The National Native American Economic Policy Summit was held in Phoenix, Arizona, May 15-17, 2007, with more than 500 key stakeholders gathering to discuss the challenges to growing healthy, vibrant Native economies. In addition to identifying challenges, participants were asked to recommend innovative and progressive solutions to foster economic growth. The highly-successful Summit, born out of a White House Intergovernmental Affairs (WHIA) initiative, was hosted by the Office of Indian Energy and Economic Development within the Department of Interior and the National Congress of American Indians (NCAI).
In this video, President and CEO of Ho-Chunk Inc. Lance Morgan discusses policy.
Morgan, Lance. "Policy." National Native American Economic Policy Summit. National Congress of American Indians and the U.S. Department of Interior's Office of Indian Energy and Economic Development. Phoenix, Arizona. May 15, 2007. Presentation.
â€œThis is about policy and Iâ€™ll talk a little bit about policy but Iâ€™m going to share a story with you from a couple of weeks ago. I do lots of things according to my intro and Iâ€™m of counsel to this law firm. Itâ€™s called Fredericks and Peoples and they had a meeting on a Saturday out in Denver and we were going to talk strategy. And I think that the strategy we wereâ€¦their strategy they were looking for was how to build up their legal practice in Indian Country. And I think that the strategy that we talked about there is probably worth mentioning because it has some parallels to this.
We were talking about things they could focus on for their legal practice and I did this little chart. I just drew a timeline on the board and I put 1993 on one end and 2007 on the other and I drew this little graph and I said, â€˜This is the era of tribal gaming. It kind of shot up in the â€˜90s, it plateaued out. Itâ€™s still kind of going on but thereâ€™s a top to this and maybe thereâ€™s even a way to go down I think to some extent.â€™ But thatâ€™s the era of tribal gaming and I said, â€˜A lot of lawyers like yourselves have ridden that wave. A lot of people have done very well on that but if you think aboutâ€¦â€™ I think we brag sometimes. I donâ€™t know if weâ€™re bragging or just telling people, itâ€™s like a $23 billion industry and thatâ€™sâ€¦by our standards thatâ€™s fantastic but I read an article a week or so ago or two weeks ago on the Fortune 500. They hadâ€¦those 500 companies, and thereâ€™s 500 companies and 500 tribes, itâ€™s just coincidence Iâ€™m sure, but they had $4 trillion in revenue and $740 billion in profits, which isâ€¦their profits alone were 20 times bigger than the gaming industry, the entire industry. And so I was thinking to myself, â€˜Maybe we should work on that area.â€™
I just kind of picked this event. When the Seminoles bought the Hard Rock CafÃ© early in the year or a year ago, I said, â€˜Letâ€™s just put a line here.â€™ And I drew this chart that had gaming kind of plateaued out and I just drew another chart on the board and if I was technically sophisticated youâ€™d be looking at it now instead of this. Iâ€™m getting confused. It was really good there. And I said, â€˜You know what, this is gaming, this is tribal corporation.â€™ I said, â€˜The era of tribal corporation is about to start and weâ€™ll say itâ€™s with the Seminoles buying this entity. Now thereâ€™s been tribal corporations forever around here but really lately theyâ€™ve been really getting their act together and growing and think about it. Gaming is geographically limited, politically limited, a few other things but did anybody stop General Electric? Does anybody stop Exxon from growing bigger? The era of the tribal corporation has no cap on it, nothing. Thereâ€™s nothing stopping it from being as big and successful as we can make it and I think that we need to understand that.â€™
And I was telling these lawyers, of which Iâ€™m a part of, Iâ€™m referring to them as if like theyâ€™re some creatures, these friends of mine. I said, â€˜Think about every big law firm in this country. Most of these giant law firms are tied to some giant corporation. They grow with the company. And whatâ€™s interesting about it is they didnâ€™t just grow with that company, theyâ€™ve been with that company for 50 years, 75 years, 30 years.â€™ Most of you arenâ€™t lawyers but imagine having a tribal client for that long in a volatile environment, a politically charged environment and that tells you something. It tells you that weâ€™re part of our own problem sometimes; that political establishments and governmental establishments really arenâ€™t going to be stable over that period of time to implement these kinds of things. Theyâ€™re not going to have that internal stability that it takes to create that. Thereâ€™s not going to be this loyalty that youâ€™ll see between a law firm and a company for 50 years. It doesnâ€™t happen that way in Indian Country. I told these lawyers, I said, â€˜What you need to do is you need to figure out how to help tribes put in place structures and systems that allow these thinking, evolving stable entities that can use tribal advantages to emerge and that this era of kind of tribal corporation isâ€¦thereâ€™s noâ€¦the skyâ€™s the limit on it and we all know gaming has this limit.â€™
