Osage News Weekly Roundup: Question 4

The Osage News asked the Osage 2012 candidates how they would vote if the Osage LLC asked for an appropriation of $1 million to $5 million to fund their operations or investments. This is the fourth in a series of questions that will be emailed to all candidates before Election Day as a part of our Osage News Weekly Roundup series.

We allowed the candidates up to 300 words to answer. Their answers are published in the order they were received. Candidates are not required to participate in the series.

The fifth Weekly Roundup question and answers will be published Monday (May 28).

Jerri Jean Branstetter

My response would be a no vote for more funds in any amount.  The board is not fully filled as there are vacant positions and there should be a full team to plan any and all action in the near future.  Congress needs to determine soon, what happens now?  Take the action advised by Mr. Barber?  If so, what and when?  No one likes losing money.  He is the expert, proven, qualified.

The actions and progress of the board are in question by unsatisfied tribal members.  Although, I believe elected officials should not be involved in day to day actions of the board, I question what status the Board's involvement could have prevented the negative effects being produced.

Negative losses the LLC inherited were a situation hampering tribal members livelihoods.  The gift shop and Palace Grocery.  The gift shop was a loss from the beginning.  In fact, Congress did not fund them with budgeting.  Miraculously, they were given funds by Executive/Treasurer and later to the LLC all the while losing more money.  As to the losses of Palace, once they were unable to sell cigarettes to another tribe the losses began to total dramatically.  Over staffing, bad checks non-refunded, unusable software for cash registers were other issues being faced. In total poor administration and loss of services to Osages living in and around Fairfax.

When the two board members asked their name be withdrawn from confirmation, the Executive Branch (Chief) did not submit any new names to Congress to replace the two positions for confirmation during March Session.  I have not been notified if any new members are acting during the interim.

To my knowledge there has not been a plan of the LLC to provide jobs to Osages in Osage County since their inception.

There has been a meeting with information provided having a board over the LLC with highly qualified business people of certain fields.  This board would be over LLC and all boards.  They would be making business decisions for our boards.  Congressmen Simms, Standingbear and Supernaw met with this gentleman. This information was brought to the Commerce and Economic Development.  Mr. Barber, who provided the information has been successful with assisting other tribes, in particular Cherokee.  He also advised the path the LLC has taken was correct.  He advised gaming monies will hit a peak and begin to decline.  Why tribes should not depend on this source of income, but develop other business strategies.  

Joseph Roger Lynn

At this time based on the consistent reported losses from the Osage Llc. I would be reluctant to approve any appropriation for them without a clear indication from the board that they had a reasonable expectation of a decent return on the investment. And there's a lot of information I would personally want to see as a legislator to be convinced: a breakdown showing all their prior investments, what the expected return was at the time for each investment, what the actual return has been, and in the case of consistent losses or low performance, if the same individual or individuals were still involved. All of these things would weigh on my decision of how to vote. And if I didn't have full confidence that the appropriation was in the best interest of the Osage Nation I'd argue vociferously against it.

Teresa Hudgins

That would depend on the reason for the request.  There are several questions that need to be answered.  Have they done their homework on the stability of the proposed investment?  Do they have data to support their proposal?  Is there a reasonable return on investment?  Do they answer your questions in a credible way?  Are they confident?  Are they overconfident?   Have they developed a trusting relationship with the legislators?  Does the tribe have the amount of money they are requesting in the treasury?  They would have to do some serious convincing to get me to vote for $1-5 million dollar appropriation because it is not my money, but I am responsible for how it is spent.

Roscoe Mays

I would not support giving the LLC and more money, because the
LLC has lost money that connot be returned back to the Osage people.
They have no accountability and are still losing money. the money they
lost could have went to elderly care, scholarship money, adequate
medical facilities, or housing for our peolple. I believe the people
of the Osage with concerns of giving millions of dollars to the LLC,
should be put to the people first and not take precedence over our
peoples well-being. i believe the people of the Osages should know
what there elected officials have done and what  they are doing.
  Opinion by: Roscoe Mays

Carl Sellers

If the Osage LLC asked for more money I would vote NO.  There needs to be restructuring and new leadership.  The Osage LLC should serve the people and be loyal to the Osage Nation and not a particular administration.  The Osage Nation Congress has been patient and generous to a losing proposition.    It is time for serious questions and answers  from the Osage LLC as to where the money has gone, is going and will go.

There might come a time when our best option as a nation will be to shut down the LLC.  The Osage LLC shut down the Palace Grocery and the Gift Shop because they were losing money and were not profitable.  Maybe they need to look at their own bottom line and shut down voluntarily.

