Indianz.Com Video: '8 billion dollars for our tribal governments': #COVID19 and Indian Country

'Patently unfair': Judge won't let Trump administration delay COVID-19 relief again

UPDATE, 6:31pm Eastern
Numerous tribes have confirmed to Indianz.Com that they have not received payments from second round of the $8 billion coronavirus relief fund despite a pledge made by Secretary of the Treasury Steve Mnuchin to get the money out on "Friday."

And just hours after a hearing in CARES Act litigation concluded, the Trump administration released a new document which states: "Treasury is making a second distribution of payments to Tribal governments today."

The new document, titled "Coronavirus Relief Fund Allocations to Tribal Governments", explains how the $3.2 billion remaining in the fund will be distributed.

Additionally, Treasury has decided to withhold $679 million from tribes pending resolution of a new lawsuit filed earlier this week even though the judge handling the case said it wasn't necessary.

Tribes will finally see the rest of their payments from the $8 billion coronavirus relief fund after the Trump administration attempted to delay the money by playing divide and conquer in Indian Country.

Barely two days ago, Secretary of the Treasury Steve Mnuchin told Congress that tribes would see final payments from the COVID-19 fund on Friday. His pledge came after a key lawmaker made him go on the record about the money that was promised to Indian Country more than two months ago.

But during a federal court teleconference on Thursday afternoon, government attorneys announced a change in course. They said Mnuchin, earlier in the day, came up with a different strategy, one which would further delay the funds tribes have been waiting on to help their communities make it through a pandemic that continues to cause illness, and even death, among their citizens.

"Unless a TRO is issued in one case or the other giving specific guidance, the Secretary of the Treasury currently intends to hold back roughly 24 percent of the wave two payments," Kuntal Cholera, a trial attorney from the Department of Justice, said in reference to temporary restraining orders that have been requested by different groups of tribes.

"I just wanted to make that clear to the court," Cholera told Judge Amit P. Mehta, who has been dealing with tribal litigation over the $8 billion COVID-19 fund for almost two months straight now.

But instead of clearing things up, the Trump administration's declaration only appeared to complicate matters. Holding back 24 percent means that the money would not go out on Friday as Mnuchin had pledged, government attorneys confirmed.

That's because the Department of the Treasury needs another "business day" to recalculate the payments promised to tribes, according to Jason Lynch, another trial attorney from the U.S. government.

"The vast majority of money would start going out on Monday," Lynch said.

So not only would 574 federally recognized tribes have to wait longer for COVID-19 relief, they would not receive a complete payment. Indian nations would be cut short a total of $679 million while litigation is being resolved, according to the government's representation about the 24 percent being held back.

"All of this, of course, is subject to the court's order, one way or the other," Cholera said.

"This is just a certain way, in part, of trying to reconcile between the [tribal] litigation, and what they are requiring, or demanding," Cholera explained of the Trump administration's change in course.

But as the hearing went on, the divide and conquer aspect became clear. Secretary Mnuchin came up with the delay and withhold strategy simply because one tribe -- the Prairie Band Potawatomi Nation -- filed a lawsuit earlier this week, alleging it was underpaid from the first round that went out last month.

"Our tribal government got very seriously shortchanged," Prairie Band attorney Carol E. Heckman told the court.

But the Trump administration does not actually believe Prairie Band is right about the underpayments. When asked whether the plan to withhold $679 million meant Treasury accepted the tribe's arguments, government attorneys said the complete opposite -- that the tribe had no case.

"If we open this can of worms and we go down that road, we are going to potentially see other challenges to our methodology," Lynch said.

"This is is not a light issue," Lynch added. "This is something that could really open up a can of worms."

And when asked whether the Trump administration would instead withhold the amount the Prairie Band might get -- a much smaller amount, obviously -- should it prevail on the underfunding issue, the government again was adamant. Treasury would rather keep $679 million from all tribes while the case is being resolved.

"If we undercount everybody, nobody gets more money," Lynch said, highlighting the scraps tribes are being fed by the federal government. "Because, again, it's a finite set of money."

