Native Business Magazine - March 2019 by Native Business

NATIVEBUSINESSMAG.COM | MARCH 2019 | $8.95

WHEN 19 PUEBLOS UNITE, OPPORTUNITY SOARS

MHA NATION RESISTS DUAL TAXATION

Mohegan Renewable Energy Keeps the Lights on in Europe

LANCE MORGAN

HO-CHUNK, INC.IS TRANSFORMING THE WINNEBAGO TRIBAL ECONOMY THE ROAD TO NOWHERE PROTECTING TRIBAL ECONOMIC ARMS DRONES FLY OVER PUEBLO OF POJOAQUE ALASKA LEADS THE WAY IN TELEMEDICINE

NATIVE NETWORK'S BOLD VISION OF INTERNET & PROSPERITY FOR ALL

on the cover

IN THIS ISSUE MAR 2019 • Volume01 Number 4

Lance Morgan

How Ho-Chunk, Inc. Transformed the Winnebago Tribal Economy See Page 8. BY ANDREW RICCI

TRIBAL CONSTRUCTION ENTERPRISES CASH IN ON LUCRATIVE FEDERAL CONTRACTING “Just because you are an 8(a) firm doesn’t mean federal contracts are going to come to you automatically. You have to go out and earn them, like any other business.” ―Thomas Wilbur, CEO, Grand Traverse Engineering & Construction See page 26. BY LYNN ARMITAGE

Insurance

Features

BY ANDREW RICCI

AMERIND Risk Expands Protection for Tribes

Infrastructure and Tribal Resistance to Catastrophe

Broadband

Newest product lines include auto insurance and cyber liability

The Hohokam survived in a desert environment for over a millennium thanks to an advanced canal system

Dual Taxation Is Costing Tribal Nations Billions of Dollars in Tax Revenues

The Road to Nowhere How the Lack of Adequate Transportation Systems Hinders Tribal Economic Development

BY SUZETTE BREWER

Native Business Intel

A Network For All of Indian Country Andrew Metcalfe envisions Tribes connected by fiber optic cable and shared prosperity.

BY MARK FOGARTY

BY JOSH ROBERTSON Cover Photo Courtesy: Ho-Chunk, Inc.

BY JOSH ROBERTSON MARCH 2 0 1 9

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WHEN 19 PUEBLOS UNITE, ECONOMIC DEVELOPMENT OPPORTUNITIES ARE EXPONENTIAL “We’ve created hundreds of jobs — construction, ongoing retail jobs, and hospitality jobs. The city sees that as a benefit to the community. Economically, we are a positive impact,” Canfield said. See page 38 BY NATIVE BUSINESS STAFF

Legislative / Policy

Energy

Yakama Power: How One Tribe Secured its own Energy Future

Call to Arms: The Attack on Economic Arms of Tribes and Sovereignty

BY DEBRA UTACIA KROL

BY ANDREW RICCI

Natural Resources

Technology

Infrastructure

Quil Ceda Village Celebrates “Firsts”

Tulalip Utilities: Water Rights Pave the Way to Clean Water

BY DEBRA UTACIA KROL

Data Centers: A Good Investment or Risky Business?

BY RENAE DITMER

BY LYNN ARMITAGE

Healthcare

Manufacturing

Fueling the Economy JC Seneca went from selling cigarettes curbside to employing 100-plus people through his tobacco manufacturing plant and travel plaza

BY NATIVE BUSINESS STAFF

Human Resources

An Eagle Eye View Over New Mexico

Alaska Leads the Way in Telemedicine

BY RENAE DITMER

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The Infrastructure Is the Business How Mohegan Renewable Energy uses American waste wood to keep the lights on in Europe

BY JOSH ROBERTSON

Navigating the Legal Complexities of Human Resources BY NATIVE BUSINESS STAFF

Your Success is Our Business With 37 companies, Cherokee Nation Businesses blends its heritage of ingenuity with modern business experience to deliver service and solutions that produce results for its customers.

777 W. Cherokee St. l Catoosa, OK 74015 918.384.7474 l cherokeenationbusinesses.com

Businesses

FOUNDERS/PUBLISHERS

Gary (Cherokee) and Carmen (Makah/Chippewa-Cree/Yakama) Davis

EDITORIAL

Executive Editor Carmen Davis - carmen@nativebusinessmag.com Senior Editor Kristin Butler - kristin@nativebusinessmag.com

CREATIVE

Art Director Kym Tyler (Diné) Creative Consultant Vestalight Sevenly

WRITERS

Contributing Writers Andrew Ricci • Suzette Brewer (Cherokee) • Lynn Armitage (Oneida Nation) Renae Ditmer (Chippewa) • Mark Fogarty • Clifton Cottrell (Cherokee) Debra Utacia Krol (Xolon Salinan Tribe) • Josh Robertson Mary Annette Pember (Chippewa) • Mary Belle Zook (Citizen Potawatomi Nation)

ADVERTISING & EVENTS

Event Director Yvonne Schaaf (Salt River Pima/Mojave/Quechan) - yvonne@nativebusinessmag.com Advertising Director Janee' Doxtator-Andrews (Oneida) - advertising@nativebusinessmag.com

FO LLOW U S

@nativebusinessmagazine

@nativebizmag

@nativebusinessmagazine

NATIVE BUSINESS MAGAZINE

12819 SE 38th Street, #111, Bellevue, WA 98006 (425) 615-6400 | info@nativebusinessmag.com | www.nativebusinessmag.com ©2019 Native Business Magazine is published by Native Business, LLC, all rights reserved. Native Business is a monthly advertising magazine. All contents are protected by copyright and may not be reproduced without written consent from the Publisher. The advertiser is solely responsible for ad content and holds Publisher harmless for its advertising content and any errors or omissions.

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LETTER FROM THE PUBLISHERS

Infrastructure

is the backbone of economy and business.

PHOTOS BY WHITNEY PATTERSON PHOTOGRAPHY

trategic investment in infrastructure creates a foundation for long-term growth. It drives and accelerates economic development, and opens doors to outside investment and business partnerships that provide reservation jobs. Without infrastructure, our communities are unable to thrive and money “leaks” off reservations, and border towns often capture the revenues. When it comes to Tribal infrastructure and prosperity, the Winnebago Tribe is a shining example of success. Native Business Magazine spoke with Ho-Chunk, Inc. CEO Lance Morgan, our March cover subject, about the forethought required for Ho-Chunk, Inc. to scale economic development. By making long-term, asset-oriented investments off-reservation, Ho-Chunk, Inc. funneled revenue into socioeconomic efforts on reservation, and effectively turned a big prairie in Nebraska into a thriving hub for business, jobs and community. Morgan details the value of master planning and how HoChunk Village deliberately integrates housing with the business, cultural and recreational elements necessary to sustain a healthy community and workforce. Our March issue examines infrastructure assets ranging from roads and buildings to legal frameworks and sovereign protection, broadband, data, utilities, telemedicine, insurance and more. But before technological infrastructure, we must consider a fundamental need: roads — constructing roads, maintaining roads and funding road repair. Our feature “The Road to Nowhere” paints a picture of the dire road conditions crippling some reservation economies. The stagnancy of never-paved roads stifles hope and opportunity for change and advancement, and dangerous conditions threaten public safety. But even Tribal Nations perceived as relatively wealthy are faced with a Catch-22 of financing prohibitively expensive road restoration, while fighting unjust dual taxation. It costs the Mandan Hidatsa and Arikara (MHA) Nation three to $3.5 million to pave only one mile of road on the Fort Berthold Indian Reservation, where tractor-trailers hauling thousands of gallons of Bakken crude are decimating reservation roads not built to withstand that kind of heavy traffic. Over the past decade at Fort Berthold, traffic fatalities have increased five-fold. We speak with MHA Nation Tribal Chairman Mark N. Fox about the impact of ancillary costs. “A billion here, a billion there–it goes fast,” he says. Beyond roads, in the 21st century, broadband is necessary infrastructure. Native Business interviews Andrew Metcalfe, the founder, CEO and president of Native Network, about his bold vision to connect as many of the 573 federally recognized Tribes with a fiber optic network as possible, creating a national footprint of online Tribal Nations. He also imagines equipping Tribes with the infrastructure to host data centers or call centers for the country's biggest dot-com businesses. In a separate article, Native Business considers the high capital costs of building data centers and the slow but worthwhile return on investment. We spotlight Data Holdings, the Forest County Potawatomi Tribe's $36

million data center in Milwaukee, and the Passamaquoddy Tribe of Indian Township, which plans to build a $25 million data center powered by hydrogen. At Native Business, we regularly strive to showcase how privately owned businesses on reservations pave the way to innovative and stronger economic climates. We interview JC Seneca, founder of Six Nations Manufacturing, Native Pride Travel Plaza and BUFFALO Cigarettes, about upholding sovereignty in the highly contested tobacco industry. Seneca shares his entrepreneurial journey from the 90s to today, employing 100plus people through his three enterprises on Seneca Nation territory. Native Business also addresses a pivotal issue impeding business and stifling economic development across Indian Country: dual taxation. Tribal government leaders including MHA Nation Chairman Fox are tackling the problem head-on, pushing to reduce state taxation of energy and resource development on reservations. If we could leave you with one final thought, it would be that economic vision and readiness are inherent to infrastructure sustainability and growth. Building physical, digital and legal structures is the first step toward growth and attracting outside investment. Our March issue identifies the ultra important role that strategic master planning and infrastructure development plays in achieving long-term economic success in our communities. Now, more than ever, Indian Country must be intentional in developing its infrastructure so that it bears the weight for our generations to come.

Onward, GARY DAVIS Publisher

CARMEN DAVIS

Publisher & Executive Editor

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MORGAN

PHOTO BY AP PHOTO/NATI HARNIK

LANCE

Ho-Chunk, In Lance at the groundbreaking ceremony for the new mixuse commercial and residential buildings at Ho-Chunk, Inc.â&#x20AC;&#x2122;s Flatwater Crossing master-planned community in South Sioux City, Nebraska, Dec. 5, 2018.

PHOTO COURTESY HO-CHUNK, INC.

25-YEAR HISTORY OF GROWTH

Tenth graders in the Winnebago Public School Academy, a projectbased classroom where students take advanced-level courses, visited the Ho-Chunk, Inc. corporate office in December 2018. They learned about the company through a scavenger hunt and discussion with CEO Lance Morgan.

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PHOTO COURTESY HO-CHUNK, INC.

nc.’s

An aerial overview of Ho-Chunk Village

From Building a Company to Building a Village

By Andrew Ricci

ance Morgan was 25 years old when he was tasked with taking $9 million and figuring out how to diversify the Winnebago Tribe of Nebraska’s economy away from gaming. Now, two and a half decades later, the company that Morgan started with one employee and $9 million in seed capital is Ho-Chunk, Inc., a Tribal success story that currently boasts annual revenues of roughly $250 million, more than a thousand employees, and multiple subsidiaries across four major division areas. Morgan didn’t spend his entire life on the reservation. His father was a non-Indian farmer and his mother was a Tribal member, but when they got married in the 1960s, it was a little bit controversial, he told Native Business Magazine. So, they left. His father went to Vietnam, and when he returned, they settled in Omaha, where

Morgan’s grandparents eventually moved as well. “We had a little Tribal thing going on in the city, like a lot of people did,” Morgan said in an interview. “But gradually, my entire family moved back to the reservation, including myself.” Morgan joined the Army Reserves in order to pay for college at the University of Nebraska, where he did well enough to get a full scholarship to Harvard Law School. After graduation, he started a successful legal career at Dorsey and Whitney, a prominent law firm in Minneapolis. At that time, back on the reservation, the Winnebago Tribe was going through a dispute with its casino’s management company. “We were paying our management company 40 percent,” Morgan said. “We put up most of the money for the casino, and they

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FEATURE

had put up money for a little trailer, and they said ‘well that’s why you owe us 40 percent.’ So, I was hired just to renegotiate the deal with them.” Ultimately, after they couldn’t come to an agreement, the Tribe had to sever its ties with the management company. This all occurred at the same time that Iowa was expanding gaming in the Tribe’s primary markets, so they knew that gaming revenues would be unsustainable as the sole source of economic prosperity over the long-term. After the Tribe won roughly $25 million in a casino-related lawsuit, they put $15 million into an investment account – where it remains today – and dedicated the remaining $9 million to starting Ho-Chunk, Inc., conceived as an entrepreneurial company that would be able to recognize and develop various economic activities. “The Tribe wanted to diversify the economy, and I had worked on setting up Tribal corporations in my lawyer job,” Morgan said. “I had done research on it both in college and in law school, and it sort of coalesced into what became Ho-Chunk, Inc.” “One day, I just decided to quit my legal job and move to the reservation, and that’s

A sign welcomes visitors to Ho-Chunk Village

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how Ho-Chunk, Inc. started,” Morgan continued. Today, 25 years later, Morgan says HoChunk, Inc.’s mission is exactly the same as it was on day one. “Literally, nothing about the mission has changed,” Morgan said. “Our mission statement is on the wall in the receptionist area. It’s to use the Tribe’s economic and legal advantages to create job opportunities – not jobs, but job opportunities for people.” These economic and legal advantages – including sovereign immunity, tax immunity, and civil regulatory powers – are key to Ho-Chunk, Inc.’s success in creating an income stream for the Tribe over the long-term. “Tribes have a set of advantages that are unparalleled in business,” Morgan said. “So, for example, we can’t be sued. We don’t pay federal income tax. We don’t pay capital gains tax. We pass our own laws. We have access to federal grants and government contracting programs and federal loans. And we don’t pay state tax for on-reservation activity.” “That is a killer set of advantages, but Tribes were never really organized to take advantage of them,” Morgan continued.

Main Street in Ho-Chunk Village

“We’ve always had them, we just didn’t have the capital or the organization to do it.” In order to maximize income-generating opportunities, Ho-Chunk, Inc. has developed a formula in which everything they do utilizes at least one of these ad-

PHOTOS COURTESY HO-CHUNK, INC.

vantages. As one example, Morgan cites Ho-Chunk, Inc.’s purchase of a modular homebuilding company 400 miles from the reservation. “The day we bought it, in 2000, the company no longer paid federal income tax, and we used that savings to pay the debt to buy the company,” he said. “Then we were a minority contractor, but we also had total control over our housing at that point, too. We’ve made our money back six times over from that investment.” Decisions like this – which Morgan calls Ho-Chunk, Inc.’s “outside-in strategy” – have not been without controversy. “We decided that if you only have one bullet, where do you shoot it?” he said. “Most Tribes shoot their bullet onto the reservation. Well, our reservation was a high unemployment, high poverty, low skill place with a small population. If we stuck our money into that environment, we would not do well. We would be stuck. So, what we did is we took the money we had and we invested in businesses in the surrounding cities.” “That was very profitable, and we took the profits and invested back onto the reservation in incremental steps,” he continued. “The money flowed onto the reservation and that allowed us to build from a position of strength. We were able to build up the economy, build up the infrastructure of the community, build up the knowledge base, and build up the people themselves. If we had just invested pure-

ly on the reservation, we probably would have fizzled out after 18 months.” Morgan took some criticism for pursuing that strategy, but he sees the benefits that it’s brought to the reservation over the past 25 years as a validation of his strategy. Even though the bulk of Ho-Chunk, Inc.’s income comes from off-reservation activity, the things that they’ve been able to do on the reservation are impressive. Part of that comes from a goal that the company added in the early 2000s, which was to add a socioeconomic component to their business dealings. In other words, during the first several years of its existence, Ho-Chunk, Inc.’s focus was purely economic – if they could create a job and generate a profit, the outcome was deemed a success. But Morgan says he began to realize that creating jobs alone wasn’t enough, and community development needed to become one of the company’s priorities. “I realized that the people weren’t necessarily ready,” he said. “Maybe they didn’t have the skill sets, or maybe their home life was bad, or they had credit problems, so we started figuring out ways to change our community socially and that allowed the growth to really take off.” “Then people came more prepared, they weren’t worried about paying the rent or they weren’t worried about living on the streets,” he continued. “We saw that if they could have a good home, and they could

have a bank account, or if they had a job, they were able to stabilize, and from there they were able to grow. So, Ho-Chunk, Inc. spent a lot of time and money not just developing a company, but also developing the entire community from a socioeconomic standpoint.” One area that has gained Ho-Chunk, Inc. significant notoriety is their focus on master planning, and there may be no better example of how they’ve used master planning to their strategic benefit than Ho-Chunk Village. According to Ho-Chunk, Inc.’s website, the company knew that additional housing was needed to create more jobs. As a result, Ho-Chunk, Inc. purchased Dynamic Homes, an established homes manufacturer, and then created HCI Construction to set the homes. “We bought 40 acres near our community and we were going to put a strip mall with some houses behind it until somebody conked me on the head and told me to get smart,” Morgan said. “So instead, we master planned a whole community.” Ho-Chunk Village’s master plan included a business-oriented Main Street, light industrial buildings, apartments above the businesses on Main street, multifamily housing, and single-family housing. It deliberately integrated cultural elements to the community’s design. And by building it in a new urbanism style, Morgan says that it came together more like a traditional small town – different from what reservations are used to. “If you go to reservations, we’re all hodgepodge,” Morgan said. “We get a grant for something and then figure out where to put it. That’s why you’ll see a big building on a reservation, and then nothing, and then a row of houses that look exactly the same, and then a big building again. That’s not really community planning; that’s grant planning.” “All we did was decide that everything has a place,” he continued. “We got grants just as randomly as everyone else, but when we put it all together it looked like a cohesive whole and it really was only one more step backwards in the planning. All we did was zoom out one or two steps and we overlaid the whole 40 acres with a plan.” The concept was so unique, the Tribe received 17 grants in a row to help develop it. Morgan says that it took about 10 years to implement the entire plan, but it’s finally about full – which is why the Tribe recently purchased 40 more acres, which they’ve

