Appeals court hears arguments in COVID-19 funding dispute

Tribal governments remain united as a federal appeals court determines the fate of more than a half-billion dollars in COVID-19 funding that’s been at the center of one of the most bitter Indian law and policy disputes in decades.

The D.C. Circuit Court of Appeals is hearing arguments in the closely-watched case on Friday afternoon. Though only 30 minutes have been set aside for Confederated Tribes of the Chehalis Reservation v. Mnuchin, the outcome will be significant.

At issue in the lawsuit is whether Alaska Native corporations, which are for-profit entities, can be treated the same as tribal governments, whose inherent sovereignty pre-dates the existence of the United States. And at stake are the remaining shares of an $8 billion coronavirus relief fund that Congress authorized almost six months ago to help the first Americans address the worst public health crisis to affect their communities in decades.

Though the Trump administration delivered the money late and in separate, unanticipated payments following intense scrutiny, more than 500 tribal governments have been making good use of the resources. Among other efforts, they have used the funding to purchase personal protective equipment, bolster their health care systems and provide direct financial assistance to citizens whose livelihoods have been negatively impacted during the pandemic.

“The clock has ticked. Time has run out and our village now has confirmed cases of COVID-19. Support for Alaska Native communities and villages is needed now, more than ever. We desperately need CARES Act funds to be released”https://t.co/7fH9sAUPKQ

— Alaska Native Village Corporation Association (@INFOANVCA1) September 2, 2020

The Alaska Native corporations (ANCs), of which there are more than 200, are hoping to do the same for their shareholders and the people they serve. But while a federal judge agreed they should receive the money, the Department of the Treasury — for reasons that remain unexplained — never disbursed the $543 million that had been set aside for them under the Coronavirus Aid, Relief and Economic Security Act, also known as the CARES Act.

The delay came as the tribes plaintiffs mounted an appeal in the litigation. In doing so, the same judge put a hold on distributing the $543 million to the corporations.

“Alaska Native corporations are doing all they can to meet the desperate needs of their communities as COVID-19 continues to spread,” Kim Reitmeier, the executive director of the ANCSA Regional Association, told Indianz.Com ahead of the hearing on Friday afternoon. “Providing health services and basic necessities to our people is no small feat when one considers Alaska’s challenging geography and weather conditions. For example, many Alaska Native communities lack access to road systems and rely on air carriers, which have been forced to scale back or cease operations due to COVID-19.”

Reitmeier was particularly mindful of a deadline imposed by the CARES Act. Under Title V of the law, all recipients must use the money by December 31 or return it to the U.S. government.

The D.C. Circuit, however, does not seem to be alarmed. Though the tribal plaintiffs — 18 Indian nations, including some from Alaska, are part of the lawsuit — asked for expedited consideration back in July, the court didn’t schedule a hearing right away.

“The delay in CARES Act Title V funds and the deadline for spending mean that ANCs may be left with only weeks to utilize these necessary funds that can help our communities fight this disease and repair and grow the Alaska economy,” Reitmeier said. “Each day that we wait for the September 11 hearing is another day our communities go without the funds that they desperately need—and which are rightfully theirs—to strengthen and protect against COVID-19.”

The Cherokee Nation is putting #CARESAct dollars to work for tribal citizens and their communities. #COVID19 #Coronavirus @ChuckHoskin_Jr @CherokeeNation @Anadisgoi https://t.co/iBbuTMwxJs

— indianz.com (@indianz) August 3, 2020

Tribes are concerned about the deadline as well. The Navajo Nation and the Cherokee Nation, the two largest governments in Indian Country, are backing legislation in Congress that would extend the December 31 deadline. [H.R.7557 | S.4232]

“We have, at Cherokee Nation and many other tribes, some of the best minds in respective subject areas that we need to utilize the funds for,” Cherokee Chief Chuck Hoskin, Jr. told Indianz.Com.

“But we can only work so quickly,” Hoskin added. “To spend it responsibly, to be effective, more time would be better.”

Hoskin and other Indian Country leaders have been outspoken about the dispute being heard by the D.C. Circuit. They firmly believe that Congress intended the $8 billion in COVID-19 relief to go to sovereign tribal governments, a view shared by the lawmakers who wrote and passed the CARES Act back in March.

Rep. Deb Haaland (D-New Mexico), who is one of the first two Native women in Congress, said it was “a great disappointment that the Treasury caused an extreme delay in the distribution of the critical $8 billion of coronavirus relief funds for tribal governments under the CARES Act.”

“In the end, the administration insisted on taking nearly three months, put tribes through unnecessary litigation, ultimately allocated large amounts of funding to for-profit corporations, insisted on overly burdensome application materials that no other state or local governments had to submit, and failed to protect tribal data in the process,” Haaland, who is a citizen of the Pueblo of Laguna, said in a keynote to the National Transportation in Indian Country Conference on August 31

But the Alaska Native corporations have some strong allies in their corner. Not only is the Trump administration on their side, a prominent attorney is arguing their case before the D.C. Circuit.

Paul Clement served as Solicitor General at the Department of Justice, a position that put him in charge of all U.S. Supreme Court litigation during the Republican George W. Bush presidency. After leaving his government job, he went onto advance conservative causes in their long-running efforts to strike down the Indian Child Welfare Act as unconstitutional, based on a faulty claim that the 1978 law is based on race rather than the government-to-government relationship between tribal nations and the U.S.

Though Clement did not succeed in undermining ICWA in a high-profile case involving a child from the Cherokee Nation, his work has not gone unnoticed in Republican circles. Just this week, President Donald Trump put him on a short list of potential picks to the Supreme Court, almost in a signal to the D.C. Circuit ahead of the CARES Act hearing.

“Over the next four years, America’s president will choose hundreds of federal judges, and, in all likelihood, one, two, three, and even four Supreme Court justices,” Trump said at the White House on Wednesday, highlighting one of the many issues at stake in the November election.

“The outcome of these decisions will determine whether we hold fast to our nation’s founding principles or whether they are lost forever,” Trump added.

The hearing in Confederated Tribes of the Chehalis Reservation v. Mnuchin is being broadcast live on YouTube at 2:30pm Eastern on Friday afternoon. An audio recording also will be made available by the court.

Attorneys Riyaz Kanji and Jeff Rasmussen will be representing the tribal plaintiffs. They have 15 minutes to argue that Alaska Native corporations are not entitled to the CARES Act funding, a position supported by nearly every major Indian Country organization.

Adam C. Jed of the Department of Justice is arguing of behalf of Secretary of the Treasury Steve Mnuchin, the defendant in the case. The government’s 15 minutes are being shared with Clement, who represents several Alaska Native corporations and corporate interests.

There is no timeline for the D.C. Circuit to make a decision.