And so I was kind ofâ€¦somebody asked me out in the hallway while I was writing this little chart what I was going to talk about and they said, â€˜What about the entrepreneurs.â€™ And a lady named Margot Gray, you probably know her, sheâ€™s declared a Miss Oklahoma. She likes that. She was the Oklahoma Businesswoman of the Year a few years ago so I just kind of shortened it up to a nickname. She said, she looked at this curve and she goes, â€˜You know what, when I started my business 10 years ago, we were just struggling to get by. But as this gaming took off, we grew with it. Weâ€™ve prospered as the tribes have prospered.â€™ And I never think much about the entrepreneurial sector because Iâ€™m very focused on the big tribal corporate thing and it occurred to me that thatâ€™s exactly true. Weâ€™ve grown, our business, even our tribal corporate business at tribes have grown, weâ€™ve grown as a function or as a percentage of the regular industry itself. And it occurred to me that the entrepreneurs are going to grow as tribal corporations grow also. And maybe itâ€™ll be at a factor of 10 percent or 20 percent of these but as this takes off, so will the rest of Indian Country economic, other corporations, other entrepreneurs. Theyâ€™re going to follow along with it. Iâ€™ve named this curve the Margo Curve. She likes that. I really wish now I had some visual aids cause now I have three curves going. I have gaming, I have tribal corporations and I have the entrepreneurs following right behind them. But I think that that is an interesting kind of thing to understand because that is where weâ€™re heading. It might take us awhile to get to the four trillion but interestingly it wonâ€™t take us as long if we got our act together as those corporations done because we have more advantages they do in business if we use them right.
Jackie asked me that I repeat a little bit of my speech from the RES Conference and that was in Phoenix too and I donâ€™t like repeating speeches but Iâ€™m going to talk about something I thought was important because it ties right into these tribal corporations and I do what Jackie says. Iâ€™m kind of scared of her. She seems nice butâ€¦ We usually say, â€˜Let her get hold of a congressman.â€™ What I said there that I thought was important and it ties to this wasâ€¦I talked about this tribal corporation development. What weâ€™re seeing happening in Indian Country in some places but not everywhere is this emergence of giants. In Europe they have companies that are called National Champions. You canâ€™t buy them because France wants that to be their big company, Germany wants that to be their big company and everythingâ€™s for sale in the United States. We just sold Chrysler. But on Indian Country we have these same things are emerging. If you think about it, thereâ€™s nothing stopping some of these tribes once they get going from becoming machines and doing super well. Southern U, theyâ€™re the Indian Exxon, theyâ€™re coming up. The Mississippi Choctaw, theyâ€™re a big conglomerate that does all kinds of manufacturing thatâ€™s branching into all kinds of areas. Theyâ€™re the Indian General Electric. The Alaska Natives, they take a lot of heat for being so successful in government contracting. I was trying to figure out what government contractor to call them, Iâ€™m going to settle on the Indian Halliburton but without Dick Chaney. I canâ€™t think of a good government, like a friendly government contractor. Oh, Iâ€™ve one, All Native Systems, itâ€™s the company I run. Weâ€™re the company that cares about your federal tax dollars. I think thatâ€™s fascinating that these giants are going to merge. What I talked about at the RES Conference though a little bit was, I said, â€˜Whatâ€™s unfortunate is that so many of the rich tribes are sitting on the sidelines sitting on their hands.â€™ A lot of these smaller tribes have gotten their act together and are becoming hard-core business people. A lot of the rich tribes are resting on their lawyers so to speak and youâ€™ve got enough gaming money you get a little bit soft I think and I suggest that they get hard and they start thinking more aggressively and start thinking how they can position themselves to be a much stronger entity.