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FEATURE

Construction underway on the site of the future Ho-Chunk Village Farmer’s Market

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A statue in the Ho-Chunk Village’s sculpture garden honors the Tribe’s history

With solar power, though, Morgan says, there are better opportunities. “You don’t need to fix them; you just stick them on the roof,” he says. “They offset power at retail cost, and we’ve been able to combine that with some grant funds which are actually slightly more lucrative than tax credits, and that has allowed us to put around 2,500 solar panels in our community.” All of this – the solar panels, Ho-Chunk Village, and everything that Ho-Chunk, Inc. does – is part of Morgan’s vision to create opportunity and prosperity not just in the near-term, but long after he’s gone. By his math, the Winnebago Tribe is currently in the middle of its seventh generation in Nebraska after ending up there in the 1860s, and they’ve come a long way from when he remembers his grandparents not even having running water. “When I was a kid, we had an outhouse, we had a hose going into our fridge and

into our sink from a pump outside,” he said. “Now, we’re an international company with hundreds of millions of dollars in revenue, and if you take that sequence and extrapolate it a few more generations, it causes you to think about it differently.” In other words, 25 years in, Ho-Chunk, Inc. is already planning for the next seven generations, which means making longterm asset-oriented investments that will continue to bear fruit. “In some ways, it’s a miracle that HoChunk, Inc. evolved in the middle of a prairie into a big company,” he said. “We’re in the seventh generation of the people who moved here, and when they came, they had nothing. We were starving and naked and we took refuge with the neighboring Omaha Tribe.” “We were starving and naked but now, you know, we’re the largest local company in the Sioux City area,” he said. “So we’re back.”

PHOTOS COURTESY HO-CHUNK, INC.

master planned as Ho-Chunk Village 2.0. Morgan also credits having a master plan with helping to develop the infrastructure needed to make Ho-Chunk Village a reality. “When we would go to a funding source for Ho-Chunk Village, we saw that the grant was for culture, and we would have a cultural statue garden that we wanted to build, so we’d apply for it,” Morgan said. “Another grant would be for health, and we’d have a trail system and sidewalks and a playground that we wanted to build. Another one would be for entrepreneurism, and we had spaces for businesses available.” “It allowed us to tell a bigger story,” he said. “We would ask for small grants but we asked for them in the context of the whole community, and it made people much more willing to give us the dollars for infrastructure. We weren’t just getting money for one house, we were helping to build up a whole community.” Now, Morgan says that they’ve become more sophisticated, with a whole system that’s evolved to mix and match funding sources, maximizing opportunities provided by new market tax credits, IHS funding, grant funding, and foundation support. “You have to plan it out big, or else it’s all just going to be piecemeal stuff,” he said. “You’d be surprised how few people actually do it.” One other area of infrastructure that Morgan has prioritized is solar energy, which harkens back to his point about maximizing advantages. The problem with windmills, he says, is that they’re funded with tax credits and aren’t easily monetized. They also cost money to maintain.

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PHOTO COURTESY GILA RIVER INDIAN COMMUNITY

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THE ROAD TO By Suzette Brewer

NOWHERE

Substandard road conditions on reservations across the United States impact the quality of life for Tribal citizens and inhibit the economic development and selfdetermination of Tribal Nations.

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PHOTO BY SUZETTE BREWER

How the Lack of Adequate Transportation Systems Hinders Tribal Economic Development

PHOTO BY BRIAN LEDDY /GALLUP INDEPENDENT LICENSED VIA AP

PHOTO BY KEN CEDENO/ GETTY IMAGES VIA CORBIS NEWS

rlando Teller’s earliest memory of the roads on the Navajo Nation is riding to market with his grandparents in their ’46 Ford pickup truck on the jagged, unpaved trails of Del Muerto, Arizona in the late 1970s. “I always remember that truck,” says Teller. “It was this big, heavy tank on a very rut-riven, rocky dirt road with my dad’s parents. It was always a very difficult drive― — especially if it had rained or if there was bad weather.” Today, some 40 years later, Teller says the roads in Del Muerto are exactly the same as they were when his grandparents lived there. “It hasn’t changed at all,” says Teller, who is now the deputy director of the Navajo Nation Department of Transportation. “In fact, we still have thousands of miles of roads on the reservation that are unpaved and sometimes impassable, which we are working hard to address. But there is a lot of unmet need in regards to roads, bridges, school bus routes and airports, and all of it has an impact on our Tribal members.” Teller’s anecdote is recognizable to nearly every land-based reservation Tribe in the United States, many of whom continue to struggle with a lack of paved roads and basic transportation infrastructure like curbs, sidewalks, signage, guardrails and proper drainage. This dearth impacts the quality of life and hinders crucial economic development that mainstream communities take for granted. With approximately 17.5 million acres covering 27,000 square miles in Arizona, New Mexico and Utah, the Navajo Nation is the largest land-based Tribal Nation in the country. Slightly larger than West Virginia, the Navajo Nation’s roadway inventory includes 14,221 miles of roads with a patchwork of ownership between the Bureau of Indian Affairs (BIA), the Tribe, the three states and the counties, according to the Navajo Nation Department of Transportation.

On the Navajo Nation, only 23 percent — or 3,270 miles — are paved. By comparison, West Virginia, which is the fourth poorest state in the country with a poverty rate of 17.7 percent, has approximately 27,000 miles of paved roads, according to the West Virginia Annual Roadway Statistics Report. And because of the high desert topography of the Navajo reservation, factors like rain, snow, floods, dust storms and landslides render many of these routes hard to navigate and sometimes impassable. These treacherous situations affect public safety, the delivery of essential services, and access to employment and healthcare. Moreover, it inhibits access to education for the thousands of school children in Navajo communities where road conditions have created transportation-related attendance barriers throughout the reservation. Taken together, these factors, say Tribal leaders, present a major challenge to the development of the Navajo Nation economy. Out of Sight, Out of Mind The lack of basic infrastructure in Tribal communities has been an ongoing problem since the establishment of the reservation system by the federal government in the

mid-1800s. As the expansion of wagon trails, railroads and white settlers exploded westward, Tribes were forced onto reservations that were, in reality, little more than prison camps — substandard, inarable parcels that were located on flood plains, in dry deserts, or rocky, untillable hill country mostly unfit for food production. When food, medicine, blankets and housing promised to Tribal communities never materialized, they were forced to live in cramped, cold, unsanitary conditions that led to hunger and disease. Under 24-hour armed military guard, Tribal members were forbidden from leaving to hunt or find food. This led to riots and uprisings at reservations across the Northern Plains and the Upper Midwest. In the case of Fort Peck, Montana, over 300 Assiniboines died of starvation in the winter of 1881. Since then, Tribal leaders, historians and advocates across the country contend that the consequence of early policies intended to geographically and politically isolate Indian Tribes has also crippled Native economies to this day. And one of the centerpieces to achieving those ends was limited access to road systems on and near Indian lands. “Economies revolve around the movement of people and goods,” says J. Eric Reed (Choctaw Nation), a Dallas-based attorney and Native historian. “Tribes traveled over vast distances and had very successful trading alliances. There was no such thing as poverty among the tribes before European settlement.” He says that limiting access to transportation was used to control and marginalize the Tribes in a variety of ways during the territorial expansion of the United States in the 1800s, similar to the townships in South Africa. As the U.S. population went from 5 million in 1800 to almost 25 million in 1850, Manifest Destiny became the justification for the forced acquisition of Indian lands. “The Tribes were intentionally isolated and cut off from access to any thoroughfare from which they would benefit in any way, MARCH 2 0 1 9

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but particularly economically,” says Reed. “The irony is that almost all of the major highways and roads were originally ancient Indian paths and trade routes — over land and water — that had been in existence for thousands of years that were hijacked for the benefit and movement of white settlement. At the same time, the Indians were moved far away from these routes and held captive. Even today, if you look closely at a map, you can see that the Tribes have very little access to major state and federal roadways.” This fact alone, Reed says, puts the Tribes at an economic disadvantage, because travel to and from the reservations can be challenging and inconvenient for economic development purposes. Additionally, he adds, the amount of money needed to bring their road systems up-to-date would be astronomical. “Constricting the ability of Tribes to have adequate surface transportation definitely limits their options greatly in regards to economic development. And while that was an intentional policy in the 1800s, the ripple effect has continued simply out of apathy and neglect,” says Reed. “There’s been some legislation, but not nearly enough to address this massive transportation problem on Tribal lands, which includes not only roads, but infrastructure of every kind. But this is just one more spoke in the wheel of an overarching policy toward the Tribes. It’s ‘out of sight, out of mind.’” The Bakken: Boom & Burden The Fort Berthold Indian Reservation is located in western North Dakota and is home to the Mandan, Hidatsa and Arikara Tribes (known as the MHA Nation, or Three Affiliated Tribes). Established in 1870 during the peak of the so-called “Indian Wars,” the reservation covers nearly one million acres and is home to approximately 7,800 Tribal members. Like most reservations located in the

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Northern Plains, the MHA Nation’s road system is a mixture of Tribal, BIA, county, state and federal roads, as well as the Four Bears Bridge, which serves as a vital link both to and from the reservation. After the construction of the Garrison Dam in the 1950s, over 80 percent of the Tribe’s previous road system was flooded, which displaced families, destroyed sacred sites, ruined farmland, isolated communities and destroyed the economy, according to the MHA Nation. The reservation’s geographic and transportation system was further complicated by the fact that its land base is split in two by the Missouri River. That division affects the provision of emergency services, and access to education and healthcare for the Tribe’s members. But the discovery of the Parshall Oil Field over the Bakken Geologic Formation in 2006 changed everything. Over the next decade, trucks carrying heavy equipment and hauling thousands of gallons of Bakken crude around the clock generated severe wear and tear on the reservation’s fragile, out-of-date road system that wasn’t built to withstand that kind of traffic. Additionally, North Dakota’s population also exploded by approximately 100,000 workers, bringing radical changes to Fort Berthold, including great wealth, along with a spike in traffic accidents and other transportation-related issues. “Because of our oil revenues and our casino, people think we have a whole bunch of money — but it comes at a significant cost,” MHA chairman Mark Fox told Native Business Magazine. “And it’s far greater than anyone realizes.” Fox says that since the oil and gas boom began, the Tribes at Fort Berthold have spent over $200 million in road repair and maintenance, with over $120 million of that figure allocated in the last four years alone. In fact, he estimates that the Tribes will spend nearly a billion in the next 10 years on road construction, maintenance and repair.

“It takes approximately three to $3.5 million to pave only one mile of road,” says Fox. “We have nearly 200 miles of road that need paving, which is about $600 to $700 million. And that doesn’t even include repair and resurfacing costs. But this is an important priority because we have kids and buses that need to get to school.” But Fox also says that traffic safety has become a major concern in the last decade, as traffic fatalities increased by five-fold due to the massive increase in traffic on the reservation. Oil trucks, heavy vehicles, increased traffic and North Dakota’s brutal winters are just a few of the factors that explain why Fort Berthold has the highest rate of crash fatalities among all the Tribes in the region. “We are part of a consortium of energy-impacted Tribes under an administration that is heavily geared toward the oil and gas industry,” he says. “It takes the feds three to five years to build one mile of Indian Reservation Road (IRR). Under their formula, however, it would take us 500 years to finish our roads. So they’re not really helping, which means that we’re using our resources to fix these problems.” Further compounding the issue is a new tax-sharing agreement pushed by North Dakota’s legislature that would force the Tribe to fork over $2 billion in oil revenues. For the MHA Nation, however, there is an understanding that oil and gas are finite resources that will one day run dry. Until then, the Tribes are working to build their communities with their long-term survival in mind. “In the last decade, we’ve spent millions in ancillary costs, including law enforcement, health care, housing, water and sewage and so on,” says Fox. “A billion here, a billion there–it goes fast. But we are planning ahead so that 10-15 years from now, our standard of living is higher, and our GDP and economy continue to grow. My dream is that because we worked hard and did it right, we are not dependent on anyone.”

PHOTO BY AP PHOTO/J. PAT CARTER

On the Navajo Nation, only 23 percent — or 3,270 miles — are paved.

Dual Taxation Is Costing Tribal Nations Billions of Dollars in Tax Revenues

By Andrew Ricci

ark Fox, Chairman of the Mandan, Hidatsa, and Arikara (MHA) Nation, sees a gross inequity in how the state of North Dakota taxes the energy ventures that are occurring on the MHA Nation’s Fort Berthold Indian Reservation, which sits directly on top of North Dakota’s lucrative Bakken Shale Formation. For one, he says, the dual taxation system in which the state levies a tax in addition to that levied by the Tribe is an impediment to economic development. “Whether the tax is going on fossil fuel resources, on our joint ventures with industry partners, or on commercial developers coming on to our reservation to try and stimulate our economy, the fact is that an entity in addition to the Tribe is taxing the operation of that proposed development,” Fox said in an interview with Native Business Magazine. “When it’s lingering out there at the outset, it’s really difficult for joint ventures to occur.” As an example that hits particularly close to home, he cites Fort Berthold’s booming oil and gas industry. “If we have two sets of taxation systems, let’s say one is 10 percent and the other one

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is 10 percent, oil and gas developers are going to see 20 percent and say ‘I can’t make a net revenue on this, I can’t make a go of it, my numbers don’t crunch out,’” Fox said. “So they take their dollars and put them somewhere else where they’re not going to be impacted to that level.” Dual taxation systems also prevent Tribes from becoming the primary beneficiaries of the tax — which he says undermines the fundamental purpose of tax systems. “You’ve got to have taxes because you have taxable activity, tax revenue, and programs and services that are dedicated to that taxable activity,” Fox said. “With alcohol sales, for example, that’s a taxable activity, and with that tax revenue you create saturation patrols for law enforcement, domestic violence responses, crimes and violence, treatment programs — all of those relate to that activity of selling alcohol on the reservation.” “When the state taxes alongside the Tribe, or at the same time as a Tribe, then there’s dual taxation,” he continued. “The money simply goes away to the state, and you don’t get the programs that come back to that taxable activity.”

