Institutional Change II: Domestic, Dependent Nations Lose Rights

A look at two invented statuses tied together in history – the corporate persons and those described as domestic, dependent nations.

Political scientists call the continuing struggle to define the powers and duties of states vis-à-vis the federal government “federalism.” To individuals, federalism is about what decisions belong at which level of government.

The modern sovereign as all-powerful up to and including life and death is anachronistic nonsense. Even tiny vestiges of that understanding of sovereignty are well disguised.

The United States and the several states and Indian tribal governments have “sovereign immunity” from lawsuits by mere citizens. To avoid public opinion Armageddon, we have statutes that waive sovereign immunity when the government enters into a contract and tort claims acts allowing people to sue when harmed by use of government property. Sovereign immunity is not controversial when it is invisible.


Most Indian nations, on the other hand, stand on the feudal idea that being the sovereign means never having to say you are sorry—or, more to the point, respond in damages. Deploying sovereignty against tribal citizens in even more outrageous ways brought us the Indian Civil Rights Act of 1968, which called attention to petty tyrants in tribal governments but did not eliminate them.

While the Indian nations were playing cat and mouse with the states, general business corporations had the advantage of being portable. Corporate law was and is state law and the predictable result was a race to the bottom that makes the big business centers of the U.S. appear to be not New York and California but rather Delaware and South Dakota. This is so for the same reason that Liberia and Panama appear to be major maritime powers.

Corporations gravitate to the jurisdictions that give them the most powers and fewest duties. This works on an international level as well, and that gives us Transocean, Ltd., the best known and one of the largest offshore drilling contractors in the world doing business from landlocked Switzerland. Or getting its mail there, while it actually does business from Houston.

Ships register under the flag of jurisdictions with the least onerous shipping regulations. It’s an open secret that Liberians and Panamanians do not in fact own all those ships, but Liberia and Panama do not impose lots of health and safety regulations, either.

The nation-state is becoming less relevant to human organization. Labor and capital ignore national borders and the voters who theoretically hold the power persuade themselves that globalization is a choice driven by multilateral trade treaties rather than a force driven by technology and the profit motive.

General business corporations are now transnational in a way that makes the country of incorporation nothing more than a way of manipulating tax liability. Even within the United States, when the Justice Department litigates against a major corporation, it’s a David v. Goliath story—and the Justice Department is David, with fewer resources, human and material, to devote to the litigation. The lowest paid lawyer in the courtroom will always be working for the government. When two transnationals litigate, the lowest paid lawyer in the courtroom is the judge.

Back at the turn of the 21st Century, the Institute for Policy Studies reported that of the world’s largest 100 economic entities, 51 were corporations and 49 were nations. Ten years later, the world economy was in recession, and the number of corporations in the top 100 had dropped to 42 according to Fortune.

New Scientistpublished a study the same year by complex systems theorists at the Swiss Federal Institute of Technology. They winnowed a database of 37 million companies down to 43,060 transnational corporations (TNCs) and then plotted the interlocking of investors and executives.

Through these relationships, the TNCs (mostly banks) essentially own each other, and after accounting for that the researchers found 147 of them own 40 percent of the wealth in the entire worldwide network.

The World Bank does a similar survey that makes governments look a bit more robust by adding cities into the mix with nations and corporations. The question is whether transnational corporations need nations; they certainly do not need cities and are unlikely to be governed in big questions by city ordinances.

Within nations, “sovereign” authority is split among localities because it’s more efficient and because democracy is now the ascendant ideology and people demand local control of local issues. National governments simply direct traffic. The time when sovereignty meant fealty to an individual, the sovereign, is long gone. This is the age of bureaucracy and nation-states do not control all the bureaus.

For Indian nations, the idea that they would stand on the international stage having their own foreign policies distinct from the United States was always the product of some parallel universe, even during the treaty-making period. The U.S. would not tolerate Canada or Mexico having a foreign policy contra U.S. interests. Do you think Indian nations are more economically or politically or militarily robust than the other two settler countries in North America?


If foreign policy is off the table, and Westphalian sovereignty is bleeding from bureaucratic fragmentation of authority below and a globalized economy above, does Indian sovereignty mean anything in the 21st century?

You bet it does. What it means is still in flux, but if tribal governments focus first on economic independence there is still space to have substantial say in the decisions that most intimately affect the lives of tribal citizens living in what is left of the homelands.