It was with the best of intentions that the Osage Nation Congress had the foresight to fund the Osage LLC for investments in the hopes of increased economic development, but the LLC has let the Congress, and their constituents down.

Becky Johnson

Whether I would give more money to the LLC would depend on why the money is requested.  If it is to invest in a new operation within Osage County within a steady area (such as the oil industry), I would likely approve it.  However, reports show that there are losses, so I would want to know what is causing this.  Is it bad decision making or is it an accounting issue (e.g., something that looks like a loss but the money is invested so actually isn’t lost but isn’t liquid either)?  Is it a management problem?  Are these losses temporary because of investment in start-up businesses, and the losses are projected to end soon?  In any case, I wouldn’t eliminate the LLC because we need to diversify, but I would change how it works and require a plan of operation which the Constitution gives Congress authority to review.  And then require quarterly reports showing progress on the plan. It's about accountability really, and the gaming company already does this. This would allow for greater knowledge of what the LLC is doing.  I think we should also give our businesses a philosophy on what direction we expect our businesses to take -- do we want businesses to make enormous profits regardless of everything else?  Do we want more jobs created within the reservation boundaries (these first two are often at odds in a single business)?  Are narrow profit businesses okay (e.g., should they have kept the Palace Grocery and Gift Shop open if they could break even or run at small profit?).  I think the answers to these questions need to come from community input and provided in resolution form along with a notice after fact-finding that no more money will be forthcoming if that is deemed appropriate after fact-finding.

Berbon Hamilton

As an Osage legislator, I, Berbon R. Hamilton will thoughtfully act as an Osage Congressman through measurement of the Osage LLC regarding appropriations.  In accordance with its mandate, any investment in Osage LLC is quantifiable based on public information. The capacities that have been developed in Osage LLC’s existence are sound and fit for Diversity Procurement.  Osage LLC’s job creating areas include Construction (Osage Manhattan Builders), Technology (Osage Innovative Solutions –SBA 8a) and Banking (Osage Investments).

Our Tribal Competitors consists of the following tenure, size and offerings:

·      Arctic Slope Regional Corporation, Alaskan Native Inupiat -39 year corporation - $2.3 Billion - 10,000 Employees - Advantages: 8(a) and HUB Zone – petroleum, technology, energy
·      Seminole Tribe of Florida, Seminole Tribe of Florida- 54 year corporation - $1.8 Billion - 6,000 Employees - Advantages: Purchased Hard Rock Chain for $965M (2007).

·      Chickasaw Nation Industries, Chickasaw Nation-15 year corporation - $700 Million – 5,000 Employees - Advantages: 8(a) and HUB Zone -, construction, technologies and medical staffing.
·      Cherokee Nation Businesses, Cherokee Nation-42 year corporation - $441 Million - 8,200 Employees - Advantages: 8(a) and HUB Zone aerospace, telecom, safety and remediation.
·      Ho-Chunk, Inc, Winnebago Tribe -16 year corporation - $154 Million - 310 Employees
·      Confederated Salish and Kootenai Tribes, Salish, Pend d’Oreille and Kootenai Tribes -12 year corporation - $127 Million - 230 Employees

The average age of the Tribal Business entities listed above is 29 years.  It’s too early to measure the returns of our Osage LLC.  Time is required to build economic self-sufficiency and jobs for the Osage Nation.  If the Osage LLC achieves its projections in its fourth year, I would vote ho.we (yes) on an appropriation of $1-$5 million or more. Please vote for Berbon R. Hamilton, on June 4, 2012.

Olivia “Libbi” Gray

I would have a lot of questions that need answers prior to making a decision to appropriate or not appropriate additional money to the LLC. I believe that many of us agree that closing down the LLC only to open up a very similar entity so that we may write off losses is not the way to go. We need to fix whatever problems the LLC may be experiencing that lead to the losses we’ve seen so far rather than just starting over time and time again. It’s the difference between being proactive rather than reactive.  The LLC’s problems need to be identified and a plan of action set in motion to correct our deficiencies.

When problems have been identified and a corrective plan of action put in place I would want to know what contracts we have been awarded and what kind of net profit the LLC can expect over the life of the contract. I would ask if they have identified ways to cut operating costs without harming their operations. I would ask specifically what this appropriation is for and how it will improve the state of the LLC. We don’t want to shut down something that holds promise of generating revenues for the Nation but we also need to learn when to cut our losses when we are involved in a business that has not hope of recovery.

I believe the burden at this point is on the LLC to show the congress and the Osage people what they are capable of achieving. This means coming up with a viable improvement plan as well as improved communications with the Osage people so that we all know what needs to happen and what kind of time frame we are looking at to expect at least a break even scenario.

