- By Rob Capriccioso
- Economic Development
A Harvard University analysis of this year’s American Rescue Plan Act (ARPA) pandemic relief funding for tribes shows vastly inequitable distributions, largely because of formulaic choices made by the U.S. Department of the Treasury.
Scholars with the Harvard Project on American Indian Economic Development conducted the research using publicly available numbers on USAspending.gov, an open data source of federal spending information. The federal government uploaded complete and detailed tribal ARPA funding to the website on Oct. 6.
Tribes receiving more than $200 million, according to the analysis, were:
• Navajo Nation — $2.08 billion
• Cherokee Nation — $2.0 billion
• Choctaw Nation of Oklahoma — $1.09 billion
• Chickasaw Nation — $552.6 million
• Muscogee (Creek) Nation — $493.3 million
• Seminole Tribe of Florida — $385.6 million
• Oglala Sioux Tribe — $246.0 million
• Sault Ste. Marie Tribe of Chippewa Indians — $235.4 million
• Tohono O’odham Nation — $234.4 million
• Gila River Indian Community — $219.1 million
• Citizen Potawatomi Nation — $208.9 million
• Mohegan Tribe of Indians — $201.2 million
The top 12 tribal recipients received $7.95 billion, or approximately 40 percent of the $20 billion in ARPA funds available to tribes through Treasury. The 12 tribes equate to approximately 2 percent of the total tribal entities that received funding under the program.
Twenty more tribes received between $100 million and $200 million, meaning that a total of 32 tribes received approximately half of the total funds available for tribes under ARPA. Thirty-two tribes equates to approximately 5.5 percent of the total tribal entities that received funding under the program, according to an updated Harvard analysis performed on Oct. 13.
On the other end of the spectrum, 312 tribes and tribal entities received less than $10 million, and 176 received less than $5 million, according to the updated analysis.
While the Department of the Interior counts 574 total federally recognized tribes, Harvard’s analysis shows 578 tribes and tribal entities received funds under the program. This number has yet to be explained by Treasury, whose officials in May told tribal leaders during a webinar that 608 tribal entities would be eligible because the department included some additional tribal bands of government in its calculations.
Tribal leaders made repeated requests to the department for clarification of the number of entities expected to receive the funding prior to its distribution.
Some of the largest tribes in terms of enrollment, like Navajo and Cherokee, received the most funding, but several tribes with much smaller populations each received more than $100 million. That’s because 35 percent of Treasury’s allocation formula depended on the number of tribal employees, not enrollment. Tribes with larger gaming operations that had more employees tended to do quite well, according to the data.
Fascinating threads emerged in the allocation statistics compiled by Harvard. For example, the Wampanoag Tribe of Gay Head at Aquinnah receiving $9.1 million, while the Manshantucket Pequot Tribe received $96.3 million, despite having approximately 400 fewer tribal members than Aquinnah.
Among similarly sized tribes from the same geographic region, tribes that employ more people ended up doing much better in overall funding because part of the Treasury Department’s distribution formula was based on self-reported tribal employment numbers.
“There are many interesting trends,” Eric Henson (Chickasaw), a research fellow/affiliate with the Harvard Project on American Indian Economic Development who played a key role in synthesizing the data, told Tribal Business News. “We are in the process of looking at it, deciding on next steps.”
Harvard officials are expected in the coming days to offer policy recommendations based on the data.
‘Could have and should have done better’
Throughout the distribution process, tribes that employ fewer people made the case to Treasury that they have tended to face systemic inequities, so they argued that they should receive larger portions of the funding.
Meanwhile, wealthier tribes said they should not be punished for being successful, especially during a downturn caused by a global pandemic. Wealthier tribes also threatened to sue Treasury if the department changed its formulas once they were publicly announced.
Over the last few months, Harvard’s Ash Center presented several “Navigating the American Rescue Plan Act” webinars that focused on presenting pandemic-related information to tribal leaders. One of the frequent participants and a presenter during at least one of the sessions was Cheryl Andrews-Maltais, chairwoman of the Wampanoag Tribe of Gay Head at Aquinnah and a former senior adviser at the U.S. Department of the Interior during the Obama administration.
After reviewing the tribal distribution numbers, Andrews-Maltais told Tribal Business News that they made her “heart sink.” She noted that some of her neighboring tribes in the northeast that are not much bigger in terms of enrollment compared to her tribe received exponentially larger amounts more than her tribe did, mainly because some have massive gaming operations that employ thousands of individuals.
“Tribes that don’t have strong economic development arms are getting a drop in the bucket,” Andrews-Maltais said. “And Treasury is providing tribes that have large economic development abilities — the tribes that are already more well off — much more funding. That wasn’t how I interpreted the intent of that money. Treasury could have and should have done better in terms of parity and equity.”
A group of five bipartisan senators, including four Democratic friends of the Biden administration, wrote to Treasury Secretary Janet Yellen on Sept. 29, expressing concerns about fairness and equity issues. Tribal leaders had alerted them to the issues throughout the distribution process this past spring and summer.
The senators suggested that Yellen immediately establish an Office of Tribal Affairs to address current and future tribal concerns, an office for which tribes have long advocated, albeit unsuccessfully. Tribes anticipate having many future compliance difficulties given strict reporting and spending rules put in place by Treasury.
