Tribal members assert that council plays fast and loose with finances
By John Weymer
To help American Indian tribes counteract financial hits due to the COVID-19 pandemic, Congress issued $8 billion in relief aid to tribes across the country, part of the federal Coronavirus Aid, Relief and Economic Security (CARES) Act. According to Puyallup tribal members who have contacted the Tacoma Weekly, the tribal council revealed at the most recent general membership meeting that the tribe has received $60 million in aid.
Members report that during that meeting, the tribal council dodged questions about how these funds are being used. Council members said that they didn’t want to bring an audit down on the tribe as a way to keep the details confidential, when the council should in fact welcome an audit if it has nothing to hide. Unfortunately, tribal members don’t want to rock the boat too much by asking a lot of questions out of fear of angering their leaders who have control over doling out tribal funds for the membership’s food and living expenses. This is life for the tribal membership under a council with too much power and no oversight.
The council also announced more changes to the per-capita system. Initially, after the pandemic shut down businesses across the state, the tribal council made a change in how per-capita payments would be paid to the membership. Instead of issuing the usual $2,000 a month per tribal member, the amount of the per-caps would be based on how well the Emerald Queen Casino and other tribal enterprises performed. With business at the Emerald Queen Casino, the tribe’s key money-maker, now having decreased radically as Pierce County COVID-19 cases rise to record levels, the council is concocting new plans to maintain payments to the membership – and it’s raising eyebrows.
According to our sources, the council’s planis to increase the per-capitas and make most of it tax free by issuing a form of general welfare.Payments would be through a two-check system – one regular per-capita check and the other issued as a “welfare” check. Where the welfare amount would come from is the matter in question, and it is an important point.
The federal Treasury Department has strict guidelines on how COVID-19 relief money can be spent. These funds cannot be used as per-capita payments. Rather, distributions can be made only to individual tribal members that can demonstrate that they have been financially impacted by COVID-19. This could set up a potential conflict among tribal members who are receiving more money and those who aren’t. It would be up to the council to decide, with council members having to discriminate among the tribal membership in deciding who gets payment.
Designating financial disbursements from gaming revenues as tax-free “welfare” is also not allowed. However, tribal members who have contacted the Tacoma Weekly report that the tribe’s law office and tribal attorney Robb Hunter are pushing it as allowable. Earmarking gaming revenue as welfare presents a real problem with the council’s plan.
Under the federal Revenue Allocation Plan (RAP), tribes are required to designate how they plan to spend net gaming proceeds and have these plans approved by the Secretary of Interior at the Bureau of Indian Affairs. RAP rules do not allow for tax-free “welfare” payments to tribal members; rather, the RAP sees these payments from gaming revenue as additional taxable per-caps. The tribal council has tried this before, to designate gaming revenues as welfare, and it didn’t pass the RAP review.
If the tribal government tells members that what they’re getting is welfare and the members don’t claim it as income, the individual tribal members will be the ones penalized if tribal government doesn’t pay the tax. This could bring the Internal Revenue Service calling on the tribal council, and trying to pass off per-caps as welfare after already being told that they can’t do that could result in harsher sanctions.
It wouldn’t be the first time that the feds have come after Puyallup tribal leaders. No one would know this better than the late Bob Satiacum. Chairman of the Puyallup Tribe in 1980, Satiacum fled the country a few years later to escape charges of racketeering involving trafficking in contraband cigarettes,embezzlement, arson and the attempted murder of tribal member Ramona Bennett. Ordered deported from Canada back to the U.S., he died of an apparent heart attack in a Vancouver jail before being sentenced for molesting a 10-year-old girl.
The tribal council also told the membership that there is $5 million in gas tax, but this tax is collected by Marine View Ventures, the tribe’s economic development arm, and not the tribal council. It isn’t known whether these funds are in the tribal treasury or in the hands of MVV.
Either way, gas tax revenue cannot be used for general expenses. The Washington State Department of Licensing dictates that tribes may only expend fuel tax proceeds on planning, construction and maintenance of roads, bridges and boat ramps; transit services and facilities; transportation planning; public safety; or other highway-related purposes.
The council spoke of other funds as well, including those from the cigarette tax, but all of this information was presented in a very general way, with no detailed accounting of the funds or what they are being used for.