ONEIDA, N.Y. – Spanish conquests in the “NewWorld” sent a flood of wealth
back to the Iberian Peninsula. For a time, newly unified Spain became one
of the most powerful countries in Europe. But the precious metals plundered
from the Aztec and Incan empires caused runaway inflation, the wealth
flowed into military ventures and far from growing, the domestic economy
actually withered or passed into outside hands. By the end of the 17th
century, writes one history, “Spain was drained economically and socially.”

In our time, the oil boom brought untold wealth to the lands of the Arabian
Peninsula. But its most famous product, aside from conspicuous consumption,
has been the rise of fanatic religious terrorism, led by a son of the
wealthy elite.

Closer to home, the Osage of Oklahoma endured a flood of income in the
’20s, when their lands turned out to sit on an oil field. Rapacious
non-Indians schemed to steal their sudden wealth, in one famous conspiracy
even taking Osage wives and then poisoning them for the inheritance. As a
tribal leader said of that period, “The Osage were never happy again until
they lost all their money.”

Many more examples could make the point that it is often easier to become
fabulously rich than to stay that way. Sudden wealth produces myriad
problems, from technical questions of investment management to political
and social crises. The problems compound when a favored few gain vastly
more than others, and the whole group is surrounded by a mass of envious
outsiders who have a long history of plundering their assets.

As one step to meet this challenge, the Inaugural Tribal Wealth Management
Conference is convened Nov. 15 – 17 at the Seminole Hard Rock Hotel &
Casino in Tampa, Fla. The gathering, co-sponsored by Indian Country Today,
brought together tribal leaders and authorities in asset management and
investment. The agenda covered the whole range of financial issues facing
tribes suddenly pulled out of poverty, from preserving individual assets
for future generations to diversifying tribal businesses and encouraging
entrepreneurs.

Some topics are now basic issues in tribal politics. As Paul Frits, a
conference presenter observed, tribes face basic decisions on allocating
the new wealth between investments that will increase their cash flow and
business base or those that will build social capital or benefit individual
tribal members. The issue of increasing per-capita payments has elected one
dissident to the Mohegan Tribal council and caused an upheaval in the
Seneca Nation’s dominant Seneca Party, leading to the defeat of Cyrus
Schindler, architect of its Seneca Niagara casino.

At the same time, some tribes have pressed ahead with diversification and
cross-tribal investments that span the continent. The San Manuel Band of
Mission Indians has joined two tribal consortia to operate hotels,
including one in Washington, D.C. near the new National Museum of the
American Indian. The Mohegan Tribal Gaming Authority of Connecticut’s
Mohegan Tribe has emerged in recent months as a national gaming enterprise
to equal the Las Vegas giants. It is purchasing a racino in Pennsylvania
and has signed development and management contracts for tribal casinos in
Wisconsin and Washington state.

San Manuel chairman Deron Marquez spoke at the conference panel on
diversification, along with Frank Riolo, chief executive office of Viejas
Economic Development Enterprises.

The conference also took up means of developing a tribe’s private sector.
One structure, which also provided an avenue for cross-tribal investing, is
the Community Development Financial Institution (CDFI), a local small
lender that provides micro-loans to individual businessmen and properly
managed can actually turn a profit. Elsie Meeks, executive director of the
First Nations Oweesta Corporation, moderated a panel also featuring
Marquez, doing double duty, and John Beirise, president of the Native
American Bank.

Another panel took up larger scale plans for tribes to set up their own
banks and financial institutions, ranging from the much discussed
traditional bank to more exotic “Swiss banking” operations. The speakers on
this much-publicized topic included Mark Grant, controller of the Navajo
Nation, J.D. Colbert, president of the North American Native Bankers
Association, Thomas M. Steirer, Tonawanda Seneca, and Hugh Lordon, a former
banker who is now chief financial officer of the Oneida Nation’s Turning
Stone Casino.

But the conference also explored technical details rarely discussed in
tribal settings. One panel discussed cash management, choosing the best
security for higher returns or, the flip side, the best way of borrowing to
reduce tribal interest costs. (One lesson sure to be learned is that higher
interest rates come from higher risk. The trade-off for both the borrower
and lender is security versus price.) Another panel examined less
traditional ways of investing, such as real estate and venture capital.

The conference also dealt with the personal needs of tribal members, in
establishing retirement plans and trust funds. It advised tribal leaders on
providing financial advice for members. As senior U.S. Internal Revenue
Service officials told the recent United South and Eastern Tribes annual
meeting, the government is watching closely to make sure that it gets its
cut of the federally taxable per capita payments.

One of the most basic panels might also be the most important, on
understanding the trends in the national financial markets. Capital
management professionals gave advice on what kinds of investments, stocks
or bonds, will pay best in a market in which interest rates are expected to
rise.

These issues might be familiar to Wall Street, but they are shockingly new
for the population considered the most marginal to American capitalism and
the most distanced from its benefits. Indian country has struggled to
master basic financial vocabulary and principles, although many have proved
fast learners. One large problem has been simply to find out whom to trust.
The conference brought together some of the biggest names in the financial
world with some of the most successful tribal leaders. The co-chairs
include Lehman Brothers, the Wall Street investment bankers; Merrill Lynch,
the stock brokers and financial advisers and the law firm of Hughes Hubbard
& Reed, whose representative Steven McSloy was once general counsel to the
Oneida Indian Nation of New York. (Four Directions Media, an enterprise of
the Oneida Nation, publishes Indian Country Today.)

Twelve other law firms and financial advisers are sponsors.

Nearly 30 tribes and tribal organizations attended, hoping to avoid the
fate of the Spanish and the Osage and to preserve their gains for future
generations.