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NIBA: A forum on economic development

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The National Indian Business Association's 12th Annual Conference and Trade
Show in the first week of September was more lightly attended than in years
past, if only because so many tribal members waited until the Sept. 21
opening of the National Museum of the American Indian to congregate in
Washington. But as much as they gained from NMAI week, they missed several
detailed discussions of Indian economic development at NIBA. Keller George,
a member of the Oneida Indian Nation's men's council, spoke on casino-based
economic growth and the attempt of one tribe to move beyond
government-initiated programs to prosperity driven by individual
entrepreneurs:

Before 1993, we didn't have much of anything. In 1985 we started a small
bingo operation. And then as it grew, we made it a little bit bigger. And
then we got it up to where it was about 800 seats, and it did relatively
good. Then we started into other businesses. A gas station, for example ...
then we did a convenience store and smoke shop. Well, today we have 16 gas
stations, smoke shops and convenience stores as well as two truck stops,
and a shopping center. Those are some of the things.

It was all because of gaming. Gaming was the driving force that generated
the dollars. Early on our council met and discussed and decided that as
soon as we were able, we were going to diversify into other businesses. We
want all of our businesses to be successful financially, but we also want
to provide jobs for the community. So the bottom line is not necessarily
cash, making a lot of money, but to provide jobs for not only our tribal
members, but for the local community. Right now in our nation we employ
4,500 people. We are the largest employer in a two-county area, other than
government employment, and we are growing in leaps and bounds.

SMALL BUSINESS INCUBATION

I'm also president of United South and Eastern Tribes, which is an
inter-tribal organization that is comprised of 24 federally recognized
Indian tribes in the Eastern region, that cover 12 states from Maine all
the way down to Florida, and as far west as Houston, Texas. In terms of
economic development, each tribe is real different in the way they approach
economic development. Some try to do it through individual entrepreneurs,
some try to do it through government, the tribal government. That's the way
we have - our nation owns all of the businesses that we have. We are in the
early stages of establishing an Oneida Indian Nation Small Business
Association. The way I visualize it ... we would establish the business
first. We would hire managers to run those businesses, and when they gain
the expertise and experience in running these businesses, we will offer
them the opportunity to buy the business and run it for themselves - kind
of like an incubator program. That's the way we visualize it. We're talking
about getting that going now, so that it will help individual business
people.

BRINGING EDUCATION BACK HOME

One of the things we had a problem with is that as our young children went
off to college, got an education, because we did not have any jobs at home
for them they would go to Washington, D.C.; New York City; Chicago; L.A. -
to places of large population so that they could get a good job. They had
an education, and so they could get the good jobs. Back home on the
reservation, we maybe had small-paying jobs, not very much, to entice them
to raise a family there. That's a problem in all of Indian country as I see
it. So hopefully through this incubator small business program, we'll be
able to get our people that go out and get an education, because we have
over 125 kids now in four-year colleges, matriculating for a four-year
degree. That's part of the qualifications that they have to have before
they get the scholarship. We offer scholarships to any of our enrolled
members to attend any college or university anywhere in the country, and we
pay books, tuition and give them a stipend to live on. They have health
care because we also provide every enrolled member health care, no matter
where they live. So this is a step up.

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But there's a catch ... For every two years of funding they're given, they
come back and work for the nation. So you go through a four-year degree
program, you come back, first thing a prospective employer asks you when
you come with your little shiny new degree - 'What experience do you have?'
So we'll give them that experience. Because for every two years funding,
they have to come back and work for the tribe for a year. So for four
years, you work for us for two. This gives you experience, and you might
like it, you might make it your home, meet someone you want to marry, raise
a family. And that's happening slowly but surely as our people are
graduating from college.

COMMUNITY DEVELOPMENT VENTURE CAPITAL

In terms of USET, I explained that I'm president of USET for one reason,
because there are a number of things that we can do with tribes. You've
heard a lot about CDFI [Community Development Financial Institution] funds.
USET is in the midst of establishing not a CDFI fund, but a community
development venture capital fund. We have commitments from some tribes. We
are not right where we need to be. But we are almost where we can launch
this program ... and start looking at different projects that we'll fund.
It's not a grant program. It's not where you just hand out cash. But it's a
program where we will invest money into a business. You know, all of you
[at the NIBA conference] are probably businessmen, because this is what
this is about - it's about businesses. But you know sometimes, you get to
this point that you need more venture capital, and you just can't get it
because you're maxed. You can't go to the bank because you don't have any
more assets [to pledge as collateral]. You can't do your property [as collateral] because it's on a reservation and it's trust lands. All of
these things. I've worked with CDFI Fund [the federal program within the Treasury Department] for over two years on pointing out to Congress and the
President the roadblocks that are in the way of Indian people getting
capital to do businesses, to do housing projects, to do a whole wide range
of different projects that are available to us.

So this venture capital fund, it's an investment. When we get enough money
- at least five million dollars, we're pretty darn close - then we'll go
and start investing in businesses. To help a - say you're an individual
entrepreneur and you have a widget company, and you want to expand but you
don't have the capital to do it, we'll invest in your company and become a
partner with you, to get you over the top so that it gets you to the next
level. That's something that I think this country needs, particularly with
Indian country, to help the individual entrepreneur to reach that next
level so that we can be successful. And as we go, and as they expand and
make more money and buy us back out, that money goes back into the fund and
the people that invest that money in there will get a return. It's not like
you're giving it for free, but there is a way that you can make money too.
Tribes can make money off it [an investment in the community development venture capital fund] through interest.

SUPPORT YOUR LOCAL INDIAN ENTREPRENEURS

We have to pay more attention to our entrepreneurs. It's a responsibility
of tribal government and in my view we help where we can. For example, if
you bid we had a bidding process in our tribe for an entrepreneur. Say you
have a business, you make furniture, office furniture. We put up an RFP, a
request for proposal out there, and if you put in a bid, we'll give you the
specifications and all that, we'll give you a 10 percent [bidding preference] - say the project is $100,000, and you bid $110,000, you'll get
that 10 percent difference. And if everything else is equal, you'll get the
contract. But there are certain protocols, not protocols but there are
certain provisions in there that you'll have to satisfy. Do you have the
capacity? If I order 100 desks, are you going to be able to supply those
100 desks in a timely manner as you agreed?

We've been talking with ... a lot of the people that are interested in
economic development and business. And hopefully having a policy [is possible] in Indian country, similar to the Buy-Indian Act. You know, it's
really amazing in my tenure, and it's about almost 20 years now as a
council member, but when Indian tribes do business, why in the world don't
Indians buy from Indian businesses? That's a question. I know I'm a
panelist [at NIBA] and I'm supposed to have some of the answers, but I
don't have an answer to that. I wish somebody, somewhere, sometime, could
explain that to me. Because it's happening in New York, in every state that
I've been in, that you'll have Indian tribes that operate businesses, but
you can't get any of the Indians in that same state to buy the products or
services from you... We'll go somewhere else and pay 10, 20, 30 percent
more from a non-Indian vendor, but you won't buy from an Indian vendor.
That's something that always has intrigued me, and hopefully one day I'll
get the answer to that. But it has eluded me so far.