corporate charters

Joan Timeche: The Practical Issues of Business Development - Some Things to Consider: Governing Body

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Native Nations Institute
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Native Nations Institute Executive Director Joan Timeche shares her experiences as a board member on two tribal economic development corporations, and identifies some key things that Native nations need to consider as they work to craft effective approaches to corporate governance.

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Citation

Timeche, Joan. "The Practical Issues of Business Development - Some Things to Consider: Governing Body." Building and Sustaining Tribal Enterprises seminar. Native Nations Institute for Leadership, Management, and Policy, Udall Center for Studies in Public Policy, University of Arizona. Tucson, Arizona. March 29, 2007. Presentation.

"I serve on two tribal corporations. One of them is a Section 17. It's the Hopi Tribe's Economic Development Corporation and we were much like Joe [Kalt] described. We went out and we bought businesses and started businesses and then had them running. They were the council-run model and then they established a new corporation, which they transferred all of those businesses over to us. So it's been a very challenging task for us. And then the other board that I sit on is with the Tohono O'odham Nation, which is just adjacent, an hour to the west of Tucson here. And they were structured very much like the Ho-Chunk, Inc. model that we put on your CD where they are a separated model. They got a large dollar, $10 million to start up their corporation, but all of their control is at the local level in their districts, political districts. So despite the fact that they have millions of acres of land for development, it's very difficult and we have yet to secure any land at all for our corporation development. So we also have many of these challenges.

I'm going to talk about these governing bodies because they are a very important key to moving forward. Basically when you look in terms of governing bodies, what we're looking at is whatever is specified in your charter. And today we heard many models of those. They're in a board of directors, but that board of directors may be the tribal council as we heard. They could be the business committee. And all of their duties and powers are defined in those charters. And you'll see some examples on that CD of the several that we gathered. They range the whole gamut from where you have minimal kinds of powers to ones where you end up having to have thresholds where at certain levels -- maybe it's purchases, maybe it's land, or whether the case may be -- it has to go back to council. So that can be all specified in there. But their whole job, this governing body -- whether it's a separate board, whether it's the business committee of the council, whatever it may be -- are responsible for the overall management of these businesses and the activities of them.

So let's talk a little bit about this board and how it should be organized. And some of the things you have to take, and these are all no-brainer stuff, I'm just going to cover examples of them. The composition: how many directors do we have? And of course you know that everyone tells you, you need to have an odd number. Five, seven, nine -- those seem to be common numbers. I sit on one that's seven but I prefer a five-member board because when you get down to the real logistics of trying to get to meetings and quorums, there's real practicality in getting, it's much easier to get three members together rather than five for a quorum.

Length, terms -- these are again all specified. One of the things that we would encourage you to do is when you're setting up these corporate terms that they not coincide with council election terms, because then it's seen that all you're doing is it's a political appointment and political elections. So you want to make sure that they're off, the terms are different than council's terms whether they're two-, three-year or four-. And just as we found in council terms, our research has indicated that the longer the terms are the more consistent stability, consistency you have and there's a more stable environment there too so we encourage you consider moving towards a longer term.

Qualifications: you heard [Salt River Pima Maricopa Indian Community] President [Diane] Enos talk this morning about the composition of her boards and you heard that from some of our panelists this morning about having the expertise of the people. And President Enos, she indicated that they always have somebody from the industry that sits on these boards. And this is something that we're seeing is increasingly common with some of the corporations that we work with. Where it's not just tribal citizens that are composing the board. It is combinations where you have some citizens -- and they might constitute the majority of those members or they can constitute a minority of it -- but you have to have these qualifications. In both the Hopi and the Tohono O'odham corporation charters, they require that all, well, Hopi requires that all of its members have successful business experience; that's the minimum criteria for that position. In the Tohono O'odham [charter], it specifies a certain number of people that have to be from a business field, who have had business experience or either have a profession in that area. So you can set up those criteria to meet the needs that you might have.

