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Sioux Chairman warns of repossession

FORT THOMPSON, S.D. ? For the third time in the last 20 years, Duane Big Eagle was asked to help solve tribal financial problems. This time, he said he couldn't solve them, but has some ideas and thoughts that he can present as chairman that may help his tribe.

The recycled Crow Creek Sioux Tribal chairman said the tribe's debt exceeds $30 million and lenders will be coming to the tribal doors to take away land, facilities and equipment, even down to file cabinets.

"The entire reservation is mortgaged; land base, buildings, filing cabinets and computers. When I say when the lenders come to collect the collateral, some will come for the land they were promised, some will be coming for the farm irrigation equipment they were promised and properties that pertain to the farm and some will be coming for the casino and motel. And let's face it, collateral is collateral.

"In my opinion too much damage has been done and I can't help. I don't foresee any process to restructuring the tribe to exceed the amount of debt," Big Eagle said.

Big Eagle has been in this situation twice before. He was a police officer when first asked to run for political office. He was then elected vice chairman of the tribe in 1978 when lesser financial problems plagued the tribe. But after his two years as vice chairman the tribe was in good financial shape. He declined requests to run for chairman because he would have had to compete against a respected incumbent.

In 1992, when the tribe was once more in financial and political turmoil, Big Eagle was asked again by tribal elders to run for chairman.

"Then we faced a deficit between $5 million and $10 million at the beginning of '92, and at the end of '98 the tribe was back in the black," Big Eagle said. "The banks were satisfied with the tribe, they were doing business with the tribe. I developed the Lodestar Casino that created a lot of employment. A lot of land base was bought back for the tribe; just in general everyone was working."

After six years in office, a tribal member informed Big Eagle that the people were tiring of him, ? not that he was doing a bad job or a good job, but that he would not win the election.

After losing the next two elections, Big Eagle was re-elected in May, and emerged from his North Shore Bait and Tackle shop to take the reins of a tribe in extreme financial trouble. He could have stayed in the shop and spent more time on the Missouri River catching walleye and showing people the best location for hunting pheasants.

"Now I'm back in 2002 and I have an even larger catastrophic problem to deal with," he said. "They are looking at $30 to 35 million in debt. You know, 520 people came out and voted for me in this election and they repeated 'You were the only person that can get us out of this mess.'"

If things get rough and the tribal government goes under he can go back to the business he and his wife started and made successful.

"I worked hard for the tribe when I was chairman. I dedicated all my time and effort to trying to build a better future for this place," Big Eagle said. "When people made the determination they had enough of me and turned me out into the sticker patch, I pulled myself out and my wife and I created our own business. We created it through extreme opposition from tribal government. And we are still successful today.

"We run it as a family operation. I know in my mind what's going to happen to this tribe, by being elected chairman this time I wouldn't give up my business. When the downfall of this tribe starts I have to have something to fall back on for my livelihood.

"And at any point we are very capable of supporting ourselves. In the event that, this may offend some council members, that I myself would step aside in any event that an administrator were brought in to manage the financial affairs of the tribe, because I don't have the capabilities of correcting it this time."

Big Eagle advocates that the tribe's financial problems be solved with a third-party takeover of the financial operation, not by the BIA or from within the tribe.

"They will have to shut down the tribal operation. My first recommendation would be to bring in a consultant, someone who is a financial administrator, restructuring the tribal portion of the tribe, not the federal. A person has to have control over the direction, where the tribal money is going, whether it's within the tribal portion of it or the casino. And then maybe in a few years time they may be able to survive."

Big Eagle said when he left office in 1998 the tribe had $4.5 million in the bank. So how did the tribe go from a financial surplus to more than $30 million in the hole in just four years?

"My determination was that I was wrong in helping the tribe resolve the settlement on the river that created the $27-million infrastructure fund, which opened a wide field of borrowing power for the tribe, and at any point the tribe exceeded that limit as far as borrowing too much.

"I'm not going to comment either way what is right or wrong," he continued. "The whole downfall, the matter was the tribe receiving the $8 million a year in interest that drew a lot of attention from lenders. There were a lot of people wanting to get their hands on the interest money and they made exceptional offers to the tribe, which created the situation we are in today."

And for all the borrowing and spending what does the tribe have to show for it?

"We have a motel, an improved casino facility. It went from a canvas tent to a steel structure, that's the extent of it."

Should there be no lender or capital investor to help the tribe consolidate the debt and bring forth a financial package it can live with, the future is bleak for Crow Creek, Big Eagle said.

"I don't know the options, whether it's bankruptcy or what. The biggest problem will be when the lenders come to collect the collateral. That is very close," he cautioned.

"You see, the way the tribe has been able to exist has been based on the enterprises they have. They take the money from the tribal enterprises and spend them through the tribal general fund process. But it's getting to the point where ? the enterprises are broke. The liquor store is broke. It was a three-quarter-million-dollar industry for the tribe. Wildlife resources revenues are gone.

"Right now the only support factor the tribe has today is the casino. And what is happening right now is the casino has to maintain a budget for general operations. It has to pay a debt service load for the tribe in the area of $27 million to $30 million and in turn we are going back to that old scenario of the tribe itself.

"Anytime it has a shortfall of money it draws large sums of money out of the casino funds for tribal operations. We live in an area that isn't too populated, so we have a situation that at any given time it will break the camel's back, and the casino will be in deep financial trouble. There is kind a stigma on the part of the tribal membership that is there is money there take it."

The Crow Creek reservation is not ready to roll over and quit. There are a lot of good people and organizations on the reservation; the school system is good enough to attract students from quite a few reservations.

"The survival rate was there, based on the way the tribe was structured, until about 1998. We have come to the end of the rope now and everyone in the tribe has to realize that the financial resources are gone and so even though our schools and business as we see today look like they are operating in a normal manner, there are dark clouds looming that are going to put a stop to all that."

Big Eagle was asked if the dire financial situation has hampered the tribe's economic growth.

"Exactly," he replied. "We are dealing with the final resource now, that's the Lodestar casino, moved the pack from one mule to another."

Big Eagle quickly pointed out that no one person or group can be blamed for the tribe's financial problem.

"I don't look at the council as bearing the blame as much as I look at the people. Because the people created the tribal council and so whether they elected good or bad tribal council people they should blame themselves.

"Traditionally, what I've told those that have been in council before me is that people will love you today, but in two years time they will hate you, I've never been wrong."

All is not lost for the Crow Creek Sioux Tribe. The search for banking is underway and discussions on debt restructuring have begun.

"The tribe is talking to someone right now," he said. "There have been no commitments made [but] the potential for both parties to work together is very good. There's going to be a lot of give and take in the matter."

Current council members were not available for comment.