As Citizen Potawatomi Nation continues to respond to the COVID-19 pandemic, the crises poses a threat to more than just the health of Tribal members and CPN employees. Tribes, and the states and regions benefiting from tribal development, must endure the threat to economic activity as well.
Grand Casino Hotel & Resort, FireLake Casino, and FireLake Arena all closed in March and remained closed through April. Across the United States, 246 tribal nations have closed more than 500 gaming facilities in 29 states.
Meister Economic Consulting estimated that closing tribal casinos for two weeks resulted in more than $4 billion in lost economic activity, including more than 728,000 people out of work, $969 million in lost wages, and $631 million in lost taxes and revenue usually received by federal, state and local governments.
“As you are aware, unlike state or local governments, the CPN tribal government is not permitted to create a tax base as a primary source of revenue,” Tribal Chairman John “Rocky” Barrett wrote in a letter to the U.S. Department of the Interior and Treasury Secretary Steven Mnuchin.
“Instead, the CPN relies on tribally owned businesses to generate the revenue necessary to provide services and programs in our community, to Indians and non-Indians alike.”
Representatives from the Harvard Project on American Indian Economic Development wrote to Mnuchin to comment on the impact of COVID-19 to tribal communities.
In the letter, economists noted that states and regions risk the loss of more than $127 billion in annual spending on goods and services, more than 1.1 million jobs, and more than $49.5 billion in wages and benefits for workers. The largest share of jobs lost, at approximately 70 percent, would be those of non-Indians.
CPN and other tribal governments in Oklahoma continue to pay gaming employees while they voluntarily suspend operations. For CPN, gaming makes up the largest revenue stream for services such as education, health, housing, government operations and more.
In the series of legislative actions at the height of the global shutdown, Congress drafted the CARES Act as a way to inject capital and funding to broad swaths of the American economy. Tribal nations, given their unique legal status, worked closely with their Congressional delegations to ensure they and their employees would have access to the funds.
“A key part of the relief package was the tribal government stabilization fund,” said Representative Tom Cole, Oklahoma. “This fund would be used by tribal governments to offset the dramatic losses they are facing at this time. This funding would be used to help them continue to do the right thing and keep their employees on the job — paid, and supported — as our nation responds to, and recovers from the pandemic.”
Congress asked the U.S. Department of the Treasury to provide funds to tribes by April 26, 2020; however, by mid-April, the Treasury had not determined the method for distributing funds or how much each tribe would receive. As of the last week of April, the Treasury had not distributed any funds.
In a letter to Treasury Secretary Steven Mnuchin, Oklahoma’s Congressional delegation reiterated the intent of the CARES Act, and stated that “The federal government has a unique trust and treaty obligation to tribes, and we urge the administration to release the funds allocated to tribes and tribal governments as soon as possible to equip them with the tools and resources to combat the effects COVID-19 has unleashed onto all our communities.”
Tribes met an additional hurdle attempting to access funds from the Paycheck Protection Program. Despite repeated guidance from Congress, the U.S. Small Business Administration and U.S. Department of the Treasury continue to disregard the terms of the CARES Act and imposed an internal agency interpretation, banning funding for entities involved in gaming. Employees across the country working in the sector have been left out in the cold due to a narrow reading of regulations combined with bureaucratic intransigence.
Nevada Congressman Mark Amodei expressed his frustration with the Small Business Administration for withholding funding from gaming facilities, which states that a 25-year-old SBA internal regulation replaces the congressional intent of the CARES Act relating to participation in the Paycheck Protection Program.
“Never again should people in need of rescue during any crisis be refused the relief enacted by Congress by an agency bureaucrat,” Amodei said.
Another hitch tribes are facing through the CARES Act is a provision allowing single locations to submit applications as individual entities despite being part of a larger holding. This resulted in several publicly-traded corporations to access funds. However, no provisions were specifically made for tribal government-owned businesses, allowing lenders not wishing to do business with tribes an opportunity to decline processing their applications. The wider interpretation of SBA rules for non-tribal enterprises provides a simpler avenue of securing funds by private lenders, who appear to be prioritizing those clients instead.
As of April 16, 2020, the Paycheck Protection Program had been depleted with zero allocated to tribal loans. However, on April 21, the Senate approved an additional $310 billion for the program that was later approved by the House of Representatives.
An email from the Native American Financial Officers Association stated, “It is clear SBA has picked winners and losers, they should have opened eligibility for all business concerns as intended. Now is the time to make sure Congress provides clarity and specificity for tribal entities, including gaming.”
Discussions with numerous federally-focused tribal advocacy groups noted that Congress — who understands the nuanced legal positions of American tribal governments — wrote the CARES Act language broadly to lessen the likelihood of the funds being held up.
Congressional support from Oklahoma’s federal delegation has been omnipresent, yet more will likely need to be accomplished in future legislative action. Tribal nations like CPN will advocate for specific, clear legal language providing them adequate federal support to keep their employees well in this time of economic and public health upheaval.