After an hour of arguments, Mehta had heard enough. He gave tribes and the Trump administration an ultimatum.

"If I don't hear from you before 5 o'clock, I will make a decision," Mehta said as the teleconference wrapped up shortly after 4pm Eastern.

An hour later, talks were still ongoing, a tribal attorney told Indianz.Com, indicating some progress was being made in order to get payments out on Friday as anticipated, without withholding large sums of money from the communities that need it the most.

But an hour after that, the discussions proved that the Trump administration refused to budge ground. So attorneys for a different group of tribes pointed out the obvious: Treasury wanted to keep $679 million from Indian Country, all because Prairie Band might have been shortchanged about $7.65 million.

"Defendant’s proposal is unacceptable," attorney Keith Harper, a citizen of the Cherokee Nation and a former U.S. ambassador, wrote in a filing that attorneys for Secretary Mnuchin did not object to.

"The government has no rational basis to withhold 24% of the $3.2 billion pool of CARES Act funds. The amount in dispute is $7.65 million," the filing continued.

"Government counsel in today’s argument was provided an opportunity to be heard as to why the defendant would withhold more and thereby exacerbate the already egregious delay," the attorneys wrote. "He was unable to provide any rational basis whatsoever."

The "egregious delay" standard is a significant issue for the tribes Harper is representing in a different case. Last Friday, they asked Mehta to order Treasury to distribute the remaining $3.2 billion by an “immediate and definitive date.”

But with its divide and conquer move, the Trump administration boxed Mehta into a corner. If he issues a temporary restraining order in Prairie Band Potawatomi Nation v. Mnuchin and sends Treasury back to the drawing board, that means he is causing delay for the tribes in Agua Caliente Band of Cahuilla Indians v. Mnuchin.

"They want the money out yesterday," Mehta noted during the teleconference hearing.

On the other hand, if he issues a temporary restraining order in Agua Caliente Band, Prairie Band would not be fully heard because the money would go out without the tribe's concerns about underfunding being taken into account.

That's why some observers saw the government's call for "guidance" as disingenuous. "DOJ/Treasury sounds utterly confused," one attorney who has been following the drama said.

Another advocate characterized the Trump administration's proposal as one in which Indian Country is being blamed for the government's repeated failures to get the money out as promised. "It is all the tribes fault for pointing out our screw up," the person said of the message coming from Washington.

By the end of the evening, Mehta came up with an answer. The money should go out as planned, without addressing the alleged underpayments.

In a five-page order denying Prairie Band's motion for a temporary restraining order, Mehta said "it would be patently unfair to make Tribal governments wait any longer to receive the remaining CARES Act funds."

The Secretary already has well surpassed the 30-day period within which Congress ordered the distribution of emergency relief to Tribal governments," Mehta added.

Under the Coronavirus Aid, Relief and Economic Security Act, also known as the CARES Act, Congress directed Treasury to distribute $8 billion to Indian Country "not later than 30 days" after the enactment of the law on March 27. The deadline was never met amid repeated broken promises, a leak of sensitive tribal data and even threats of no payments at all.

"Another area that there are problems with is $8 billion for our tribal governments," Sen. Maria Cantwell (D-Washington) said at a hearing of the Senate Committee on Small Business and Entrepreneurship on Wednesday.

"Can you tell me," she asked of Secretary Mnuchin," when the $8 billion for tribal governments will be distributed?

"Tomorrow," Mnuchin said . His response contradicted with representations made in court as part of the CARES Act litigation.

Cantwell, who also serves on the Senate Committee on Indian Affairs and was the first woman to chair the panel, pushed back, wanting to be sure about the answer.

"Actually, maybe Friday," Mnuchin said. "I apologize. It's either tomorrow or Friday."