Mark Fox, Chairman of the Mandan, Hidatsa, and Arikara (MHA) Nation

In other words, dual taxation hits Tribes in two ways. The high rate that occurs when a tax is levied by both the Tribe and the state is an impediment that blocks economic development from happening in the first place. And the amount taken by the state — which should be reinvested in services related to the taxable activity — is siphoned off and used for other purposes far from the reservation. For the MHA Nation, there may be no more egregious example of this than the way that commercial traffic resulting from the Tribe’s oil and gas exploration impacts roadways on the reservation. Over the last decade, Fox says the State of North Dakota has realized more than $2 billion in tax revenue from the sale of oil and gas on the Tribe’s reservation. Few — if any — of those funds have returned to the reservation to help mitigate some of the unintended consequences of that business activity, like torn up roads. “Good roads are important to oil and gas development and to get that barrel off,” Fox says. “Not everything goes off by pipeline, for example; a lot is trucked out to gathering stations and gathering areas on and off the

PHOTOS BY TOM STROMME/THE BISMARCK TRIBUNE AND LICENSED VIA AP

reservation, so there’s a lot of traffic.” As recent as two and a half years ago, he says, the highest traffic count in the entire state occurred on a roughly 20 mile stretch of Highway 23 between the cities of Parshall and New Town on the Fort Berthold Reservation. “Now here’s the problem,” Fox says. “At Fort Berthold, all of the roads outside of those state highways that come through our reservation weren’t built to withstand oil and gas traffic. They weren’t built to withstand 20-ton trucks rolling down the highway. They were built for regular cars, half-ton trucks, and they were built to get repaired every 6-8 years if we get the money.” “But now, when the oil company comes in, with the highest volumes of traffic at the most tremendous weights, it just tore our roads to hell,” Fox continued. “Our roads have been torn asunder, making them dangerous. We’ve got children that have to get to school, we’ve got terrible winters, we’ve got mud slides, we’ve got all these things, so you can see our dilemma.” Over the last four years of Fox’s Administration, the Tribe has contributed more than $120 million from its own collected tax revenue to improve and maintain these roadways. This is well above the $4 million in the federal budget allocated to repair and build roads on the Fort Berthold Reservation over that same four-year period. “The federal government is supposed to be helping with this,” Fox said. “It’s their responsibility. It’s land held in trust by the United States of America. And if you look at the budget, it’s a little over $4 million in four years for roads.” “That number is ridiculous,” Fox continued. “It takes about $3 million per mile to construct the road to withstand the pressures of oil and gas traffic. We have about 200 miles that has to be built right, so if you do your math, that’s least $600 million, maybe $750 million on highways alone that has to be constructed to meet oil and gas traffic.” “If you’re giving us $4 million over four years, it would take 200 years to do our roads, because we’ve got 200 miles to pave,” Fox said. “We need to make sure that the roads are safe for kids to go to school, for dialysis patients to get where they need to go, for people to get home, but also to make sure that oil and gas can come out and we can sell this valuable resource.” This road-associated cost forces the Tribe to divert funding away from the other priorities it gets tax revenue and royalties for, like health care. And at a projected cost of $1.3 billion for all roads over the next decade, Fox says the dual taxation system creates a big headache. “We can’t get any help,” Fox said. “One of the things we’ve requested is for the United States government — rather than through

Interior and through the Indian Reservation Roads (IRR) formula — to figure out a way to fund Tribes that are impacted by energy. As horrendous as another Tribe’s roads may be, as deep as their needs may be, they didn’t have an industry come storming in and booming, as they say here, and just tearing everything asunder.” “Because of dual taxation, the $120 million we’ve already put in could be $240 million,” Fox said. “But half of that just disappeared.” Fox says he sees four ways to potentially solve the problem. The first, which he says happens a lot and is something the Tribe is thankful for, is for some of the companies who do business on Fort Berthold to make contributions and enter into cost-sharing agreements to help repair roads and fix them. The second is to sit down with the state and work toward a more equitable split of tax revenue. “We have to say to the state, ‘look, of that $2 billion you took, we need to change our agreements, so over the next 10 years, we retain more of that tax revenue to build and repair these roads,’” he said. “Right now, we’re looking at changing a 50/50 split on trust lands to 80/20 in favor of the Tribes, so that additional 30 percent on trust lands might give us the elbow room to build some more roads on top of what we’ve already done.” The third way is to get the federal government to ante up its responsibility and bring in dollars from other sources, particularly for energy-impacted Tribes. “They need to come in and provide us with $30 million to $40 million per year, not just a couple million,” Fox said. “Especially in this administration where they’re trying to have energy dominance and trying to open up nonrenewable resources on federal lands, it fits right with that. Give us more dollars here to fix our roads, and we’ll get more oil and gas out.” Finally, he says the fourth way is for the federal government to assert and require that all taxes off federal lands held in trust go to the Tribe to meet their purposes, thereby eradicating dual taxation and infringement by the state altogether. While roads on Fort Berthold are the most prominent example, Fox says other sectors are similarly impacted, from environmental protection to water infrastructure to law enforcement and first responders, to housing. “There’s so much more beyond roads,” Fox said. “But it all starts with us trying to figure out how to gain more resources, and a big way we can do that is to get those taxes back to where we need them most, which is with the Tribe.” “We’re estimating that in the next 10 years, to develop our infrastructure, we need about $2 billion,” he said. “With housing, for

example, we already had a need for 400 or 500 homes before the oil boom, and now with all the workers that come in from the outside to work, our membership is at an even greater need.” “We’re estimating that we need $750 million to build an all-in infrastructure, with water, sewer, gutter, and planning out lots of things like that.” At the end of the day, Fox says his biggest fear is that, if the dual taxation system isn’t resolved in a way that makes sense for the Tribe and allows them to invest in their infrastructure, all of the efforts to leverage their oil and gas resources toward long-term economic opportunity will be for naught. “If we don’t have these changes to the dual taxation system, we’ll end up sacrificing a lot of our revenues,” he said. “We’re not going to put ourselves in a position to look back after 25 years of oil and gas on Fort Berthold and say, ‘How have we significantly improved? Is our standard of living better as a whole for all 16,000-plus members? Are we all better off by allowing this resource that belongs to all of us to be sold to market?” “If our Tribal Nation can reinvest, create

all this economic opportunity, build infrastructure, capture this gas, move into agriculture, do all these different things, then it will have benefitted us long-term,” he said. “But right now, because of the way we’re treated, we’re struggling to keep our heads above water when it comes to improving our reservation.” “But if we take the tax we get and put it into solid infrastructure, take care of the health and welfare of our people, invest our money into the long-term and put it into different baskets economically, we can wake up 15 or 20 years from now, and even though this play is over, we’ll be sitting in a really solid place to continue our own economic development,” he said. MARCH 2 0 1 9

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For All of Indian Country By Josh Robertson

Andrew Metcalfe envisions Tribes connected by fiber optic cable and shared prosperity

hink of the current situation in Indian Country, particularly rural or financially strapped reservations, living on the wrong side of the "digital divide." Now imagine that digital divide closed. Imagine reservations with the same sort of Internet access you'd find in an affluent suburb. Now imagine a higher-than-average standard for broadband connectivity on Indian land. Imagine the infrastructure to host data centers or call centers for the country's biggest dot-com businesses. Finally, imagine Tribes all around the country with this capability, connected to each other in their own secure network, working in coordination to provide digital services to consumers across the country, as well as to Indian Country. Tribes sharing their strengths, specializing, bundling services and sharing in prosperity. This is the vision of Andrew Metcalfe, the founder, CEO and president of Native Network. "I would connect the Tribes together with fiber optic networks, which are the core basis for being able to do business between each other," he says. "Think about a data center — one data center doesn't do you any good, because if a natural disaster happens, your data's gone. You have to have multiple Tribes with data centers that are linked together, so the Tribes can share resources. One of the ways the Tribes can work together is to create a platform, so that the folks using the data centers can feel comfortable that the protections and the protocols and systems are the same — the same experience from one reservation's data center to another." Connecting Tribes via fiber optic cable requires physical assets and implementation — namely, the cable itself. But it's not as daunting as it sounds, in many cases, particularly with Native Network on the job. "There's a significant amount of fiber around the U.S.," Metcalfe explains, "and it usually goes within 10 to 30 miles of any particular

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Tribe. For some Tribes, it goes right across their land, and they don't even know it. So it's a matter of getting access to that fiber ... if that's the superhighway, Tribes need to build their off-ramp. So as a company, we help the Tribes identify where all those services are in proximity to their reservations, and then help them determine what it would take — money, time, engineering — to construct those services and get connected to that backbone." A reservation can be very appealing venue for a large company — there's a willing workforce, there may be government incentives or tax benefits for basing some operations there — but the sticking point is invariably infrastructure. "Without infrastructure, it's very difficult to worry about anything but yourself," Metcalfe says. "But when you start to think, If I have the infrastructure, now I can connect to another Tribe that has the infrastructure — what can we do together to strengthen ourselves? So my vision is to connect as many of the 573 federally recognized Tribes with a fiber optic Andrew Metcalfe network, creating national footprint of connected Tribes." While this connectivity has outward-facing potential, by empowering entrepreneurs and small businesses, and attracting data centers for large companies, it also promises strengthening and streamlining in Indian Country. The Indian Health Service is a prime example — "Maybe one Tribe's got a hospital and the other one doesn't," Metcalfe says, suggesting virtual medical consultation for checkups or walk-in care that might not justify driving hours to the IHS hospital. Casino operations are another area in which many Tribes are involved, separately, that

could benefit from a secure, Native-only network — imagine a national lottery, run by casinos, that takes place over a gaming-industry network. And then there's trade among Tribes that have specialties or resources. "Say one Tribe is a fishing Tribe, and another has mining or timber resources, how do they trade with one another?" Metcalfe asks. "We'd be creating a platform for Tribes to trade services. And those could be virtual services — for example a call center. Not every Tribe needs a call center, but there needs to be a handful of them out there. So a Tribe that has an infrastructure in broadband services, they may not want to provide all the support 24/7. So they would potentially link to another Tribe and utilize their call center services. And the Tribe that has the call center services may buy their internet or voice product from Tribe C. So by having that connectivity and structure set up, that enables that whole economic development flow." The social benefits are tantalizing as well — it's hard to keep young people on the reservation when they feel there aren't any job opportunities. The flight from Tribal lands for cities can fracture families and erode Native communities, something Metcalfe witnessed growing up on the Colville Indian Reservation. "I'm very interested in creating the physical infrastructure of data centers and call centers." Metcalfe says, "Not everyone wants to work virtually. Some people want to have a job where they go to work every day, a job that's technical, it's needed. And it's a job where they earn a living wage, a family wage job. That's an aspect that can bring people back to the reservation."

PHOTO BY KRISTIN BURKS PHOTOGRAPHY

PHOTO COURTESY NATIVE NETWORK

A NET WORK

AMERIND Risk Expands

Newest product lines include auto insurance and cyber liability By Mark Fogarty

MERIND Risk, the only Tribally-owned insurance provider serving Indian Country, has been expanding its protection of Tribes, their businesses and their employees with new product lines. AMERIND Risk launched its latest programs, Tribal commercial auto coverage and cyber liability insurance, in May of 2018. These expansions add to the reach of the insurer, which was started more than three decades ago in response to a crisis in housing insurance. The company, now based on the Santa Ana Pueblo in New

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Mexico, employs about 50 people. AMERIND Risk was begun in 1986 in the housing arena when commercial property insurance for homes on reservations became prohibitively expensive, according to Chief Executive Derek Valdo (Acoma Pueblo). AMERIND was started through efforts by the National American Indian Housing Council and the federal Department of Housing and Urban Development (HUD) to get Tribes to band together to self-insure. Valdo tells Native Business Magazine that hundreds of Tribes responded to start AMERIND after the cost of insuring HUD’s

Tribal housing portfolio jumped from $5 million for three years to $15 million for one year. AMERIND now has 430 Tribal members that make up the backbone of its philosophy, “Tribes Protecting Tribes.” “No other insurance entity wanted to work with residential property coverage in Indian Country,” Valdo says. About 70-80 percent of Indian Country was rated a “10” for risk by the insurance industry, and 10 is the worst rating. Insurers were interested in Tribal gaming operations, but not housing, he says. Tribes in Forefront on Housing Safety

s Protection for Tribes AMERIND Risk is based on the Santa Ana Pueblo in New Mexico, not far from Albuquerque. The building displays the firm’s motto, “Tribes Protecting Tribes.”

Now, AMERIND protects 60,000 units of housing. And Valdo, who took over as CEO in 2012, says the insurance industry has been proved wrong on that assessment of high risk over the years. “I do believe Tribes are in the forefront of building sustainable homes, homes that are more fire-resistant.” He continues, “It’s actually performed much better than all the modeling. Everyone thought we’d be bankrupt in five, six, seven years. Thirty-two years later, AMERIND is still standing strong.” In 2004, AMERIND became a Section 17 corporation under the Indian Reorganization Act to get Tribal tax advantages and access to Tribal sovereign immunity. “It gave us a tremendous opportunity to expand our reach,” Valdo says. “When a Tribe does business with AMERIND it’s doing business with an entity that has similar attributes of a Tribe. We’re considered an arm of the Tribe.” That’s because AMERIND Risk was sponsored by three Tribes: the Red Lake Band of Chippewa, the Confederated Salish and Kootenai Tribes of Montana, and the Pueblo of Santa Ana. “What section 17 gave us was sovereign immunity as well as the tax advantages of a Tribe. When they (Tribes) contract with AMERIND to provide insurance, we recognize that sovereignty,” Valdo says. A key factor in this change of organization was being able to use the Tribal courts, Valdo says. “From the claims perspective, we help Tribes keep third-party claims in their Tribal jurisdiction, in their Tribal courts.” AMERIND Risk now protects $14 billion

of property. Its premiums have climbed from $6 million the first year to $57 million currently, according to Valdo. “We have a lot of Tribes,” he says. “When you control volume, you can dictate a better price.” Its product lines have expanded from housing (it still handles coverage of the Indian Housing Block Grant units it started with) to Tribal governments and businesses (property and liability), Tribal Auto, Cyber Liability, homeowners’ and renters’ insurance, employee benefits, worker’s compensation and critical infrastructure (broadband), its first non-insurance line.

reservations, Valdo says. And he thinks AMERIND can be helpful in other ways, as well. “Tribes are beginning to expand beyond hospitality,” he says. “They are going to need a company that knows how to negotiate Tribal law and state law. We want to be there for those Tribes.” Broadband Now Critical Critical infrastructure for Tribes now includes broadband Internet technology. That’s why AMERIND Risk has added a broadband component to its more traditional lines of insurance products. It sees broadband as a critical need for Tribes as so few have it now, and as the technology supports crucial Tribal priorities like public safety, education and health care. Geoffrey Blackwell, (Muscogee (Creek)) AMERIND Risk’s Chief Strategy Officer and General Counsel, points to a recent General Accountability Office report that concludes a Federal Communications Commission (FCC) study on Tribal broadband access overstated broadband availability in Indian Country. Blackwell, testifying before Congress last October, said, “Thirty-six percent of residents on Tribal lands lack access to fixed broadband service at the benchmark speed of 25/3, as compared to seven percent nationwide. And the disparity grows even more striking on Tribal lands in rural areas, where 59 percent of residents lack access to what has become the high-speed Internet lifeblood of our 21st century economy.” AMERIND Risk’s ACI unit is the firm’s first non-insurance line. ACI is involved in all facets of a Tribe’s broadband implementation, Blackwell says, including “planning, development, acquisition, design, implementation, buildout, management and even fiscal agency for projects

PHOTO COURTESY AMERIND RISK

“Tribes are beginning to expand beyond hospitality. They are going to need a company that knows how to negotiate Tribal law and state law. We want to be there for those Tribes.” —Derek Valdo, AMERIND Risk AMERIND also brokers medical, dental and vision coverage. Cyber liability is now available to all its clients who subscribe to its General Liability package, and comes in amounts from $50,000 to $1 million. It protects Tribes from breaches of security of their information/technology structures. On auto insurance, AMERIND Risk is partnering with Berkley Risk, a subsidiary of W.R. Berkley Corp., which carries an “A+ (Superior)” A.M. Best rating and “A+ Strong” rating with Standard and Poor’s Corp. Going forward, AMERIND would like to expand its product offerings to protect Tribal members on near-reservation land and fee simple land (private property) on

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A fiber project in the desert helps broadband Internet reach another Tribe. At least 10 Tribes have used AMERIND’s Critical Infrastructure unit to get access.

that bring high-speed Internet to Tribes.” The majority of projects involve fiber, “the Valhalla of high-speed Internet backbone transmission,” he says. “It was really a commitment to Indian Country,” says Blackwell of the effort to start ACI. AMERIND’s highest priority is “finding sources of financing and working in the trenches with Tribal leaders and project managers to get broadband into Tribal communities. Many of these communities are remote, and but for specific federal funding or matching funding, or creative ways of financing, would not have fiber through their communities.” ACI has done at least 10 broadband projects to date, with Tribes in New Mexico, Arizona, Alaska and Minnesota. There have been Tribal consortiums, where there have been services off a major fiber route that have gone into multiple Tribes, “including remote Alaska Native villages.” Blackwell has extensive experience in the field. He is a former Chief of the FCC’s Office of Native Affairs and Policy. Irene Flannery, who also came to AMERIND Risk from the FCC, where she was Deputy Chief of its Office of Native Affairs and Policy, is the director of ACI. She is an expert on FCC’s subsidies, a key broadband financing component for Tribes. “Indian Country lags far behind the rest of the United States in broadband deployment,” Blackwell notes. Key to an installation is the particular Tribe’s needs. “The point is to start at the beginning. The beginning is to look at everything the community needs and the community is seeking to obtain. No one size fits all. We’ve said that for years. There really needs to be an analytical approach that

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takes into account unique needs of Tribes.” Implementation can take a total of two or three years, Blackwell says. Different communities have different building seasons, for one thing. Terrains can be different. Plus, “In certain places in Indian Country there are cultural resources that must be accounted for and avoided. These projects can be very detail-intensive from one Tribe to another. ACI has been very successful in multiple projects that have involved miles and miles of long-haul fiber,” he says. “It’s more than just recreation. A lot of it is for essential and very diverse community needs. At the top of the list is public safety, health care, civic engagement, education. “A lot of the curriculum for our students is going online,” he points out. Going forward, Blackwell sees the country as poised for a second generation of technology advancement. “Indian Country will be ready the next time there’s major constructions of fiber across the West and North and well, throughout the country really. It won’t get bypassed like it did before.” Tribal Workers Compensation Another key product line is workers comp. AMERIND Risk program manager Robert Dahl helped create the company’s Tribal Workers Compensation program in 2004, and for him it is all about Tribal self-determination. “When Tribes purchase conventional, statutory workers’ compensation policies, they’re not only signing up for a standard, one-size-fits-all model, they’re waiving their sovereign immunity and subject-

ing themselves to state jurisdiction and courts,” Dahl writes in a trade journal article on aspects of the TWC program. “Statutory workers’ compensation policies leave Tribes vulnerable to the litigation that runs rampant in state systems.” Besides being designed to be adjudicated through Tribal courts rather than state ones, TWC can also save Tribes money. “By appointing seasoned, Tribal lawyers to cases and utilizing an arbitration type format, AMERIND helps tribes avoid lengthy court battles. This more informal process saves Tribes considerable legal expense,” Dahl feels. “Doing business sovereign to sovereign with AMERIND Risk means saving money by avoiding state and federal taxes and fees. AMERIND’s expense ratio is typically 10-15 percent less than other insurance carriers.” Another way Tribes can save money is by a Return to Work program, he writes. “Bringing an employee back to work faster keeps them connected with their employer, lessening the likelihood of them seeking an attorney, which reduces potential litigation costs.” Dahl describes aspects of the program in a detailed fact sheet. “Like state workers’ compensation systems, AMERIND’s TWC program covers Medical Expenses, Lost Wages, Death Benefit and Permanent Disability Benefits. Unlike state workers’ compensation systems, however, our TWC program is adaptable to a Tribe’s specific needs. For larger Tribes with an existing workers’ compensation ordinance, AMERIND Risk will underwrite the Tribe’s ordinance and handle the claims pursuant to that ordinance.” He continues, “AMERIND regularly promotes hazard awareness and prevention, and additionally encourages safety consciousness from leadership down to staff. “When supervisors reinforce employee attention to safety with positive reinforcement, it not only boosts morale, it keeps claims down.” Dahl began his career assisting Midwest Tribes in creating self-insured workers comp plans, creating ordinances for the programs and guiding adjudication to Tribal court systems. He feels this product helps the economic sustainability and growth of Indian Country. “AMERIND Risk’s TWC program keeps money circulating in Indian Country.”

