- By Rob Capriccioso
- Economic Development
WASHINGTON — A new policy paper from the Harvard Project on American Indian Economic Development paints a scathing picture of the U.S. Treasury Department’s allocations related to the $20 billion tribal American Rescue Plan Act funds.
According to the Nov. 3 paper, the allocations earlier this year were distributed to tribes in an unfair way that went against the progressive goals of the Biden administration and the Democratic Congress that passed ARPA via reconciliation.
“We find that the allocations that have been made are grossly inequitable and contrary to the policy objectives of Congress, the Biden Administration, and the Treasury Department itself,” the authors wrote in the executive summary of the 83-page paper.
“Rather than targeting the most economically disadvantaged tribes and their citizens, Treasury has ended up doing the opposite,” the authors continued. “Treasury’s allocation formula particularly favors tribes with high numbers of employees (Native and non-Native) relative to a tribe’s number of enrolled tribal citizens. The results of the formula are nothing short of shocking.”
The authors were Eric Hensen (Chickasaw), a research fellow/affiliate with the Harvard Project; Miriam Jorgensen, research director for the Harvard Project and the Native Nations Institute at the University of Arizona; Joseph Kalt, a renowned international economic analyst and head of the Harvard Project; and Isabelle Leonaitis, a research affiliate with the Harvard Project.
Their paper, “Assessing the U.S. Treasury Department’s Allocations of Funding for Tribal Governments under the American Rescue Plan Act of 2021,” is based on data Harvard compiled in October from USAspending.gov, as Tribal Business News previously reported.
The authors conclude that “Treasury’s formula distinctly favored tribes with relatively high proportions of employees relative to enrolled citizens, which tend to be the tribes with strong pre-pandemic economies that financed modern infrastructure and well funded public services.”
That happened precisely because Treasury created an “inequitable” three-part formula, whereby $1 billion of the funds were divided equally by all tribes; for the remaining $19 billion, 65 percent of it was divided among all tribes by their tribal populations, and 35 percent was divided among all tribes based on their number of tribal employees.
Treasury officials would not change their formulas, despite being asked by many less wealthy tribes to do so at various points before and during the distribution process. Tribes were also unsuccessful in getting White House officials to understand and act on their equity concerns.
Treasury did not use COVID infection rates or unemployment data or other methods suggested by tribes to determine its formulas and potentially improve them. To date, the department has not explained why.
The formulas led one tribe, the Alturas Indian Rancheria, to receive $1.08 million per tribal citizen in ARPA and CARES Act pandemic relief funding combined, according to Harvard’s analysis. Meanwhile, the Sun’aq Tribe of Kodiak received only $7,299 in combined funding per tribal citizen under ARPA and the CARES Act.
“It is striking that the substantial weight — $14,619 per employed worker — given to employees under the Treasury Department’s allocation formula produces the result that one tribe has received an estimated 364 times more dollars than each of 277 of the tribes,” the authors wrote about the Seminole Tribe of Florida, which employees approximately 25,000 people. The tribe received $385.6 million in overall ARPA funding.
According to the analysis, seven tribes appear to have received no funding under ARPA. They are the California Valley Miwok Tribe, Onondaga Nation, Tonawanda Band of Seneca, Tuscarora Nation, the Native Village of Pilot Point, the Village of Red Devil, and Umkumiut Native Village.
‘Meager’ allocations for struggling tribes
Wealthier tribes tended to like Treasury’s formulas. They also tended to have lobbyists and lawyers in place who were ready to legally challenge Treasury if it decided to change the formulas after they were announced. Threats were made along these lines, according to tribal and federal officials.
“While these tribes deserve recognition for their accomplishments, they are the tribes that already were in the best position to ‘build back better,’” according to Harvard’s paper, noting an oft-repeated slogan of the Biden administration. “Yet, Treasury’s formula has resulted in ARPA payments as high as $880,000 per tribal citizen for some ‘have’ tribes. Meanwhile, hundreds of ‘have not’ and ‘have less’ tribes, encompassing 89% of all tribal citizens in the U.S., have received ARPA allocations of less than $10,000 per tribal citizen.”
On this point, the authors added: “From the standpoint of equity, the problem is not these tribes’ success. The problem is that Treasury’s allocation of ARPA monies was weighted so heavily toward tribes with high ratios of employees to citizens that it yielded ARPA payments to such tribes totaling hundreds of thousands of dollars per tribal citizen. Meanwhile, tribes with the opposite composition — i.e., high ratios of tribal citizen population to tribal employees — have ended up with very low ARPA support. Such citizen-to-employee characteristics are indicative of communities that are still struggling against widespread unemployment, low incomes, and limited wealth.”
