TAMPA, Fla. - "You don't get it," Keller George told his lunch audience of
financial advisers at the Inaugural Tribal Wealth Management conference.
"You just don't get it."
George, president of the United South and Eastern Tribes, was a featured
speaker halfway through the Nov. 15 - 17 conference at the Seminole Hard
Rock Hotel & Casino, and he was trying to bridge a gap in perception
between tribal financial officers and the financial industry
representatives, who slightly outnumbered them. Sponsors of the meeting,
including colleagues of George from the Oneida Indian Nation, planned the
meeting to educate tribes in managing and preserving their newfound wealth
for future generations. But George was emphasizing that the education had
to go both ways, and that Wall Street had a lot to learn about its would-be
"It's not about accumulating wealth," he said. "We are doing this for
unborn generations, still beneath the ground."
George echoed criticism of a few of the presenters, who were clearly there
to sell financial products and meet clients. But he found appreciative ears
among many more attendees, which included a high proportion of the Native
people prominent in the financial industry.
Some Native panelists delivered the message, admittedly self-interested,
that tribes should use their new position as financial clients to encourage
large Wall Street firms to advance indigenous employees or to nourish
Native-owned firms. Bill Lomax, who went from a small indigenous village in
British Columbia to the nationally know Smith Barney brokerage, invoked the
legal struggles of 30 years ago. "We needed more Native attorneys, and the
industry made good," he said. "That holds true for financial advisers as
The conference might in fact prove to be the seminal event its organizers
hoped, since it is expected to give the final push to a long-planned launch
of a professional organization for Natives in finance and economics,
modeled after the active AISES, American Indians in Science and Engineering
More than 150 attendees answered the call to what was designed as a new
kind of tribal economic summit. Co-chair Steven Paul McSloy, a partner in
the Hughe, Hubbard & Reed law firm, said the idea arose when he asked a
tribal leader if he planned to attend an economic development conference.
The leader replied, "I've already done that. But where is the conference
that tells you how to manage the money?"
(McSloy is a former general counsel for the Oneida Indian Nation of New
York, whose tribal enterprise Four Directions Media publishes Indian
The keynote speaker, champion professional golfer Notah Begay, offered his
own rags-to-riches story as a model of the experience of some tribes. He
recalled that as a poor youth from the Navajo reservation he started out
playing in ladies golf shoes with used clubs. His athletic success made him
rich, he said, "but it's not only the money. I've made a lot of money. I
want to keep my money."
As the sound of bells and jingles from the Hard Rock casino floor filtered
into the conference room, succeeding panels illustrated the pitfalls in
keeping the money. Gautam Vora, professor of finance at the University of
New Mexico, warned, "One cannot ride on a highway in a horse and buggy,
because one will quickly get run over." The high speed of financial
transactions, "ever-increasing complexity" and innovations in types of
investments, as well as changing legal rules, required tribes "to be much
more knowledgeable," he said.
He singled out the change in the legal environment from the "prudent man"
rule of fiduciary responsibility, which required managers of funds in trust
for another to apply the judgment of a reasonably-careful adult, to the
"prudent investor" rule, which required more expertise in finance.
Vora also cautioned about "greed, exemplified by non-abating known
A few panels, conducted more like infomercials, inadvertently bore out his
point. One session touted "hedge funds," the hot item on Wall Street, which
seemed defined by their freedom from the government regulations designed to
make mutual funds safer. One speaker maintained that the "alternative
investments" in hedge funds offered a higher rate of return, but downplayed
the basic investing rule that higher returns come from higher risk.
Remembering the unending Wall Street cycle of highly touted innovations
turning into financial disasters, this writer asked from the floor if it
was appropriate for a tribe to invest in unregulated funds. Paul K. Frits,
the founder of Waterfront Strategies and a Mohawk from the Six Nations
Reserve, supported some alternate investing, provided it was done with a
small portion of discretionary funds through a reputable major firm. (Mark
Grant, controller of the Navajo Nation, reported in a later talk that he
had indeed invested a small portion of government money in hedge funds.)
But another panelist admitted that brokers "sometimes oversell" their
Panel moderator McSloy asked the main barrier financial firms faced in
dealing with tribes. "Distrust," was the answer.
Some distrust was justified, indicated Hugh Lordon, chief financial officer
of the Oneida Nation's Turning Stone Casino. He warned against some
proposals to set up "Swiss-type" confidential banking on sovereign tribal
territory. "The U.S. is going to look very carefully," he said, citing post
9-11 concerns with money laundering. "Indian nations are going to be
subject to this scrutiny.
"The key question is who you are dealing with. What are they up to?"
The most scandalous of all tribal money managers was conspicuously absent.
No one from the BIA attended. Assistant Interior Secretary of Indian
Affairs Dave Anderson was invited to give the luncheon speech, but
declined. But attendees heard a great deal about BIA mismanagement. John
Echohawk of the Native America Rights Fund gave an update of the class
action Cobell lawsuit over an estimated 500 million dollars in Individual
Indian Monies accounts, which he said could be followed by tribal suits
involving five times the amount.
Dean T. Parisian, chairman and founder of Chippewa Partners, Native
American Advisers, Inc., and a self-described "BIA brat," mentioned a
little-known scandal from the mid-80s, in which the BIA invested Indian
money heavily in Collateralized Mortgage Obligations, a hot item of the
time marketed by Kidder Peabody, and was left holding millions in worthless
paper when the firm collapsed.
But the conference ended on a high note, with a display of the Native
talent emerging in the financial industry. Elsie Meeks, executive director
of the First Nations Oweesta Corporation, described the success of a
growing number of tribes with Community Development Financial Institutions
designed to foster small businesses and home ownership. John Beirise,
president of the Native American Bank, gave an upbeat update on its
struggles. Elke Cheveny, director of the Global Private Client Group at
Merrill Lynch and a member of the Omaha tribe, offered her firm's help in
financial literacy courses, another project spearheaded by Meeks. She also
mentioned that Merrill Lynch had identified and organized 45 Native
employees to help expand the tribal market.
Native speakers also held their own in the sometimes obscure technical
analysis. Robert Snigaroff, president of Denali Advisers, gave a
chart-filled presentation of trends in the stock market that explained the
success of his firm in growing in four years to manage $750 million in
assets, over 90 percent from non-Indians. Mattox of Smith Barney called
Snigaroff, son of an Aleut logger from Alaska's Kenai Peninsula, "easily
the most successful Native American fund manager out there."
In what could be one of its most significant results, the conference also
gave a boost to establish a Native professional organization for the
financial industry. In a presentation and private conversations, Thomas
Steirer promoted plans for Native Americans in Business, Economics and
Commerce (NABEC), modeled on AISES. With his friend Michael Martin, he has
already chartered the group in Colorado and put up a Web site (NABEC.org).
They are now applying for tax-exempt status from the Internal Revenue
Service. He said that he and Martin got the idea from their active
participation in AISES, which by default now draws 20 percent of its
membership from finance and economics professionals. With approval of the
tax-exempt status, he said, they planned a national membership drive,
possibly as early as December.
By the end of the conference, it seemed the consensus of tribal
participants that an increase in Native professionals was the best and
maybe the only way that the financial industry would come to "get it" about