Citizens for Accountable Government (CAG) has filed a letter of objection with the Bureau of Indian Affairs (BIA), opposing the Shakopee Mdewakanton Sioux Community (SMSC) application to place more Tribal owned property into tax-free trust. The 14 member Steering Committee was unanimous in its decision. The decision was based upon the fact that the SMSC pursuit of buying up highly developable parcels of property and removing them from the tax base unfairly burdens those who do pay taxes, and that SMSC as arguably the wealthiest native American tribe in America has no need for tax exemptions that are not available to ordinary tax-paying residents and businesses. The text of CAG’s letter follows:
November 16, 2015
United States Department of the Interior
Bureau of Indian Affairs, Midwest Regional Office
Norman Pointe II
5600 West American Boulevard, Suite 500
Bloomington, MN 55437
Attention: Diane K. Rosen, Regional Director
Dear Ms. Rosen,
This letter is submitted in response to your notice dated October 13, 2015 regarding a Land Acquisition Application filed by the Shakopee Mdewakanton Sioux Community (SMSC), said notice being received at the City Offices of the City of Prior Lake on October 19, 2015. This letter is being submitted at the direction of the 14 member Steering Committee of Citizens for Accountable Government (CAG) which is an activist body of residents in Prior Lake, dedicated to the ideal of transparency and accountability in local government. CAG has been a voice of the residents and voters of Prior Lake for over a decade. For more information on the Organization I would refer you to our website at c-a-g.org.
The purpose of this letter is to express vigorous opposition to the SMSC Application to place the subject land into tax-free trust. The Application submitted by SMSC provides no credible need for placing the land into trust status. Approval of the Application would represent a complete disregard for the intent and purpose of the Indian Reorganization Act, and would undermine the very legitimacy of the Act itself.
The Wheeler-Howard Act (otherwise known as the Indian Reorganization Act) became law on June 18, 1934 at a time when our nation was struggling with two epidemics, the great depression and the effects of the severe “dust bowl” drought . Because of history and geography, some Native American tribes were particularly victimized by these epidemics. In response, the US Congress enacted the Indian Reorganization Act.
It is an indisputable fact that the Indian Reorganization Act was enacted to assist those Native American tribes who were suffering poverty as a consequence of the two epidemics noted above and other causes, and who lacked the capability for self-governance. It was an ethical and humane response by a wise US Congress in response to a critical need in the 1930s. It was not enacted, nor ever intended to provide tribes with a mechanism to expand their reservation lands, without regard to whether a legitimate need existed. It was enacted to provide a response to the critical and legitimate needs of impoverished tribes. Using the Act to enrich an already wealthy tribe, or to provide a tribe with disproportionate economic and political power clearly falls outside the intent of the Indian Reorganization Act. It is on this basis that we vigorously oppose the subject SMSC Application described below.
The Shakopee Mdewakanton Sioux Community Application to the Secretary of the Interior of the United States petitions the US Department of the Interior to transfer approximately 250 acres of SMSC Fee owned property (Meadows Parcels) into trust. As arguably the richest Native American tribe in America, the SMSC cannot claim poverty, nor can they claim to lack the capability for self-governance. The SMSC is not an impoverished tribe that needs more exemption from local and state taxes.
The SMSC Application defines four needs in justification of their application to place the Meadows Parcels into tax-free trust. (The paragraph numbers below are taken from the SMSC Application.
4.1 Economic Development:
The SMSC Application claims need for additional land for economic development to promote the long-term health of the Tribe. It is a fact that current business and commercial development on SMSC reservation land (that we are lead to believe supports less than 200 families), exceeds the total economic development within the rest of the City of Prior Lake with about 25,000 non-tribal members. With about 2000 acres in trust and about 4500 acres in total, it is disingenuous for the SMSC to claim the need for more trust land for economic development. In fact the SMSC is by far the largest land owner in Scott County.
The SMSC Application claim that “its current economy is dependent on a single enterprise” seems less than truthful. In addition to its gambling enterprises, the Tribe owns and operates numerous other businesses including the largest hotel within miles, a fitness and health center, the only golf course in the City of Prior Lake, an ice arena, credit union, travel bureau, campground and RV park, day care facility, gift shop, liquor store, convenience store, 2 service stations, mini-storage warehouse, car wash, numerous restaurants and a large and modern recycling facility.
The SMSC Application states that the Fee-to-Trust transfer will allow the “Tribe to meet a portion of the need for economic development and diversify the tribal economy through a golf course enterprise”. Since the golf course was an operating enterprise when the Tribe purchased it, and it is currently a successful enterprise owned and operated by the SMSC, it’s inexplicable to claim that trust status is required to permit it to continue to operate. The Tribe does own and operate business enterprises that are not on reservation land. To imply that a Tribal-owned enterprise must be on reservation property is inconsistent with facts.