And again, back to this, I started talking about this, about the independent members. On the Tohono O'odham Nation for example, they have a seven-member board. Five of those members have to be citizens of that nation and they have two that can be non-tribal citizen members. I happen to be in one of those seats that is a non-tribal member sitting on that board. And one of the things that I have been able to find, just from my own personal experience, has been that I can say a lot of things that perhaps they can't say because I'm looking at them from the outside in. Sometimes because they know each other politically, it's a little bit more difficult for them to be realistic and to say what they might be thinking, but I can say those kinds of things from the outside. So that's one of the benefits to it. Sometimes they don't always like me saying what I do say, but I try to say it in a way that benefits the corporation overall.

The other question that also gets raised all the time is, ‘Can employees be eligible for these board seats?' And I'm talking about tribal government employees. Should they be eligible or not? This is a decision that you will end up having to make. Can an elected official be on this board? Some tribes will define elected official very broadly so that, I even know of one tribe where even if you sit on the school board, the public school board where you've been elected to a seat, you're defined as a public official so you cannot be a member on that board. So those are all considerations you have to take into place.

Then comes the big question -- council members. Can a council member sit on the board or not? When you open up Ho-Chunk, Inc.'s charter, you're going to find that it states that two members of their board should be from the governing body, the tribal council. There's pros and cons to it. We can argue about this all day but basically, I believe, I think it was [Meadow Lake Tribal Council] Chief [Helen] Ben who mentioned earlier about the competing interest that you have. If the chief is sitting on the board, are they wearing their chief hat? Are they wearing their employee hat? Or are they wearing their citizen hat? Are they wearing another hat of some sort? And it gets... there's a real fine line there, so it gets really difficult. But basically we found that it's just really difficult to keep those political considerations out of any kind of enterprise decision.

The other considerations that you need to make sure you have are sections that define how individual board members can be removed. Is this something that, do they serve at the pleasure of the council? Does the chief executive, the chairman, the president, the chief have the authority to remove these individuals? What is the process for removing them? Because this becomes very, a big issue as well as you move forward. Resignations, how do you fill vacancies? Does it have to go back to the council? Can the board itself then be able to fill these slots in the interim until the next council, maybe perhaps until the term expires? These are all things that need to be spelled out in procedures to move forward here.

Vacancies: one of the things that can be done is sometimes vacancies can be that blessing in disguise because it allows the board to take a look at themselves and determine, ‘Okay, who's sitting on our board? What skills, what talents, what areas are represented? Maybe we need to have...' I'll just take Hopi's development corporation. We have two vacancies. One of our vacancies was a person who knew the hotel and restaurant industries. Well, we have two hotels and two restaurants to run. Now we're lacking that kind of knowledge base on our board, and for us it's critical to find someone in there. We have three huge ranches. We don't have anybody with a ranching background. So for us that kind of a person is critical for us to find to fill that kind of a seat because the rest of us may know business in general because three of us have MBAs, but we know business concepts in general but we don't know the industry specifically.

So those are things that you can take a look at and you'll see some of the ideas up there that have worked for other entities. They're all ones that you can take a look at. The following slide is just basically a matrix that you can utilize to do this analysis of what is your board [consist of]? Each individual member: now this is all...one of the things I always encourage people to do is each individual member of the board fill this out for themselves and how they view each other and then hopefully the relationships within the board is one where they can be open and frank and honest with each other and that they don't take any of these -- if there was a negative answer on there -- that they would not take it personally because it's all being done in a constructive manner to be able to improve the board.

In terms of who selects or appoints the board, the shareholder has generally all of those responsibilities. I've seen... I don't know of any right off the top of my head where it's delegated to another entity. And the shareholder in many cases is the governing body of the nation who is the tribal council in many options. And sometimes the shareholder may decide, 'Okay, we're going to start on this new enterprise and we're going to appoint you, you and you to be on this board.' It can be done and I've seen it done that way. Or they can say, 'We're going to go through a formal nomination process,' and they advertise, they put it out and so on. And there's processes to follow, which I'll cover in the next slide. Or there can be an application process where it's much like a job. Whatever the case may be, you're going to want to make sure that you do have the information that you need on each of these potential board members because you're entrusting them with major responsibilities and sometimes just like a council they are making multi-million dollar decisions, the kinds of decisions that end up having to have long-term impact on not just the nation but its future as a whole. So these are very important.

