by Jacob Rueda
Corruption in tribal governments is often overlooked or underestimated. Despite that, it occurs more often that people might realize.
In 2020, three officials from the Three Affiliated Tribes of the Mandan, Hidatsa, and Arikara Nation (MHA Nation) were charged with accepting bribes from contractors working on the Fort Berthold Indian Reservation, according to a Department of Justice press release.
Randall Jude Phelan, one of three officials, was sentenced to five years in prison in 2023 for accepting bribes and kickbacks from contractors.
Delven Reeves, a former board member of the MHA Nation economic development corporation, also received bribes from contractors, according to prosecutors. He is serving a five year sentence for his role in the scheme.
Frank Charles Grady, also a former MHA government official, is serving a six year prison sentence for accepting bribes. Combined, all three former tribal officials received over $1.5 million dollars in bribes.
In 2014, Jason Merida, the executive director of construction for the Choctaw Nation, was indicted on charges of running a “pay to play” scheme where contractors had to give him money and gifts to win jobs. He was found guilty and sentenced to 12 years in federal prison.
The FBI’s investigation into Merida’s actions also showed that he stole more than $500,000 from the tribe through phony invoices from subcontractors.
The illegally obtained money was not reinvested in the tribes. As a result, it made efforts for people living in tribal lands to escape poverty difficult, leaving many communities struggling to improve their circumstances.
Because tribes are recognized by the U.S. government as sovereign nations, there is no federal oversight of their governments. Likewise, they have their own law enforcement and investigate crimes within their jurisdiction. However, serious crimes on tribal lands are investigated by federal agencies regardless of jurisdiction.
Both cases show a troubling trend of corruption involving tribal officials. According to the Internal Revenue Service, other forms of corruption in tribal lands include:
Tax Evasion: Some individuals improperly shelter taxable income by routing transactions through Indian tribes.
Disguised Enterprises: Businesses may falsely present themselves as tribally-owned to avoid federal taxes and state insurance regulations.
Embezzlement: There are instances of embezzlement from tribal enterprises.
Misuse of Tribal Credit Cards: Tribal credit cards are sometimes used for personal expenses rather than official purposes.
Improper Use of Casino Benefits: Casino comps are misused for non-gaming related activities.
Illegal Activities: Corruption, such as bribery and kickbacks, occurs in enterprises lacking proper internal controls.
Employment Tax Issues: There are irregularities related to employment taxes.
Mismanagement of Gaming Revenue: There are improper tax treatments regarding net gaming revenue, including misclassified payments to tribal members.
Misrepresentation for Tax Benefits: Some misrepresent the federal status of their tribe to gain tax advantages.
Misinterpretation of Treaties: There are claims of improper tax relief based on misrepresented treaty provisions.
Tribal lands face a series of issues, including a lack of a proper energy infrastructure and sanitation, pollution, and climate change, among others. Corruption not only prevents tribes from addressing these and other issues, it leaves tribal members vulnerable to exploitation.
The lack of federal oversight of tribal governance creates an environment where corruption can take place. The only way to stop it is if someone is aware of it and reports it. But with limited access to internet and phone service, reporting corruption can be difficult, if not impossible.
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