4.2 Cultural Restoration:
Since the Application indicates there will be no change in the use of the Meadows Parcels if placed into trust, the claim that trust status is required for cultural restoration is ambiguous at best. For example, the Application states that a portion of the Meadows Parcels is used to annually host a Wacipi or pow-wow that helps foster cultural identity. This event has been successfully hosted by the SMSC for many years. The SMSC Application offers no explanation of why trust status is now required to continue.
4.3 Surface Water Drainage:
The SMSC Application states that there is a “need for stewardship of water resources, which the Tribe can provide”. Of course there is need for stewardship of water resources, and that need is currently satisfied by City, County, State, and Federal law, and overseen by the County-appointed Prior Lake Spring Lake Watershed District and the Scott County Soil and Water Conservation District. There is no reason to believe that removing this watershed area from local and State jurisdiction will provide better stewardship than currently exists. In fact substituting tribal jurisdiction for city, county, and state jurisdiction could lessen the degree of stewardship of water resources.
The idea that the goal of self-determination can only be achieved by tribal members when they are exempt from local and state taxes, even though entitled to enjoy all the amenities that other tax payers must pay for, is difficult to comprehend. American families, businesses, and institutions all strive for a degree of independence (or self-determination) consistent with laws that freely elected representative pass for the benefit of all. With the economic success enjoyed by SMSC tribal members, and the fact that they are entitled to all of the rights and privileges available to all residents of City, County, State, and Country, and that they have the additional benefits bestowed by their dual residency in a sovereign nation that is outside of local and state jurisdiction, it is not understandable what additional is needed.
In our opinion, the SMSC Application has failed to identify any credible or legitimate need of the SMSC Community, to place the Meadows Parcels into tax-free trust. Instead it is an application for what the SMSC leadership wants. Wants have no relationship to the intent or purpose of the Indian Reorganization Act. In our opinion, this Application represents an abuse of the Wheeler-Howard Act which was intended to help seriously impoverished Native Americans who were truly in need. It was not intended to help the rich grow richer.
IMPACT IF APPROVED
Approval of the referenced application by the BIA would not only undermine the trust that Prior Lake residents have in the integrity of the BIA and the Department of the Interior, but more critically undermine trust in their SMSC tribal neighbors. There is no way to explain or justify to Prior Lake residents why more land should be taken out of the tax base to benefit wealthy tribal members, while they as taxpayers are expected to shoulder the additional tax burden.
Because of local media attention that has been given to this subject for many years, Prior Lake and Scott County residents are well aware of the Indian Reorganization Act of 1934 under which the SMSC Application has been submitted. They are aware that the primary purpose of the Act was to provide assistance to impoverished tribes, both economically and in terms of self- governance. No one in Prior Lake believes that the SMSC which reportedly is the richest tribe in the nation, and whose adult members reportedly receive payments from casino operations approaching a million dollars a year, is in need.
When it was reported earlier this year by the Minneapolis news media that the SMSC had applied for and received an Affordable Housing Grant from the US Department of Housing and Urban Development (HUD), the response as could be expected was anger and disbelief. With tribal members living in mini-mansions on the SMSC reservation, and owning luxury boats, cars, and airplane, how does one explain the rationale for application for an Affordable Housing Grant, to be paid for by taxpayers? And how can one trust the integrity of a department of the US Government that approved the grant?
The fact that officials within HUD were able to ignore or manipulate information to somehow justify a need for an Affordable Housing Grant for the SMSC does not make it right or legal. While we acknowledge that the SMSC subsequently donated the grant to a different tribe (possibly in response to the Grant being made public in the news media), we nevertheless believe both the application and the grant represent an abuse of legislation that was intended to help those in need. Granting the SMSC Application to place the Meadows Parcels into tax-free trust would similarly represent an abuse of the Indian Reorganization Act.
Some tribal representatives argue that residents and businesses on trust land, located across the boundary from non-trust property create no cost for city, county, or state government. This position seems incredulous when considering that tribal residents and businesses avail themselves of all the facilities paid for by taxpayers including local schools, state colleges and universities, streets and highways, libraries and parks, courts and other local and state bureaus, local and state law enforcement, and numerous other services.
Undoubtedly, transfer of land from Fee to Trust (and its subsequent removal from the City’s tax base) places more tax burden on non-tribal residents whose real estate taxes are required to provide for facilities and services provided by Scott County, the City of Prior Lake, the Prior Lake Savage School District, and the Prior Lake Spring Lake Watershed District. In a report prepared a number of years ago by current Prior Lake City Manager, Frank Boyles and his Staff, it was estimated that non-tribal residents were paying a 15 % premium in real estate taxes to compensate for the lack of taxes from tax-free trust land.
BASIS FOR APPLICATION DENIAL:
The Bureau of Indian Affairs should deny the SMSC Application on the basis that it fails to meet the letter and the intent of the Indian Reorganization Act, but the Bureau should also consider ethical and moral factors.
