Southern Utes prosper by owning gas rights

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By Cyndy Cole -- The Arizona Daily Sun, Flagstaff

FLAGSTAFF, Ariz. (MCT) - Going to a daily job is optional for more than 1,400 members of one tribe in southwestern Colorado.

That;s because each member who is at least one-quarter Southern Ute starts receiving sizable checks from the tribe upon adulthood and high school graduation.

While other tribes in the Southwest rely on royalties and leases from larger corporations, the Southern Utes have built a multibillion-dollar empire of natural gas and investment wealth.

In 1990, the tribe was poor, even with 63 oil and gas companies drilling for natural gas there.

Then, in 1992, the tribe bought back some of its natural gas reserves from companies, learned to pump it, then hired financial advisers to reinvest the money, developing a growth fund.

The idea started with a longtime chairman who looked around, surveyed the natural gas wells and realized the tribe could be making a lot more if it weren't collecting just a percentage from gas companies.

It was innovative thinking, leading to a growth fund that now employs 700 and has operations in nine states.

''I've talked to large tribes with large mineral resources, and I'll tell you, they don't have a clue what they have,'' said Bob Zahradnik, founder of the Southern Ute Growth Fund.

By funneling the money into investments ranging from oil drilling to housing developments, medical devices and even homeland security, the tribe is making long-term plans for how it will operate long after most of the natural gas has been pumped away.

Next, the fund is looking to invest in wind power, Zahradnik said.

And the tribe has been telling its story to others, describing how it no longer relies on federal aid.

''We do want to educate Native Americans as well, so they can hopefully go back and educate on their reservations,'' Southern Ute Growth Fund Manager Bruce Valdez said.

Cooking classes and massage

A group of visiting reporters recently toured the tribe's $11 million recreation center, complete with a large pool and large, gleaming basketball courts.

The center offers low-cholesterol cooking classes, massage and fitness classes, and is open to residents of towns next door.

Nearby is a Montessori school that accepts kids from birth to age 13, having specialists on staff for even the infants.

The next challenge is recruiting tribal members who want to work at the fund, and particularly older members to serve in the tribal government, said Tribal Councilman Steve Herrera.

The question he poses: Would someone take on a difficult or sometimes controversial job for a local government, if he or she didn't need the paycheck?

Often not, he said.

He grew up working for his stepfather, bucking hay, then working the oil and gas fields for nine years.

Herrera's children don't meet the blood requirement to be members, and won't be receiving trust payments. He tells them they'll have to work hard to go to college and build careers, as he did.

''Our way is not having material items or wealth, but sustenance,'' he said.

''Wealth is something that can change you.''

Copyright (c) 2008, The Arizona Daily Sun, Flagstaff. Distributed by McClatchy-Tribune Information Services.