Two tribes aren’t recognized federally. Yet members won $500 million in minority contracts

Tribal council members break ground on the Ma-Chis Lower Creek Indian Tribe of Alabama’s new tribal complex and church in Elba, Ala., in 2012. 

(Jason Johnson / Southeast Sun)

By ADAM ELMAHREK, 

PAUL PRINGLE

DEC. 31, 2019

 

5:54 PM

Companies set up by members of a self-described and state-recognized Creek Indian tribe in Alabama have received more than $240 million in federal minority-business contracts, despite a determination by the U.S. Bureau of Indian Affairs that there is no credible evidence the group has Native American ancestry, a Los Angeles Times investigation has found.

Federal contracts worth an additional $273 million have gone to two companies run by a member of a different Native American group in Alabama with no federal recognition as a tribe.

The ability of company owners with questionable Native American identity to obtain more than half a billion dollars in taxpayer funded minority-business contracts reflects a nationwide failure by agencies overseeing programs set up decades ago to help socially and economically disadvantaged minority groups.

Including the Alabama outlays, The Times has found more than $800 million in federal contracts awarded to companies whose owners made unsubstantiated claims to be Native American, although the total is almost certainly higher. The contracts were for construction, computing and other projects in 27 states, including California.

Federally recognized Native American tribes, and other racial and ethnic minorities are the losers. 

A Times analysis of Small Business Administration contracts found Native American companies are often overrepresented compared with other minority groups. But the disparity is particularly stark in Alabama, where Native Americans comprise less than 1% of the state’s population but Native American businesses were awarded more than $2 billion through the SBA’s minority program since late 2007.

By comparison, while African Americans make up 26% of the state’s population, black businesses in Alabama received about $827 million in minority business contracts, the records show. Black business owners in Alabama say they struggle to compete against Native American companies, and suspect many are owned by whites. 

California and five other states have moved to strip minority status from companies examined in The Times’ earlier reports on the contracting programs. 

In addition, the U.S. Department of Transportation has called for a nationwide review of Native American contractors to ensure the owners are members of recognized tribes, and the Small Business Administration’s inspector general has begun an audit of SBA certifications of Native American contractors.

Each year, the federal government reserves 5% of its multibillion-dollar contracting budget for businesses owned by eligible minorities, including U.S. citizens who are Asian, black, Latino or Native American. But the program’s process for vetting applicants is seriously flawed, The Times’ investigation showed. 

One major problem is that the SBA considers business owners to be legitimate Native Americans if they belong to a tribe recognized by either the federal government or a state. Many Native Americans have long opposed allowing states to recognize tribes, arguing that the federal government should make the decision because states often fail to properly screen groups.

Alabama has recognized nine tribes, but only one — the Poarch Band of Creek Indians — is recognized by the Bureau of Indian Affairs, which is part of the U.S. Interior Department. 

continue