First and foremost, the Indian Reorganization Act passed by the US Congress in 1934 and the associated Congressional Record make it abundantly clear that the purpose and specific intent of the Act was to provide economic assistance to impoverished tribes. For the SMSC to imply by their Application that they (reportedly the richest tribe in America) are impoverished or in need of economic assistance is simply ludicrous. It is insulting to non-tribal residents of Prior Lake to learn that a tribe whose members are locally reported as receiving up to a million dollars a year from casino operations (or 10 to 20 times the typical annual income of a non-tribal family in Prior Lake), and whose members are exempt from local and state tax, needs more tax-free trust land for their members to enjoy life, and to prosper.
A second purpose of the Indian Reorganization Act was to assist tribes in achieving self-governance. It is quite evident given the financial success of the SMSC Tribe, and their financial capability to hire management, professional staff, or whatever consulting services are needed, that more tax-free land is for the purpose of more enrichment and has nothing to do with self-governance.
With regard to intent and purpose of the Indian Reorganization Act, let us be reminded that “Discretionary authority” provided to the Secretary of the Interior under Section 5 of the Indian Reorganization Act of 1934, was enacted to “—reverse the precipitous decline in the economic, cultural, governmental, and social well-being of Indians —”. And let us remember that the BIA in past years has been diligent, at least in Minnesota, in both approving and denying applications based upon the criteria defined in the preceding sentence.
For example, in 1998 the Minneapolis Area Office of the BIA denied an SMSC application for a Fee-to-Trust transfer of land within Prior Lake. In that denial in October of 1998, BIA Area Director Larry Morrin cited “there is no reason to believe that the Community (SMSC) cannot continue to manage and develop land resources regardless of whether or not this land is placed into trust status”. History since 1998 has proven Mr. Morrin to be absolutely correct. The SMSC Community has continued to economically flourish from its investments both on and off reservation land.
In his denial, Mr. Morrin also made other clear and unambiguous statements: “The IRA (Indian Reorganization Act) is premised on the assumption of a tribal need for assistance to restore and protect its ability for self-government and to foster its own economic development”; “We are unpersuaded that the Community (SMSC) needs additional trust land to continue its economic vitality or the protection of its governmental integrity”; “We do not believe that the purposes or intent of the IRA is promoted by providing further assistance in a circumstance where a tribe has both the business acumen and the resources to guarantee its own survival”.
In March of 2001, Deputy Commissioner of Indian Affairs Blackwell in a letter dated March 26 again denied an SMSC Fee-to-Trust application as failing to demonstrate need.
The major change at the SMSC Community since the above decisions were rendered has been continued economic growth, both on and off the reservation. The SMSC has accelerated its investments both on and off the reservation, for example making a major investment in the Canterbury Race track and purchasing off-reservation businesses. They have just announced plans for the construction of a new hotel and convention center. These facts unquestionably validate the earlier decisions that were made by the BIA and the Department of the Interior. We can only hope that the BIA and Department of the Interior will act with the same integrity relative to the current SMSC Application.
The Indian Reorganization Act specifies that the right to transfer land into trust under the Act, applies to Tribes that were under Federal Jurisdiction at the time of passage of the Act in 1934. While this interpretation has been ignored and challenged by those who choose to disagree, nevertheless the United States Supreme Court in a rather concise 2009 decision (Carcieri v Salazar) reaffirmed that only tribes that were under Federal Jurisdiction at the time of the Acts passage in 1934, are entitled to transfer land from Fee to Trust. Since the SMSC was not recognized until 1969, the US Department of the Interior has no legal right to transfer more land into trust for the benefit of the SMSC Tribe.
We recognize that there are bureaucrats within the Federal Government, and justices in various lower courts who regularly disagree with each while interpreting or reinterpreting the law to suit their bias, and who often choose to ignore the decisions of higher courts. We also recognize that highly paid lawyers are particularly adept at doing so to achieve their client’s wishes. But a decision by the US Supreme Court is supposed to be the law of the land, and we would expect a tribe like the SMSC that has been richly blessed by the decisions of both Federal and State Government, would honor and respect the intent of the Indian Reorganization Act and comply with the Supreme Court decision. And we would expect the Bureau of Indian Affairs as an agent of the US Department of the Interior and the US Government, to uphold the law of the land.
Approval of the SMSC Application would undermine the foundation of trust that exists between tribal and non-tribal residents of Prior Lake. Because of local media attention that has been given to this subject for many years, Prior Lake and Scott County residents are well aware of the Indian Reorganization Act of 1934 under which the Application to place the subject land into trust is being submitted to the Bureau of Indian Affairs. They are also aware that the primary purpose of the Act was to provide assistance to impoverished tribes, both economically and in terms of self- governance. No one in Prior Lake believes that the SMSC which reportedly is the richest tribe in the nation, and whose adult members reportedly receive annual payments from casino operations approaching a million dollars, is in need. Without need there is no justification for more tax-free trust land.
WE PLEAD WITH THE BIA TO REJECT THE SMSC APPLICATION.
Wes Mader, Chair
Citizens for Accountable Government (CAG