Choctaws Prevail at FEC in Vote About Donations

Posted March 11, 2005 at 5:31pm

A proposed construction business will not jeopardize the ability of the Mississippi Band of Choctaws to make federal political contributions, the Federal Election Commission ruled last week.

In a 4-2 split, the FEC ruled that the Choctaw tribe would not be considered a federal contractor even if a new tribally chartered corporation called IKBI Inc. seeks construction contracts from the federal government.

Going against the advice of the FEC’s own general counsel, the watchdog agency decided there was enough legal separation between the tribe and IKBI so as not to subject the tribe to a federal law that bans political contributions from government contractors.

The politically active tribe, which runs two successful casinos in Philadelphia, Miss., had requested formal advice from the FEC to ensure that it is operating completely within the purview of federal election laws as it sought to get IKBI off the ground.

“We are pleased that the federal government did not make the tribe choose between economic development and participation in the political process. We need both if we are going to protect our sovereignty and enhance the lives of future generations,” Tribal Chief Phillip Martin said in a statement after the FEC reached its decision.

Since IKBI will be seeking federal construction contracts from several agencies, including the Federal Aviation Administration and the General Services Administration, the tribe wanted to make sure that its backing of bonds for IKBI isn’t a problem.

But the FEC ultimately said the co-indemnity agreement was not an issue.

During a public discussion of the issue last week, Ellen Weintraub, a Democratic member of the commission, said the FEC’s decision was consistent with its prior determinations on such matters. She suggested that the tribe should not be penalized for trying to get a company off the ground.

Her colleague, Democrat Danny McDonald, agreed that “tribes shouldn’t have to make a choice” between political giving and pursuing business opportunities.

FEC Chairman Scott Thomas, also a Democrat, joined McDonald and Weintraub and ruled in favor of the Choctaws. Brad Smith, who was absent from the meeting, cast his vote in favor of the Choctaws in a later circulated tally.

The two dissenting voices were GOP Commissioners Michael Toner and Dave Mason.

Tribal leaders hailed the March 10 vote as confirmation that its activities, both in the construction industry and the political arena, were solidly protected under the law.

“IKBI has voluntarily delayed its intent to become a federal contractor until this clarification was forthcoming, and is now free to move forward with its established purpose. At the same time, the tribe may continue to exercise its First Amendment rights with continued participation in the national political process,” the Choctaws said in an official statement released after the decision.

Under federal law, the Choctaws, as an American Indian tribe, are allowed to use tribal funds to give directly to federal campaigns, without facing restrictions that limit other types of donors.

Over the past decade, the tribe has spent millions of dollars lobbying Congress and made millions more in political contributions.

In 2003-04 alone, the Choctaws gave more than $498,000 in donations to the campaigns of incumbent Members of Congress, party committees and prominent 527 groups.

The Choctaws have attracted unwanted scrutiny in the past year due to the tribe’s ties to former Republican lobbyist Jack Abramoff, who is at the center of a federal investigation of his work on behalf of a half-dozen Indian tribes.

Mason, who along with Toner was preparing a dissenting opinion on the matter Friday, said that while he doesn’t believe the Choctaws should be punished for Abramoff’s sins, he does believe there are enough concerns about tribal political activity that the FEC should not completely set aside such issues when setting policies. In particular, Mason said, the FEC should not ignore questions raised in news stories about the connection between contributions and appropriations.

He also argued that the Choctaws had other options available to them other than just giving directly to candidates. They could, for instance, set up a political action committee, as some federal contractors do.

The determining factor in the vote was Commissioner Thomas, who came into Thursday’s meeting “on the fence” but by the end of the discussion agreed that the tribe should be granted more flexibility, not less.

Bryant Rogers, the New Mexico-based attorney who represented the Choctaws before the FEC, said such flexibility is necessary if the tribes are ultimately going to be able to be self-sufficient communities that can meet their health care and education needs.

“I’ve seen them go from utter poverty to having the capability of providing for their members,” said Rogers, who has been working with the Choctaws since 1972. While he acknowledged the tribe still has a long way to go, he added, “They’ve gone from absolutely the bottom to having a chance to really give their members choices in life.”