Special Report: The Seneca Nation: One Heritage, Two Worlds
Share the Wealth? Senecas Would Rather Not: Second of Five Parts
Specter of Alcoholism Pervades Tribal History

Critique of Seneca Nation shows economic confusion

Posted: May 28, 2004 -- 11:03am EST
by: Jim Adams / Associate Editor / Indian Country Today

SALAMANCA, N.Y. -- Warren Buffett's new and improved Buffalo News fell into Cardinal Richelieu's very old economic fallacy in its recent multi-part critique of the Seneca Nation of Indians.

A common theme in the five days of hammering was that nation members didn't pay enough taxes, either to their own government or New York state. The reporting team cloaked this familiar special-interest complaint in a display of concern for the income disparity between the rich Native entrepreneurs and the poor, disabled Indians left behind.

The sincerity of this concern can be measured by the scant attention The News team paid to the social programs now under way or in the works with the Seneca Nation's new casino revenue. But if, as we suspect, their real worry was that Indians are getting rich, their obvious economic agenda is designed to solve that problem.

Their outlook parallels that of the 17th century French absolutist Armand Jean du Plessis Cardinal de Richelieu, in the face of a remarkably similar situation. As chief minister of Louis XIII, Richelieu devoted himself to centralizing power and raising taxes. Before he took over, several French regions, called the "pays d'etat," were in effect "domestic dependent sovereigns" by virtue of coming into the realm through marriage agreements, which some historians call the equivalent of international treaties. They had their own parliaments and much lower taxes than the rest of the kingdom and as a result were much more prosperous. Greedy for their wealth, Richelieu constantly maneuvered to destroy their special status and raise their taxes. He succeeded and also destroyed their prosperity.

As Montesquieu later observed in his "Spirit of the Laws", this campaign destroyed a system that spread its benefits afar and should instead have been enjoyed. After the French Revolution, that most astute observer Alexis de Tocqueville singled out this destruction of regional institutions and the disastrous rise in taxation as a major cause for the fall of the Old Regime and the tyrannies of the new one.

If Richelieu, Montesquieu and Tocqueville were too obscure for The Buffalo News writers, they could have learned the same thing from a name they should know from their own sports pages. Former Buffalo Bills star quarterback Jack Kemp, later Congressman from the Buffalo area and Republican vice presidential candidate in 1996, based his political career on "supply-side economics," which derived from 18th century reflections on the disastrous policies of the 17th century. Kemp preached that lowering taxes would stimulate economic growth. As Secretary of Housing and Urban Development he sponsored Enterprise Zones (still going in New York state as Empire Zones), which mimicked the low-tax environment of Indian reservations but without nearly as much success. Perhaps someday someone will explain why the New York state legislature is willing to set up tax-free zones for large corporations but wants to shut them down for Indians.

Just days before The Buffalo News series started running, a Washington, D.C. research group influenced by Kemp's economics released a fascinating report on the Seneca territories. The study, which was not mentioned at all in the News series, measured the economic footprint of the Seneca businesses arising from the nation's sovereign status. By selling cigarettes and gasoline without the state's high excise taxes, Seneca entrepreneurs generated more than $360 million in retail sales and directly employed more than 1,200 people. These benefits rippled through the economy, creating nearly 1,700 additional jobs and a total of $103 million in wages and benefits for New York state workers. Nearly all of this activity would vanish, said the report by the American Economics Group, if the state taxed Seneca sales.

The Buffalo News articles finessed the issue of state efforts to tax tribal sales, which led to vehement protests from the Senecas and tribal grass roots groups around the state in 1997. Instead, the articles campaigned for internal tribal taxation. In a not too subtle call for income redistribution, it contrasted a retired tribal member who couldn't get the council to pay for an air conditioner with a tribal businesswoman who made a $2 million profit selling the 64 acres used for the Seneca Allegany casino. No logic whatever linked a legitimate private business deal with an application for government money. (The News even described the land sale inaccurately, since it would have been to the Seneca Territory Gaming Commission, not the tribal government.) But The News was seeking emotional support for its picture of the two Seneca Nations, rich and poor.

These disparities would be reduced, suggested the series, if Seneca businesses paid a tax to their government. It gave a garbled account of what it called "a bedrock of broken tribal law."