That Democratic lawmakers — including Sens. Elizabeth Warren of Massachusetts, Oregon’s Ron Wyden and Jeff Merkley, and Alex Padilla of California — critiqued the Biden administration on one of its centerpiece issues like equity has rankled some feathers, both in the White House and at Treasury, according to legislative and tribal officials. Republican Sen. Steve Daines, of Montana, also signed on to the letter.
Some of these same officials have said that Sen. Warren is considering offering a bill to create such an office if Yellen does not do so on her own.
Effects on future tribal allocations?
Tribal leaders and advocates who participated in the Harvard webinars have expressed widespread concern that legislators could look at the final distributions with a critical eye. No one in Indian Country wants disadvantaged tribes to suffer in the future as a result of Treasury’s formulas.
The ultimate worry is that the inequities could negatively influence policymakers’ desires to provide future funding to tribes in the ongoing bipartisan infrastructure bill, the Democrats-only budget reconciliation, and/or the $28.6 billion disaster relief bill for which the Biden White House is advocating.
“When Congress does see this, I do think it’s just human nature that they may say, ‘Well, the tribes got so much money,’ but they need to factor in that tribes are not a monolith,” Andrews-Maltais said.
“Part of what the challenge is when Congress is setting up its budget and these numbers and these set asides, they are not having the opportunity to hear from a wide cross-section of Indian Country,” she added. “Oftentimes, the tribes that need the most help just don’t have the capacity to be sending in their comments or reaching out to their legislative delegations.”
Tribal advocates have generally favored a 5-percent set-aside in program dollars in the complex reconciliation budget, as well as in the disaster relief bill. Tribes have already been allocated $11 billion to $15 billion in the bipartisan infrastructure bill, which has yet to pass the U.S. House.
Some at Harvard are hopeful that the tribal pandemic distributions could help legislators begin to better direct funding.
“One of the things that the inequities might allow the federal government to do is to look at tribes that got less money through CARES and/or ARPA and come up with a plan on how to account for that,” said Henson, who is also an executive vice president with Compass Lexecon, a global economic consulting company.
Henson hopes that, as a result of the statistics, either the U.S. Census Bureau or some other federal entity, like the Center for Indian Country Development of the Federal Reserve Bank of Minneapolis, could develop better data on tribal poverty.
“With the CARES Act and then ARPA, the federal government so clearly demonstrated the data gap for Indian Country,” Henson said. “I would have just about killed for a dataset that showed unemployment rates for each tribe. That would have been incredible and very helpful.”
Formula recommendations went unheeded
That the 574 federally recognized tribes, plus several more tribal bands, received wildly divergent funding amounts from Treasury is not necessarily surprising, as the formulas for the funding were well known as the process played out over the last year.
Under ARPA, Treasury developed rules to give all tribes an equal portion of the first $1 billion of the $20 billion pool of funding. Tribes then received a portion of 65 percent of the remaining $19 billion based on their enrollment numbers; the other 35 percent was based on the number of employees they reported to Treasury.
The department set a $1 million minimum baseline for each tribal entity receiving funds under the employee-based portion of the plan, but contrary to recommendations from tribal leaders, it did not set a maximum cap.
“Just because of how the formula was set up … small tribes with not much going on in terms of employment, they were missing out on two of the huge components that went into ARPA,” Henson noted.
Under the CARES Act in 2020, which resulted in $8 billion total going to tribes and Alaska Native Corporations, tribes received allocations based on their housing block grant numbers from the U.S. Department of Housing and Urban Development. Not all tribes rely on housing block grants, so some felt greatly shortchanged by this formula, over which the Trump administration faced much scrutiny (and lawsuits).
What surprised some in Indian Country was that Treasury chose not to follow several recommendations tribes and economic experts made to both the Biden and Trump administrations on how to make the distributions fairer across the board.
Unheeded suggestions included for Treasury to appoint a special master over the department’s distribution process and to offer funds divided on a more regional basis, taking into account tribal COVID-19 infection rates.
Such numbers would have been more difficult for Treasury to collect than what it ended up using.
“The ease of getting data in hand, I think, trumped some of the modifications to the formula,” Henson said, while adding the caveat that coming up with a perfect calculation that could have addressed all equity issues would have been next to impossible.
Some tribal leaders also suggested this summer that Treasury take more time in making its final distribution based on employment numbers so that it could better gauge the needs of all tribes and make any necessary adjustments.
Treasury officials also ignored that idea, largely because of pressures from the Biden administration and Congress to get the funds out quickly.
“Treasury is committed to ensuring the unique needs of Tribal governments are being prioritized and continues to evaluate the best ways to fulfill this commitment, including through staffing and resourcing,” Elizabeth Bourgeois, a spokesperson for Treasury told Tribal Business News by email on Oct. 6 in response to questions on whether the department will create an Office of Tribal Affairs to address some of the ARPA-related problems.
Going forward, in an effort to help disadvantaged tribes that continue to have unmet needs as a result of the pandemic, some tribal leaders and advocates say they plan to support proposals for Congress to consider some type of community means or multi-factor test for future tribal allocations.
“We need to start with a fundamental principle that every federally-recognized tribe should be equal in the eyes of the United States government, and therefore are entitled to an equal share of whatever allocation is coming in,” Andrews-Maltais said. “Some tribes that have been overlooked need to be brought up. The formula must be fair.”
EDITOR’S NOTE: This story has changed from its original form to include updated data from Harvard Project that was revised on Oct. 13.