WASHINGTON — Over the past three months, the Treasury Department has managed to send out billions of dollars in loans to small businesses, checks to families and aid to corporations.
But distributing the $8 billion pot set aside for tribal governments, a relative pittance compared to the broader programs established in the $2.2 trillion stimulus law, has proved more difficult. As a result, tribes, already critically underfunded and among the nation’s most vulnerable communities, have not received all the money they need to weather the pandemic and begin recovering from the economic toll.
At the heart of the issue is an effort by some tribes to force the Treasury Department to recalculate the way it initially began distributing the money. The tribes say they want to ensure they receive the aid they say they need even if it means holding up the process in the short run.
The basic dispute is over how to count a tribe’s population — based on its enrolled members, not all of whom live on a reservation, or using government population figures based on specific geographic locations.
“We do find ourselves in a situation where you’ve got four lawsuits — you may have more coming — challenging all different aspects of Treasury’s decision-making here,” said Pilar Thomas, a lawyer representing the Shawnee Tribe in Oklahoma.
A lawsuit filed by the Shawnee Tribe on Thursday said the agency had undercounted some tribal populations when it first divided just over half of the $8 billion among tribes. The tribe says that the department did not give it an equitable portion of the money, and seeks to block the money it says it deserves from being spent elsewhere.
But Judge Amit Mehta of the U.S. District Court for the District of Columbia ordered the department this week to release the funds.
“Congress made a policy judgment that tribal governments are in dire need of emergency relief to aid in their public health efforts and imposed an incredibly short time limit to distribute those dollars,” he wrote in an order released late Monday night. “The 80 days they have waited, when Congress intended receipt of emergency funds in less than half that time, is long enough.”
In a separate case, which would have seen all of the funds frozen pending the outcome of the lawsuit, Mehta rejected the tribe’s case, citing the need to get the aid out of Washington.
The Prairie Band Potawatomi Nation, a Kansas-based tribe that sought to prevent all the remaining aid from being spent, is appealing the decision. But some other tribes have warned that the funding needs to be released immediately in order to avoid further economic and health devastation.
“There’s a timeline on this,” Jonathan Nez, the president of the Navajo Nation, said at a recent town hall. “We need to get those dollars to all the tribes across the country so they can help their citizens.”
Before sending the first wave of payments, the Treasury Department asked tribes to submit information, including figures on enrolled members of the tribe, to help calculate how the money should be divided. The $8 billion fund was split into two portions, one to be allocated based on population and enrollment, and the other based on tribal expenses.
But instead of using the broader count based on tribal citizenship, tribal leaders say, the agency used population data from the Department of Housing and Urban Development’s Indian Housing Block Grant program to determine funding levels. The housing department’s figures are tied to how many people within a certain geographic area identified as American Indian or Alaska Native on their census forms.
Because some tribes do not have a designated reservation or service area, their population counts were listed as zero and they received only the minimum $100,000 allocation.
“We are not races — we are sovereign nations,” said Chief Ben Barnes of the Shawnee Tribe.
“How can a tribe have zero people?” he added, noting that more than 3,000 people belong to his tribe. “It was a simple clerical error, but no one at Treasury tried to fix it.”
The oversight was even more egregious, Barnes said, because there is also a census count that, while not completely accurate, would have ensured the tribe got closer to the $12 million it believes it is entitled to based on enrollment numbers.
Barnes, other tribal officials and Rep. Markwayne Mullin, R-Okla., repeatedly urged the Treasury Department to adjust the formula to no avail, according to court filings. Multiple lawmakers, including Mullin, wrote to the agency in late May warning of the concerns, and a dozen Democratic senators called on the Treasury Department to clarify the formula and provide a breakdown of the allocations.
“That methodology is not rationally related to the distribution of COVID-related expenses because tribal governments have a responsibility far beyond their actual geographic reservation,” Carol Heckman, a lawyer for the Prairie Band Potawatomi Nation, said during a recent court hearing. “It’s a very, very unfair metric.”
In that hearing, Jason Lynch, a lawyer for the Treasury Department, told Mehta that the department had several issues with the enrollment data submitted by tribes — including verification issues and incomplete submissions — and the information from the grant program served as a proven and verified set of data.
Tribal officials rejected that explanation. Tralynna Sherrill Scott, the treasurer of the Cherokee Nation, described an “arduous, frustrating and time consuming” experience using the system to submit the requested data.
“If certain tribes get more money under a new methodology, that means by definition — mathematically — certain tribes will be getting less money,” Lynch said. “How do you think those tribes will feel about that?”
A policy analysis compiled by the Harvard Project on American Indian Economic Development cited in the lawsuit found that a number of tribes received “payments that are clearly not reflective of the population of tribal citizens or of tribal needs” and that in using the population metric, the Treasury Department produced “arbitrary and capricious allocations.”
“I’m a potential health care burden on my tribe, even though I live 1,500 miles away,” said Eric Henson, a citizen of the Chickasaw tribe, who worked on the policy report and is based in Massachusetts. “It’s not the tribes’ fault their people are scattered — look at the fabric of this country, how westward expansion happened.”
A spokesman for the Treasury Department said the formula the agency used and the one presented in the Harvard study share two of the same factors — population and employment. The CARES Act required that the government use expenditures as a third factor, the spokesman said.
With tribes receiving their portion of the second allocation of funds on Friday, some tribal officials warned that there would be no way to remedy the disparity if all of the money was spent. An undisclosed portion remains frozen in litigation over whether Alaska Native Corporations, for-profit entities that serve Alaska Natives, are eligible for the funds, and tribes will not see any more federal relief unless Congress agrees to another stimulus package. (Negotiations on such a package have not yet begun, though lawmakers expect some talks to begin in the coming weeks.)
Shelly Buck, the Tribal Council President on the Prairie Island tribe in southeastern Minnesota, said that the tribe received funding from the federal government but that it does not cover many of the expenses the tribe has accumulated during the pandemic, including providing health insurance for the tribe’s workforce even if members been furloughed. Buck said a lack of transparency on how the funding was distributed further complicated the problems.
“The payment amount increased, and we are thankful for that,” Buck said. “However, there is still no transparency in how the amounts are determined, and that remains a frustration for tribal leaders.”