Several Native American nations and other tribal entities from Arizona have joined a lawsuit seeking to block the federal government from giving COVID-19 relief funds designated for tribes to for-profit corporations in Alaska.
The CARES Act, a $2 trillion aid package that Congress passed in March, included $8 billion for tribal governments. The money, which was part of a $150 billion allocation for state, tribal and local government entities, must be used to cover “necessary expenditures incurred due to the public health emergency” caused by the novel coronavirus.
But the U.S. Department of the Treasury, which oversees and distributes those funds, decreed that for-profit corporations associated with tribal members in Alaska are also eligible for the money, leading several tribes to sue in federal court. The Navajo Nation and San Carlos Apache Tribe joined the lawsuit as plaintiffs after it was filed, while the Gila River Indian Community, Inter Tribal Association of Arizona and Arizona Indian Gaming Association have sought to join the case as amici curiae on the side of the plaintiffs.
Under the terms of the CARES Act, the $8 billion was designated for tribal governments. Treasury Secretary Steven Mnuchin decided that includes entities called Alaska Native Corporations. Those for-profit entities were created by state law in 1971 to settle land and monetary claims by Alaska Natives.
That sparked concerns among many tribes that the for-profit companies would receive money that is supposed to go to tribal governments.
In a lawsuit filed in the U.S. District Court for the District of Columbia this week, the tribes argued that Alaska Native Corporations don’t meet that definition. The corporations aren’t governments, don’t provide any services and exist only to serve their shareholders, many of whom are Alaska Natives.
“ANCs are not governments, they are for-profit corporations incorporated under the laws of the State of Alaska,” the lawsuit reads. “These private corporations, like other corporations, are owned by their shareholders, including non-Indian shareholders. And ANCs, like other corporations, have access to funding opportunities under other sections of the CARES Act, whereas Tribal governments are not eligible for all of those funding sources.”
The Treasury Department and the U.S. Department of the Interior, which has advised it on the matter, have argued that the plain language of the CARES Act allows Alaska Native Corporations to apply for the funding.
There are 574 federally recognized tribal governments in the United States, the lawsuit said. Under Mnuchin’s interpretation of the law, there are also more than 230 Alaska Native Corporations that would be eligible for tribal CARES Act money.
If the Treasury Department were to give each tribe an equal allocation of the money, they would each receive about $14 million, the lawsuit read. But if Alaska Native Corporations are added to the mix, everyone would get $10 million apiece. The result would be a net loss of about 30 percent of the funds for the tribes, according to the complaint.
And if the feds allocate the money based on population, land base, employees and expenditures, the corporations will have a larger impact, the lawsuit said. The corporations own about 44 million acres of land, which the lawsuit said is roughly equivalent to the combined trust land base of every tribe in the lower 48 states.
As of April 17, the deadline to apply for the money, at least 600 tribes and Alaska Native Corporations have applied for CARES Act funding, Indian Country Today reported. About 55% of those applications were from corporations.
The loss of funds could have serious ramifications for tribes and their battles against COVID-19.
The Navajo Nation has been hit especially hard by the COVID-19 pandemic. As of Tuesday, when the tribe joined the lawsuit, the Navajo Nation had seen 1,321 confirmed cases of COVID-19 and 50 deaths. In addition to measures banning large groups and closing nonessential businesses, the tribal government has imposed curfews and banned visitors and tourists from tribal roads.
To enforce those edicts, the tribe has mobilized police officers, health workers and others, set up checkpoints at entry points to the nation and created mobile health units. In the meantime, the Navajo Nation must continue funding other functions of government.
“Through these activities, the Navajo Nation has expended substantial resources,” the lawsuit stated.
The San Carlos Apache Tribe has thus far been able to avoid any confirmed COVID-19 infections among its 17,000 members. To prevent the spread of the virus, the tribe has enacted a state of emergency, imposed curfews, banned large gatherings, set up tolling stations to monitor the health of commuters and shut down hunting and fishing on its reservation. It has also closed its two casinos, hotel, golf course and restaurants, costing the tribe substantial revenue.
“San Carlos Apache has incurred substantial additional expenses in implementing its mitigation measures and providing assistance to its Reservation residents, which includes, for example, meals to elders and families with young children, community care packages, and additional police safety checks on elders,” the lawsuit read.
The Treasury Department has not yet distributed any CARES Act money to the tribes. The law requires the funding to be disbursed by April 26, though the litigation threatens to push back that deadline.
The Treasury Department did not respond to a request for comment.