
Finally, successful economies in Indian country stand on
the shoulders of culturally appropriate governing institutions.
It is no coincidence that tribes functioning under essentially
foreign governing systems have a long history of economic
failure. The task for tribes is to equip themselves with the
institutional tools that fit their unique societies.
To conclude, our research, coupled with the lessons taught
by our Honoring Nations winners, suggests that the Federal
Government has a role in fostering economic development on
Indian reservation. Of primary importance, self-determination
should remain the cornerstone of Federal Indian policy. It is
the only policy in over a century that has brought improvement
to the material health of Indian country.
To withdraw from self-determination would not only reverse
the successes of the past 30 years, but it would ultimately
burden the Federal Government and America at large.
Moving forward, we urge the Government to expand
opportunities for tribes to control programs through compacting
and contracting, and fully break away from the ``planning and
projects'' mentality by supporting institutional capacity
building for tribal governments.
If there is one thing I would stress, Mr. Chairman, and Mr.
Vice Chairman, it is that governance matters and self-
governance works.
Thank you for the opportunity to be here today.
[Prepared statement of Mr. Lee appears in appendix.]
Senator Campbell. Mr. Reynolds, why don't you go ahead? I
have some questions of Mr. Lee. I will hold them until you are
finished.
STATEMENT OF JERRY REYNOLDS, ASSOCIATE DIRECTOR OF
INFORMATIONAL SERVICES, FIRST NATIONS DEVELOPMENT INSTITUTE,
FREDERICKSBURG, VA
Mr. Reynolds. Very well. Thank you, Senator. Greetings, Mr.
Chairman and Mr. Vice Chairman. Members of the committee and
staff: My name is Jerry Reynolds. I am with First Nations
Development Institute. For the second time before the
committee, I think, I am pinch hitting for our president,
Rebecca Adamson and vice president, Sherry Salway Black, who
are engaged in other First Nations obligations.
We are pleased and privileged to take part. We know how
hard you work and how hard you try. We take note of your
successes and all that you do. Please include us if we can help
you in the important work that you do.
We felt that the contribution that we could make today was
to emphasize the role of philanthropic, nonprofit activity on
good governance and economic development in Indian country. I
don't think I have to tell anyone here that the demands on
tribal government often exceed the demands on other forms of
government.
I was a reporter at Indian Country Today from 1988 to 1993.
I would often go over to talk with the late, lamented Alex
Lunderman, Sr., chairman of the Rosebud Sioux Tribe. In the
course of 1 hour, he might have people coming in to help him
with commodities or women, infant, and children benefits. He
might give someone some money. He might be on the phone with a
congressman. He might be making a decision about the tribe's
economic future.
So, that was a first-hand lesson on the enormous demands on
tribal governments and tribal leaders. I think everyone here is
well aware, too, that those demands are increasing between
Federal devolution and the rising in youth population on
reservations.
I had the opportunity to be in Seattle at the beginning of
April at the Wisdom of the Give Away Conference that First
Nations held. It was on Native American philanthropy. The
Umatillas have been mentioned.
At that meeting, Les Minthorn, a tribal councilman with the
Confederated Tribes of Umatilla Indians said something I think
is very worth noting. He said that as the demands increase on
tribal governments, whether you can fulfill those demands or
not, you need to deal with them one way or another.
Well, First Nations has teamed up with the National Indian
Gaming Association for the first, we believe, national survey
of Indian gaming nation charitable giving. It is in a late
draft stage and I will submit it to the record when it is in
final form or if the record is not open, I will get it to your
staff.
Senator Campbell. That will be fine.
Mr. Reynolds. Among the findings that I know will not
change are that a majority of Indian gaming nations make
charitable contributions without a formalized process or
structure and that the majority of recipients of tribal
contributions are non-Indian nonprofit organizations. We
believe this reflects the limited number of native nonprofit
organizations operating within some Native American communities
In conclusion, I think that I would simply like to
emphasize the role of nonprofit intermediaries, native
nonprofit intermediaries and their potential role in
stabilizing governments and providing for economic development
by taking away some of the demands that are made on tribal
governments. They can meet some of those demands.
In fact, among the many outstanding case studies that the
Harvard Native American Project has put together, and you can
read about them in the book that is back on the mantle, in
many, many cases you will find that it is nonprofits that are
working with tribal governments and other organizations, State
and Federal agencies and helping to facilitate this economic
development.
I would mention in particular the Yukana Development
Corporation in Alaska where actually the tribe's willingness to
create a corporation enabled the tribal government to
concentrate on politics while others concentrated on business.