PHOTO COURTESY AMERIND RISK

INSURANCE

The Hohokam survived in a desert environment for over a millennium thanks to an advanced canal system

PHOTO BY CONNIE DARBY, COURTESY OF DESERT ARCHAEOLOGY, INC.

nfrastructure is one convenient measuring stick by which we judge societies. The ancient Romans, for instance, get a lot of good press for the durability of their roads, bridges and aqueducts. A particular Native American society in present-day Arizona had an infrastructure success story of its own. The Hohokam, a Tribal people who inhabited the Phoenix basin along the Gila and Salt Rivers for over 1,400 years, irrigated and sustained their crops in desert conditions using a system of canals. But these were no ordinary canals — the Hohokam's network of waterways was the most sophisticated system north of Peru. A recent study of archaeological evidence has shed new light on the canals. Examining patterns of sediment in two canals near the Salt River, researchers were able to identify three major floods that did significant damage. For the Hohokam, the canals were everything — without irrigation, there would be no crops in the arid desert; without crops, the people might starve. Archaeologists found evidence that the Hohokam responded to each flood as a community, teaming together to repair the canals and get their society functioning again. The community model of disaster recovery among Indigenous peoples attracted notice after a tsunami struck American Samoa in 2009. Researchers studying the event noted that Indigenous Samoans snapped into action using a pre-existing and age-old hierarchy. The pulenu'u (village mayors) sounded the alarm as the tsunami approached, saving perhaps hundreds of lives; in the aftermath, the matai (leaders) organized squads of aumaga (young men) for rescue and cleanup work. The aualuma (village women) provided first aid and food to victims, while aigas (extended family) provided additional support with shelter and food. “Communities

INFRASTRUCTURE AND TRIBAL RESISTANCE TO CATASTROPHE By Josh Robertson

like this have strong traditions that may not fit into the Federal Emergency Management Agency (FEMA) model but they are still highly effective,” said Andrew Rumbach, a professor at the University of Colorado-Denver who authored a study of the event. But back to those Hohokam canals. Infrastructure can be its own worst enemy, in that the better it is, the more people will depend upon it. Better roads encourage a culture of driving, and high-speed Internet keeps us logged on longer than frustratingly slow dial-up. Furthermore, any infrastructure that improves life is bound to raise population -- a system that distributes clean water to everyone in the village will increase the infant survival rates and longevity. The benefits of infrastructure are the very things that end up putting more strain on it, at the same time the users are becoming more and more dependent upon it. It can all lead to a precarious situation, with a system that is both overworked and more vital to its users' sur-

vival than ever. Evidence suggests that such was the case with the Hohokam canals when the third and most damaging major flood hit, sometime before 1400. Population was high, the canals were overextended to meet farming demands, and the communal response system that had worked in the past was disrupted. After the flood, the canals weren't extensively repaired, and the people paid the price. Population dropped, and by 1450, the Hohokam society was disintegrating. Today the Hohokam are no more, though their descendants live on in the Pima and Tohono O'odham people. The lesson from the Hohokam canals? Don't try to skate by on an outdated or overworked system. Upgrade, strengthen and expand your infrastructure as needed, over time. It takes discipline (and funding), but if a natural disaster strikes, having an up-todate infrastructure could be the difference between disruption and catastrophe.

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GTEC provided design and construction management services to enhance the arrival and parking experiences at Turtle Creek Casino and Hotel, a primary tourism draw for Traverse City, Michigan.

PHOTO GRAND TRAVERSE ENGINEERING & CONSTRUCTION

PHOTO COURTESY TEAM ELMER’S

PHOTO COURTESY BAY SHORE STEEL WORKS

In January, GTEC added Bay Shore Steel Works (BSSW), a longtime manufacturer of steel and aluminum, to its portfolio of Tribal 8(a) companies.

TRIBAL CONSTRUCTION ENTERPRISES

Cash In on Lucrative Federal Contracting By Lynn Armitage

he United States government doles out $500 billion each year to buy the goods and services it needs to keep the country running smoothly. That’s a staggering amount of money enriching businesses fortunate enough to land these coveted contracts. And thanks to the Tribal 8(a) Program, Tribal enterprises can dip into the honeypot of government contracting, too. According to the Congressional Research Service, the Tribal 8(a) Program is a special provision to the Small Business Investment Act of 1958 that gives eligible Alaska Native Corporations, Tribes, Native Hawaiian Organizations and Community Development Programs an exclusive stronghold to compete more advantageously in the federal

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marketplace through set-aside (only certain contractors may compete) and sole-source (without competition) awards. The idea behind this business development program, managed by the Small Business Administration, is that it gives qualifying Tribal enterprises the opportunity to generate much-needed revenue to fight poverty and promote economic development in their disadvantaged communities. As the Native American Contractors Association (NACA) says, “The Native 8(a) Program is a hand up, not a hand out.” Both NACA and the National Congress of American Indians acknowledge that the Tribal 8(a) Program has a few legislative bugs to

PHOTO COURTESY FOUR TRIBES CONSTRUCTION

Four Tribes Construction is currently working on a $12 million project at Arlington National Cemetery refurbishing worn-out roads.

TIPS ON LANDING TRIBAL 8(A) CONTRACTS The first step to winning government contracts is to get certified as a Tribal 8(a) business through the Small Business Administration (certify.SBA.gov). Once you meet the requirements, consider advice from Natives who have done it successfully: GTEC was hired to provide construction management services to reconstruct part of the M-72 corridor — a major roadway in the heart of Michigan.

PHOTO COURTESY FOUR TRIBES CONSTRUCTION

work out―including reforms that will make the program accessible to more Tribes. Even so, some Tribal businesses are already in lockstep with the rules and regulations of federal contracting and are profiting quite nicely. Native Business Magazine spotlights two of them. If You Build It, Profits Will Come As Doyle Lowry says, “The U.S. government buys everything. You can sell them thumbtacks, if you have a company to do it.” Instead of thumbtacks, Lowry chose construction. As the CEO of Four Tribes Construction Services, a general contracting firm owned by the Susanville Indian Rancheria (SIR) in California, Lowry oversees tens of millions of dollars in federal construction jobs. In fact, 98 percent of Four Tribes’ work is with the federal government, which is why the construction company is headquartered in Maryland. “We need to be near the decision makers,” Lowry explains of the Tribe’s coast-to-coast wingspan. Last year, Four Tribes signed more than $40 million in federal construction contracts. Its best year ever. Doyle Lowry, CEO of Four Tribes “This year, we have brand-

Thomas Wilbur, CEO of Grand Traverse Economic Development: • Hire people experienced in the federal arena who understand business, marketing and financials. “It's a complicated business, but very lucrative if you know how to navigate it.” • Separate yourself from the business and Tribal politics. “Don't let emotions get in the way.” • Once you’re in, you must deliver with each project. “A bad performance is the kiss of death.” • Be patient. “It’s a long-term investment that requires a longterm strategy.” Doyle Lowry, CEO of Four Tribes Construction Services: • Get ahead of contracts before they are published online. “Set up a meeting with an SBA representative in your chosen expertise who will tell you about projects coming down the road.” • For construction contracting, it’s imperative to find a bonding company to insure each project. “Bonding is everything to construction. These companies start out conservatively but will increase your bonding rate the longer you work together. We are bonded for $35 million per project.” • When setting up the business, Tribal economic boards must be independent from election boards. “It’s hard for some Tribes to give up that control, but totally worth it.”

new construction projects ranging from $500,000 to more than $20 million,” including a current $12 million project refurbishing roads at Arlington National Cemetery, the SIR Native shares. “It has really been a great way to create revenue for the Tribe and fund social programs that help our people.” Four Tribes’ first client was the Army Corps of Engineers in South Carolina. It built a gravel parking lot and remodeled a secure facility at Joint Base Charleston to the tune of $800,000. “In the construction world, you live and die on your reputation, so you gotta do that first one right.” After that initial success, contracts started rolling in regularly. The Corps remains Lowry’s largest client today. This federal contracting formula has worked so well that the SIR Tribe has developed six more Tribal 8(a) companies since Lowry

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CONSTRUCTION

An Army Ranger Captain Leads the Charge Last year, the Grand Traverse Band of Ottawa & Chippewa Indians hired Thomas Wilbur, an enrolled member of the Oneida Tribe of Indians of Wisconsin, to marshal the Tribe into the federal contracting space. Diversification into this arena just made sense. “Gaming is becoming saturated and we worry about how online gaming will affect our bottom line,” says Wilbur, the new CEO of Grand Traverse Economic Development (GTED), the Tribe’s nongaming investment division. Wilbur brought with him impressive wins in government contracting, and a special formula. “Ten years ago, some professionals and I came up with a model of what happens to a company when you place it under Indian ownership in the federal space.” Wilbur discovered the company’s fair market value Thomas Wilbur, CEO of GTEC increases by approximately 35 percent due to competitive advantages in the SBA Tribal 8(a) Program. Fast-forward to last January when GTED purchased Bay Shore Steel Works (BSSW), a steel and aluminum manufacturer for many industries, including the U.S. military. “The day we bought them, their fair market value increased by about 35 percent, based on my model,” says Wilbur, who now runs two Tribal 8(a) companies (BSSW and Grand

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GTEC’s reconstruction of the M-72 corridor included installing a pedestrian tunnel under M-72 and rebuilding the roadway as a boulevard.

Traverse Engineering & Construction or GTEC) and has three more close to launching―in IT, development and land-holding. Wilbur, a former U.S. Army Airborne-Ranger captain, says he is especially proud of the BSSW acquisition. “I believe we are the only Tribe in the federal contracting space to have a component that protects our war fighters.” In five years, Wilbur envisions GTED owning nine to 10 Tribal 8(a) companies. Using his formula, he estimates they will help create a $100 million portfolio for the Tribe, depending on contract awards. His longer-term vision? It is predicated on the success of regional Alaska Native Corporations. “Thirty years ago, they were start-ups in the federal space. Now they are billion-dollar-plus companies with tens of thousands of employees and multiple 8(a) firms,” explains Wilbur. “I believe in the 21st century, we can achieve that in a third of the time because we have learned from ANC’s best practices, the pace is much quicker and federal contracts are much larger than they’ve been in the past.”

PHOTOS COURTESY GRAND TRAVERSE ENGINEERING & CONSTRUCTION

PHOTO COURTESY FOUR TRIBES CONSTRUCTION

launched Four Tribes in 2010, including IT, personnel and environmental businesses. But it wasn’t easy getting to this cha-ching moment. Lowry admits his Tribe did not know how to get into the federal contracting arena at first. “We spent three years trying to figure it out. You have to jump through a lot of hoops,” some of which can be quite scary for Tribes, says Lowry. “Sovereign immunity is a big issue. The federal government won’t contract with you if you have total sovereign immunity,” so he advises hiring good lawyers to meet this challenge and structure firewalls to protect your Tribe. However, if you are willing to adhere to specific requirements by the U.S, government, he claims that federal contracting is very profitable, very fulfilling. “There is so much work out there. I am surprised more Tribes don’t do this,” Lowry says, hoping to encourage other Tribes to take that first unsteady but thrilling step toward more economic empowerment.

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Call to Arms:

The Attack on Economic Arms of Tribes and Sovereignty A you can tax.” Maranda Compton (Delaware Tribe of Indians), a partner at Van Ness Feldman LLP, adds that because Tribal lands are held in trust by the federal government, property taxes are largely unavailable, so the typical land-based tax regimes that states and municipalities employ are also difficult to implement in Indian Country. “The idea that tax revenue could fund Tribal governments — like other governments are funded — is just not there,” Compton said. “In light of that, Tribes must rely heavily – and sometimes almost exclusively — on commercial development to fund their basic governmental services.” To address this issue, Congress has sanctioned the formation of Tribal Corporations and Tribal Business Enterprises

Pilar Thomas PHOTO COURTESY MARANDA COMPTON

ccording to Pilar Thomas (Pascua Yaqui), a lawyer in Lewis Roca Rothgerber Christie LLP’s Indian Tribal Nations Practice, there are only three ways a Tribe can raise revenue for Tribal governmental purposes. One way, she says, is like any other government — through the assessment and collection of taxes. A second way is through grants and contracts with federal or state governments. And a third way is through Tribal enterprise revenue. “But the challenge for Tribes is that unlike other governments, from a tax perspective, Tribes really lack, in many circumstances, an economic base to tax,” Thomas said in an interview with Native Business Magazine. “There just isn’t a lot of economic activity on the reservation that

PHOTO COURTESY PILAR THOMAS

By Andrew Ricci

Maranda Compton

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PHOTOS COURTESY ISTOCK BY GETTY IMAGES

operating as an Arm of the Tribe. Understanding this “Arm of the Tribe” distinction is critical because it serves as a differentiator between businesses that exist to fund Tribal coffers and all other businesses on and off the reservation. “Arms of the Tribes are entities that are governmental in status but commercial in behavior. These sovereign commercial arms are essential for Tribes but also used by some of the fifty United States,” says Compton. “The federal government has long understood that Tribes require an extra level of commercial endeavor to fund their governmental activities.” In theory, this sounds simple enough, but recently, there have been a number of lawsuits in which a Tribally owned enterprise, or a wholly owned-subsidiary of a Tribal economic enterprise, has had its status as an “arm of the tribe” attacked or challenged. This largely stems from the extension of the Tribe’s sovereign immunities to the business or businesses operating as its arm. “The more Congress has promoted Tribal enterprise development and therefore the more Tribal enterprises get created, the more pushback you start to see in the federal law around this idea of what has been called a subordinate economic organization,” Thomas said. “Tribes can and should take on enterprises that are wholly owned by the Tribe and where the revenue of that enterprise is going into the Tribe’s coffers. By definition, they should be considered part of the Tribe.” Along with the challenges to arm of the Tribe companies invoking the Tribe’s sovereign immunity from suit comes a court system grappling with how to determine whether a company is an arm of the Tribe — and thus entitled to sovereign immunity — or not. “The test for what constitutes an ‘arm of the Tribe’ is in flux and still developing under federal, state, and Tribal law,” Compton said. “I think Tribes would assert that the key criteria for ‘arm of the Tribe’ are method of creation and intent — i.e., whether the Tribe created the entity under Tribal law with the intent to create an arm of the sovereign.” “But what we are seeing the courts apply is an ad-hoc, multifactor test that goes well beyond Tribal intentions to discrete matters of financing and operation, establishing standards for Tribal businesses that chill the very ability of Tribes to engage in commercial activity,” Compton continued. Under federal law, Tribes possess the sovereign authority to engage in a wide range of economic enterprise — subject only to self-imposed limitations and con-

gressional action limiting those activities. “These factors seem to deal more with the discomfort of non-Tribal courts, regulators, and plaintiffs’ attorneys,” Compton said. “The real inquiry is likely not how Tribes can conduct commercial activity as sovereigns but what commercial activity Tribes should be allowed to conduct.” While there have been several tests established to determine whether an entity qualifies as an arm of the Tribe, one of the most commonly cited is the six-factor test outlined in the Tenth Circuit Court of Appeals’ 2010 decision in Breakthrough Management Group v. Chukchansi Gold Casino and Resort. Those six factors for an economic entity include (1) their method of creation; (2) their purpose; (3) their structure, ownership, and management, including the amount of control the tribe has over the entities; (4) whether the tribe intended for the entities to have tribal sovereign immunity; (5) the financial relationship between the tribe and the entities; and (6) whether the purposes of tribal sovereign immunity are served by granting immunity to the entities. Compton says that while the Breakthrough Court was indicating some factors to consider, no one factor is dispositive and later courts’ reliance on Breakthrough as

“Unless and until Congress endorses the specific criteria of Breakthrough, it is appropriately understood as one Circuit’s proposed analysis, not a national test,” Compton said. “It should not be conflated with Congress saying, ‘given our desire to encourage Tribal economic development, here are the factors that we think should be considered.’” This reflects one of the big challenges with a lot of these cases, Thomas says, which is that courts have mixed law and Congress has not stepped in to provide clarity. As a result, the first thing that Tribes do after a suit is brought is invoke their immunity and argue that their immunity extends to the arm of the Tribe. “A Tribe puts up information that shows why it meets the test for arm of the Tribe, and then they wait to see what happens,” Thomas said. “If the Tribe wins, then the case is dismissed because the court lacks subject matter jurisdiction. If it loses, then it either appeals the decision or litigates the case.” “It’s unfortunate that what’s happening is that this test is morphing, and that’s really the bigger challenge,” Thomas continued. “And the more it morphs, as with anything in Indian law, it morphs not in our favor — and so it’s only going to get worse.”

