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Eating Crow with Ernie Stevens, Jr.

Harold A. Monteau
4/28/11

Congratulations to Ernie Stevens, Jr. on his victory for another term as President of the National Indian Gaming Association (NIGA). The numbers speak for themselves. The other candidates are to be congratulated too, for being good sports.

This is not an apology for my comments about NIGA needing to do some soul searching (see "New Mission for NIGA" and "NIGA's New Mission, Part 2") about better serving the “have-nots” of Indian Gaming and how to better serve Indian country.

Every month that passes without a strategic plan for implementing the 10% “Buy Indian” goal that NIGA set for itself means a few hundred million dollars more that hemorrhages from our Indian economies, never to be seen again.

Should not NIGA study the draining of gaming revenues away from reservations? Or at least make an effort to understand the problem? I want to be proved wrong. I’d be happy if a study revealed that 10% of tribal gaming and governmental spending goes to Indian-owned or majority Indian-owned sources. I’d retire and put away my pen if someone could demonstrate that the number of new tribal or Indian-owned or majority-owned companies fulfilling Indian country purchasing is increasing each year. I’d shout praises to the heavens if it could be demonstrated that Gaming tribes are investing in the creation of Tribal and Indian companies that supply and serve Indian Gaming.

In fairness, there are NIGA tribes that are starting (or buying into, lending start-up capital to, giving business grants to, and otherwise helping create) Indian-owned companies to supply the industry. Unfortunately, that number is still pretty small. Even with those, you have to have a darned good business plan and pro forma financials showing a high return on investment before they will entertain the investment. Some want the same ROI they get from the casino business or businesses created to take advantage of tax immunities. That is a totally unreasonable expectation, if you are talking about a business that depends on the sweat and work ethic of entrepreneurs who are willing to take the risks involved in a start-up company.

Even if these Indian entrepreneurs get beyond the start-up phase, they have to find expansion capital so they can reach a wider market. Even if they find a bank willing to lend with a BIA Loan Guarantee, the entrepreneur has to show required equity to leverage the loan. In most cases the bank will consider the loan, even if the equity is debt equity (such as a loan from a Gaming Tribe covering the required equity percentage) or if the equity can be shown by the investment of the individual owners of the company and/or a showing of sales, especially from purchasing sources that are willing to commit to multi-year purchasing. And there stands the next hurdle; getting tribes and their managers to purchase.

Most tribes will deny this, but it is extremely difficult for Indian entrepreneurs to get past the purchasing or marketing departments of Indian casinos, even if the tribe has a Buy Indian and Indian Preference policy that applies to hiring, contracts and purchasing. Even worse, if the Tribe has a TERO (Tribal Employment Rights Office) that is supposed to have enforcement authority in this area, management will still resist an Indian owned company that has TERO Certification. Tribal and gaming purchasing agents are ignoring tribal law and are staying with existing non-Indian sources, even if the Indian company is within a few cents of the bid. Some Indian business owners assert that they have submitted bids that were under the other source’s bid, but the other source was allowed to adjust their bid thus coming in under the Indian company. Others are told, “Well, you don’t have a proven track record”; they’ll never get one either, with that attitude. There are instances of ‘bid buying’ or ‘greasing’ going on that can be as innocuous and hard to detect. This can include things such as a gift being sent to the home of the purchasing agent; or a paid vacation; or dinners, or shows, or sometimes even cash. It could be that the managers say they have always used this company wherever they worked. There are no good excuses for the blatant ignoring of tribal law that we know is going on with regard to Buy Indian and Indian Preference. It is happening because tribes are letting it happen.

There is one small, simple step that NIGA Tribes can take that would greatly enhance the purchasing from Indian Companies; require all governmental and business managers to comply with tribal law and policy regarding Indian Preference in hiring, contracting and procurement and make it part of job performance. Tribes also need to define what are the preferences. Is it a percentage (5%-8%)? Is it an opportunity for the Indian Company to adjust the bid within a certain level of cost tolerance? Or is it just an opportunity to bid (which amounts to no preference at all)?

Perhaps the federal agencies or the Inspector General’s Office should take notice of these violations by their tribal contractors, which quite possibly constitute waste, fraud and abuse. The tribes, by signing off on those contracts, have agreed that these provisions will apply. With the money comes an obligation to create job opportunities, FOR INDIANS. However, tribes have to police themselves when it comes to the spending of gaming revenues. There is no good reason for gaming tribes not to enforce Indian Preference and Buy Indian; after all, it creates business opportunities and jobs, FOR INDIANS.

“The road to salvation starts with but a single step”.

Harold A. Monteau is a Chippewa Cree attorney who resides in Albuquerque, New Mexico, and was the chairman of the National Indian Gaming Commission in the Clinton administration. He can be reached at hamlaw@live.com.

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maryleejohns's picture
Thank you Harold for continuing to speak out about the idea of "By Indian"... for years we have used this term as a means to encourage the U.S. Government to allow Indian owned businesses to participate in the lucrative area of doing business with the Feds. We have pushed in numerous places to open the doors for Indian owned business to participate in the economy of the reservations. We have convinced many international corporations to become more "socially responsible" in both hiring and contracting with Indian people and businesses - and yet when we review what is happening in the largest industry that Indian people have it is a very, very sad story. The idea of N2N is a great idea but as my Grandfather always said "talk is cheap - but it takes money to buy whiskey. Until Indian country is fully integrated into the Indian Gaming Industry - all is talk. I believe we have to begin changing the top jobs in this Industry with Indians and maybe that will make changes possible. Or is it that there are false barriers put up to keep our young intelligent experienced Indians from showing up the "old guard" or do they refuse to kiss up and as a result are "black listed" for that refusal. I always ask myself "What would Joe Delacruise say about this situation... we all know he would stand up and tell us the same thing you’re stating in your well written editorial. Thank you... Mary Lee Johns Lakota
maryleejohns
nativearts's picture
Thank you Harold, Finally someone has the guts to speak out for Native Business. A good place for NIGA to start would be the Native casino gift stores. I have owned a arts and crafts business for 20 yrs. Any time I have asked to meet a casino gift store buyer, they are allways non Indian. They say they are not buying, yet they have mostly non Indian made products. Monrongo has Indian paintings made in china. Avi has fake Indian dolls made in china. 20 Indian arts and crafts booths set up at Cal Gaming in Pachanga, yet there Russian buyer came and bought non Indian made bead work from a non Indian.Next day put it in their gift store marked Indian made.
nativearts
nativearts's picture
NIGA conference does treat the Arts and Crafts vendors a little better after years of complaints.Natives have allways been traders of hand made products. We are the grass roots of Indian business. We are the ones that buy from Indians that cannot afford to travel to shows. We sleep in tents drive all night to make it to a conference or pow wow. Yet the largest Native organazations in Indian country treat us like crap. RES conference treats us the worst. They slap a N2N button or a buy Native button at you. Yet the Arts and crafts vendors are not able to go into the trade show, to further our business. 4 years in a row their vendor cordinator charged $500 per table and demanded $200 cash for extra tables and a $100.00 product. I turned her in to 4 board members. Guess what they never talked to me again. Thank God that cordinator is no longer there. also thanks to Pat Parker for speaking out this year, at the last 2hrs we got to go into the trade show. If it was not for good friends, that I only see at these shows I would give it up. So again, Thank you Harold for being a voice for us.
nativearts