President Donald Trump, center, takes part in a Native American roundtable in Phoenix, Arizona, along with, from left: Secretary of Labor Eugene Scalia, Governor of Arizona Doug Ducey (R), Vice President Myron Lizer of the Navajo Nation, Second Lady Dottie Lizer of the Navajo Nation, Governor Stephen Roe Lewis of the Gila River Indian Community and Senator Martha McSally (R-Arizona) on May 6, 2020. Photo: Shealah Craighead / White House

Instead of paying the entire amount to tribes, Treasury on May 5 announced distribution of $4.8 billion from the coronavirus relief fund. A senior White House official later said the decision was made so that President Donald Trump could look good during a roundtable with tribal leaders in Arizona on that same day.

"He absolutely wanted to be there to award money to the Native American community," Kellyanne Conway, who serves as Counselor to Trump, said during an Operation Lady Justice listening session on May 27 that was marred by technical and logistical difficulties.

The Trump administration subsequently promised payments from the remaining $3.2 billion would go out starting on June 4. The self-imposed deadline was never met either but this time Treasury blamed it on Indian Country, accusing nearly 400 tribes -- almost 70 percent of the federally recognized family of Indian nations -- of submitting information deemed inadequate by the department.

Unless tribes submitted the "correct" information about their employment base and expenditures, Treasury said they would not receive any money from the second round. The department initially gave tribes 48 hours to fix the supposed inconsistencies but the deadline was later extended to 11:59pm Alaska time on June 6.

With their shares of funding at risk, tribes had little choice but to deal with the threat. According to Daniel Kowalski, who serves as Counselor to Secretary Mnuchin, nearly of the alleged problems were fixed by the June 6 deadline.

"Treasury's efforts resulted in a vast majority of Tribes - nearly 95 percent - with corrected submissions," Kowalski said in a sworn declaration on Wednesday.

Kowalski, however, did not say what will happen to the 5 percent of tribes with supposedly incorrect submissions. If Treasury follows through with the threat, around 28 or 29 tribes could be denied shares of the $3.2 billion.

With numerous questions still unresolved, more than two months after the CARES Act became law, tribal litigation is far from over. Later on Thursday, following the back and forth in Prairie Band, Judge Mehta scheduled a hearing at 10am Eastern on Monday in Agua Caliente.

If the payments start going out today as previously indicated, Treasury might be able to beat back a motion for temporary restraining order in Agua Caliente.

Even if that happens, there's still more to resolve for Indian Country. On Friday at 1pm Eastern, Mehta is hearing closing arguments in the CARES Act case that started it all.

At issue is whether for-profit Alaska Native corporations are entitled to shares of the $8 billion COVID-19 money. Mehta has temporarily barred Treasury from distributing any of the funds to these entities, on the grounds that they are not "tribal governments," as that term is defined in the CARES Act.

As a result, about $162.3 million was withheld from the first distribution of the coronavirus relief fund, the Trump administration previously told Mehta. That accounts for about 3.4 percent of the $4.8 billion.

Based on representations made in court on Thursday, an additional $371 million will be withheld from the Alaska Native corporations from the second distribution. That accounts for about 11.6 percent of the $3.2 billion that is supposed to go out starting today.

Altogether, more than $533 million will be paid to more than 200 Alaska Native regional and village corporations should the litigation end in their favor. That accounts for about 6.7 percent of the entire $8 billion coronavirus relief fund.

The 18 tribal plaintiffs in Confederated Tribes of the Chehalis Reservation v. Mnuchin, Cheyenne River Sioux Tribe v. Mnuchin and Ute Indian Tribe of the Uintah and Ouray Indian Reservation v. Mnuchin argue that the CARES Act only allows "tribal governments" to benefit from the fund. Their view is supported by every major inter-tribal organization in the U.S.

On the other side are the Trump administration and the Alaska Native corporations, which have been allowed to intervene in the case. According to Treasury, the for-profit entities are entitled to shares of the $8 billion fund because they meet a different definition referenced by the CARES Act.

The public can listen to the 1pm Eastern hearing using the following information:

  • Toll Free Number: 877-848-7030
  • Access Code: 3218747

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