Self-reliance for non-gaming tribes

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California voters passed Proposition 5 in November of 1998 with 63 percent support, and again passed Proposition 1A, a California state constitutional amendment, with 64.4 percent of the vote. Both propositions affirmed that most California voters favored providing California Indian communities with opportunities for economic development through gaming. American Indians campaigned on the platform that gaming offered a pathway to economic self-reliance, when previous government programs and policies made little headway against poverty and dependence. Gaming revenues fund education, economic development, cultural preservation, housing and health programs for California Indian tribes.

Not all Indian tribes, however, benefit from gaming compacts. Tribes located near large urban populations benefit most, while geographically isolated tribal communities are less able to generate gaming revenue. Gaming income is a direct function of location. In California, and around the country, more isolated tribal communities cannot count on gaming revenues to generate income necessary for sustained self-reliance. The benefits of Indian gaming are unevenly distributed, and the more isolated tribes must find other means to enter the American market economy.

Most American Indian communities have lost much of their land and hence their most useful economic asset. Small isolated reservations are not easy places to enter the competitive marketplace. California voters, most likely, took into account the history of American Indians when they voted in favor of offering state gaming compacts. Like the gaming tribes of California, tribal communities want to enter the U.S. economy on their own terms as governments that preserve their cultures and communities.

Over the past 20 years, federal legislation opened many doors for tribal economic entrepreneurship and business. Although success is mixed and often difficult, tribal leaders and communities embrace market enterprise as a practical path for sustained economic development. The Small Business Administration provides tribal businesses, usually owned by tribal communities and operated for the benefit of the tribal membership, with temporary opportunities such as government contracts under the 8(a) program, which are non-competitive sole-source contracts designed to help jump-start small businesses, including tribal businesses and corporations. Indian corporations within the 8(a) program are granted contracts for a period of eight years, during which grantee businesses must show development toward sustained market capabilities and profit making.

Recent congressional initiatives have moved to constrain American Indian participation in SBA grants and in 8(a) contracts in particular. Currently under review in the Senate, these proposals will limit the possibilities of American Indian tribal businesses and corporations from entering the market economy and achieving economic self-reliance.

The SBA usually provides opportunities to small and minority businesses. Small businesses are owned by private entrepreneurs, usually owned by a few partners or a family. The proposed House bills (H.R. 1362 and H.R. 1872) now under consideration in the Senate limit SBA contracts to $10 million; and while not affecting small, private entrepreneurs significantly, tribally managed businesses represent hundreds, even thousands, of tribal member who are often depending on tribally managed enterprises for jobs and benefits. Furthermore, the limitations on 8(a) sole-source contracting are aimed at large corporate contractors, like Halliburton, who have received large defense contracts, often without full competitive bidding processes. The proposed bills are designed to clarify federal government contracting procedures and ensure that taxpayer funds are spent efficiently and effectively. This is a proper measure by any standard.

The congressional bills, as now written, however, limit entry of American Indian tribal businesses and corporations into the market economy. Greater contract monitoring and oversight, and effective spending of funds, are called for but should not deter the government from fostering Native American economic self-reliance.

A major case in point, besides the more isolated California tribes, are the Alaska Native Corporations that have - over the past several years - increasingly taken advantage of federal and SBA contracting provisions. The 13 regional ANCs have about 109,000 mostly tribal shareholders and serve about 140,000 tribal members. Like California tribal communities, ANCs are the main market enterprises for the Alaska Native communities. Less than 1 percent of government contracting is provided to ANCs, and so the goals of reforming government contracting processes will not be achieved by constraining tribal access to federal contracting. Like other Indian communities, but more recently, in 1971, Alaska Natives surrendered much of their land to the United States. The large oil and natural gas deposits on Alaska Native lands went to the United States, and the present-day economy continues to benefit significantly from Alaska oil, once on Alaska Native lands. In return, the government created 13 regional for-profit corporations and the option for villages also to form ANCs. Alaska Natives were offered a pathway to the market economy, although they lost many economic assets and live in extremely isolated places.

The current bills before Congress need to be modified to ensure that American Indian businesses continue their movement toward sustained market economy. Self-reliance will not be solved with more government programs or hand-outs, but with government policies that foster economic growth and entrepreneurship among tribal businesses and corporations. Reform of corporate contracting with the federal government should not take place at the expense of sacrificing American Indian business opportunities for entering and succeeding in the marketplace.