This is the kind of process that nonprofits and tribal
government created, governmental entities--I won't get into all
the details of tax law at this point in the day.
We know that these considerations are often not noted. They
seem to have a little bit of a low profile when we discuss
economic development. So, we felt that our role should be to
emphasize what nonprofits can do and their value to good
governance, stability of governance and economic development.
I will be very happy to answer any questions. As I say, I
will fill out the record when this survey becomes final.
Senator Campbell. Thank you.
Let me start by telling you, Mr. Lee, that I have briefly
read your testimony. I have to tell you, it is terrific
testimony. I have always been very impressed with the Harvard
Project. I guess it is because you share my philosophy about
how to make things better in Indian country.
I have never believed that the way you help make Indian
country better is to make them more dependent on the Federal
Government.
You mentioned in your testimony that some people have
become expert grant seekers. There is no question about it.
There is a keen competition about getting grant money. To me it
flies in the face of sovereignty. How can a nation dependent on
another nation and still declare itself sovereign?
We have the problem, of course, of fitting that into the
trust responsibility that we are obliged to provide the tribes.
So, we have to find a balance, you know that. But there is no
doubt that just depending on grants for jobs, we have something
backward.
You know, in the free enterprise system, it seems to me
what you do is provide a service. You provide a product and
then you compete out there and you get the thing sold or you do
whatever you have to do. That provides jobs.
But in some conditions with some tribes, the way to create
the jobs is to get a grant and that grant provides the jobs for
the duration of that grant. I mean you have explained that very
carefully. It is not very far-sighted, as I think your
testimony indicates.
It seems to me as a Federal Government, what we need to do
is help provide the conditions for growth. The tribes can
flourish in a democratic market-based system. I know they can
do it. The places where they have had some successes, they have
proven over and over they can do it if they are given the
opportunity to do it.
So, it is really a tough question, but one of the things
that makes this tough is that we have an institutionalized
bureaucracy that is afraid of letting tribes be too
independent. You know that. I don't mean to say it to our new
Assistant Secretary, but you know, we have known that for years
that in some cases the agencies that are authorized and
empowered to help Indians become more independent in fact put
some roadblocks in there because they worry about the loss or
authority or turf or jobs or whatever the reason is. We have to
get away from that mentality, too, if we are truly going to let
tribes be free.
I just wanted to tell you that I don't really have any
questions. I want to submit some in writing to both of you. But
that testimony really hits the nail on the head. Unfortunately,
in some circles it probably offends some people because
somebody probably could misconstrue that to mean, ``Do you mean
you are going to pull the rug out from under the tribes?''
It is not that at all. We have to have a new way of
thinking and get away from this mindset that somehow government
has all the answers. Most tribes don't want the government to
have the answers to their problems. They want to have the
answers to their problems.
We have to help create conditions so that tribes cannot
only define the problems, but find solutions and give them the
opportunities to be able to do it.
Senator Inouye, do you have any questions or comments
before we close down?
The Chairman. Thank you. I would like to join you in
commending Mr. Lee for his testimony. I have always maintained,
especially in the last 15 years or so, after serving on this
community for some time, that the best laws are laws made my
Indians in Indian country for Indians, because all to often,
well-meaning non-Indians living in Washington, living in air-
conditioned homes, not really knowing the conditions in Indian
country, draft laws that do not serve Indian country well.
So, your statement is right on target. However, as you
indicated, if there are to be successful governments, there
must be an environment that would be conducive to success. When
one looks at some of the conditions in Indian country, you see
conditions that are just horrendous, conditions which would be
unacceptable, even in Third World countries.
Having said that, many of those who want to do business
with Indian country have repeatedly suggested that it would
help if Indian nations had stable governments. They frequently
cite one example. The turnover is too high. Every year there is
a change of government.
Do you have any suggestions at to what can be done? I
realize that Indian governments have to be relevant to their
conditions. For example, there is a tribe in New Mexico where
families take turns in governing.
Other than that, do you have any suggestions?
Mr. Lee. I am very glad you asked that question, Mr.
Chairman. Let me suggest that the problem has less to do with
turnover in tribal government as it does with inconsistent
policies or institutions that change rapidly.
The problem is not necessarily the politicians themselves
and their turnover, but the institutions. We work with a number
of the Pueblos in New Mexico. They have rapid turnover. Some of
those Pueblos, like the Cochiti Pueblo, Pueblo of Pojoaque, and
many other Pueblos have elections every year.
What they have there, in the ones that are economically
successful, is stability in institutions. The policies don't
change from administration to administration. So, I think the
appropriate way to frame this issue is stable institutions,
rather than turnover in government.