“A Tribe puts up information that shows why it meets the test for arm of the Tribe, and then they wait to see what happens,” Thomas said. “If the Tribe wins, then the case is dismissed because the court lacks subject matter jurisdiction. If it loses, then it either appeals the decision or litigates the case.” the sole standard is troubling. “With the Breakthrough factors, the court was not setting out a rigid set of criteria,” Compton said. “They were simply identifying, given those specific facts, some factors that they felt were consequential.” She also says that the most important component beyond the Breakthrough test is that, outside of the gaming context, the federal government has not established requirements for an “arm of the Tribe.”

“Given the changing case law, it might really be time for Tribes to put their heads and resources together and figure out how to best deal with these issues as they pop up around the country,” Thomas said. We need to figure out how to stem the attacks against Tribal sovereignty and Tribal sovereign immunity in what these cases represent.” “What’s needed is for the legal standards to be married with a little more realism and business operation,” Compton said.

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Data Centers: By Lynn Armitage

A GOOD INVESTMENT OR RISKY BUSINESS?

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they have discovered whether data centers are a good investment or risky business. First Native-owned Data center in Wisconsin About 8 years ago, the Forest County Potawatomi Tribe in Milwaukee, Wisconsin, saw an emerging trend and pounced on it. “We noticed a significant number of data centers being built here in the U.S. and internationally,” explains Kurt O’Bryan, CEO of the Potawatomi Business Development Corporation, the Tribe’s investment division. A market study revealed that Southeast Wisconsin did not have a Tier III data center and the Milwaukee business community was underserved, as well. “We also identified a lot of interest from the Native American community,” he recalls. Two years later in 2013, the Potawatomi Tribe opened Data Holdings on Tribal lands in Milwaukee―a two-story, 46,000-squarefoot Tier III facility, with scalability for an additional 40,000 square feet, giving them plenty of room to grow and acquire new tenants. When all phases are completed, the total cost of construction is estimated to be $36 million. To date, Data Holdings services about 130 clients, including major corporations, state governments and other Native American Tribes. O’Bryan cannot name their clients specifically due to privacy concerns―“They

Kurt O’Bryan, CEO of the Potawatomi Business Development Corporation

don’t want people to know where their data is,” he explains. But he can divulge that the company’s largest client is the State of Wisconsin. And of course, the Potawatomi Tribe is on board, too. “We are trying to encourage other Tribes to look at their data security for gaming operations and Tribal government to make sure it is adequately backed up,” says O’Bryan. “We believe this is an area of weakness for many Tribal Nations.” The Data Holdings chief does not believe that data centers are good investments for all Tribes. It all comes down to location, location, location, he says. “Reservations themselves are not prime spots for data centers, although there are a few financial ad-

PHOTO COURTESY KURT O’BRYAN AND DATA HOLDINGS: POTAWATOMI BUSINESS DEVELOPMENT CORPORATION

ata centers are big business. According to MarketWatch, the global data center market is estimated to reach revenues of around $174 billion by 2023. Is it any wonder that many Tribes are wanting a small slice of that big pie? A data center, or “colocation facility,” is a very large, windowless space―some the size of many city blocks―where digital data is stored in a secure, cool, windowless area. Businesses will rent space at data centers for their servers and computing equipment because they offer fast connectivity, cooling, backup power and 24/7 security at a rate far less costly than if they built their own data storage facility. Even tech giants like Google and Microsoft are partnering with data centers all over the world for auxiliary data storage space, as the Cloud in the sky does have its limits. Mind-boggling as it is, Digital Trends reports that every day, around 2.5 quintillion bytes of data are created by 3.7 billion Internet users. While the demand for data storage solutions is high, running a data center is not a business every entrepreneur can jump into, as the barrier to entry is also very high―particularly start-up costs―and it could be a long time before you see a healthy ROI. Even so, some Tribes have bravely ventured into this market space. Native Business Magazine has reached out to a few to see if

Data Holdings is a $36 million Tier 3+ data center built by the Forest County Potawatomi tribe in 2013.

TIPS FOR STARTING A DATA CENTER

PHOTO COURTESY JOI DATA SYSTEMS

If your Tribe is mulling over the prospect of launching a data center, heed these words of wisdom from Tribal professionals who have been down that road already:

vantages to being on trust land.” On the other hand, O’Bryan says the Potawatomi Tribe has won the location lottery. “We are strategically located in the largest economical region in Wisconsin and within 90 minutes of Chicago and its outlying suburbs. Our large Midwest radius spans from St. Louis to Minneapolis to Detroit to Indianapolis. And if clients need direct access to their data, transportation is easy between two big airports―Milwaukee and O’Hare.” Then there’s weather to consider, he adds. “We don’t have hurricanes; we aren’t in a flood zone, and the building was designed to withstand any tornado. Plus, our ambient temperatures are relatively low, so we get a lot of free cooling from the outside, which accounts for one of the highest overhead costs for data centers.” Data Holdings’ business formula seems to be working. “After four years of operation, Data Holdings is generating significant income that supports the directive to develop diversified income streams for the Tribe and simultaneously enhance Milwaukee as a hub for IT support,” says O’Bryan, adding that patience is key. “It is not a fast turnaround, and no one should expect, if you’re going to invest millions, to suddenly get a high return on your investment in a short period of time. It’s just not that kind of market right now.” His advice to other Tribes contemplating data centers? Look for a lower cost alternative to manage your data. “Most Tribes are

not in the right location, capital costs are extremely high, making your return on investment a challenge. And you’re not creating a lot of jobs.” O’Bryan says that is not an important metric for data centers, anyway. “A well-run center requires very few full-time employees. Computers do most of the work. Data Holdings was never built to create jobs. It was built as a business, as an investment, and as a much-needed service to the business community.” For Another Tribe, Data Centers Are About Jobs The Passamaquoddy Tribe of Indian Township has big plans. It hopes to build a $25 million state-of-the-art data center real soon, powered by hydrogen. “By trying to make our data center green, it fits in with the Tribe’s mission of preserving and maintaining nature, Mother Earth,” says Darrin Coffin, CEO and chairman of Indian Township Enterprises, as well as the Tribe’s chief financial officer. All that stands in the way is financing. Fingers crossed that the Tribe gets approved for the U.S. Department of Treasury’s New Market Tax Credit. “As soon as we get our allocation, we will be able to break ground and start build-out and be operational within 12 to 18 months,” Coffin is hopeful. But for this Tribe, Coffin says that building a data center is more about creating much-needed jobs for Tribal members than it is about making a profit. “Washington

• “My best advice would be to go small first, then go big. If you go big right out of the gate, that’s when you fail, because you don’t have enough margin or revenue to sustain your debt load. Also, consider energy costs and get local partners, as well as initial base customers onboard. After that, expand out and make industry connections.” — Darrin Coffin, CFO of Passamaquoddy Tribe of Indian Township • “Make sure you have lots of extra capital to invest and think long and hard about what the ROI is reasonable to expect. Get a good read on the market and research other companies who have built data centers and see how it is working out for them. Also, be aware that this market is constantly evolving and you may have to increase your investment in three to five years to meet new market needs.” — Kurt O’Bryan, CEO of the Potawatomi Business Development Corporation

County is the poorest county in the state and our Tribe suffers from 50 percent unemployment.” The Passamaquoddy data center would initially provide jobs for about 25 Tribal members at about $40,000 to $50,000 a year, which Coffin says is unheard of. “Most people work at Walmart, making $10 or $11 an hour. Or they work in the paper mill, but there are only so many jobs there.” The Tribe is partnering with Washington County Community College to help train future employees through a six-week Microsoft certificate program. “They can take those skills and work in our data center or go work for the Microsofts, Googles and other companies that have virtual desktops,” Coffin outlines his long-term vision to help Passamaquoddy Natives find good jobs. Certainly, the business plan for the data center calls for making tens of millions of dollars in revenue. But again, it takes a back seat to jobs, says the CFO. “We are not looking for that high return on investment, but rather, the social impact it will have on employment. If our data center broke even and we gave zero dollars back to the Tribe, but employed 25 Tribal members, then that is success to us.”

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YAKAMA POWER:

How One Tribe Secured its own Energy Future By Debra Utacia Krol

Yakama Power linemen reconnect 83 new customers who came to the company from another utility firm operating on the reservation.

Yakama Nation’s utility company provides services, great jobs while bolstering sovereignty 34

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akama Power provides much more than just electric, high-speed internet and phone service to the sprawling Yakama Nation. The Tribally-owned company is also building a thriving, sustainable economy by providing Tribal members with stable, high-paying jobs and patronizing Tribal businesses. In 2004, Yakama staff member Ray Wiseman was given a new assignment — create a Tribal utility company. Wiseman, who started with the Tribe as a forester, had been working on a project to install a wide area

network to connect various government entities. “I became the GIS [geographic information system] manager and then the data manager,” he says. “We were installing fiber optics.” The Yakama Tribal Council was also concerned about how to create jobs on its 1.4-million-acre reservation. “In 90 years of receiving electric service, no Tribal member had ever been employed by the power utilities,” says Wiseman. In addition to the high wages earned by electrical workers — Wiseman says that the base salary for a lineman

is $90,000, which regularly tops $100,000 with overtime — the Tribe wanted local control over how the utility operated. And, “we felt we could provide better service and benefits,” says Wisemen. So, the onetime forester undertook a crash course in utility management. After two years of hard work, which included meeting the stringent operational criteria of the Bonneville Power Association, the federal agency that oversees electric utilities in the Northwest, Yakama Power began delivering electricity to 132 customers, about half of which were Tribal or federal entities. That included the Tribal government campus, the Indian Health Service, the Bureau of Indian Affairs, other agencies and Tribal enterprises including their (now closed) RV park, Yakama Forest Products and Legends Casino. “We started with a bang,” says Wiseman. “We wanted to prove we were serious.” That’s because they had something to prove to skeptics. “The pressure was on,” says Wiseman. “Lots of people said we were going to fail.” But, Yakama Power, at one time the smallest utility in the Northwest, has the last laugh. Wiseman oversees two complete crews, all Tribal members. In fact, all but two of the company’s employees are Native. And the little utility with just 3 MW of power to deliver now serves 3,000 customers with 18MW of power, at an average monthly cost savings of $25, or $300 a year. That can mean a lot to families or to elders on fixed incomes. Yakama Power’s influence on the Tribal economy isn’t just jobs and cheaper power, though. Wiseman noted in a 2017 presentation that for one 10-year period, more than $301 million in electricity bill payments were made to off-reservation companies. And, another $26 million was lost in wages, contracts and Tribal vendors not being used. However, in 2017, with Yakama Power capturing 29 percent of the electric market, nearly one-third of those dollars are staying within the Tribal community, being circulated to on-reservation vendors, businesses and contractors. That creates a more sustainable and vibrant economy, according to the Institute for Local Self-Reliance. The organization found that for each $100 spent at a locally-owned business, some $48 stays within that community. The Yakama Tribal community also benefits when the utility puts even more Tribal members to work. Wiseman says that Yaka-

PHOTOS COURTESY YAKAMA POWER

When a Tribe owns its own utility company, “you control more of your destiny,” says Yakama Power General Manager Ray Wiseman. ma Power now uses Tribal subcontractors exclusively for construction jobs instead of having to contract out of the community. “We construct all our own lines,” he says. Also, “We buy all our fuel from the Tribal gas station,” Wiseman says. “I never saw any of the outside utilities purchase fuel at our gas station.” Growing a Skilled Workforce — A Slow Start, Rapid Results But it hasn’t always been easy going for the growing utility. Wiseman says that finding Tribal members to grow into electrical workers was at first a daunting task. For one thing, no Tribal members had any training or experience as linemen or other skilled tradespeople needed to keep homes and businesses powered up. “At first, we resorted to just requiring a valid driver’s license for our apprentices,” says Wiseman. The training is also grueling, as to become a fully qualified lineman, an apprentice must work some 7,000 hours and pass several tough tests with a grade of 80 or above. “It’s about a 50 percent washout rate for apprentices,” he says. And, as Wiseman notes, the life of an electrical worker, although very well compensated, can be hard, as they can be called out at any time — and in any weather conditions — to restore power. But it’s all worth it, Wiseman says. “There’s nothing like watching a lineman who graduates from the apprenticeship after all that work,” he says. “You have these role models to see that constitutes success.” However, as word spread about how much these jobs paid, Tribal members saw the value in putting in the hours and obtaining preliminary certifications before even applying for an apprenticeship with Yaka-

ma Power. “We have role models now,” says Wiseman, “and people who say, ‘I want to do that.’” In fact, “I found a whole bunch of people who are willing to go out on Christmas Eve and turn the power back on,” says Wiseman. Yakama Power is also looking to the future. When cutting trees in the way of power lines, for example, the crews don’t just throw them in a chipper: the trunks are cut up for firewood, that’s distributed to churches, elders and sweat lodges. “We use a biodegradable oil, Envirotemp FR3,” says Wiseman. “It costs more but in case of accidents, it’s non-toxic.” The utility also builds new lines with an eye to the future, using heavier wire to areas where new building is planned. “Most utilities only build to what’s needed at the moment,” Wiseman says. But, “We look at things differently,” he says. The utility also helps customers by offering hourly usage rates, which can be accessed online, to help monitor electric consumption with an eye to saving money. Yakama Power also uses automatic meter reading technology, or AMI. These meters can be read directly from the office, eliminating the need for meter readers. The meters can also be used for water service, which Yakama Power is looking into providing. Even more technology is on the horizon, says Wiseman, with the goal of eventually serving the entire reservation. “We were dead last when we started, now we’re the second-largest utility on the reservation,” he says. But Yakama Power is more than just a utility offering low-cost electric service and stable, well-paying jobs. “[Owning and operating a utility company] is a really good thing for Tribes,” says Wiseman. “Forming a utility has immediate benefits. It allows the Tribe to have jurisdictional control; you control more of your destiny.”