Rose Mary Shaw

I would vote no on this appropriation.  This issue is very important for this Osage election.  I expected a loss if they were investing in start up companies but I believed that they would invest in corporations that had a long and secure return for our money.  They do have a diverse portfolio, but there was not enough research done that would allow the LLC to show a positive return.  I question their ability to take more money and make decisions which would not be a loss. 

My understanding is that the money comes from our reserves and this was test for the LLC to show us what they were able to do for the Nation.  I wish that there had been better communication between the LLC and the Government and the losses could have been stopped earlier.

The concept of having a business board separate from the government has worked for other tribes in a positive way.  It also depends who is on the board and how the board are clear on their guidelines.  Investing millions of dollars is a lot different than a couple of hundred thousand and I don’t know if we are ready to make these large investments at this time.

Jenny Miller

No.  I will not consider funding future investment in the Osage LLC.  Since October 2008 to today (3 ½ years) Congress has appropriated $18,500,000.00.  The last appropriation was on April 15, 2011 for $2,500,000.00 and was not made at the request of the LLC but at the whim of the Congress itself.  Congress chose on their own to appropriate this amount to purchase land and contribute funds for the purpose of investing in “The American” statue project.  The LLC turned down the $2,500,000.00 citing no return on capital within reasonable risk.

The “Osage Nation Limited Liability Companies Act” (ONCA 07-23) provides regulations for organizing limited liability companies within the Osage Nation yet within those regulations the LLC has full reign to do business anywhere in the United States of America and there are no regulations requiring that jobs are created for those of us who are Osage.  Given reports from Congress members up in arms regarding the fantastic losses of the LLC and the fact that there are only three (3) Osages employed by the LLC, I would suggest they find the flaws in ONCA 07-23 and accept responsibility for these costly existing problems, conduct an investigation by the oversight committee, determine if Civil Action against the LLC, its managers or officers is required while at the same time making appropriate amendments to ONCA 07-23  enforcing the purpose for which the LLC was intended.

This situation with ONCA 07-23 reinforces my point that quantity is not as important as quality when writing legislation.  We can’t go by what we think, thought or intended a law to say.  The law has to be specific and precise.  The results of poorly written law in this case leave us with 3 Osages employed and 6+ million dollars in losses.  See enacted legislation:  http://www.jenny2010.com/hot_topics.html

Maria Whitehorn

As an Osage legislator, I would vote no for additional funding to the Osage LLC. Under the current circumstances of staggering losses, investing more tribal dollars into the LLC without an investigation, would be an irresponsible way to spend or invest. 

Considering the common  knowledge of the Palace Grocery and gift shop failings, Congress has not had a very satisfying explanation by the LLC board or management as to where the money has gone to date and how the investments are really working for us, for example--the LLC should report the current health and projected earnings of each company in which we are invested.  Yes, there are  financial statements, but that is like getting a diagnosis from a doctor through the mail; no real dialogue. The LLC keeps coming back to the congress for capital.  Once an appropriation is approved for the LLC there is no oversight how it is spent and no regulation or follow up we just hope they do the right thing.   

As a legislator, I am for formally examining the strengths and failings of this current Osage LLC.  I'm not convinced it is the right business structure for our tribe. What ever the findings of an investigation show, we should transition into the best fit for our assets.  Let's not slash and destroy, but rationally recover and reset into a more transparent Osage friendly business model, immediately.

John Jech

As a legislator if I were asked to vote for or against an additional 1-5 million dollar appropriation for the Osage LLC I would have to vote no given the current situation.  When the LLC was initially set up it was to be self-sufficient within five years and then begin paying a dividend to the Nation.   Since inception it is my understanding the LLC has been given 16.5 million dollars plus various other assets and liabilities.  I believe the LLC structure is needed to separate business from politics and keep the Executive and Legislative branches from micro managing the operations but there should be more communication between the three.   I view the Nation as the sole shareholder of the LLC and as the owner the Nation should be informed and reported to quarterly if not monthly on the operations of the LLC.   If certain information is deemed proprietary in nature it should be discussed in executive session and summary information from the executive session be made available to constituents.  There have been unexpected events occur within the US economy since the inception of the LLC which have surely caused setbacks in their  investment strategies but those types of issues need to be communicated to the Osage People.  If any Osage business continued to request capital investments from the Nations Treasury without any explanation as to why prior contributions were not sufficient to achieve the goals set by the governing board then I would have to deny approval of additional funding.  The LLC may be communicating regularly to Congress on its operations and providing statements of financial position, cash flows and income but it doesn’t appear this information is readily available to the Osage people and it should be.