TAMPA, Fla. - Tribes looking to get involved in financial services need to
carefully think through the sovereignty and accountability implications,
the Tribal Wealth Management Conference sponsored here by Information
Management Network heard.
Hugh Lordon, chief administrative officer of the Oneida Nation of New York,
and chief financial officer of the tribe's successful Turning Stone Casino,
said tribes should think both about how their sovereignty would be impacted
by closer scrutiny and how their sovereignty could help them serve
potential clients. (Four Directions Media, an Oneida Nation enterprise,
publishes Indian Country Today.)
Lordon noted that casino development to date has not exposed American
Indian nations to a lot of financial scrutiny, something that would change
with ventures into domestic or offshore banking. There would be "a higher
level of disclosure and scrutiny" due to "a myriad of federal laws."
He told the meeting "Adherence to such standards, yet within sovereignty,
is critical." Tribes should also think through their responsibility to
those who funds they accept to hold.
Lordon pointed to the mutual fund started by the Sycuan Band in California
and the Community Venture Fund started by the United Southern and Eastern
Tribes as two examples of new tribal financial ventures.
USET's institution will soon be certified a CDFI (community development
financial institution) by the U.S. Treasury, Lordon said.
There is also a political dimension to new finance ventures, he said, as
nations may have to amend their ordinances to set up provisions for
garnishment, foreclosure and bankruptcy. "Creditor protection is vital," he
Lordon advised caution on offshore ventures, noting there are many schemes
in this arena, and that due to the secrecy associated with them nations
should be "diligent in investigating and vetting."
And he said "Indian nations should expect to be subject to government
scrutiny on offshore ventures."
Asked if sovereignty inherently conflicts with business, Lordon said "as
tribes develop, clearly there is a need to take on a corporate structure
within which to operate your businesses. You have to have a business
orientation, more so than a government orientation."
Lordon noted that tribes can have a tremendous economic development effect
on their whole area. The Oneida of New York employ 4,000 people, for
instance, and have just completed a $310 million expansion of their resort.
Approximately $145 million of that was financed with tax-exempt bonds, and
$165 million through high-yield bonds.
A second panelist with Lordon advised caution on tribes jumping in to new
ventures. Mark Grant, controller for the Navajo Nation, said his giant
tribe is taking "a look-see" at several new ventures but "we're not jumping
in head first."
These include a mutual fund and offshore banking plus a captive insurance
unit, portfolio management and master purchasing contracts.
The nation's investment portfolio already includes mutual funds, real
estate, fixed-income instruments, international equities and hedge funds.
Grant, who is Navajo and Omaha, also mused about possible cooperative
ventures between Indian nations, such as buying a Las Vegas casino or
getting into regulated industries such as power plants, where there is a
And he advocated releasing the economic power individual Indians should
have, through land certificates that "would allow people to participate in
ownership of tribal land."
The Navajo, which approved a gaming referendum a couple of weeks ago, has
$500 million in annual revenue, $2 billion in assets, 6,500 employees,
1,500 vehicles and 2,500 buildings.