That said, I think there are a number of things that tribes
should be thinking about. I think Mr. Reynolds has it exactly
right. The civil society sector should be holding tribal
governments accountable.
What the Federal Government can do, I think, is change the
incentive structure. If it is true that many tribal governments
are experts in the grantsmanship game, then their incentive is
to perform according to how the Federal Government wants them
to perform rather than how their citizens demand that they
perform.
I think shifting around that incentive structure will have
a tremendous difference. The implications for policy are that
block grants might be the appropriate way to go. I very much
see devolution as providing good opportunities if it is done
properly.
Another way the Federal Government can help in this regard,
is to have performance-based grants rather than having a
checklist of boxes that a tribe must go through before a grant
is made. The Federal Government might consider doing midstream
and post-investment appraisals.
Those kinds of things shift the accountability to the
people and the tribal governments, and I think, with more
accountability, we will eventually see less turnover and
greater stability in the vary institutions that we are talking
about today.
The Chairman. Mr. Reynolds, you submitted a couple of
articles that speak of section 7871 of the Internal Revenue
Code.
Mr. Reynolds. Correct.
The Chairman. What are some of the benefits that Indian
country can derive from the application of that section?
Mr. Reynolds. Yes, thank you, Senator. The section 7871
determination is for tribal government entities. Often people
say it is nonprofits, but that is a little tricky terminology.
It is for tribal governmental entities. It assures grant makers
that the grant they made counts toward their payout. In other
words, a simple way to say it is that it is tax deductible.
Tribes have the benefit of not having to file with the
State Secretary of State in their State if they get a section
7871 determination. This is helpful because if the tribe ever
wants to change the charter of that organization, it will not
risk running into some problem within the State where they
maybe don't want to see that charter changed for various
reasons. They will just be able to do it. They won't have to
answer to that Secretary of State.
In other words, they are not under the oversight of State
government. They answer to Federal law. So, we consider it as
an extension of sovereignty to do that.
They also have much less of a compliance burden because
they do not have to file Form 1023 initially or Form 990 every
year thereafter, reporting on their activities to the State.
Now, we always advise that because compliance and reporting is
the comfort zone for grant makers and philanthropic community
as a whole, shall we say, we always advise that tribes should
acknowledge donations and report on them publicly, maybe in an
annual report.
However, it is quite an advantage in terms of the
compliance burden not to have to constantly report to the
State. So, those are two of the major advantages that tribes
can realize from section 7871 for their government entities.
The Chairman. If the Navajo Nation decided to use section
7871 and set aside a large parcel of land within their
reservation borders and this section 7871 organization leased
this property to a hotel operation to conduct hotel business,
would the terms of the contract be subject to State scrutiny or
approval or disapproval?
Mr. Reynolds. That is a fascinating question. I think we
are getting into Atkinson here, maybe. It is fascinating. I am
not normally known for holding back when I can plunge over the
verge. I am tempted to do so here. I don't know the exact
answer to that, but I think the possible answer is that there
are real possibilities there.
I think the tribes should explore those possibilities. I
guess part of what we hope to accomplish today is to urge the
committee and the Congress at large to help them explore those.
I think it might make a good topic for your conversations with
NCAI.
We would be very happy at First Nations to provide you
references to the tax attorneys that we have used who could
give you truly reliable information. I am a little bit worried
about myself there. I know some, but not enough.
The Chairman. We will be calling upon you, sir.
Mr. Reynolds. I hope so. I just can't predict this Supreme
Court, Senator.
The Chairman. If I may, I would like to submit a few
questions to Mr. Lee and Mr. Reynolds.
Senator Campbell. Please do.
The Chairman. Thank you very much.
Mr. Secretary, you have established a new record and a new
standard, sir.
Mr. McCaleb. After you gave me that ``atta boy,'' I had to
come back.
The Chairman. Thank you very much.
Senator Campbell. With that we will keep the hearing record
open for 2 weeks. If anyone has additional things they would
like to comment on to be included in the record, do so in the
next 2 weeks.
We thank all the witnesses.
The hearing is adjourned.
[Whereupon, at 11:38 a.m. the committee adjourned, to
reconvene at the call of the Chair.]
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A P P E N D I X
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Additional Material Submitted for the Record
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Prepared Statement of Hon. Daniel K. Inouye, U.S. Senator from Hawaii,
Chairman, Committee on Indian Affairs
The committee meets this morning to receive testimony on the
governmental practices that foster the potential for economic
development in Indian country.
I am pleased to know that the academic research conducted by the
Harvard University Project on Economic Development has documented that
the fundamental cornerstone of good governance is sovereignty.