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TULALIP UTILITIES: Water Rights Pave the Way to Clean Water By Renae Ditmer

n a semi-urban reservation located on 22,000 acres adjacent to both Everett, Washington, and Marysville, Washington, Tulalip provides water and water treatment for 1,800 residences on the reservation, plus a plethora of businesses that lie within it: Walmart, Cabela’s, Home Depot, McDonald’s, a mall, several banks, and three casino-hotels. Even before “mni wiconi” became the watchword for the importance of water for life, Indian Country was awash in water issues. While the rate of Native homes without access to safe water supply and/or waste disposal facilities dropped from 12 percent in 2007 to 6.5 percent in 2016 (compared to 1 percent of non-Tribal homes), an amalgam

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of issues, stemming from climate change and big ports and industry along the coasts, now threaten to reverse this progress. Worse, “Some Tribes have not yet secured their water rights,” lamented Karletta Chief, Associate Professor & Extension Specialist, Arizona State University. This is due to very costly litigation and lack of funding to implement infrastructure. Not so for the Tulalip Tribes in Washington state who “are making moves for clean and safe drinking water for the reservation for the next 100 years,” according to Mike Leslie, Tulalip Utilities Authority Manager, Water and Wastewater. Until 2014, Tulalip used only ground water for all uses within its boundaries. But in 2014,

it finally negotiated its water rights — and a contract — with the City of Everett, gaining the right to 32 million gallons of clean water per day from Everett from 2016-2066. Yes, you read that correctly. But they can’t possibly use, or distribute, it all — not yet, anyway. Daily usage, and Tulalip infrastructure and operational capacity, is between 800-900,000 gallons of water. Currently, the Tribe owns and operates all infrastructure from Everett’s boundary to the reservation, and monitors the quality of water delivered from Everett. Tulalip also has had a ground water system operation for 50 years. The Tribe uses it to supply the “back side” of the reservation, where infrastructure does not yet reach. The Tribe also treats all the ground water and conducts all operations and maintenance in accordance with Environmental Protection Agency (EPA) regulations under its Tribal water quality assurance plan. More significantly, according to Leslie, “Leadership was very committed to improving and expanding infrastructure.” It could see the potential for prime retail on their Tribal retail right off of Interstate 5, and the Tulalip Tribes planned accordingly. This included planning what to do with the excess 31 million gallons they had rights to. Leadership was also committed to ensuring safe coastal waters on which it is economically and spiritually dependent. And they were determined to treat the water as a blessing rather than a commodity. Though a recent United Nations letter highlighted the fact that water is being managed as a profit generator by private industry, Tulalip aims to provide affordable, continuous, and ample clean water to its members and reservation businesses. So, what happens to that other 31 million gallons of water per day that Tulalip has right to? They sell it to surrounding jurisdictions and businesses outside of the reservation. Right now, they are operating a bit in the red, but forthcoming new infrastructure will change that, providing a new – and novel – source of revenue for the Tribe, Leslie said.

PHOTOS COURTESY CHRISTOPHER WRIGHT, TULALIP DATA SERVICES

Tulalip Utilities provides water and water treatment for 1,800 residences on the reservation, plus a plethora of businesses that lie within it: Walmart, Cabela’s, Home Depot, McDonald’s, a mall, several banks, and three casino-hotels. Here is an Aerial View of Tulalip Utilities Wastewater Plant, Mission Bay.

Alaska Native Medical Center

Alaska Leads The Way

In Telemedicine

PHOTO COURTESY ALASKA NATIVE MEDICAL CENTER FACT SHEET

By Renae Ditmer

ruising the Internet might leave you with the impression that telemedicine is a 21st century invention. So, you might be surprised that telemedicine has been the state-of-theart for healthcare in Alaska for more than 50 years. Necessity was indeed the mother of invention when it came to figuring out how Alaska could treat 240,000 Alaska Natives, spread out over its 571,951 square miles — including many of whom live in areas accessible only by air, boat or snow machine. Though definitions vary, telemedicine is broadly defined as sharing medical information from the point of medical treatment to the point of medical advice via electronic communications means. This includes: • Live Video Conferencing: the use of live two-way video conferencing to conduct virtual office calls; • Asynchronous Transfer (Store-and-Forward) of electronic files (video clips, still images, X-rays, electrocardiograms (EKGs), electroencephalograms (EEGs), paper files, and audio clips) for non-real time diagnosis; • Remote Patient Monitoring (RPM), the real-time collection and transfer of patient data to an urban specialist for interpretation; • Mobile Health (mHealth), the use of mobile devices (smartphones, tablets) that support a myriad of software applications to assist with diagnosis. And Alaska has done it all, according to Dr. Dan Hartman, Medical Director in Primary Care at the Southcentral Foundation (SCF). The largest of CIRI’s nonprofits, SCF was incorporated in 1982 to “work together

with the Native Community to achieve wellness through health and related services.” It is one of several nonprofit funding arms of Alaska Native Corporations (ANCs) that administer the U.S. Department of Health and Human Services funding obligated to Tribes for healthcare. “It’s been a tremendous success in terms of Tribal self-determination, too,” Hartman said. And so it has, with 99 percent of telemedicine serving Alaska Natives today. Since its beginnings in the 1960s when healthcare workers used single sideband (ham) radios to communicate with patients in remote clinics, Alaska telemedicine has evolved to become a global model for distance medicine. The tech revolution, especially satellites, has transformed Alaska’s approach to diagnosis and treatment from presenting an individual case over the radio — weather permitting — to more reliable, real time, face-to-face interaction with clinic patients at one of six regional reference centers, or hubs — Sitka, Bethel, Dillingham, Kotzebue, Barrow, Nome or the Alaska Native Medical Center (ANMC). Underwriting the success of Alaska telemedicine were two, much more pragmatic, institutionalized features. One was the creation of licensed Community Health Aides, a healthcare category specific to Alaska distance medicine. The second was the early development of standalone “carts” equipped with the communications and medical technology of the day to facilitate communication between the clinics and the hubs. Supplementing these were onsite stocking of medical treatment materials and pharmaceuticals to dispense immediately to the

Remote Alaska Native Clinic; Photo Courtesy of Sarah Freeman

patient, and more importantly, emergency airlift for patients to hubs or to the ANMC. Prior to 2005, when computers and electronic health records became the standards for communication, and Health Insurance Portability and Accountability Act (HIPAA) for protection of patient privacy, Hartman ascribed the success of the program to the “incredibly heroic work by thousands throughout the state of all kinds of healthcare providers and IT people to capture and hold information using carts.” The six regional hubs serve 170 rural Alaska clinics, with each clinic serving 1012 patients per day. They are staffed by 550 Community Health Aides with other providers (doctors, nurse practitioners, physician assistants) staffing the regional hubs or the ANMC. And while the telemedicine system was developed largely for Tribal communities, when there are no other healthcare systems in remote areas, clinics cannot limit care to Tribal members. “They care for whoever, with equanimity,” Hartman said with professional pride. In the continental United States, a change in U.S. law in 2018 should facilitate the growth of non-Tribal telemedicine by the 36 states that have expanded Medicaid. But questions regarding who pays in a non-Tribal situation have put robust use of telemedicine in the Lower 48, plus Hawaii, likely another 5 to 10 years out. But that hasn’t stopped investors who have latched onto expert predictions of a 14.3 percent market growth in non-Tribal telemedicine by 2020 – up to $36.2 billion. If, as Dr. Hartman claims, “Everything follows money,” both underserved Tribes and non-Tribal patients stand a chance of catching up.

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“I don’t think that anywhere else in the world 19 sovereign Nations have come together and, for the betterment of all 19, formed another government as a political subdivision,” Canfield said.

When

The interior of the Starbucks at Avanyu Plaza features Puebloinspired architecture and handmade Pueblo pottery and art.

PUEBLOS UNITE

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he land once home to the Albuquerque Indian School (AIS), a boarding school that operated 1881-1981, is today the site of a thriving business and cultural complex owned by 19 Pueblos of New Mexico. The story of how the Pueblos jointly built a sovereign, economic ecosystem in Albuquerque begins back in 1969 — the first time that the 19 Pueblos petitioned the federal government to convey land to Pueblo ownership. The Pueblos sought to turn an unused portion of AIS property into a cultural center. Feasibility studies, economic assessments and appraisals were conducted. Letters of support from municipal, state and federal legislators were garnered. The Pueblos identified the specific ways they intended to develop the land to create economic and cultural opportunities that would benefit tourism and commerce for the 19 Pueblos, City of Albuquerque and the State of New Mexico. Fast forward to 2019, and the 19 Pueblos have successfully petitioned for four con-

PHOTO BY ASHLEY BROWNING, COURTESY IPMI

ECONOMIC DEVELOPMENT OPPORTUNITIES ARE EXPONENTIAL

By Native Business Staff

INFRASTRUCTURE

PHOTO BY CAITLIN CANO, COURTESY IPMI

veyances of federal land to Tribal land. Together, they’ve gradually acquired nearly 80 acres of land for cultural and economic development. “For each land transfer, the 19 Pueblos committed to not building casinos on the property. That sped up the process quite a bit,” said Michael Canfield (Pueblo of Laguna), President and CEO of the Indian Pueblo Cultural Center, Indian Pueblos Marketing, Inc., and the Indian Pueblo Federal Development Corporation (IPFDC). “The lands became Tribal lands the min-

Above: In early 2012, Michael Canfield (Pueblo of Laguna) was named President and CEO of three corporations owned by the 19 Pueblos of New Mexico: the Indian Pueblo Cultural Center, Indian Pueblos Marketing, Inc., and Indian Pueblo Federal Development Corporation.

PHOTO COURTESY IPMI

Below: IPMI serves as both landlord and tenant of the nearly 5,000-square-foot Starbucks Coffee — the largest Starbucks in the Southwest.

ute the transfers were complete,” Canfield continued. “You have to go through Congress, and it has to be signed by the President, when you transition land from federal ownership into Tribal ownership.”

Back to 1976, the Indian Pueblo Cultural Center (IPCC) opened its doors to the public. “As with any start-up, we were challenged with figuring out: How do we make money? Where do we make money? What kind of services do we provide, and what kind of facilities do we need?” Canfield said. When the Albuquerque Indian School shuttered in 1981, the Pueblos seized their opportunity. The dormant, former school property fell into disarray, becoming a refuge for vandalism and homeless people. The 19 Pueblos petitioned the U.S. for its second land conveyance of the remaining 44 acres of AIS property. Situated on the east side of 12th Street, that land (and then some) is today a bustling office park and hospitality area known as Avanyu Plaza. (IPCC is just across the street.) With visions of building a vibrant cultural and business corridor, the Pueblos formed a for-profit organization, Indian Pueblos Marketing, Inc. (IPMI). (Central to IPMI’s purpose was stimulating revenue to cover IPCC’s operating costs.) The Pueblos appointed one Board of Directors to oversee both corporations, IPCC and IPMI. The Board, limited to five members, is granted the authority to run IPMI like a business — with the ability to buy and sell assets and enter into debt. “That gave them the autonomy to be successful,” Canfield said.

For starters, IPMI opened a convenience store and a smoke shop — two major economic drivers to this day. “We sell a lot of gas and a lot of tobacco products, and that helps us generate the revenue to do the cultural things that we are responsible for,” Canfield said. Eventually, two office buildings were built to house Bureau of Indian Affairs agencies as tenants of the Pueblos, beginning in 2004. The Pueblo-owned Holiday Inn Express held its grand opening in May 2005. “Our Holiday Inn Express is breaking all kinds of records,” Canfield said. “It’s in a great location. We’re right off I-40 and right near I-25, which is the major intersection in the state.” In September 2005, the 19 Pueblos debuted the Four Winds Travel Center and convenience store. In July 2010, the Pueblo Governors transferred management of the IPFDC to IPMI to Canfield, who served on the IPMI Board from 1995-2011. In 2012, Canfield was hired as President and CEO of the three corporations owned by the 19 Pueblos: IPCC, IPMI and IPFDC. All three entities continue to operate under one Board of Directors. “That entails a deep trust that stems from full transparency, positive audits, and general financial performance. That trust has been earned,” Canfield said. The Pueblos are currently receiving tax dollars through the 19 Pueblos District, but IPMI is not currently generating dividends, because profits are being used to complete the property master plan.

IPMI is continuously driving economic growth for the 19 Pueblos, the City of Albuquerque and State of New Mexico. Avanyu Plaza is anchored by the Indian Pueblo Cultural Center and the first Native American-licensed freestanding Starbucks in the nation. IPMI serves as both landlord and tenant of the nearly 5,000-square-foot Starbucks Coffee — the largest Starbucks in the Southwest. It opened in 2015, and features Pueblo-inspired architecture and handmade Pueblo pottery and art. That’s apropos for “Avanyu” Plaza; the Tewa word references the sacred water serpent at the heart of Pueblo culture. Next came a Pueblo entrepreneur-owned Laguna Burger, the restaurant Sixty-Six Acres, and a Domino’s Pizza. As previously mentioned, Avanyu Plaza also houses the Pueblo-owned Holiday Inn Express and two office buildings with federal tenants, includ-

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INFRASTRUCTURE

IPMI CEO Mike Canfield addresses the audience at the groundbreaking of the 92-room Marriott TownePlace Suites at Avanyu Plaza in November 2018.

ing the Department of the Interior Bureau of Indian Affairs (BIA) Southwest Regional Office, and various BIA agencies. “We’re one of the top five most visited properties when it comes to tourism in the State of New Mexico,” Canfield said. The museum draws about 90 percent of its visitors from further than 75 miles away, which often merits an overnight stay. “That’s an economic boost for the community,” Canfield said. On an as-yet undeveloped part of Avanyu Plaza, IPMI broke ground in late 2018 on its second hotel, the 92-room Marriott TownePlace Suites. An extended-stay hotel, the new Marriott will attract a different clientele than IPMI’s Holiday Inn Express, catering to business travelers on longer stays. “We’re optimistic, and every study that we’ve done — whether it’s feasibility or appraisal — points to a huge success,” Canfield said. The Marriott will overlook the outdoor space currently in development to serve as a home for entertainers, dancers and artisans. “Native vendors will bring their products on the plaza,” Canfield said. To fund development of the outdoor artisan space — a non-revenue producing asset, the 19 Pueblos contributed tax revenue toward a grant. Slated for completion in spring 2019, it will lend itself to the next phase of retail development in Avanyu Plaza: restaurants with patios facing the plaza, more space for office and commercial tenants, a state-of-the-art conference center, additional lodging, retail operations, security operations, and more. A Class A office space will target federal tenants. “It will be a great place for federal

employees to work, because it’s close to the freeway, to the airport, and all the amenities we’ve built around here,” Canfield said. In addition to the plazas, IPMI has developed a 15-acre tract of land (not contiguous with the plazas) into a commercial storage center. In summer 2017, IPMI broke ground on phase one, featuring 497 units and 93 oversized vehicle-storage spaces. The second phase, forecasted for completion in 2020, will create another 230 storage units. IPMI additionally converted a building, constructed in 1939 and left standing at the former AIS property, into a charter school: the Native American Community Academy. “We brought education back to the property

Tribal leaders. “In this case, we had 19 Tribal councils that would have to make decisions on every ordinance, tax ordinance, and every jurisdictional issue. They might require resolutions for each one of those,” Canfield said. Canfield consulted an attorney to create a political subdivision of 19 sovereign Nations — a unique model Canfield can only relate to that of the United Nations. Canfield believes Avanyu Plaza is the first project of its kind where 19 different Tribes united to form one development. “I don’t think that anywhere else in the world 19 sovereign Nations have come together and, for the betterment of all 19, formed another government as a political subdivision. In order to do that, I had to go to all the Pueblos, and get their councils to pass a resolution approving that political subdivision, and appointing their governor as their representative to reside on a council that takes care of governing matters for this property,” Canfield explained. Today, the political subdivision, called the 19 Pueblos District, maintains a government-to-government relationship with the City of Albuquerque. Among ordinances, the 19 Pueblos District created an MOU for first responders, “so if we have an accident on our property or a robbery, the city has agreed to provide those services. This is a shining example of a public-private-Tribal partnership.” Canfield continued: “We’ve created hundreds of jobs — construction, ongoing retail jobs, and hospitality jobs. The city sees that as a benefit to the community. Economically, we are a positive impact.” While IPMI is building revenue streams and wealth for the Pueblos, Canfield emphasized that the soul of the Pueblo-owned organizations is educating and perpetuating Pueblo cultures. IPCC and IPMI are often classified as non-profit and for-profit, respectively, but they’re truly “for-purpose,” Canfield said, “to share the beauty of Pueblo culture, and to be an economic force, providing employment for Natives. We also want to be a good citizen for the North Valley of Albuquerque, providing the amenities that people want, and providing resources for the people of the 19 Pueblos.”

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— but we brought it back on our terms. It’s operated by Natives for Natives. It’s really cool to have that here,” Canfield said.

The legalities of developing any multiuse property on Tribal land are complex. Bring 19 governments into the mix, and those challenges can be compounded. For instance, selling alcohol requires a liquor ordinance, which involves approval of

PHOTO BY CAITLIN CANO, COURTESY IPMI

“We’ve created hundreds of jobs — construction, ongoing retail jobs, and hospitality jobs. The city sees that as a benefit to the community. Economically, we are a positive impact,” Canfield said.