Iâ€™m going to make a few policy suggestions and thenâ€¦because thatâ€™s what Iâ€™m supposed to do, right. Itâ€™s kind of divergent from what I want to talk about. Iâ€™ve given speeches before on trust land. I just hate trust land. Itâ€™s the way to keep the states out of our pockets, though, right and so itâ€™s important but I always thoughtâ€¦but it acts as a gigantic capital restriction device. You canâ€™t have your own taxes, you canâ€™t get mortgages, you canâ€™t leverage up your land. Itâ€™s really one of the primary reasons I think weâ€™re poor and it really hurts us in terms of taxation and capital attraction. And so Iâ€™ll make a couple of little policy suggestions and then Iâ€™ll poo poo them in a minute. The BI Loan Guarantee Program. Itâ€™s important. If youâ€™re a rich tribe, you have a big casino in L.A. or San Diego, a bank will find a way to give you the money. If youâ€™ve got oil, theyâ€™ve been there since the early 1900s on the Osage right, they found a way. If youâ€™ve got nothing, they could care less. Now you still care and you still have all these restrictions of trust land but the only thing you can really do is go to the BI Loan Guarantee Program which is capped out. Itâ€™s a very small amount of money. Out of a multi-billion dollar budget itâ€™s in the few millions of dollars that are attached to that program. And so if the only opportunity for the poorest tribes with the least resources is the BI Loan Guarantee Fund and youâ€™re only putting inâ€¦ Whatâ€™s the amount that goes into that?â€
â€œWell, weâ€¦last year we put out $108 million.â€
â€œBut what amount is allocated to it?â€
â€œItâ€™s about a 21 leverage so about $6 million.â€
â€œ$6 million. $6 million and $100 million is an even bigger number but that is essentially the cap on capital that can flow to 500 tribes. That ainâ€™t a lot and so if youâ€™re going to do it, letâ€™s throw a few more million bucks in there. A million dollars is 20 more million, thatâ€™s better than what weâ€™ve got. So if youâ€™re going to make a policy change, do that at the very least. If youâ€™re not willing to change the big picture issue on the trust land and stuff at least throw some money at the programs designed to help it.
The other issue thatâ€™s kind of a pet peeve of mine and a good friend of mine, Gavin Clarkson, is totally into this issue, is the IRS. I just donâ€™t trust them. Theyâ€™re up to something. Thereâ€™s one IRS agent for every eight tribes that deal withâ€¦in that department right now just in case youâ€™re curious. I wonder how many you would need to have that for every American or every company. So weâ€™re probably the most, on a percentage basis or the number of companies involved, the most targeted entities out there. The IRS has really put a monkey wrench and the federal government has also put a monkey wrench in the tax exempt bond market. The tax exempt bond market isâ€¦it shouldnâ€™t even be called that. Itâ€™s a joke. Thereâ€™s no such thing and we donâ€™t have taxes, right. So we can issue these tax exempt bonds if we have something to tie them to, casino money or something of this sort, but even that weâ€™re restricted. They said thereâ€™s a law that says you have to do essential governmental functions. Now in the states and the counties and the cities, that can mean anything. Itâ€™s the most creative environment imaginable. For tribes it means very little. They can target you and limit you from doing things. But Iâ€™m going to make this point. Trust land means no taxes; it means that we have to go into business to make money to supplement the effects of trust land. We are forced to go into business to pay for our programs and to create jobs. So I would argue the logic that everything we do in business, and I donâ€™t care if itâ€™s casinos or not, is part of that ongoing obligation we have to create, to provide and that money is used to provide essential governmental services to our people. So thereâ€™s no reason that we should beâ€¦thereâ€™s no logical reason that we should be more restricted than states. In fact thereâ€™s much more reason that we should have a much more expansive environment than states. And so somebody needs to change that. Itâ€™s a couple of words in a law from the 1980s that are holding back millions of people in 500 tribes. If we want some policy changes, letâ€™s take a shot at that one. Iâ€™ll get an eraser. Just hit delete on a couple of things. Thatâ€™ll solve some problems to let the capital flow. If youâ€™re not going to solve the trust land, then letâ€™s do that. That canâ€™t be that hard.
