Business Reservations 

What’s keeping Montana’s tribes from economic success?

Former Fort Peck Tribal Chairman Larry Wetsit wants to do more business with fellow Indians. But unless tribal leaders change their attitudes about economic development, he thinks reservations will continue to miss out on prosperity.

“Tribes are most worried about what they can get from us up front,” says Wetsit, now a manager with Nemont Telephone Cooperative Inc., a multifaceted communications firm that serves the Fort Peck and Crow reservations and other outlying areas of eastern Montana. “Every time we do anything, they want money from us.”

Wetsit spoke at last week’s Tribal Economic Development Summit in Great Falls, where about 300 tribal leaders, state and federal representatives, investors and private business owners gathered to discuss ways to improve reservation economies. The event was sponsored by U.S. Sens. Max Baucus (D-Mont.) and Mike Enzi, (R-Wyo.), the Montana-Wyoming Tribal Leaders Council and various private and nonprofit entities.

Wetsit says tribes need to stabilize their governments, update their constitutions, clean up their court systems, and rewrite regulations that govern the business community before good times will come. He also thinks tribal governments should refrain from starting commercial ventures on their own.

“I have yet to see a government successful in business,” says Wetsit, who also serves as board chairman for A&S Tribal Industries, an Assiniboine and Sioux manufacturing firm based on the Fort Peck Reservation. “They should be the last people who we talk to for advice.”

Wetsit says it pains him to be critical of his own people, but the criticism is meant to be constructive. Without fundamental changes in the way tribal governments deal with private commerce, high unemployment rates and searing poverty, related social ills will continue to engulf reservations, now among the poorest places in the nation.

“American businesses are very insecure,” he says. “They need stability and predictability. There’s a whole bunch of businesses that vote with their feet.” That, Wetsit adds, often means that money gets siphoned away from tribes.

Stephen Cornell, director of the Udall Center for Studies in Public Policy at the University of Arizona, notes that there’s enormous frustration among tribal leaders about the slow pace of change on reservations. Cornell, a co-founder of Harvard University’s Project on American Indian Economic Development, says tribes truly want sustainable, self-directed growth, but several key issues stand in the way.

For one, many of the jobs in Indian Country are government related. That means there’s little diversity in reservation economies, which increases dependence on often-fickle Congressional appropriations.

“That’s a risky economy,” Cornell says. “It’s a cyclical thing. It’s a kind of dependence you want to escape.”

Government jobs do indeed make a huge financial impact, however. Robert Swan of RJS & Associates, a firm contracted by the state to complete a study on tribal needs and contributions, says his preliminary figures show tribal and federal Bureau of Indian Affairs salaries alone pump about $200 million a year into Montana’s economy. Since every dollar turns at least five times in a local economy, the total annual contribution may reach $1 billion, he says.

When reservation businesses succeed, Cornell says, there are usually a few common factors.

First, successful tribes exercise their sovereignty steadily and dependably. They do strategic, long-term planning, make their governments more hospitable to outside commerce, and then get out of the way.

“Development is a political problem,” Cornell explains. “Political interference consistently torpedoes business development in Indian Country. Sovereignty has to be backed up by good government. The rules send a message to investors.”

On the other hand, he says there are plenty of reasons why reservation businesses fail. Many residents are impoverished, reservations are usually located far from population centers, many tribal workers lack adequate education and training, and poor leadership and corruption can eat into profits.

Greg Dumontier, president of S&K Technologies (SKT) on the Flathead Indian Reservation, agrees that savvy tribal governments can do a lot to shore up businesses—without micromanaging them. The Salish and Kootenai Tribal Council has backed SKT with its considerable financial weight, but the highly successful tribal business is a separate entity run by its own board of directors. The firm, which serves as a model for other tribes across the nation, recently snagged a new $325 million contract with the U.S. Air Force to track and repair parts. Changes in the federal welfare system are also intensifying the need for private-sector jobs because even more people are being pushed into the workforce. Cornell says displaced welfare clients have only a few choices—give up, find employment in their hometowns or reservations, or relocate to find a job. According to Jonathan Windy Boy, chairman of the Montana-Wyoming Tribal Leaders Council, Montana Indians still make up about 47 percent of the state’s welfare rolls.

But Majel Russell, an Indian attorney, says tribes have to be extremely careful about who they do business with. Many business contracts she reviews include waivers of sovereign immunity, mandatory outside arbitration of disputes, tribal court exemptions and other provisions that undermine tribal sovereignty.

Some summit speakers also discussed the fact that the capitalist model doesn’t really fit for many Indian people. Tradition teaches that communality keeps tribes whole, while capitalism pushes individuals to climb on the backs of others to succeed. “Business and who we are as Indians often clashes,” observes Michelle Henderson, executive director of the Missoula-based National American Indian Business Leaders.

But Pete Homer, head of the National Indian Business Association, maintains that Indians can hold onto their culture and still be successful entrepreneurs. What Indians can’t do, he says, is keep “feeling sorry for ourselves and cursing the white man.”

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