The next slide just gives you some examples, and some of the ones that are real common or what I call standard. Most people will advertise, they ask for a letter of interest and a resume. Sometimes they'll do a reference chart, sometimes they won't. Hopi, look at Hopi's example here. This is what's happening now, but when we got acquainted we were under that first one, the first initial board of directors, we were just asked to submit a letter of interest and nobody even interviewed us and it wasn't until quite some time afterward that we were required to undergo an extensive background check. I think that background checks are going to be very critical, because again financial institutions are going to look at the composition of the board, can these people make sound decisions, these people have been running businesses but they've bankrupted each time, these are all very important kinds of things to take a look at. The Tohono O'odham Nation probably has one of the most comprehensive processes for recruiting or filling these four vacancies and I included a sample of their last announcement on that CD. I had to go through three interviews, two of them at the legislative committee level, and I first saw my first background check. I couldn't believe how extensive it was. It was just totally unbelievable. I passed. I had to go to a formal interview for the council. It was very much like a job. I was basically applying for the job of being on this board. I was asked business questions. Do I know what a business plan consists of? It was very much like a job and they screened them very well and I thought that that was one of the things that has helped me contribute to make the board much more powerful and helping us to be on the same page as we move forward in making some of these decisions.

Just a couple of other slides -- that you're making sure that you have these people and sometimes you can get these people to join your board: the banker, maybe a professor, you think of marketing people, maybe a business person, somebody out in the community who has been working, has been a friend of the tribe for years, someone like that, those are all valuable assets for you. And just some last suggestions, that you want to make sure that your enterprise board has this clear definition of its role in relationship to the council. You heard that over and over again from all of these enterprises that spoke this morning. And that also needs to go down to the CEO level as well and does it schedule reports to council. You heard this over and over again, communication, communication, communication, not just with the shareholder but with the citizens of the nation, because they're the ones as we've heard that are going to have those questions about 'where is all of that money going that you guys are earning? You guys just go and travel and do whatever,' and they're the ones that need to know what's being done and it needs to be stated to them very simply. These are all...Hopi's coming up to their first shareholder meeting next...the fifth of April, so it's going to be an historic moment for us because it's the first time that the Hopi people have ever heard about all of its five enterprises that have been existence for years, so this is going to be very historic.

Have conflict of interest rules spelled out and one of the things that's very common is to have members, board members sign a code of ethics or a code of standard that they would agree as being on the board. Have clear compensation rules, again because this is another big area that often gets raised over and over and over again. And then of course making sure that the board's chair, because they're going to be the ones out being the front face for you, and your CEO is going to be insulated from the council by the board. You have to make sure you act as one as you move forward."

Michael Taylor: Nation-Owned Businesses: Quil Ceda Village

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Native Nations Institute
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Tulalip Tribal Attorney Michael Taylor discusses Tulalip's rationale for taking the unique step of creating Quil Ceda Village, a federally chartered city, and the benefits this approach has brought the Tulalip Tribes.

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Taylor, Michael. "Nation-Owned Enterprises: Quil Ceda Village." Building and Sustaining Tribal Enterprises seminar. Native Nations Institute for Leadership, Management, and Policy, Udall Center for Studies in Public Policy, University of Arizona. Tucson, Arizona. March 29, 2007. Presentation.

"Well what the second part of the presentation before me emphasized was structure. How do you structure? How do you get away from politics, if you can? And you can't always get away from politics. But I would say that, I would argue in contesting part of what was said this morning, that dividing the business operations from the politics of the tribal council is perhaps not a panacea, but it's necessary if the tribes are going to succeed with their development. In all the years that I've worked on reservations -- and I worked in the tribal facility always, I've always worked directly for the tribe -- the struggle has been how to figure out ways to deal with this problem. We need to develop our resources; we need to pay attention to taking those resources that we have and maximizing [them] for the benefit of our people and creating institutions that last, both governmental and business. And so in struggling with this problem I think I -- along with the people that I've worked with, Indian people -- have figured out a couple of ways and I want to talk about two of them.

