Tribe Sues Treasury Over Use of ‘Highly Unreliable’ Metric to Allocate CARES Funding

Prairie Band suit is corroborated by a recent Harvard Project on American Indian Economic Development report that reveals Treasury relied on a population data series that produces “arbitrary and capricious” representations of Tribes’ enrolled citizens to calculate the dispersal of CARES Act funds. 

Treasury used a flawed population metric to allocate a portion of the $8 billion in COVID-19 relief funds to Tribes under the CARES Act, resulting in the severe undercounting and underfunding of some Tribal Nations, according to a lawsuit filed in D.C. federal court Monday. 

The department ignored Tribal enrollment data and instead “adopted a highly unreliable and controversial race-based formula used by the Department of Housing and Urban Development to distribute Indian housing funds,” the Prairie Band Potawatomi Nation states in its suit. “Without advance notice that it was using this formula, Treasury then distributed $4.8 billion to Tribal governments.”

The Prairie Band received $2.45 million in CARES Act funds based on a population of 833, although its Tribal enrollment, on and off its northeast Kansas reservation, exceeds 4,500 members. The HUD formula that was adopted by Treasury undercounted the Nation’s enrolled population by 80%, according to a Tribal statement. 

“As a result of this absurd decision, the Nation was denied nearly $8 million in funding that it otherwise would have received,” the Tribe states. 

Meanwhile, many Tribes had their population listed as zero, and thus received the minimum funding, $100,000.

The Prairie Band’s complaint cites the Delaware Tribe of Indians, whose enrollment is upwards of 11,000, but its population under the housing block metric is listed as zero. The Delaware Tribe was also referenced in a recent report by a team of researchers from the Harvard Project on American Indian Economic Development, the University of Arizona and UCLA. The report found that Treasury employed a population data series that produces arbitrary and capricious “over-” and “under-representations” of Tribes’ enrolled citizens. 

The 32-page study demonstrates that the first $4.8 billion of the CARES’ $8 billion set aside for Tribal governments — allocated across the nation’s 574 federally recognized Tribes in proportion to populations based on HUD data — is not based on definitive data. “Different Tribal population data series are available, and different series give rise to very different allocations of CARES Act dollars,” the study states. 

The Prairie Band Potawatomi Nation suit seeks a preliminary injunction to prevent Treasury Secretary Steven Mnuchin from distributing the remaining $8 billion CARES Act Tribal set aside for 21 days, until a more accurate funding formula consistent with the CARES Act can be developed. Without an injunction, the remaining $3.2 billion in CARES Act funds for Tribes will soon be “totally depleted,” the Tribe noted.

The Prairie Band Potawatomi Nation explained how the departments of Treasury and Interior ignored Tribal recommendations to use Tribal enrollment data and instead used HUD figures to determine disbursement amounts. In April, Treasury and Interior solicited input from Tribal leaders on how best to distribute the funding. Tribes were later requested to provide certain data to help generate a distribution formula. A centerpiece of the data request was that each Tribe provide its total enrolled population, the best measure for determining a Tribal government’s service obligation. But Treasury opted instead to leverage the “highly unreliable and controversial race-based formula” used by HUD.

“Only Tribal enrollment numbers accurately reflect the true scope and extent of a Tribal government’s responsibility to its citizens,” the Prairie Band Potawatomi Nation said.

Joseph Rupnick, Chairman of the Prairie Band said, “The Tribal Council and I are appalled that the Treasury Department wrote off a significant portion of the Prairie Band Potawatomi Nation’s membership when making the initial CARES Act distribution. This suit is intended to restore justice to our Tribe and other similarly situated Tribes. We don’t want to see Treasury distribute any more CARES money until it fixes the problem from Round 1, and we have a chance to see the formula that Treasury intends to use for Round 2.”