The Wildflower team with Silent Falcon Drone

Over New Mexico AN EAGLE EYE VIEW

By Renae Ditmer

PHOTO BY EDDIE MOORE, ALBUQUERQUE JOURNAL

here’s a reason that New Mexico is called The Land of Enchantment, because sometimes magic happens. Just ask Governor Joseph Talachy of the Pojoaque Pueblo and Kimberly deCastro, owner of Wildflower International. Looking to expand in an increasingly competitive but less lucrative federal IT contracting world, deCastro was seeking a related intrusive market sector that would allow her company to survive into the future. At the same time, Governor Talachy was brainstorming economic development opportunities that offered rewarding job prospects for its 482 enrolled members and surrounding community. It was a marriage made in business heaven: Pojoaque’s almost 12,000 acres of real estate and highly varying and inaccessible topography, combined with Wildflower International’s partnership with Unmanned Aircraft System (UAS or drone) manufacturer Silent Falcon. Pojoaque needed the surveillance capability, and Wildflower needed to train drone pilots over more challenging and realistic terrain. In this marriage, deCastro was the one to propose the partnership. She originally sought a deal to use the Pueblo’s Santa Fe Downs to train the 14-foot fixed wing span, solar-powered aircraft with a 4to 8-hour flight-life close to Albuquerque. In exchange, Silent Falcon would train Tribal

members as future drone pilots for federal contracts. Pojoaque would gain high-tech jobs in high demand, and Wildflower qualified pilots that would allow it to compete for federal contracts the Pueblo pilots would staff. Win-win. The Governor was all in. However, they quickly ran into a wall of Federal Aviation Administration (FAA) regulations. Undeterred, and armed with Tribal sovereignty and a bent for self-determination on both sides, they looked at that fourby-six-mile piece of trust land the Pueblo inhabited as Plan B. Within weeks of negotiating and getting Pueblo council by in, they reached an agreement for training that included assurance of compliance with the Pueblo’s cultural resource code and populated areas. They are now about to get off the ground – literally – with only an FAA 107 Regulations site waiver holding them back while training begins. “We’re not going to get the practice we need in a metropolitan area. The kind of training we need is really going to come from partnership with Native American Nations,” deCastro acknowledged. And that can only work in Tribes’ favor. Wildflower is currently preparing to bid on a federal opportunity that requires 100 qualified drone pilots with top secret clearances, and it is looking at Pojoaque as the place to source those pilots. “My sense is that the Pojoaque are a proud people who want to live on their land and fulfill skilled tech jobs from right where they live,” deCastro noted. They can get their four-day training class, pass the test, plus get their 50 flight hours right on the Pueblo, and Governor Talachy couldn’t be happier. “I’m really pleased to be Wildflower’s partner, hopefully on other things in the future

with them as well. The idea of having Tribal members train on these systems is very appealing. We are trying to get members to explore technical training in different areas, and we see cultivating future collaboration with Wildflower as part of that plan,” the Governor explained. “Kim is a brilliant entrepreneur, thinks outside the box, and sees the future of data gathering which is a huge revenue-rich growth area as well,” he added. The timing couldn’t be better for getting into drones. A 2013 study by the Association for Unmanned Vehicle Systems International (AUVSI) concluded, that precision agriculture and public safety will comprise 90 percent of the potential drone market. That translates into $82.1 billion in economic impact and nearly 104,000 jobs between 2015 and 2025. Other drone use comprises: wildfire mapping, disaster management, law enforcement, imaging, mapping, media coverage, environmental monitoring, gas and oil exploration, freight transport, and public safety, which the Pojoaque will be well-prepared for. Drone use got a political push from the White House in October, 2017, as well, naming 10 selectees for its Integrated Pilot Program (IPP). The one Native American program member chosen was the Choctaw Nation, which is “expected to…foster a meaningful dialogue on the balance between local and national interests related to UAS integration, and provide actionable information to the [U.S. Department of Transportation] USDOT on expanded and universal integration of UAS into the National Airspace System.” It remains to be seen whether the government can keep up with the speed of a public-private partnership like the Pojoaque-Wildflower agreement.

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By Debra Utacia Krol

QUIL CEDA VILLAGE CELEBRATES “FIRSTS” Top: Amphitheater at Quil Ceda Village Left: Tulalip Resort is within Quil Ceda Village on the Tulalip Tribes' lands. Below: Premium Outlet Mall at Quil Ceda Village.

he United States’ first-ever Tribal political subdivision continues to fulfill its mission of building a sustainable economy for its Tribal citizens. The Consolidated Borough of Quil Ceda Village, established in 2001 by the Tulalip Tribes to take advantage of its location on the I-5 corridor just north of Seattle, Washington, has been a huge success for the Tribe. The village was envisioned in 1998 by the 4,800-member Tribe as an economic engine to supplement its casino. However, Tribal leadership went one step further: they took advantage of existing federal rules and legislation to establish Quil Ceda as a municipality under the Indian Tribal Government Tax Status Act of 1982. In fact, Quil Ceda is the first-ever such political subdivision of a Tribal government. The only other such “federal city” is Washington D.C., says Quil Ceda Village General Manger Martin Napeahi.

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Quil Ceda functions like any other municipality. Its governing structure is a village council that, just like any other city or town council, enacts local laws and ordinances, develops village policies and sets annual village budgets. The council appoints the general manager, who functions like a city manager. And, just like any other city, the village government is responsible for building and maintaining infrastructure, parks, police and fire departments, and emergency services. The village was conceived and built for business. The 2,200-acre municipality houses not only Tulalip’s resort/casino and bingo hall, but a premium outlet mall; several anchor stores, including Cabela’s, Home Depot and Walmart; a retail center; an amphitheater; and several eateries. Most recently, a cannabis dispensary opened, says Napeahi. Tulalip Remedy is a Tribally-owned business and is the first dispensary on Tribal land in Snohomish County. The village and the Tribe are also proving to be good neighbors. They’re expanding an interchange along I-5 at 116th Street, which directs traffic to Quil Ceda Village. “We’re expanding the existing road, which is three lanes and a turn lane, to a full six lanes,” says Napeahi. The project, due for completion in spring 2019, which also includes bike lanes and sidewalks, will create a faster flow and reduce congestion. And even more importantly, Quil Ceda Village provides Tulalip tribal members with good jobs. “About 60 to 70 percent of the village’s 5,000 jobs go to Tribal members,” says Napeahi, himself an enrolled Tulalip Tribal citizen. The Tribe assesses a sales tax, and the lease income for the “big box” stores help offset elder’s per capita, he says. In fact, all the income generated by Quil Ceda Village’s businesses go right back to the Tribe to help fund a variety of Tribal government services. “It’s all about helping our people,” says Napeahi. But Tribal members also must go through the same rigorous lease process as any other potential tenant. However, Napeahi adds that there is one Tribal member who opened a fitness center three months ago on a trial basis. “He’s doing really well,” says Napeahi. Quil Ceda also has another “first:” When complete, the village will operate the first-ever Native American In-Lieu Fee (ILF) mitigation program for aquatic resource impacts and compensatory mitigation in the nation. The southern end of the village lies along the northern edge of the Snohomish River delta, and several smaller streams meander through the municipality. The program will allow the Tribe to sell credits to “impact projects located within Quil Ceda Village boundaries…, while the service area for ILF mitigation projects includes the entire Quilceda Creek watershed,” according to a 2013 release issued by the Tribe, the U.S. Army Corps of Engineers and the U.S. Environmental Protection Agency. “The Quil Ceda Village ILF program will provide a comprehensive natural resource program that addresses ecosystem needs at the local watershed level, and that provides mitigation for lost or degraded aquatic resources and their buffers as a result of unavoidable impacts.” The program is also expected to support improvement of Tribal lands that “have important ecological value to the watershed.” Napeahi adds that the Tribe — and the village — are also working on maintaining salmon spawning grounds along Coho Creek to preserve the Chinook, coho and chum salmon populations which are a central part of the cultures and history of the 13 Tribes forming the Tulalip Tribes’ Nation. And the Tribe’s cultural center, the Hibulb Cultural Center and Natural History Preserve, is also part of Quil Ceda Village. After nearly 20 years after the first plans were drawn, Quil Ceda is gearing up for its next decades by developing a new master plan.

“The new plan will set the tone for development over the next couple of decades,” says Napeahi. Among other items, the plan will include the casino expansion as well as other projects such as the wetlands program finalization and other infrastructure improvements. The village government is conducting a feasibility study for a possible indoor water park and hotel. And, the new plan is being developed with the input and partnership of Tribal members. “We brought in our youth, elders and other Tribal stakeholders to learn what they see we need,” says Napeahi of the year-long process. “The plan lays out the road map for the future.” The village has won acclaim nationwide as a key strategy to building Tribal self-reliance, prosperity and communities. In 2003, the Harvard Project on American Indian Economic Development presented Quil Ceda Village with an “Honoring Nations” award for its holistic approach to development. “During early planning stages, the Tribes adopted a holistic approach to the environment and set aside substantial land within the Village for a park, trails, and a wetland,” according to a release announcing the award. “A stateof-the-art wastewater treatment facility maintains clean surface water for the fish, wildlife, and plants within these Village areas. The Tribes also designed the Village to promote their rich cultural history and traditional practices.” The Harvard Project goes on to note that “Quil Ceda Village is an important assertion of the Tulalip Tribes' sovereignty…. Quil Ceda Village demonstrates that the use of a special-purpose municipality, with significant investment in infrastructure, can create an environment extremely attractive to investors as well as its Tribal citizens.” It’s not just outside think tanks that see the value this unique government entity has brought to the Tulalip Tribes. “Growing up here and being part of the growth is amazing,” Napeahi says. “It’s important to provide jobs and services. “We don’t see just the resort; our heritage, our languages are thriving. Everything we do, we do for the people.”

PHOTOS COURTESY QUIL CEDA VILLAGE

“It’s all about helping our people,” says Quil Ceda Village General Manger Martin Napeahi.

A nighttime concert at Quil Ceda Village's amphitheater.

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Infrastructure Is the Business How Mohegan Renewable Energy uses American waste wood to keep the lights on in Europe

By Josh Robertson

n business, it's tempting to see infrastructure as something you just have to work with. You have a factory, or a store, or an office — how do people get to it? How do you move your product? Where do you get your power, and how do you connect to the Internet? If you're a business owner, you might not have much choice. You get what you get, like a hand dealt to you in a poker game — and it's probably not going to be a royal flush. When the Mohegan Holding Company, the non-gaming business arm of the Mohegan Tribe, looked to succeed in sustainable energy, they approached — or ended up approaching — their new business venture from the other perspective. The goal was to maximize the success of a sustainable energy plant; the challenge was to locate a site or sites blessed by the infrastructure gods.

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The business, called Mohegan Renewable Energy (MRE), which only came into existence at the end of 2017, added its fifth plant to its operation when it bought a disused pellet-manufacturing facility in Quitman, Mississippi, in November 2018. The Quitman location joins plants in Crossville, Alabama; Jasper, Tennessee; Ligonier, Indiana; and Peebles, Ohio — all under the MRE umbrella. The product that Mohegan Renewable Energy produces is wood pellets, which can be used as fuel in home heating and power generation. Mohegan Renewable Energy initially sought to sell its pellets from facilities in Indiana and Ohio to the domestic home heating market. But early on, the company found that the heating market was too dependent on a factor beyond their control — the weather. Dissatisfied with the returns,

MRE needed a different strategy. Mark Boivin, President and CEO, was brought on board to get MRE out of the home heating market and to shift focus to industrial pellets and selling them overseas. That might seem a big change, if you're fixated on an owned brick-and-mortar factory and a local product. Boivin takes a more fluid view, focusing on the end recipient: Where is the best paying customer, and how do we structure our operation to make and deliver what's needed? “Businesses are really just supply chains,” says Boivin. “You would not build or invest in a plant unless you had long-term offtake, meaning that path to supply product to a utility. The main thing that a utility wants is certainty of supply. That needs to push back to the way we think about designing our businesses or supply chains.” In the wood-pellet industry — at least the way MRE is pursuing it — infrastructure is not some abstract element that exists outside the business and must be dealt with as needed. The infrastructure of roads and ports is where MRE's business lives. “There are lots of massive wood pellet plants that we have zero interest in,” says Boivin. “And that's because they're just in the wrong place.” As replenishable organic material that is converted to energy, wood pellets are clas-

Mohegan Renewable Energy counts five wood pellet plants: in Quitman, Mississippi; Crossville, Alabama; Jasper, Tennessee; Ligonier, Indiana; and Peebles, Ohio.

PHOTOS COURTESY MOHEGAN HOLDING COMPANY

Mohegan Renewable Energy is about to attain its Sustainable Biomass Program certification, an industry-wide standard that guarantees it produces biomass strictly from sustainable sources.

sified as biomass, a term that also includes gas (such as ethanol) made from organic material. There's not a huge domestic market for wood pellets, but in Europe, thanks to subsidies from greener European governments, demand from utilities is robust. “When you look at a portfolio of renewables, there's always onshore wind, offshore wind and solar,” Boivin explains. “Biomass has had a place in the portfolio of renewables in many, many countries, and that number is really growing. The piece of the pie is really dependent upon what's happening in each of those countries. The main way pellets are used is a displacement for coal. Utilities can do a wholesale conversion, just convert the whole [coal-burning power plant] over to biomass, wood pellets. The reason to do that, to use biomass as your renewable, is that you can store it and ship it to the burner, and you can do that whether or not the wind is blowing or the sun is shining. Until the overall challenge of storing energy from wind and solar is solved, biomass will be an important renewable technology.” A wood pellet business like MRE's depends on raw materials that are essentially unwanted, harvesting irregular wood

from logging operations, or remnants and sawdust from sawmills. It brings to mind a saying — associated with other Tribes, far removed from the Mohegans' traditional lands in the northeast: Use every part of the buffalo. The idea is an old one, and not unique even to Tribal people of the Americas. For humans to survive, it's necessary for us to kill things, whether it's animals and plants for food or trees for shelter and warmth. But many Indigenous cultures strive to do so respectfully, with a thriftiness and resourcefulness that make full use of the gifts from the natural world. MRE finds a human use for waste wood that might otherwise end up in a landfill. And

is about more than the pellets — it's about transportation. “This is very much a logistics [based] business," says Steve Wintle, MRE's vice president of business development. “Any time we seek out a new opportunity, the two biggest items we focus on in terms of siting a location are proximity to the deep-water port that can handle the pellets, and then the local fiber availability in and around a site location — what we refer to as the ‘wood basket.’ You really need both of those to work out well to be able to have an ideal location for the business. You determine a port of export, which is suitable for handling wood pellets, and then work your way back to the plant from there.” MRE's first two plants, located in Indiana and Ohio, don't meet the port requirement — but the plants in Alabama and Tennessee, and the soon-to-be operable plant in Mississippi, all do. “All of that product exports or will export through the port of Mobile, Alabama,” says Wintle. “Ordinarily the port of export has a storage facility that allows for the supply of pellets to be aggregated until enough product is available to load a vessel. And the reason for that storing requirement is the pellets can't really get wet.” Moving and storing the pellets requires MRE to employ a couple different trucking companies and barge-related services, but Wintle reveals that MRE even gets a break on the shipping logistics of the logistics-based business. “For this existing offtake contract, we actually sell the product FOB Mobile.” In other words, the European customers buy the pellets on the dock in Alabama, and handle the shipping themselves — adventure on the high seas is not part of MRE's operation. MRE's rapid growth has been impressive, and this opportunistic approach is repeatable by design. Find the supply of raw materials, find the deepwater port, and secure a processing plant. But there's a final element, inherent to renewables, that's both a hurdle and a point of pride: Sustainable Biomass Program (SBP) certification, which MRE is on the cusp of attaining. It's an industry-wide standard that was adopted so that buyers, and the governments subsidizing them, can be sure the biomass they're getting was actually produced from sustainable sources. It establishes a chain of custody for the fiber, to ensure that it was harvested from an appropriate place observing best forestry management practices. SBP certification is “an absolute requirement,” Boivin says, “and when you talk about the Mohegans, and reverence for the land — you can't get any more aligned than that.”

“There are lots of massive wood pellet plants that we have zero interest in,” says Boivin. “And that's because they're just in the wrong place.” while wood, like coal, produces CO2 when it burns, the new trees that are planted after harvesting will suck CO2 out of the air as they grow. It is this cycle of burning and replanting — emitting and absorbing carbon — that has earned biomass the “carbon neutral” designation from the U.S. Energy Information Administration. Selling wood pellets from the American Midwest and south to European customers

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Navigating the Legal Complexities of HUMAN RESOURCES By Native Business Staff

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Geoff Hash

rupt business and sever relationships with potential customers. Worse, employees can become a huge liability. “Employees can become litigants and losses,” Hash says. “Those lawsuits can be very expensive in terms of hard economic cost, and they can be time-consuming and draining beyond just dollars and cents. The emotional tolls that lawsuits take are tremendous, and they’re often not realized until you’ve been through the lawsuit as a defendant in the hot seat, so to speak. Avoiding those types of legal issues, especially when it comes to litigation, is very significant to business success.” The most common claims filed against Tribes and Tribal enterprises are those by federal government agencies, especially the Department of Labor — often for wage and hour violations as well as workplace safety issues. The great majority of those claims

stem from employer misclassification of workers. And once one employee files charges against a place of work, it opens the door for a class action lawsuit. “The plaintiff attorney receiving that call does not care about getting anything other than that employee’s paystub information. Because once they get that, it’s almost guaranteed that they can find a technical violation to bring a claim not only on behalf of that individual employee, but on behalf of every single other employee that is similarly situated,” Hash says. Native Business Magazine asked Hash to shed light on how Tribal and Native-owned businesses can cultivate a trustworthy team of employees and shield themselves from potential lawsuits. NBM: How can a Tribally or Native-owned business protect against potential claims? Hash: That’s the million-dollar question. To sum it, I would say: get good, trusted, sound advice from the very beginning. Partner with trusted legal counsel that: (1) knows the law; (2) knows the business(es) involved; and (3) is not afraid to speak candidly and directly to the leadership. In my experience, many attorneys working in Indian Country are too fast to say ‘yes’ to Tribal Council’s without advising, candidly, of the real risks or even saying ‘no’ when appropriate. I also think many Tribes and related businesses fear the expense involved with consulting legal counsel. From my perspective, however, a dollar spent today on good counsel will save many dollars spent tomorrow if you opt for no (or bad) counsel.