Indian nations are part of the federalism puzzle that is U.S. government. What authority governs which decisions? Who regulates business? Marriage and divorce and child custody? Who can protect traditional spiritual practices?

Our autonomy—the content of the meme “sovereignty”—depends politically on public opinion remaining at least neutral on Indian self-government. The legal attack on sovereignty is based on Fourteenth Amendment equal protection, and claims that any law or policy that works to the advantage of Indians is a race-based privilege that disadvantages white people. This is a powerful argument.

The average American is innocent of the distinction between Indian as race and Indian as dual citizenship in a tribal nation. Those of us who hold dual citizenship need to explain it in political rather than racial terms every chance we get.

Growing up with an Indian identity in the modern United States sometimes feels like all stereotype, all the time. We get weary. But in spite of K-12 education pushing the seamy side of Indian policy down the memory hole, parts of the stereotype work to our advantage.

Culturally, all Indians are Plains Indians in the imagination of voters who think they’ve never seen an American Indian. (They probably have, but the Indian did not match their expectations.) It’s some kind of ironic that the tribal nations in the last battles involving firearms—Apaches, Kiowas, and Comanches in the south and the Great Sioux Nation with their Cheyenne and Arapaho allies in the north—fit the popular profile. Because they do fit the central casting understanding of “Indian,” educated and articulate representatives of those nations stand the best chance of educating U.S. voters about tribal sovereignty.

The practical uses of Indian sovereignty—as well as its limits—remain to be explored by leadership that recognizes sovereignty can be so much more than a shield for misconduct by tribal governments.

When not being used to frustrate an audit or forestall an indictment, sovereignty is too often a rhetorical plaything, a bright shiny object more about grasping for power and maintaining power than its responsible exercise. We need leaders who know enough about U.S. government to occupy the Indian sovereignty space and throw elbows to keep the race-baiters at bay.

The task for those of us who hold dual citizenship in tribal nations in addition to the United States is to elevate that kind of leadership while the door of political opportunity remains open.

In Donald J. Trump, we have the POTUS who is most hostile to tribal sovereignty and who understands how to use the Fourteenth Amendment against us. We know this because he has deployed that argument in his role as casino mogul.

Because Trump poses a clear and present danger to tribal sovereignty, it would be prudent to consider where we stand if we lose that sovereignty. The last time the U.S. tried to abolish our political existence, they wrote laws to divide tribal assets among individuals. Those individuals were easy pickings for jackals with lawyers on speed dial, and even after the termination policy was beaten back, the terminated tribal governments sustained heavy economic losses.

This time, we should go back to the Supreme Court’s creation of domestic, dependent nations and corporate persons at around the same time. Since the creation, domestic, dependent nations have been bleeding authority every time the SCOTUS got an opportunity to cut off another slice.

Corporate persons have been going in the opposite direction, first gaining the procedural protections in the Bill of Rights and then substantive rights of individuals that did not appear to fit corporations.


Corporations, earlier than Indian tribal governments, could protect their property with the Fifth Amendment. Corporate rights appeared to break a glass ceiling of absurdity when the SCOTUS decided that the corporate owner of Hobby Lobby has religious rights that can trump government regulations.

The religious accommodation for corporate persons is something Indians were unable to accomplish even when they had a law, the American Indian Religious Freedom Act, that appeared to confer the rights that the Court cobbled together for Hobby Lobby out of nothing.

The SCOTUS created both the corporate person and the domestic, dependent nation and then proceeded to gift the former with more rights of human beings while limiting the rights of domestic, dependent nations at the same time.

Transnational corporations have arguably become too powerful for a nation-state to regulate effectively. Only Indian lawyers are likely to notice that corporations have now what we thought we had during the treaty-making period.

Should we be about to lose our made up status as “domestic, dependent nations,” there is nothing to stop us from adopting the other made up status as corporate persons.

The SCOTUS refused to make Indian nations before U.S. law equal to England, Spain and France. Now Indian nations have a method to render themselves before U.S. law equal to Walmart, Exxon and Apple.

The irony is splendid, but the whole scenario fails for those Indian nations that are “dependent.” Those who have solved their economic problems could become equal partners in the new method of political organization, where everybody knows Apple could buy Belgium….if Walmart would sell it.

RELATED: Institutional Change I: Domestic, Dependent Nations Invented in 1831

Steve Russell, Cherokee Nation of Oklahoma, is a Texas trial court judge by assignment and associate professor emeritus of criminal justice at Indiana University-Bloomington. He lives in Georgetown, Texas.