While the Navajo Nation received approximately $2 billion in ARPA funding, largely because it has approximately 400,000 members, Treasury’s formulas ended up having the Navajo government receive distributions at a rate of less than $6,000 per person, according to the analysis.
“[W]e find some of the most economically challenged tribes in the country (e.g., the Crow Tribe of Montana, the Navajo Nation, the Oglala Sioux Tribe, the Cheyenne River Sioux Tribe, the Rosebud Sioux Tribe, and a number of larger population Alaska Native communities), as well as some of the tribes that have suffered the highest rates of COVID infection in the United States (e.g., the Navajo Nation) … were allocated absolutely and comparatively meager ARPA funds of less than $6,000 per citizen,” the authors wrote.
Treasury has maintained that it made its formulas based on information received from tribes during several tribal consultations. It first released the formulas on May 5 of this year.
However, the authors’ references to these consultations were presented within quotes within their paper, noting that the U.S. Government Accounting Office in late October “finds deficiencies in and provides a number of useful recommendations for improving the substance of Treasury’s tribal consultations.”
Treasury officials would not directly respond to questions about whether any employees would be held internally accountable for the issues the authors pointed to in their report.
“Treasury looks forward to reviewing the report’s findings and recommendations,” Elizabeth Bourgeois, a spokesperson for the department, told Tribal Business News via email in response to several questions regarding Harvard’s policy briefing.
“Treasury’s allocation methodology is based on feedback received through a series of consultations with Tribes and Tribal leaders,” Bourgeois added. “Treasury has published a detailed overview of the allocation methodology and remains in the process of distributing funding to eligible Tribal governments on the Tribal set aside under the Coronavirus State and Local Fiscal Recovery Fund."
The authors defended Treasury on one point.
“In its defense, the Department was hampered by limitations on the data at its disposal, tight deadlines set by Congress, and the reality that it was quite inexperienced in Indian affairs when it was suddenly charged, in 2020 and early 2021, to allocate billions of dollars across hundreds of communities about which it knew and understood very little,” they wrote. “Indeed, it did not help that, unlike the CARES Act, ARPA did not require that Treasury work with the Department of Interior — with Interior’s greater experience in Indian Country — in devising Treasury’s ARPA allocation formula.”
Still, “[t]he Department certainly ended up with access to better and more data than any other single federal actor,” the authors added. “It would have been prudent for the Department to examine the data before the fact for inequitable patterns in the way we have only been able to do after the fact.”
“We surmise that a review of the type we have undertaken here was not performed by Treasury before it began to allocate ARPA monies directly to tribal governments,” they wrote.
Since the monies have already gone out in a way that promoted vast inequity among the tribes, the researchers offered recommendations to Congress and the Biden administration to try to balance out a portion of the problems caused by Treasury.
Their proposed solutions include the creation of “equity offsets by (1) targeting use of ARPA’s $500 million Local Assistance and Tribal Consistency Fund to address the worst inequities, (2) prioritizing disadvantaged tribes in reconciliation, infrastructure, disaster, and other forthcoming funding measures and in other Departments’ funding for tribes, and (3) waiving bureaucratic restrictions on how tribes can use relief and recovery funds.”
The paper also calls for the creation of “a permanent and appropriately staffed and resourced Office of Tribal Affairs within Treasury in order to build the Department’s capacity and expertise.” The authors also say Treasury should “engage in substantive consultations with tribes that go beyond mere listening to generate useable knowledge and policy options.”
Several senators have written to Treasury Secretary Janet Yellen asking her to establish a Treasury Office of Tribal Affairs, yet they have not received a response, as Tribal Business News previously reported.
Republican Alaska Sen. Lisa Murkowski, ranking member of the U.S. Senate Committee on Indian Affairs, has also asked for such an office to be established, with department officials promising a “forthcoming response.”
Murkowski’s office said she is still reviewing Harvard’s report.
Oregon Democratic Sen. Jeff Merkley, chair of the Interior Appropriations Subcommittee, is one of the senators who has called for the creation of a Treasury Office of Tribal Affairs.
Merkely told Tribal Business News that he is discouraged by the report’s findings.
“I have always believed that the federal trust and treaty responsibilities to Indian tribes doesn’t end with the Bureau of Indian Affairs or the Department of the Interior — it is a responsibility that belongs to all agencies of the federal government, including the Department of the Treasury,” Merkley said. “One of the foundations of upholding those responsibilities is engaging with Indian tribes through meaningful tribal consultation, government-to-government.”
Merkley continued: “It is clear from this report that the Department of the Treasury did not live up to those responsibilities.”
Senators and House members are considering holding hearings as a result of the report, according to legislative staffers and officials with intertribal associations.