I know I was brought here to talk about Quil Ceda Village, which I will spend most of my time on, but on the Colville Reservation, which is just south of Osoyoos, in the early '80s the tribe was faced with this problem. They had a whole bunch of businesses; they were all being subsidized by timber revenues. And when the timber market went bust, all those businesses essentially couldn't operate because they were being supplemented by timber revenues. So we established a corporation called tribal governmental, which we called a tribal governmental corporation. If you want to study this model, there's a case now out from the -- I don't think anybody else in here is a lawyer -- but this case just came down from the Washington Supreme Court, a court which has never been favorable to Indians from its inception. When it was a territorial court, before there was a State of Washington, it still wasn't particularly interested in Indian issues, and has done its best to torpedo Indian rights wherever it could. But this organization that we established back in the early '80s was eventually sued in a way that we thought it would eventually be sued. And in this court, a very unfavorable court, the Washington State Supreme Court, we succeeded in getting a very favorable decision about this form of organization and I recommend the case to you. It's called Wright vs. Colville Tribal Enterprise Corporation [CTEC]. You can mention this to your lawyers; you can get it on [Lexis and Westlaw]. In that case, the Supreme Court of Washington talks about this corporate entity that was formed on the reservation at Colville. What it is and why it maintains the powers and immunities of an Indian tribe while being sort of a half step away. And that half step is important because the half step separates business from government. And I would argue that the reason that CTEC is still around after 24 years or however long it's been is that this separation took place.

Now there have been many wars here, internal wars, but the trick here is survival and profitability. And CTEC Corporation has, over the years, maintained that separation between the tribal elected officials -- there are 14 of them at Colville, a 14-member tribal council -- and the corporate body, the leadership that's brought in essentially, some tribal members, some not, to run the businesses of the corporation, which include gaming and timber, sawmill, grocery stores, there's a recreational houseboat development -- a whole bunch of things that this entity does. There's even a kind of a bank that operates, loaning money to people. And so this entity has survived, what I think as a lawyer is, a critical test where it got sued in the state courts and the case went up to the state supreme court and the state supreme court validated what we did. And if you look at that case, every fact and every law and every ordinance that both the majority opinion and the concurring opinion use as a basis for legitimizing what we did here was thought out, it was well thought out, even though we didn't have any models or at least we didn't have any models in Indian Country to do this.

Now as we say, over the years it's not a panacea. There are mistakes that have been made occasionally. Sometimes things that you plan don't work out. But we're still making money; it's got lots of employees. If I walk down the street in Omak, the town that I lived near all those years, I run into people who I can say as I'm greeting them and walking along, raised their families by working there and/or bought off... we sold off some businesses to tribal members who started them, managed them and then said, "˜Okay, I'm ready to do it myself, sell it to me.' And as I said this morning, the charter of this entity says that the corporate board has an obligation to provide support for tribal members who want to do it themselves. And that's especially true whether it's a sell-off of a business that's been operated by the corporation and a tribal member who managed it, worked it and operated it, built it can say, "˜Okay, I've gone to the bank, they'll provide me with the money to help me buyout this business and operate it myself.' I still have a house over here so I can go to Osooyoos and the guy who takes care of my well is one of the businesses we had, a well-drilling business and now he's got a big well-drilling business in that area because one of the things that area lacks is water. It's a desert. It's part of this desert. It goes all the way up into Canada, the great Sonoran Desert.

