SALAMANCA, N.Y. – The Seneca Nation of Indians has formed Seneca Holdings, LLC to diversify its economy and create wealth for the nation and its people by investing in and buying companies.
Community development and job creation will be a part of the holding company’s strategy, but will be secondary to profit maximization. The company, formed by the nation’s council, will start with $28 million allocated in increments over the next five years.
Seneca Holdings’ investments will be conducted through subsidiaries. One will be called Seneca Capital and will primarily focus on maximizing investment income through passive investments and by acquiring interests in other companies, including those owned by Senecas, and others outside the nation’s territories.
Seneca Capital plans to initially invest slowly and strategically, but will eventually seek to acquire whole companies. The nation will allocate investment capital for the next five years starting with $3 million and a commitment to invest $5 million per year for five years. The company will be allowed to reinvest all of its profits during this period. After five years of operation, the company will allocate up to 10 percent of its profits back to the nation annually based on a scheduled dividend plan.
“The formation of Seneca Holdings is another example of the nation’s commitment to the well-being of its people and the quality of their lives,” said Seneca Nation President Barry E. Snyder Sr.
“This will serve as an additional vehicle for diversifying our economy, creating jobs, expanding economic development and improving the nation’s ability to generate revenues to support the nation’s government and people long into the future.”
The rationale behind the formation of Seneca Holdings is based on the continued economic and political pressure on the nation’s gaming and tobacco interests, including the constant threat of competition from state-authorized gambling efforts. Because both Indian gaming and the tobacco industry have uncertain long term viability, the nation wants to expand its economic base by using its current and substantial gaming income to maximize tribal economic advantages to diversify its business interests.
Seneca Holdings is a separate corporate entity established with an appropriate level of separation from the nation government. According to the Harvard Project on American Indian Economic Development, tribal government-led business models are rarely successful because of political interference in the business decision making process.
“The nation, therefore, has created Seneca Holdings to serve as a business venture separate from the government. This separation will allow the company the freedom to quickly evolve into a dynamic, independent and successful source of revenue for the nation,” Snyder said.
Social and community development should be helped by the company’s success, but they are generally considered governmental, not corporate, functions. The company’s primary goal will be to create wealth, officials said. In establishing Seneca Holdings, the nation is creating another source in western New York for venture and seed capital for companies looking to sell, partner, grow or diversify.
The Company Management Committee will immediately begin interviewing candidates for chief executive officer. The CEO will lead the company in seeking profitable non-gaming business opportunities anywhere with return on investment potential in a risk managed environment.
The Management Committee includes Chairman Robert Odawi Porter, Vice Chairman J.C. Seneca, Secretary Brad John, Treasurer Robert Mele, and Arlene Bova. Seneca, John and Bova serve on the nation’s council.