Without sovereignty, in all likelihood, Indian people would have
long ago been assimilated into the dominant society and would no longer
have any lands or communities that you have made your own. Your
children would not know their culture, their traditions, their language
or the great contributions their ancestors have made to America.
All of this would have been wiped out over time, because American
law draws a sharp distinction between those who have a government-to-
government relationship with the United States and those people who are
defined by reference to their race or ethnicity.
Although there are still many Americans who don't seem to
understand this distinction. That which makes the indigenous, native
people of this country unique.
The members of this committee do understand this most fundamental
of all principles, and we know that it is on this basis that the
treaties with Indian nations were entered into, and that it is on this
basis that the Congress has, for over 200 years, enacted legislation to
address conditions in Indian country.
But when we speak of good governance, we must be much more careful
that we are not calling upon Indian governments to be a mirror
reflection of other governments.
As the Navajo Nation Supreme Court expresses so effectively, your
traditional laws have governed the relations among people in your
communities for hundreds of years before this country was ever founded.
You have customs and mores and ways of resolving disputes that have
proven effective over time, and have stood the test of time. So the
dominant society must not rush to judgment if your governmental
mechanisms may differ a little or even a lot from those they are
accustomed.
Having said that, I believe the Harvard Project has tried to
examine those governance practices that are the most effective from the
vantage point of what works in Indian communities because those
practices have the greatest degree of acceptance from the citizens of
the tribal government--and thereby, the consent of the governed.
Indian nations that are strong and healthy will be those in the
best position to shape the future of Indian country. Those of us on
this committee who are dedicated to your cause want to do everything we
can to assist you in building and maintaining governance structures
that will serve your children and your grandchildren well.
______
Prepared Statement of Neal McCaleb, Assistant Secretary for Indian
Affairs, Department of the Interior, Washington, DC
Good morning, Mr. Chairman and members of the committee. I want to
thank you for the opportunity to appear before you today to speak about
tribal government practices and how that influences economic
development in Indian country.
The development of stable and responsive tribal governments, with a
sound strategy for and commitment to economic growth, is a prerequisite
for prosperity and economic opportunity in Indian country.
There are many contributing elements to economic success including
access to market opportunities, access to capital, natural resources,
human resources, governing institutions and tribal culture. There have
been tribal successes where there was a lack of natural resources,
minimally skilled human resources and even poor access to markets.
These successes have been in spite of these economic liabilities and
have been accomplished by determined tribal leadership building stable
and effective sovereign governmental institutions.
The policies contained in the Self-Determination and Self-
Governance Acts have been the seed bed of growth for sovereignty and
the development of strong and effective tribal governments that are
essential for sustainable economies.
Even now, tribes are asserting their self-governance influence
through the Economic Development Subcommittee of the Bureau of Indian
Affairs' [BIA] Tribal Budget Advisory Committee by developing
strategies on how the BIA and other Federal agencies can be more
effective in encouraging prosperity and economic parity for American
Indian tribes within these United States.
Conversely, it requires a viable and vigorous economy to provide
sovereign governments with the tax base to pay for the essential
infrastructure and services required by their constituents and
businesses.
With that in mind, I would like to talk briefly about some of the
successful enterprises that exist in Indian country and their vision in
making things happen. One of the more notable examples is the
Mississippi Band of Choctaw Indians [MBCI]. MBCI was federally
recognized in 1945. By the late 1960's, tribal leaders were unimpressed
with their improvement, despite over 15 years of effort by Federal
employees sent to help them. MBCI remained the poorest tribe in the
poorest county in the poorest State. Tribal leaders took responsibility
and initiated projects designed to create jobs for MBCI members. The
first enterprise for the tribe was Chahta Development, a construction
company that built houses under a low-income housing program for a
small profit while also training and employing tribal members in a
building trades skill. From this modest beginning, the tribe began
tackling other ventures, in some cases seeking and obtaining Federal
assistance through the Indian Finance Act. MBCI is now a major economic
engine in northeast rural Mississippi, providing a total direct and
indirect impact from MBCI and its affiliate companies of 12,112 jobs,
$173M in wages, $16.7M in taxes and $9.1M in rent payments. Currently,
the tribe is engaged in the development of its own natural gas fired
electric generating plant. Williams Energy is conducting a feasibility
study, and based on the results, construction could begin in 6-8
months.