Well, let's talk about Quil Ceda Village. Quil Ceda Village is another example of separating, but this time it's dividing government responsibilities. Today I work on the Tulalip Reservation, which is, for you folks it's a relatively, many of you [in the] area down here, it's a relatively small reservation. It's 22,000 acres and it's roughly a triangle. Over here on this side of the reservation is water, Puget Sound. We're about 35 miles north of Seattle. Up here is Vancouver, this is Interstate 5; I-5 is the eastern boundary of the reservation. And down here, if you keep going, is what? Tijuana. So that's the geography of this place. [Laughter] Why's this funny? I grew up in California. Okay. So along this I-5 corridor -- if you've ever driven it -- when you get into populated areas it's an area for development, it's a good location in other words. It's a good real estate location. And when I came to work about 13-14 years ago at Tulalip -- leaving this beautiful God's country over there at Osoyoos and the Colville Reservation for the moldy, wet side -- this area along here, the reservation boundary was relatively undeveloped. There's a little area down here where the tribe had its original casino, right in here, that was developed, but otherwise along here it was just trees, a very pretty drive on Interstate 5 along here because it was undeveloped and there was trees. Tribal council had a notion about how to develop this area and after a few years and I was there they decided to develop a particular plot of land, which is about 2,000 acres and it's right here. And one of the things that they were going to do is it was a future plan, they were going to build a much larger and more accommodating casino facility up on this part of the land. At the time I got here, this area was, as I say it was undeveloped, in fact it was a big hole. There had been a lot of earth removed from this area to build freeway overpasses and that sort of thing. The tribe sort of sold the dirt from this area. So when we went over here it was just a big mud hole, enormous puddle because it rains a lot.

Well, so I'm going to talk about the governmental side of this situation. I'm not going to talk about the business side, that's different. In practice we have developed this area quite substantially. We have a Walmart©, a Home Depot©, a great big 110- or 120-store fancy outlet facility, the casino is built in here, there are gas stations, restaurants, but we still have a lot of land that we're looking for people to come in and build and we have a lot of folks that we're dealing with on all kinds of projects. So we have a list of various people. We're trying to essentially develop this into a destination resort and right now we're building a big hotel right next to the casino. So there's a lot of talk, a lot of argument back and forth on the business side as to what this area is going to be in terms of the services and the projects that are going to be produced here in this area. But there were some problems in doing this. I'm just going to talk about two of them. One was annexation and two was taxes.

Those of you who work around cities, especially small cities -- I assume it's this way every place -- if you've developed, if you have an undeveloped area and then suddenly it begins to develop, the cities nearby will look very closely at trying to get this area into the city boundaries because it's a very substantial source of tax revenue for them. So we have a city over here, Marysville, we have one down here, Everett and then a little bit north is Arlington. And these cities have engaged in litigation and utilities warfare grabbing, like amoebas they reach out and they grab areas where there is substantial commercial development. They like that. They don't like the grab housing developments because that's just a sink of money. You have to provide services and you don't get too much back. But if you've got a bunch of car dealerships, restaurants and grocery stores and all that kind of stuff, you want to grab it. And those things tend to, they have a symbiotic relationship and they tend to clump together. So people come into this area, they spend money, they create tax revenues and so cities want these areas and they have, under state law, the opportunity to go out and grab them through an elective process of various sorts.

And we knew that Marysville, Arlington and Everett have done this in a number of places. And we were concerned that if we were successful here -- we didn't know whether we would be -- but once Walmart agreed to come, and that's another story, but once Walmart agreed to come we thought, 'Hey, somebody, some city is going to want to annex onto the reservation.' Now, can they do that? Can they move their boundaries onto the reservation? Absolutely. There's a bunch of cases in federal courts where Indian tribes have tried to stop annexation onto the reservation, all lost, all lost. They never have been successful. And we didn't want one of these cities moving in and essentially taking over the government of our area that we were going to develop. So annexation was an issue. In addition, if we were successful, we were going to produce a lot of tax revenue in this area. And the tax revenue as we know now, we thought then and we know for sure now, it would dwarf what we can get from leases and other forms of development, it would dwarf it. So we wanted to have a shot at getting the tax revenue that's derived from this area. So here's what we did. And in your materials I provided the documents, the basic documents that we did.

