Tribal Sovereignty: Good for Indian Country’s economy, good for America’s economy

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Tribal sovereignty can be an obscure concept for non-Native Americans, but for all federally recognized tribes in the United States, it is an inherent and essential expression of their status as nations. Since time immemorial, American Indian tribes have existed as sovereign nations. Sovereignty is a unique demonstration of freedom that allows a government entity to manage its own affairs. In fact, Native Americans are mentioned once in the U.S. Constitution and that pertains to Congress’s power to regulate commerce with sovereign tribes.

As the nation grew, states began to impose their will on tribes. It took a series of Supreme Court rulings almost 200 years ago to remove state meddling in tribal affairs. After a long and well-documented struggle, the federal government ultimately transferred the management of tribal affairs back to the tribes so they could determine their own futures. This “self-determination” has allowed tribal governments to explore the full extent of sovereignty by developing their own economic arms to improve their communities and create prosperity.

{mosads}The St. Regis Mohawk Tribe represents a perfect example in exercising sovereignty. With just over 3,000 residents, its reservation sits on the border with Canada in remote upstate New York. The poverty rate on the reservation is almost triple the current national rate at 40 percent. Though the St. Regis Mohawks previously utilized their sovereignty to become owners and operators of a casino, median household income hovers well below the national average at just $33,000 per year.

Long thought the economic savior of Indian Country, many are surprised to learn that less than half of the 567 federally recognized tribal nations in the U.S. operate casinos. For tribes geographically positioned to benefit from the industry, gaming provides revenues essential to tribal government operations like education, health care, infrastructure development, and cultural preservation. However, and unbeknownst to many, gaming was not given to tribes by the federal government. Had it not been for tribes exercising their inherent sovereignty and fighting it all the way to the Supreme Court, tribal gaming as we know it today would simply not exist.

For the 329 tribal nations without gaming operations, utilizing their sovereignty is a necessity in evaluating all economic development opportunities. Unfortunately, tribes faced with these challenges are met with derision and criticism from those who demonstrate little to no understanding of the importance and value of tribal sovereignty. Furthermore, those critics lack any understanding or comprehension of the hardships most tribal nations face.

The St. Regis Mohawks felt firsthand the backlash of exercising their sovereignty. Utilizing its sovereign rights, the tribe purchased patents to a popular eye drug called Restasis. The tribe then leased the patent for a substantial annual fee back to the drug’s developer, while retaining all the rights afforded the tribe through self-determination and its sovereign status. Lease-back provisions in patent sales are quite common, and it was a smart and sustainable investment for the St. Regis Mohawks. The financial benefit derived from the transaction would allow St. Regis to make critical improvements to its community.

Nonetheless, drug manufacturers and elected officials, including Sen. Claire McCaskill (D-MO), immediately plotted to infringe upon the sovereignty of the St. Regis Mohawks by proposing legislation to limit tribal sovereignty in intellectual property. Indian Country regularly witnesses attempts to diminish sovereignty from those on the outside looking in, many of whom should know better.

We see a similar situation arising in the financial services industry where the Consumer Financial Protection Bureau (CFPB) is attempting to impose state licensing and lending laws on tribal government-owned businesses operating under tribal and federal law, despite Congress expressly forbidding the agency from such regulatory attacks. The agency is even punishing non-Native service providers simply for partnering with tribal businesses.

These are only a few examples of how tribes continue to struggle to overcome the oppressive economic and social constraints resulting in hardships most Americans believe only exist in the developing world. Our survival as Native Americans, including preserving our culture and improving our communities, is not possible if our status as sovereign nations is challenged each time we rightfully engage in sustainable business ventures within the American economy.

The Founding Fathers recognized the important contributions made by tribal nations to a fledgling national economy and ultimately memorialized that economic relationship in the U.S. Constitution. Whether it is gaming, purchasing patents, natural resource development, providing financial services, or any of the many economic opportunities tribes engage in across the country, the only way for Indian Country to provide a better future for the generations to come – and a better economy for the country – is to fully exercise sovereignty.

Sovereignty is the truest expression of self-determination and a sure path toward economic independence. But economic independence cannot be achieved if tribes are forced to defend sovereignty each time it is exercised.

Gary Davis is Executive Director of the Washington, D.C.-based Native American Financial Services Association, which advocates for tribal sovereignty, responsible financial services, and better economic opportunities in Indian Country.

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