Another success story is told by the Confederated Tribes of the
Umatilla Indian Reservation, located in rural northeast Oregon. Their
economy was based on natural resources, primarily fishing, grain and
timber. Today, the tribe has diversified into commercial developments
such as a trailer court, a grain elevator, the Wildhorse Casino, a
hotel, an RV park, a golf course, a solid waste transfer station and
the Tamastslikt Cultural Institute. The tribe is now the second largest
employer [1,100] in Umatilla County, following only the State of
Oregon. Their operating budget has increased from $7,559,950 in January
1992 to $94,157,875 in January 2001.
The Southern Ute Tribe, located in rural southwestern Colorado,
provides another model of economic success. That tribe has taken
control of its own oil and gas production. In 1992, the tribe
established a tribal production corporation [Red Willow Cooperation],
and in 1994 it acquired a majority interest in a gathering pipeline
company [Red Cedar]. In addition, the tribe has expanded by investing
in other oil and gas projects in the west, and is investing its energy
fuels revenues into other commercial enterprises.
Using knowledge gained from managing and operating it's own
reservation companies, the tribe has acquired production properties in
Texas that produce 20M cubic feet of gas per day. It has invested in an
offshore well in the Gulf of Mexico, and has entered into a partnership
with the Ute Indian Tribe of the Unitah and Ouray Indian Reservation
and the Dominion Oil Company to explore and develop conventional oil
and gas from the former Naval Oil Shale Reserve No. 2. The tribe is
also evaluating the purchase of shopping malls and a drug store chain
in Texas and Arizona.
The tribe does not release financial information on their
enterprises, but it's reported that the income to the tribe is in
excess of $250M per year. The Wall Street rating houses of Fitch and
Standards & Poor recently gave the tribe a triple A rating on the
tribe's development bonds.
The role of the Federal Government should be to remove obstacles to
economic development [especially those created by Federal rules and
actions], create incentives, and provide technical, financial and other
assistance to tribes, tribal members and public and private sector
businesses willing to promote economic activities in Indian country.
The initial priority is for the Federal Government to come together
with tribes to develop a straightforward approach on how we all can
work toward the integration of program services and coordinate
activities in the pursuit of economic parity for Indian country.
Congress has provided us the mandate and authority under the Indian
Employment, Training and Related Services Demonstration Act of 1992
[Public Law l02-477], as amended; the Native American Business
Development Trade Promotion and Tourism Act of 2000 [Public Law 106-
464]; and the Indian Tribal Regulatory Reform and Business Development
Act [Public Law 106-477].
The goal of the subcommittee, I mentioned earlier, is to develop a
strategy to coordinate and integrate all available resources from the
tribal, Federal, private and public sectors into one comprehensive
approach that will develop businesses, enterprises, and tribal
government services and provide meaningful living wage employment in
Indian country. The subcommittee has identified 10 major tasks to be
accomplished. Each of the tasks is to be examined by a sub-subcommittee
for past studies and recommendations, current working models, available
resources, legislative and regulatory authorities, budget and resource
coordination, and integration. These sub-subcommittees are named for
the general subject matter of their inquiries, as follows: [1] Tribal
Business Development Corporations and Tribal Venture Capital Funds; [2]
Taxation & Incentives; [3] Tribal Economic Development Models; [4]
Indian Finance Act; [5] Tribal Courts; [6] Federal Set Aside
Procurement; [7] Technical Assistance Centers; [8] Natural Resources &
Energy Development; [9] Tribal Infrastructure; and [10] Employment
Development.
The first working meeting of the subgroup is being held this week.
The? first action was to contact representatives from all Federal
programs [HUD, SBA, ANA, Census, EPA, Energy, et cetera] that provide
economic development assistance or statistical information to tribes
and invite them to participate in the effort. The subcommittee is
planning on providing its initial findings and recommendations to the
full committee and the participating tribes in October.
BIA's Office of Economic Development is committed to economic
development that enhances the lives of Indians and stabilizes the
future of Indian tribes. In the more successful tribes and Indian
business enterprises around the country, the BIA has observed some
common elements. BIA has noted some common themes where Indian economic
development is lacking, and through study and consultation with tribal
leaders, believes that a few initiatives would significantly improve
the current disparity between the few American Indian tribes and
businesses that are doing well, and those that are not.
Ultimately, the relative economic success and vitality of any
nation is a public--private effort that combines the resolve of the
government policymakers and the imagination and appetite for risk of
entrepreneurs to create a healthy environment for enterprise and
respect for each others unique point of view. Government will always be
focused on the ``common good'' while the entrepreneur has to be driven
by an anticipation of profits as a reward for it's risk.
Thank you, again, for the opportunity to speak on a subject that is
near and dear to my heart. I will be happy to answer any questions you
may have.
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