Red Lake tribal finances: what’s the rest of the story?

by Clara NiiSka

During its regularly scheduled October 9, 2001 meeting, the Red Lake tribal council narrowly enacted an ordinance providing for the recall of tribal council representatives and officers.  As Press/ON reported on October 12, the #1 concern motivating the recall ordinance was, “the way that Red Lake treasurer Dan King has handled tribal business.”

Dan King, perhaps in response to rising community concerns about the financial situation at Red Lake, published an “October 2001 edition” Tribal Financial Report—a full-color glossy brochure which reportedly cost $6,500 to print, and more than a thousand dollars to mail.  The brochure was apparently mailed shortly after the Tuesday, October 9^th tribal council meeting.

Dan King also joined with tribal council representatives Fabian “Nickel” Cook, Al Pemberton, Harlan Beaulieu, and Delores Lasley in circulating a flyer, “Negative rumors attempt to undermine gaming efforts.”  That flyer includes a number of statements about tribal council finances, as well as sharp criticism of alleged “political posturing” by tribal secretary Judy Roy.  (Judy Roy introduced the Removal Ordinance and moved for a resolution adopting it, and voted for the Removal Ordinance at the tribal council meeting.)

This writer read the financial report and the ‘negative rumors’ flyer, then contacted tribal council treasurer Dan King at the phone number given on the financial report, (218) 679-3341, hoping to get clear answers to several questions raised by the tribal council treasurer’s presentation of Red Lake financial information.  The report lists historic assets, but it does not list liabilities.  It lists historic revenues, but it does not list expenditures.  The report does not show the tenfold increase in debts incurred by the tribal council, from $4 million to over $40 million, since Dan King took office in 1998.

On page 6 of his report, the tribal council treasurer published a chart about “tribal cash status.”  Most of the cash reported deals with claims-settlement funds, and it is unclear whether or not most of the $16.5 that he describes as “available for tribal purposes” is actually restricted money.  Furthermore, there are some potential legal challenges which could made against the current settlement agreement, which could further restrict the availability of funds to the tribal council.  What the cash status report actually does indicate is that there has been a spend-down on tribal cash reserves, and also in trust funds, during King’s tenure as tribal council treasurer.

In addition, on page 8 the report lists “tribal budgets” for the years 2000 and 2001, but does not show actual expenditures for the year 2000, nor does it show expenditures for the first six months of 2001.  The chart on the same page is also misleading, because it does not make it clear exactly what “net profit” consists of, nor where that money went during the year 2000.  The most effective way to get a clear and accurate picture of the financial status of any organization is through audited financial statements.  Press/ON has requested such audited financial statements from Red Lake tribal council treasurer Dan King on several occasions, but he has not made them available.

In his report, the tribal council treasurer claims that the federal government “is legally required to provide for basic needs and support services” at Red Lake based on “Treaty Agreements.”  This writer asked Dan King exactly what treaty provisions he was referring to.  King refused to answer the question.

A report which honestly detailed the present financial status of the Red Lake Band would have looked more like a bank’s loan application than a glossy public-relations promotional brochure: detailing income and expenses, assets and liability.  (Assets minus liabilities are generally assumed to be the “net worth” of an organization. For a number of reasons including that for all practical purposes the land at Red Lake cannot legally be mortgaged or sold, the land, lakes, and forests should not be included as “assets” in accounting for “net worth” on a financial statement.)

When asked for information to fill in some of the huge gaps in his financial report, Dan King categorically refused to answer any of this writer’s questions.  “Are you actually going to print it,” he asked.  When assured that the reason Press/ON contacted him was to get his side of the story, the tribal council treasurer accused Press/ON publisher Bill Lawrence of journalistic bias because he is “related to Judy Roy,” the tribal council secretary and target of a number of allegations made by Dan King.  After repeating his accusations and arguing that, “Bill is the editor, and will have the final say,” Dan King said that he would “present” further financial information on his own. “I do not want it filtered,” he said.  He then abruptly hung up the phone.

This writer observes that I am respectful of the fact that Bill Lawrence does in fact own The Native American Press/Ojibwe News, and of his skill in pinpointing critical questions in an investigative news story.  But, even though there have been a few times when I and the publisher have disagreed on something in a story with my byline, Bill Lawrence has never censored my articles.

Press/ON has a number of unanswered questions relating to Dan King’s financial reports.  Since he has offered to publicly ‘fill in the gaps’ in his financial report, here are a few of those questions:

· How much, exactly, is the outstanding debt for the casino expansion and other construction projects, and how much will be owed in interest?  Provide a full accounting of the development costs, and the debt outstanding.  What are the monthly payments, and how do these compare with the actual income from each casino?  Detail the monthly expenses—overhead, debt repayment, overhead, wages, and other costs—for the River Road casino since the water-slide and other expansions were opened on May 25^th.  Also, detail the monthly income, motel occupancy rates, water-slide usage, and restaurant and gift shop revenues.  How have the new ‘developments’ have increased gambling revenues at the casino?  How does actual business compare with the business plans which were used to justify the casino expansion?

· Exactly how many employees are there at each casino?  How many are Red Lake enrollees?  What is their average monthly pay?

· Detail the total debt of the Red Lake Band of Chippewa Indians.  What is the collateral which guarantees this debt?  What is the present total net worth—in detail.

· What, precisely, is the present ‘return’ on the tribal council’s investment in the casinos and River Road expansion?  Is the casino earning enough money to pay all the bills?  (Claiming that there will be a “per capita payment in the near future” does not answer that question—and it is not clear whether “near future” is being calculated using ‘Indian time’ or ‘BIA time.’)

· There have been allegations of bid rigging and kickbacks in the River Road casino construction.  Provide a list of all of the bids relating to the casino expansion.  Also, detail the involvement of Red Lake Builders in casino construction.  Provide a full and complete account of actual construction costs and amounts still owed.

· The recent financial report indiscriminately combines a number of “tribal revenue sources,” including federal, state and county funds for “need based” programs administered through the tribal council.  Detail exactly what this includes—and the corresponding costs and other expenses.

· Both the “Tribal Financial Report” and the ‘negative rumors’ flyer refer to housing: $39 million dollars worth of housing since 1998, in addition to the Walking Shield program.  List the programs, the sources of funds, the status of each project, and the number of units provided.  How many are complete and in livable condition?

· In recent the ‘negative rumors’ flyer, it is claimed that the Jourdain-Perpich Elder Car Center is “showing a profit.”  Provide a line-item budget.  Are any services to elders being cut, in order to make a profit?

As tribal council treasurer and chief executive in charge of development for the River Road casino expansion project, Press/ON believes that Dan King should have no difficulty answering these questions.  Press/ON welcomes the opportunity to publicly clarify issues of concern to many people at Red Lake.