CHAPTER 16 ETHICS ISSUES IN DOING BUSINESS WITH NATIVE AMERICAN AND ALASKA NATIVE TRIBES AND TRIBAL ENTERPRISES

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TROY A. EID Is a Principal Shareholder in the Denver office of Greenberg Traurig LLP, an international law firm. He is also an Adjunct Professor of Law at the University of Colorado. He served as Colorado's United States Attorney, appointed by President George W. Bush, from 2006-09. Most recently, Troy chaired the National Indian Law and Order Commission. Congress created this advisory commission to develop a blueprint for strengthening justice for all 566 federally recognized Native American and Alaska Native nations. Troy was appointed to the Commission by U.S. Senate Majority Leader Harry Reid in 2010 and unanimously elected Chair by the Commission's members, serving in that role until the Commission's legislative sunset m January 2014. Last November, the Commission issued its final report to the President and Congress, A Roadmap For Making Native America Safer. Hailed as the most comprehensive assessment ever undertaken, the Roadmap proposes reforms at the federal, state, and tribal level to make Native American and Alaska Native nations safer and more just for all U.S. citizens. Troy's recent honors include the "Member of the Year Award" from the Navajo Nation Bar Association. He grew up in Colorado, graduated from Stanford University and the University of Chicago Law School, and clerked for Judge Edith H. Jones of the U.S. Court of Appeals for the Fifth Circuit.

The rising economic and political power of Native American and Alaska Native tribes, and of tribally owned and operated commercial entities throughout the United States, presents ethical issues of first impression. In an era of professed corporate responsibility, ethical standards and their enforcement have not always kept pace with the growth of tribal economies. Nor are tribal-related transactions structured in a manner that is ethically and culturally attuned. How Corporate America treats Native America speaks volumes about the United States' seriousness in strengthening business ethics in an increasingly globalized economy. This is particularly so as multi-national corporations increasingly deal with developing foreign nations and governments, which - especially given the United States' pledge to adhere to the United Nations' Declaration of the Rights of Indigenous Peoples² - might be reasonably expected to more closely scrutinize how U.S. companies treat First Americans in our own country.

This Article addresses some of the major ethical considerations that may arise when non-Indians seek to do business with Native American and Alaska Native tribes and tribally owned and operated enterprises. Section I provides a brief overview of tribal economies in the United States, which are increasingly important not just in many local areas, but regionally and nationally. Section II explains why attorneys representing or dealing with tribes have an ethical duty to learn

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about tribal culture and history and gives practical examples of why such preparations should matter to clients. Section III examines some of the core characteristics of many Native nations, reflected in tribal laws, which may be unfamiliar to some non-Indians. Bridging such divergent legal and ethical perspectives is a prerequisite for cultivating and growing productive business relationships.

Section IV of the Article turns to nuts-and-bolts ethics regulation at the tribal level. In practice, Native nations' standards of professional conduct are nearly as diverse as Native nations themselves. At least 100 tribes have adopted written ethics codes - most of them within the past decade or so - monitored and enforced either directly by governing tribal councils or by tribal agencies, auditors or investigators exercising varying degrees of independence. A driving force behind these ethics systems, which increasingly extend to procurement policies and procedures governing tribes' outside contractors and business partners, is to prevent self-dealing and insulate - or at least buffer - tribes' governmental decision-making from tribal enterprises' arms-length business operations.

Finally, Section V concludes by suggesting practical ways that non-Indian businesspeople and their attorneys can avoid potential ethical pitfalls in dealing with Native nations and their enterprises. Respecting Native culture and tradition is an imperative, but it must never become an excuse for outsiders to pursue business practices with tribes that contravene tribes' interests or offend companies' own corporate values. Businesspeople should raise the bar by implementing more effective internal controls to strengthen their own ethical awareness and behavior while reinforcing tribal leaders' efforts to strengthen professional conduct and depoliticize tribal commerce.