I talked about Colville Tribal Enterprises Corporation a little bit because I essentially followed the same pattern or I talked my client into following the same pattern, my client being the tribal council, of establishing an entity. In the case of Colville Tribal Enterprise Corporation, it was a business corporation, something to produce surplus revenues and employ people. I did it in the '80s and when this problem came up I thought, 'Well, maybe we can move over onto the government side and essentially do the same thing.' And that's what we did. The tribal council passed an enabling act, which you have in your materials, allowing them to charter municipalities themselves and we hustled it over to the BIA [Bureau of Indian Affairs] and they said, "˜What's this?' They say that with everything. We said, "˜We're going to charter, we want to charter a municipality, and so here's the enabling act that allows how this is to be done.'

Well, we thought, if we have our own municipality here, we can at least defend ourselves on the annexation business. So that strategy...and it's basically worked. There have been no annexation, the cities around us have bought off on the fact that this is a municipality and they can't go there, they can't move onto the reservation and take this within their boundaries. And we've solidified that by making deals with them where they have agreed contractually not to do it. But that initial adoption of this entity as a municipality with its own village council. It's called the 'village council'; it's called Quil Ceda Village. It's got a big long legal name to differentiate it from cities in the State of Washington, but Quil Ceda Village is what we call it and it's the colloquial name, what people call it when they say, "˜Oh, we're going to Quil Ceda.' We now have an amphitheater over here so we're starting to bring all kinds of old rock acts and country stars and that sort of stuff here. And so now...we brought the Everett Symphony, nobody came but...I went. We have an amphitheater. So Quil Ceda, people know now, Quil Ceda, Quil Ceda, I'm going to Quil Ceda.

Anyway, we stopped the annexation. We're settled in our minds that they're not going to be able to do that and if we have an attempt to do it, we have a good case to defend it. The village council, they take care of business in here; they build the roads, they set the speed limits, they built their own sewage treatment plant. We've negotiated water transference through the City of Marysville's system because we don't have a water line. We're working on that, but we don't have a water line here. We have an agreement with many municipalities and the counties and that sort of thing for water. I won't go into that. We have to transfer that through Marysville's system to get it in here and that's what we're doing at this point. And that agreement protects us from the kinds of utility wars that these small cities get into when they fight over whose going to get this particular bid of commercial development. The next issue...we've defeated our annexation concerns and I guess one more thing about the annexation business. The leadership on the reservation, the people on the reservation and the people in Marysville especially, a century of bad blood; they went to school together, they fought each other, and so that's one of the reasons we were really concerned. Marysville is a very border town kind of atmosphere, discriminatory -- you know the story. That's changed pretty substantially now. In fact, the Marysville Tulalip Chamber of Commerce is now located in Quil Ceda Village. That's kind of amazing.

What about the taxes? We're not getting anywhere on taxes, but we have a very good case and we're putting it together. We have worked with the state revenue department, the governor, the legislature and they're just, they're getting a huge windfall here. Between $17 and $20 million a year in taxes are coming out of here and not very much of that is going into either the village council or the tribal council. The tribal council's office is over here on the water where it's pretty. In order to solidify, I think, solidify our position we used a provision of the tribal government tax status act. How many of you know the tribal government tax status act? Anybody in here familiar with it? No. Well, it's there. It was passed by Congress in 1982 and it's a smorgasbord of tax fixes that Congress thought they ought to do for Indian tribes. It makes Indian tribes more like states in terms of dealing with the internal revenue code. The tribal government tax status act has a provision in it that says that if you apply appropriately, if you create, if a tribe creates an entity that qualifies under the provisions under the tribal government tax status act, it can be given a federal designation as a political subdivision of an Indian tribe and then it has many of the federal governmental aspects of an Indian tribe. The tribal government tax status act, when you want to get on the list, and it's a very short list of entities that are designated as political subdivisions of an Indian tribe, you have to file with the Internal Revenue Service a petition for a tribal letter of opinion. [Question] There is a lawyer in the IRS in D.C. who has this responsibility to review your petition and then you have to have the Department of Interior write a letter supporting this petition. And then the two of them together will decide whether you qualify and if you do you get this letter back, which I supplied you in the materials, which says, "˜Because you qualify under certain provisions of the tribal government tax status act you're now a federally recognized political subdivision of an Indian tribe.' Well, that's part of our tax case. It will be part of our tax case, because what the state's doing in here with regard to our tax situation is causing us to lose some of the benefits that we're entitled to under the tribal government tax status act. So we have this letter and we're going to use it and, as I said, our accountant's telling us that the state and the county are getting between $17 and $20 million in taxes each year out of Quil Ceda Village and we're after that. And so we're drafting a federal lawsuit complaint.

