On the Pine Ridge Reservation in South Dakota. Photo: James Pendleton, U.S. Department of Agriculture

Native Sun News Today: Economic development and the Pine Ridge Reservation

OST and the empowerment zone
By James Giago Davies
Native Sun News Today Correspondent

PINE RIDGE — In recent years, three different types of economic development zones have been authorized by Congress targeted at otherwise underdeveloped and impoverished areas. All three have been implemented on the Pine Ridge Reservation. These zones are the Empowerment Zone, the Promise Zone and the Opportunity Zone.

Empowerment Zone
According to a 2011 Native Sun News Today article by Jesse Abernathy, the Oglala Sioux Tribe (OST) became the first tribal Empowerment Zone (EZ) in January, 1999. EZ was a program within the Clinton Administration’s ambitious Community Empowerment Agenda, and over ten years, $17 million was funneled into a variety of tribal programs and projects and personal loans, but the big question became, after the program was terminated in 2009, what economic development had actually achieved.

Abernathy reported: “It is unclear how many business and other economic entities have actually been created by the tribe through EZ program funding. Pine Ridge Reservation’s Lakota Funds, a community development financial institution and key EZ program partner, has loaned over $5.7 million to tribal members for the supposed creation of over 400 businesses and over 1,200 jobs on or near the reservation since its inception in the 1980s, according to information contained on the institution’s website.

“There is no proof to substantiate this claim. Jeffrey Whalen, a correspondent of Native Sun News, calls these claims ‘plain baloney.’”

OST’s initial EZ program was called the Oglala Oyate Woitancan Empowerment Zone. Oversight came from the OST Business and Economic Development Committee. Later, another program emerged, headed by Tally Plume, but neither group had anything substantive to crow about in progress reports.

“Based on its 2008 annual progress report,” Abernathy wrote, “Oglala Oyate Woitancan EZ, which is currently headed by OST member Daphne Richards-Cook, appears to still be in its infancy, or planning, stage – more than ten years after the program received its initial funding.”

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Ultimately, no group was responsible for determining the proper use of EZ funds, not the USDA rural development division, not the OST, and not the EZ programs implemented by the OST. In terms of developing an economy, of altering the dysfunctional reservation economic paradigm, little seems to have been accomplished over the course of a decade.

The final result of the EZ program for the OST seems to be one of two realities, that the program was bungled by well-intentioned but incompetent tribal supervision, or that the program was set upon and ransacked by endemically corrupt tribal hogs at the Nanny State trough. OST enrolled member Elsie Meeks, was South Director of Rural Development for the USDA at the time, the federal agency which oversaw the distribution and implementation of EZ funds.

According to then spokesman, Jay Fletcher, USDA rural development regularly reviewed EZ accountability reports. Meeks told NSNT, “It is up to the tribe as a whole to determine whether or not the Empowerment Zone program has been successful on the Pine Ridge Reservation. My belief is, it had to have had some impact.”

Given the program’s ambitious intent, and multi-million-dollar funding, “had to have some impact” is a disturbing assessment of the program’s efficacy.

Promise Zone
In 2013 the Obama Administration created 20 Promise Zones (PZ) across the country. The idea was to assist impoverished areas in creating jobs, improving education, and reducing violent crime. An important and often underappreciated benefit was assistance in applying for grant monies. In 2014, the Thunder Valley Community Development Corporation, submitted an application on behalf of the entire tribe and won a PZ designation.

Grant money is a double-edged sword. On the one hand, you don’t have to pay it back. On the other hand, when you don’t have to pay money back, you can become imprudent with how you spend it, since no matter what goes wrong, no agency will come collecting. Of all three zones, OST has been most successful with PZ funding. Thunder Valley seems to be the fulcrum for this success, exercising vision, accountability and competence, three things generally at variance with OST planning and procedure.

The PZ designation ends in 2025, but during that time the OST has a real opportunity to develop, expand and maintain tribal programs, reservation businesses, non-profits, schools and educate tribal leadership. Most importantly, they will have access to specialists in many areas, including grant writing, to help fund future OST programs and projects after the PZ designation runs its course.

Opportunity Zone
Being a real estate magnate before he became president, Trump had his reasons for wanting the 2017 Tax Cuts and Jobs Act. The Opportunity Zone (OZ) part of that act provides for real estate development in economically distressed areas, by giving investors, leery of the capital gains tax, a tax break incentive to invest.

Under the guidelines of the program, states may designate up to 25% of economically distressed areas as OZ. Obviously, these designations cannot only be arbitrary, but critically compromised by self-interest and exploitative intention. That being said, these are genuinely distressed areas, and just because the unscrupulous may have found a dependable vehicle to game the system, tangible good can still be accomplished by any tribe that understands how the OZ works, and is willing to be receptive and cooperative with potential investors in OZ enterprises.

This has been a problem for the OST in the past, mistakenly dismissing such investment because the investor might actually benefit handsomely from it. Ideally, any sound business venture should benefit all parties involved, and if one should benefit far more, the other partner benefitting less, must weigh their percentage against the prospect of no partnership, and 100% of nothing.


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James Giago Davies is an enrolled member of the Oglala Lakota Tribe. He can be reached at skindiesel@msn.com

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