I. INTRODUCTION: THE WEALTH OF TRIBAL NATIONS

Today's 566 federally recognized Indian tribes and nations control 56 million acres of land in the continental United States plus another 44 million acres in Alaska,³ adding billions of dollars annually to the U.S. Gross National Product - everything from energy, water and natural resources to banking and financial services, real estate development, and entertainment, hospitality and tourism.⁴ The financial wealth of Native nations ranges from barely developed tribal economies, often located in counties with some the lowest reported per-capita income rates in the country, to sophisticated local, regional and even national and international competitors.

Gaming remains the most recognizable tribal commercial endeavor. U.S. tribes generated $27.4 billion in total gaming revenue in 2011, up from $26.5 billion the year before. Those

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revenues led to payments of $6 billion to the federal government, $3.8 billion to state governments, and $2.5 billion to local governments.⁵ Gaming has transformed the economies of some Native nations geographically positioned to benefit from their proximity to local and regional population centers. One of the best-known examples is the Seminole Tribe of Florida ("Seminole Tribe"), with approximately 3,800 enrolled members. In March 2007, the Seminole Tribe purchased Hard Rock International from United Kingdom-based Rank Group PLC for an estimated $965 million. That initial deal has since grown to include 177 venues in 58 countries: 141 Hard Rock Cafés, 18 Hard Rock Hotels and eight casinos. The Seminole Tribe and its commercial entities today employ more than 20,000 people. Another 15,000 are employed by Hard Rock licensees around the world, or by vendors who operate various businesses under contracts at Seminole gaming sites.⁶

While the Seminole Tribe has successfully leveraged its commercial ventures nationally and internationally, most gaming tribes depend on a local or regional clientele. The Ho-Chunk Nation of Wisconsin ("Ho-Chunk") is a case in point. Formerly known as the Wisconsin Winnebago Nation, Ho-Chunk is headquartered in Black River Falls and entered gaming in 1973, at a time when tribal members were among the state's poorest citizens. In 1992, the State of Wisconsin entered into gaming compacts with all 11 of the tribes and bands located within its boundaries. This included the Ho-Chunk Nation, with roughly 7,000 enrolled members, about half of them living in Wisconsin. Ho-Chunk today nets $200 million annually through its network of six casinos in or near Black River Falls, Madison, Nekoosah, Tomah, Baraboo, and Wittenberg.⁷ The profits from the Ho-Chunk Nation's gaming operations have enabled it to provide what one court described as "a relatively generous set of benefits for its members, including annual per-capita stipends of $12,000 for adults and one-time payouts of up to $200,000 from a children's trust fund when a youth turns 18 and graduates from high school."⁸

Yet important and visible though it is, casino gaming holds little or no economic development potential for most tribes, whose geography can support few if any casinos, bingo halls, or similar facilities despite many non-Indians' misperceptions. What is perhaps most remarkable is how many Native tribes have built vibrant economies with little or no gaming at all.

The 1,400-member Southern Ute Indian Tribe, for instance, had only a modest casino when it emerged as one of the largest employers in Southwestern Colorado - with a AAA bond rating and enterprises reportedly worth in excess of $4 billion - by focusing on oil and natural gas development. The Southern Ute Tribe's Growth Fund, formed in 2000, operates and manages the tribe's diversified businesses and business investments with operations and assets spread over at least 14 states and the Gulf of Mexico.⁹ Southern Ute tribal entities operate more than 500 gas and oil wells and, through the Growth Fund, have expanded into numerous ventures, including real

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estate development. For example, in 2006, the Tribe was instrumental in replacing the City of Durango, Colorado's century-old hospital with Mercy Regional Medical Center, an 82-bed, 215,000' square-foot acute care hospital owned and operated by Centura Health that serves a fast-growing metropolitan population of approximately 60,000. Among other things, a Tribal company donated fee land near Durango for the new hospital complex, which anchors a 700-acre mixed residential and commercial development project the Tribe owns southeast of town.¹⁰

Other Native nations are likewise leveraging energy development to grow and diversify their economies. The Mandan, Hidatsa and Arikara Nations, also known as the Three Affiliated Tribes of the Fort Berthold Reservation, broke ground in November 2013 on a refinery to serve the crude oil-rich Bakken Field in North Dakota.¹¹ The refinery, the first to be...