One final comment: everything that we've done to create this entity, we've taken a bunch of cases which tribes lost, mainly from Arizona, Gila River and some other tribes who lost these tax cases. But in losing them the Ninth Circuit has laid out this prescription of what you can do to win. And so we've been following these unfortunate events in Arizona and we've tried to satisfy every one of those requirements that the Ninth Circuit has put on tribes in order to succeed in getting control of tax revenues that are derived from economic development here. And that's why, for example, every person who works for the Quil Ceda Village government is an Indian except me. My enrollment application has been pending for quite some time. Everybody from the accountants to the people who fill the potholes and paint the lines on the street, we try to employ...when we have to do a contract, like we got to get somebody to tow the cars out of the...lots of parking in the village because there's lots of activity. We've got...at this point, we're way too successful because there are two freeway accesses to this and they're backed up all the time trying to get into one or the other of the activities that's going on in here. So we've got a lot of employment, relative to what Indian tribes have, in the village. I think the village has maybe 60 employees or something like that. They're all Indian. They're not all Tulalip, but they're all Indians. We've got our police precinct down here because the rest of the reservation is benign compared to what goes on over here. So we've got a police precinct in this area that's just...there's tribal police cars that have Quil Ceda Village written on them so they know they're a Quil Ceda police car.

So that's on the government side. It's a government that's different from the tribal council. The tribal council of course controls it because what do they have? They have the enabling act that steers. One of the great things about this Colville Tribal Enterprise Corporation, other people have mentioned this, you have this tension all the time between the corporation and its employees and managers and that sort of thing and politicians. And the enabling act that sets up the ability of the tribal council to charter corporations like CTEC, which is a special kind of corporation, it's called a governmental corporation. It's not a for-profit corporation, it's not a not-for-profit corporation, it's a governmental corporation. And you'll see this in writing. But this enabling act allows the tribal council to steer, not crush, the corporation. So once the tribal council understood that, and we had a lot of close calls I'm telling you, they feel a lot better about the corporation doing things that they might be unhappy with because they know that they've got medium- to long-term control. In closing I'll give you one example of that.

When we created this corporation, we brought in a number of people; almost none of them were from the reservation. Some were tribal members who had succeeded in business somewhere else, California or somewhere. Some were not Indians who had specific experience in the businesses that we're in, like running supermarkets. So what happened here? These folks came in and saw how sloppy we were operating and they had suggestions and they had ideas about what to do. And so they started saying to themselves, 'Well, I'll take a consultant contract to help you organize your supermarkets better.' We had a guy who is a billionaire because he owns the only supermarket on one of the islands in Puget Sound and he agreed to be on our corporation, and that was great on our board because he knows a ton about how to operate a supermarket successfully. Well, he took a small contract, consultant contract to help us straighten out things at the supermarkets, which was great. And that's fine in the business community. In the business world of your corporate directory you can take a consultant contract with your corporation so long as you don't fleece the corporation. You can get paid the standard amount for doing that kind of work and that's fine. But that doesn't go on the rez. On the rez, people look at these guys coming in there and say, "˜Well, we give them all this authority and now they're taking money out of here and we don't like it.' So what's the reaction of the tribal council? Squash that corporation. What's Mike's [my] argument? Well, you don't have to do that tribal council, all you've got to do is amend the enabling act to say that people that are on the boards of these corporations can't work for them. "˜Oh, okay. So we don't have to wipe out our own economic development entity in order to squash this problem?' 'No, just amend the enabling act. Just add something to it to say that you can't do that under the tribal law.' "˜Oh, okay. Fine.'"