PHOTO COURTESY GEOFF HASH

mployees are vital assets — like any other piece of business infrastructure. Across industries, for a business to scale, founders rely on employees to act as the bridge between the business and clients. “Workers are absolutely imperative to business success,” says Geoff Hash, co-founder of The EiroBridge Group, a consulting firm committed to helping businesses thrive. Hash is also a licensed attorney who, for the past 15 years, has worked with business owners, including Tribal Governments and Native-Owned business owners, providing both litigation and counseling services in the area of employment law. “You’ve got to have employees that are not only proficient in whatever service you’re providing but also have the emotional intelligence to connect with your customers or clients so they keep coming back,” Hash stresses. Hash stands by the belief that “all work is sacred,” naturally excluding work that is illegal or aimed at exploiting others, he adds. He believes and has witnessed firsthand that leaders who embrace this fundamental truth “naturally do things in their marketplace and workplaces that lead to increased employee engagement, decreased incidents of improper behavior (whether that’s harassment or anything else), and decreased expense related to litigation, turnover, administrative charges, etcetera,” he says. Hash adds: “I think Indian Country is more likely to embrace the sacredness of work than those on Wall or Main Street.” While employees can act as the bridge to efficiency and customer retention, on the flip side, a disengaged employee can dis-

“I see a tremendous amount of opportunity — through the marketplace and business — flowing from proper exercises of sovereignty, knowledge of the limits of sovereignty and sovereign immunity, and recognition that growth is about a lot more than just complying with the law,” Hash said.

PHOTO BY PEOPLEIMAGES, COURTESY ISTOCK BY GETTY IMAGES

NBM: While some Tribes and Tribally owned businesses may think or hope they’re impervious to the U.S. Equal Employment Opportunity Commission (EEOC) laws and other national labor laws, those rights vary tremendously across geographic jurisdiction, the law(s) at issue, and the facts regarding the work (nature of the work, where it’s performed, etc.). What’s safe to assume when it comes to sovereign immunity? Hash: The bottom line is that outside of strictly/purely governmental functions occurring strictly on Reservation, Rancheria or Trust land (as opposed to at a Tribal-owned business), Tribes are well-advised to start with the presumption that they must comply with the various local, state and especially federal employment laws. That presumption should only change once they have applied the specific facts to the laws and jurisdiction at issue, with the help of legal counsel that is well experienced in the unique intersection of sovereignty, business and employment law. Too often, I have seen where Tribes, understandably but mistakenly, assume that as Sovereign Nations, they are immune from the employment-related laws of other jurisdictions. That can be a very expensive assumption, in terms of legal fees, penalties, and interruption of Tribal affairs/attention. That attitude often also leads to practices that put them at a competitive disadvantage when it comes to recruiting and retaining talent. One additional factor worth noting is contracts. Specifically, many Tribes have entered into contracts with other governments (state and federal) or other entities. The vast majority of those contracts, at

least upon presentation to the Tribe, have choice of law clauses, forum/venue selection clauses, and alternative dispute resolution clauses, each of which have been found by many courts to be a waiver of sovereign immunity. It happens in virtually all business-to-business contexts. It also happens when Tribes seek to do government contracting work, or accept government grant funds. Often, without actually knowing it, Tribes are ‘voluntarily’ subjecting themselves to compliance with state and federal laws, as well as the enforcement mechanisms that go with that. NBM: How can Tribes leverage sovereignty to its greatest extent? The single-most important factor here involves a proactive exercise of sovereignty. Too often, sovereignty is viewed in the context of a shield – as sovereign immunity (from application of laws and enforcement of them). The more important aspect of sovereignty, from my perspective, is the authority to govern yourself under your own laws. As a sovereign, a Tribe has the right and authority to adopt and enforce its own laws (ideally, enforcement comes from a truly independent judiciary that is committed to due process). If it does both, it will have a strong jurisdictional defense, and it will be less likely to get hit with claims. I see a tremendous amount of opportunity – through the marketplace and business – flowing from proper exercises of sovereignty, knowledge of the limits of sovereignty and sovereign immunity, and recognition that growth is about a lot more than just complying with the law.

NBM: What about small, privately owned Native businesses and entrepreneurs — how can they avoid issues or claims, while cultivating a positive and productive workplace environment? Hash: Beyond, as previously discussed, recognizing that work is sacred, focus on the following, in roughly this order: 1. Assume that they ARE subject to all local, state, and federal laws (to the extent those are otherwise applicable to a non-Native owned business). 2. Engage qualified counsel — counsel with experience in Indian Country, their state/jurisdiction, and employment law to help proactively identify what laws they are actually subject to. 3. Evaluate hiring practices. (Stop hiring in a hurry/without clarity on anything beyond immediate panic to fill immediate need.) 4. Refine wage/hour practices. • Correctly classify independent contractors versus employees, and use written contracts when hiring independent contractors. • Clarify and accurately classify employees as salaried versus hourly and exempt versus non-exempt from overtime pay. • Track all time employees work (no off the clock work). • Pay overtime properly. 5. Hold anti-discrimination/harassment trainings. (Go beyond creating and disseminating written policies.) 6. Be diligent about performance management and termination procedures — particularly as it relates to documentation and use of general releases for risk-mitigating terminations.

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“I had the idea that if we were going to succeed in business, we had to put ourselves in control of our own destiny,” Seneca said.

hen JC Seneca, a member of the Seneca Nation, started his first business in September 1987, he was working three jobs. “I was pumping gas; I was working at our bingo hall; and I had a little gig on the side spinning records at a local radio station,” he told Native Business Magazine. One might think he was too busy to consider launching his own business venture. But from Seneca’s ambitious perspective, that’s just when opportunity came knocking. “When I started my business, I had enough money to purchase 60 cartons of cigarettes. I had a little camper, and I parked my camper on the side of the road, and set up a table with my 60 cartons of cigarettes. It was like a little fruit stand, but instead of fruit, I’m selling cigarettes,” said Seneca. Two major highways intersect on Seneca Nation territory, located roughly 30 miles south of Buffalo, New York, drawing a significant amount of traffic. Seneca had no problems turning a profit. He put that revenue toward building a small convenience store called Native Pride — which, about eight years down the road, he would relocate and vastly expand to a 50-acre property called Native Pride Travel Plaza. Today, Native Pride Travel Plaza houses a smoke shop, gas station, high-speed Diesel pumps and popular diner in Irving, New York. Fuel for Success Business accelerated after Seneca installed gas pumps at Native Pride Travel Plaza in September 1995. But sales really started to soar in 1998, when Seneca added diesel pumps and debuted his truck stop. Located on prime real estate, off Exit 58 on the New York State Thruway I-90, “all the big trucks pull off the highway to come in and fuel up. We have everything a trucker could need, including supplies and showers. Everything is geared toward the trucking business,” he said, including the 24/7 convenience store and Native Pride Diner, a buzzing, family-friendly restaurant serving from 5 a.m. to 11 p.m. daily. Truckers can take a break by taking advantage of free truck parking at Native Pride. Seneca also drives traffic to Native Pride, because his gas prices are hard to beat. “I’m a

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JC Seneca, founder of Six Nations Manufacturing, Native Pride Travel Plaza and BUFFALO Cigarettes

FUELING THE

ECONOMY By Native Business Staff

JC Seneca went from selling cigarettes curbside to employing 100-plus people through his tobacco manufacturing plant and travel plaza By Native Business Staff

HELPING TRIBES BUILD TOBACCO BRANDS JC Seneca is now looking to offer guidance to other Sovereign Nations on launching their own Tribally owned and branded tobacco products. “We can help facilitate that — produce it for them, and help them brand their own cigarette for their own Nation,” Seneca said. Seneca realizes the power of branding across companies and product lines. He thinks Tribal casinos, convenience stories and gas stations can capitalize on putting their personal label on tobacco products, while retaining a greater share of the revenues. “I’m sure many of the casinos that our people operate are selling Marlboro or Winston cigarettes. Why not sell a Native cigarette? Why not sell their own branded cigarette — that we can help them with to create and produce?”

PHOTOS BY NICOLE SENECA

motor fuel wholesaler and transporter with my own fleet of trucks. We go to the refineries and pull fuel from them and bring it back here, so I’m totally self-sufficient,” Seneca said. “I produce my own cigarettes, and I haul my own fuel.” Seneca recently purchased two new trucks for a total of six units. He sends a tractor and tanker daily to Pennsylvania and back. Seneca is taking charge of his own destiny by getting fuel at the best price. “If I were to buy from a wholesaler who goes and delivers fuel to me, I’m stuck with his price — whatever it may be that day. I’m able to get the best price every day, because I’m the buyer, I’m the trucker, I’m the wholesaler, and the transporter of the fuel.” Creating BUFFALO Cigarettes More than a decade ago, Seneca developed and trademarked his own brand of cigarettes: BUFFALO Cigarettes. “At the time, I had them produced in Peru, and to facilitate that, I applied for and received a customs bonded warehouse here on Seneca Nation territory, where I could receive my product,” Seneca explained. Manufacturing BUFFALO Cigarettes in Peru, shipping them to New York, and then trucking them to a customs bonded facility on Tribal property accomplished two things: “I created my own brand of cigarettes, and I was able to protect my supply line, so that the state of New York could not come in and interfere with it. They don’t have authority to do that, because the federal government regulates bonded warehouses,” Seneca explained.

“Today I’m selling [regular] gas for $1.89 a gallon,” Seneca told Native Business Magazine in late January. “Off the territory here, the price is about $2.50 a gallon. If you go towards New York City, it’s going to be higher.”

“I had the idea that if we were going to succeed in business, we had to put ourselves in control of our own destiny,” Seneca said. Since the early 1980s, New York State has vigorously tried to find ways to tax commerce on Seneca Nation territory, Seneca said. “Over the course of my 32 years in business, New York State has continually attempted to encroach on our sovereignty and to force their regulations on us,” Seneca said. “We’ve been very successful in resisting that.” Six Nations Manufacturing is licensed by the Trade and Tax Bureau (TTB), which regulates the manufacturing of cigarettes in the United States. “In doing so, I remit federal taxes on every cigarette that I produce and release into the market,” Seneca clarified. To this day, Seneca doesn’t pay state sales or excise tax on sales of BUFFALO Cigarettes or any products sold through Native Pride Travel Plaza. “We exercise our sovereignty in regards to our economies and regulations,” Seneca said. “We stuck to our principles and what our ancestors put in place for us to protect and defend. It’s our responsibility to future generations; it’s a great responsibility.” Seneca believes his persistent advocacy for Tribal rights and sovereignty has influenced legislators. “As I sit here in 2019, I believe it has protected not only my business but other Native businesses throughout the territories in New York,” Seneca said. But it’s been an upstream battle. In addition to state push-back, Big Tobacco attempted to impede on Tribal sovereignty. “Phillip Morris was working with state legislatures, especially in New York, and also with Washington, to craft legislation that would put the small manufacturer and Native manufacturers out of business. They spent a lot of money lobbying and helping legislatures craft legislation,” Seneca said.

That resulted in a couple things: one was the PACT (Prevent All Cigarette Trafficking) Act, “which was very detrimental to our economy at the Seneca Nation, because we had a significant number of businesses that were mail-order or Internet-based and shipped cigarettes all across the country. Once the PACT Act was signed into law, that put many of our people out of business,” Seneca recalled. Along with that, New York State Governor Andrew Cuomo issued a provision nearly eight years ago restricting the flow of product to Tribal territories. He effectively barred big brand tobacco, such as Marlboro and Winston-Salem, from traveling to Indian reservations. Now Tribal Nations in New York State sell Native-produced cigarettes exclusively. Native Pride Travel Plaza currently carries cigarettes produced on the sovereign territories of the Seneca Nation,

“I’m totally self-sufficient,” Seneca said. “I produce my own cigarettes, and I haul my own fuel.” Tuscarora Nation, Cayuga Nation, Mohawk Nation, as well as the Six Nations Reserve in Ontario, Canada. Seneca underscored that if he and other Native entrepreneurs and Tribes had not started their tobacco initiatives 20 years ago, “we would be out of business, because we would have no supply line or product,” Seneca said. Seneca had the foresight to recognize potential threats down the road. When he started BUFFALO Cigarettes, he got help from a friend with a factory for production the first couple of years, “until I was able to get my factory up and running.” For the past

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MANUFACTURING

Building Six Nations Manufacturing Seneca self-capitalized Six Nations Manufacturing with the income created through his retail business. “I had to be a self-sufficient funding source,” said Seneca, emphasizing how challenging it can be for Native-owned businesses to obtain a bank loan, because Tribal lands can’t be held for collateral. “They don’t want to deal with an Indian, because if someone defaults on a loan, they have no recourse to property or collateral. A lot of the businesses that I’ve built have been self-funded,” said Seneca, adding that he always funnels revenues to reinvest into other business projects. On family land passed down to him, Seneca hired a contractor to construct a small building to house his initial customs bonded warehouse for the production and manufacture of cigarettes. Over the course of time, he added on two more buildings. “It goes in phases as your business grows. You adjust and take the necessary steps to accommodate it,” he said. Six Nations Manufacturing is currently “operating very efficiently and productively,” Seneca said, adding that he’s grateful that he’s been able to play a role in sustaining the local economy — “not just with the cigarettes that I make, but supporting other Native cigarettes. I built and structured Six Nations and Native Pride to enhance our ability as Native people to help others to be in busi-

ness and be successful at it,” Seneca said. “We need to help Native people and businesses. We’re much stronger if we do that, rather than squashing one another. That’s the way I look at business and being an entrepreneur and a responsible member of my Nation.” Tobacco Distribution While Six Nations Manufacturing can legally pursue licenses to distribute in all 50 states, the manufacturing and distribution company has chosen its licenses selectively to navigate the constantly changing tobacco market. Foreign cigarette brands are entering the United States’ market “at a much lower price than I can manufacture and pay the tax on,” Seneca said. “We’re seeing it time and time again. Korean tobacco cigarettes are coming in at a significantly lower price. As a manufacturer, I have to create the cigarette and pay the tax to whatever state I’m going into.” Ever-agile, Seneca has responded by reevaluating the movement of his product into other states. Seneca previously sold BUFFALO Cigarettes in Nevada, New Mexico, California, Washington, Idaho, Nebraska, Florida, Texas, New York and South Carolina. “The new model just concentrates on the homeland here, and the Nations within the Confederacy in New York. I’m still in the Florida market, but I’ve pulled back from the other states,” he said, adding that BUFFALO Cigarettes have maintained traction in Florida due to its long-time presence in the Sunshine State. Making an Impact Through his various businesses, Seneca currently employs more than 100 people. “I

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look at it as it’s also a hundred families that depend on what I do. It’s a great responsibility every day to make the right choice and right decision, because I could make an adverse decision that could really affect that. I have to make sure that I’m with a good mind and making good decisions each day that I operate my business,” he said. Also central to Seneca’s personal mission in life is supporting indigenous people and giving back. In 2011, he started the JC Seneca Foundation, a nonprofit corporation whose mission is to advance healthy living in body, mind, and spirit for the people of the Seneca Nation and surrounding communities. The JC Seneca Foundation additionally serves as the “support mechanism” his wife Nicole Seneca’s nonprofit called It Takes a Tribe, which provides support and love to children in foster and kinship care, as well as the families who are caring for them. Through determination and gumption, Seneca has created businesses pivotal to the economies of several Sovereign Nations in New York State and the local community. “One of the things that was ingrained in me when I was a child is that there is no such word as ‘can’t.’ You always have to find a way to succeed — and that’s what I’ve done. It’s been a great journey,” Seneca said. Seneca will celebrate 32 years in business this September, though, he said, “It doesn’t seem that long ago that I was standing on the side of the road selling cigarettes with nothing in my pockets.” Those fond memories of his early days keep Seneca “grounded and focused,” he said. “Make sure that you attend to the important things in business and in life, so that you can be successful and enjoy it.”

PHOTOS BY NICOLE SENECA

10 years, Seneca has produced BUFFALO Cigarettes at his tobacco plant, Six Nations Manufacturing.

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Native Business Magazine - March 2019

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SNEEK PEEK: Native Business Magazine - March 2019