Monteau: Prosperity through collective marketing, not exploitation
Assistant Secretary for Indian Affairs Carl Artman, Mashantucket Chairman Michael Thomas, Seminole Chairman Mitchell Cypress and other United South and Eastern Tribes recently announced a new economic development initiative that would link land rich, cash poor tribes with wealthy gaming tribes. The purpose is to stimulate purchasing by the wealthy tribes from these partner tribes.
The National Tribal Development Association, which developed the ''Join the Circle'' tribal economic development and diversification model several years ago, is extremely pleased that someone has been listening and another piece of the model is coming together. NTDA is an association of 49 tribes and is dedicated to creating and stimulating intertribal trade and commerce. The NTDA model is based on a partnership between wealthy tribes, non-gaming or ''marginal'' gaming tribes, private investors, current gaming vendors and service providers and, in some cases, elements of the federal government. It would establish collective marketing capability for existing tribal and Indian businesses, and more importantly, create and enhance incentives to bring distribution points, manufacturing, assembly, fabrication and importation points to Indian country.
NTDA was started by the late John Sunchild, the late Merle Boyd, Philip Martin, Keller George, and several other tribal leaders from various tribes across the United States. NTDA and its partner, Native American Business Development, have drafted business plans which would accomplish what Artman and the tribal leaders are advocating. Under these plans, the ''customers'' are the ''owners'' of the distribution networks, manufacturing facilities, service points, service companies and importation centers. An Indian Costco, so to speak.
It is estimated that the Indian gaming industry and tribal governments associated with Indian gaming spend some $15 billion a year on goods and services. Less than 1 percent of this spending is estimated to go to Indian, tribal or Native majority-owned companies and firms. The bulk of this $15 billion goes to non-Indian casino supply vendors, gaming device companies, Class II systems companies, architectural and engineering companies, et cetera. I'm sure the list goes on and on. Everybody is making money, except Indian, tribal and Native-owned companies, that is.
Some challenge the $15 billion figure I use and, actually, neither I nor anyone else knows what the true figure is. I would love someone to prove the figure wrong either by a true polling of the tribes, or by scientific or investigatory methods. However, even if it turned out to be a lesser figure, the same principles would apply.
The National Indian Gaming Association has a self-imposed goal of having its member tribes enforce Indian preference in hiring and contracting so that at least 10 percent of what they purchase in goods and services comes from Indian country sources or Indian and Native majority-owned companies. Too bad the non-Indian vendors, companies and firms have not been willing to do the same thing. Tribes should demand that these companies not only hire Indians but they should be sub-contracting with Indian and Native companies. They should be partnering with tribes or Native and Indian-owned companies to produce, assemble, distribute and deliver the goods and services our tribes and our Indian gaming industry consumes. Without the full cooperation and participation of these non-Indian companies and firms, even NIGA's ''modest'' goal of 10 percent will not be reached.
At a speech at the 2007 NIGA convention, I gave my imitation of the great sucking sound that $15 billion makes as it leaves Indian country. People laughed at the imitation, but not at the point. The reservation economic boom created by Indian gaming is hemorrhaging green while we are applying Band-Aids to a severed artery. We set ourselves a self-imposed goal without any kind of comprehensive plan as to how we achieve that goal. The absence of such a plan allows off-reservation interests to continue to siphon off 99 percent. The supply and service industries are silent as to what they can do or are willing to do and what goals that they can set to help Native economies.
They can do this by utilizing business models that allow circulation of some of this money through Indian country at any point: purchasing, distribution, production and assembly, or subcontracting to Indian and Native-owned companies. Moving a portion of their business operation to Indian country or contracting with a tribal, Indian or Native partner to produce and distribute products and render services is a no-brainer given the availability of an underemployed labor force, numerous tax incentives, other tribal, state and federal incentives, absence of union activities, freedom or mitigation of impacts from state licensing, and other regulatory issues. Tribes are willing to create a friendly and familiar business environment by adopting the Model Tribal Uniform Commercial Code and training their managers and court personnel regarding its enforcement.
It is my understanding that NIGA explicitly committed itself to developing a strategy for achieving the ''modest'' goal of having member tribes and their casino/resort operations purchase at least 10 percent of their goods and services from Indian country sources. This strategy was to be formulated in a series of NIGA-led ''economic summits,'' at which gaming tribes, Indian gaming management, the Indian gaming finance industry, as well as Indian gaming service and supply companies would come together with tribal leaders - including leaders from non-gaming or ''marginal'' gaming tribes - to develop a strategy for implementation of NIGA's goal. We need to follow through with this process. So far we have seen a BIA and NCAI co-sponsored Economic Development Summit. That's a good start, but NIGA needs to bring the above-mentioned parties to the table under its banner.
NCAI, NIGA and National Center for American Indian Enterprise Development have taken a significant step in moving toward the overall goal by compiling an Indian vendor list. While it is a significant step in the right direction, it does little toward reaching the 10 percent goal to simply identify what exists without a genuine concerted industry effort to create Native vendors and suppliers. When we start creating supply and service entities in Indian country, whether they are Indian-owned or not, is when we start to re-circulate some of the $15 billion back through Indian country and create development that contributes to a sustainable economy.
Former California Lt. Gov. Cruz Bustamante summed it up well by saying, ''The American Indian community needs to circulate its dollars beyond the one 'turnover' it makes in the Indian community before it leaves the community. The Jewish American, Latino American, Asian American and African American communities all circulate the dollars that are earned or originate in their communities at a much higher rate than Native Americans, sometimes as much as a half dozen times before it leaves.'' Cruz has it right; we not only don't give our trade to Indian, tribal, or Native-owned businesses within our immediate community, but we also don't give our trade to other Indian, tribal, or Native-owned businesses outside our immediate communities. It is insane to just keep giving it away.
We never will accomplish the NIGA goal unless we bring together all the parties that profit from Indian gaming, as well as from our other assets such as land, water, energy sources, timber, minerals and aesthetics that attract tourism to areas on or near our homelands. Exploitation should be replaced by partnerships in developing Indian businesses, rather than selling, leasing or simply giving away our valuable assets (i.e. $15 billion in purchasing power). The non-Indian companies that make millions from Indian country should be asked to take an intimate role in achieving the NIGA goal. Perhaps it should be demanded of them. Some of these non-Indian companies should step up to the plate and sponsor the Indian economic summits that Ernie Stevens spoke about.
In the 1980s and '90s we all were up in arms when the scandals broke about energy companies siphoning off Indian resources and either underpaying the owners or not paying them at all. The $15 billion in annual value being siphoned off of Indian reservations by gaming vendors should deserve the same scrutiny and outrage. So far, it hasn't.
Harold Monteau, Chippewa Cree, is a past board member of NTDA and is the CEO for Native American Business Development and is also the owner of Monteau Law Offices. He resides in Missoula, Mont. His law practice and business development efforts are dedicated to creating and financing Indian Country Economic Development Projects.