Now remember I said Iâ€™d poo poo all that, after putting out these great ideas. Those are well known ideas. Those arenâ€™t anything new. But Iâ€™m going to tell you something. The BI Loan Guarantee Program, the grant programs associated with tribes, all of the housing programs that we have to deal with, all those things that the feds can fund, those are side effects. Those are all side effects of other things that the government has done to us. Trust land put a lock down on housing so we have to have this Indian housing program. Trust land put a lock down on capital flow so we have the BI Loan Guarantee. Trust land meant no taxes so we have to go into business and face all these otherâ€¦thatâ€™s why weâ€™re in gaming. Now weâ€™re doing too well at that apparently so it causes problems. But if everything that weâ€™re asking these guys to do as the governmental body, from a policy standpoint, is tied to something theyâ€™ve done to us before, Iâ€™m just thinking logically perhaps itâ€™s not the best way to approach it because theyâ€™re not the answer. They can help, they can tweak, maybe we can make a big picture change or suggestion that will help free up some of this capital but basically all theyâ€™re trying to do, theyâ€™re treading water. Theyâ€™re on a tread mill, theyâ€™re not going anywhere. Maybe they can throw a little more resources at it in an environment where resources are becoming increasingly strict, especially in the war environment.
I was telling somebody the other day, do you know that we areâ€¦that the Gulf, that this Iraq war has lasted six months longer than we were involved in World War II. I think itâ€™s an amazing statistic. It has nothing to do with this speech by the way. I just thought it was interesting. The feds arenâ€™t the answer. We can complain about them. Where Iâ€™m from, Nebraska, South Dakota area, itâ€™s a cottage industry complaining about the government. Iâ€™ve heard the best speeches Iâ€™ve ever heard from tribal leaders in this area and talking about whose fault it is and itâ€™s occurred to me that relying on these guys to solve our problems hasnâ€™t worked for the last 100 years, that weâ€™re functioning in a system that is very difficult for us to deal with and for themselves and so we need to forget about that. Letâ€™s come up with some good policy ideas and letâ€™s throw bigger band aids at the problem, right. But letâ€™s figure out a way internally that we can get by this.
I run this little tribal corporation in a town of 1500 people. I always say thereâ€™s a herd of buffalo outside my office. We started with one employee and very little money. We donâ€™t have this huge casino. I have 500 and some employees and we have $150 million in revenue in a town of 1500 people. Itâ€™s phenomenal what has happened in our little world. And we did it with the help of the BI Loan Guarantee programs, some of those grant things that are out there, but really that wasnâ€™t our focus. We did it because we started focusing on internally what can we do, letâ€™s get our governmental systems straightened out, letâ€™s set up a corporation with a separation of politics, letâ€™s put in place checks and balances so that people feel comfortable, letâ€™s put Native Americans in there and letâ€™s learn. What people donâ€™t get is that you canâ€™t take something from Harvard off the shelf and drop it on your reservation and think all of a sudden itâ€™s going to be solved. What you have to do is put in place a system that you trust, that you buy into and that your own people can learn and evolve in. And if that happens, then after several years and lots of mistakesâ€¦I never talk about those. No, weâ€™ve never made any. Iâ€™m so glad weâ€™re not bankrupt because I was 25 when we started this. I really thought I was smart then, too.
You can evolve and Iâ€™ve given thisâ€¦when people come to visit me, I tell them something. I said, I do this little timeline thing again and I said, â€˜Here I thought I knew it all and here I thought I knew it all and here I thought I knewâ€¦I never did.â€™ But at each point I got a little bit smarter and Iâ€™m a 12 year veteran of tribal politics and tribal corporate CEO. Thatâ€™s like almost unheard of. But the tribe has spent all these years teaching me and Iâ€™ve spent all this time teaching my staff. Iâ€™ve got five or six people on my staff that are qualified to run another tribal corporation. Who can say that? Because weâ€™ve learned, weâ€™ve evolved, we have an environment that allows that to happen and weâ€™ve done it and our tribe has allowed us to do it. And despite all the negatives that are out there, the political targets, the attacks, the restrictions, we still found a way because we were motivated to do it and thereâ€™s nothing stopping you from doing the exact same thing. And so I would suggest that, yeah, letâ€™s fix some policy issues but really where you need to look is inward into what you can do and to take matters into your own hands because in the end it matters far more to you than to somebody in Washington, D.C. Thank you very much.â€