"Six times since the mid-1980s, the Seneca council passed laws aimed at forcing the booming tobacco and gasoline businesses to give back to their own people," said the first article. The trouble here, as the article admitted later on, was that the reporters don't know what they were talking about. They cited interviews with unnamed former tribal officers rather than the texts of the laws, giving the excuse that tribal records "are private." Their statement that current tribal tax laws are going unenforced puzzles Seneca Nation President Rickey Armstrong Sr., who told Indian Country Today that he knows of nothing on the books that matches The Buffalo News assertion.

One of these phantom laws, it appears, was a tax compact that Seneca leadership negotiated with the state government in 1989. This infringement of tribal sovereignty caused a political upheaval that threw that leadership out of office. Another was a 1994 measure The News attributed to Robert Odawi Porter, a Seneca who was then tribal attorney and now directs the Center for Indigenous Law, Governance and Citizenship at Syracuse University. But this law was not merely a tax. It would have set up a tribally-owned monopoly for wholesale distribution to Seneca businesses, a controversial power grab from the get-go.

The involvement of Porter as a source for the series is revealing. He is a close associate of a political faction in Haudenosaunee politics, which has shown unrelenting hostility to private entrepreneurship.

But the idea of a Seneca Nation tax on business is still under discussion, said President Armstrong. His administration has just enacted a hotly contested ordinance to require retailers and wholesalers to obtain annual licenses and is trying to bring some regulation to the Reservation free market. Even though taxation "is a dirty word here," he said, some kind of measure might not be too far away.

He said, however, that he understands why the business community is reluctant to hand money over to a tribal government that in the past has aroused widespread distrust. "The idea that there can be different leaders every two years discourages the businesses from entering into long-term agreements," he said. "I guess you can understand that some of the business leaders are concerned that the president might not be there the next time, and that their money either won't be accounted for or credited to them or misspent."

The tax issue also ties into a New York state drive for price parity on reservations, a fallback from its drive for outright taxation. State negotiators have pushed compacts with other tribes that provided for a tribal levy to a point at which prices would nearly match those of the non-Indian neighbors. The argument is tribes would maintain their sovereignty and reap a windfall of revenue while reducing the political pressure their competitors are bringing on the state. This plan fails to consider, however, whether anyone would bother to drive to a reservation for gas or cigarettes without the lure of a significantly lower price. It could wind up damaging the reservation economy almost as much as a state-imposed tax.

While bypassing these considerations, The Buffalo News did manage to work in hostile comments from a lobbyist for the National Association of Convenience Stores, which has devoted itself to eliminating the tax advantage for reservation businesses and the taxation powers of tribal governments. This lobby pushed for the New York state legislature's budget directive last year to start taxing reservation sales to non-Indians -- a unilateral action taken without the consent of the Indian governments.

This group is also behind a federal bill to eliminate Internet cigarette sales. (According to the General Accounting Office, the research arm of Congress, up to 40 percent of the Internet cigarette sales companies are based on the Seneca's Cattaraugus territory.) With its allies in the gasoline station business, it is supporting the wholesale attack on tribal sovereignty launched by the anti-Indian Oklahoma-based One Nation group.

This narrowest of special interest groups has shown no concern for the social cost of destroying reservation economies, even though the bulk of the impact would fall on non-Indian employees and suppliers.

This imbalance brings Seneca Nation President Armstrong to see a hidden agenda behind the News series. "What are they trying to obtain here?" he asked. "All of our backing we gained against attacks by the state of New York, we had eroded by these articles."

"Maybe I'm too suspicious or paranoid but I kind of link it to that," he said. "These people have never been the champion of Native Americans, much less the Senecas, and what is their motive? Every time Native Americans might elevate themselves or stick their head over the rim, so to speak, they slap it back down."

This attitude, which brought the State Legislature to mandate taxation of Indian reservations, has found an echo in The Buffalo News. Like Richelieu, it seeks to eliminate a prosperity it should be enjoying.

Niman: The Buffalo News, Dissin' the Senecas with a colorful new same old same old

Posted: May 28, 2004 -- 10:49am EST
by: Michael I. Niman / Professor / Communications Department / Buffalo State College

It's no secret that when you buy a can of Coca Cola, the can costs far more than the tainted water it holds. In the same vein, footwear companies often spend more to advertise their wares than they spend to manufacture them. Today's market is all about the triumph of hype over substance. Hence, it should surprise no one that beneath all the hype surrounding the May 16 debut of the new improved Buffalo News, was the same tired old Buffalo News. The much-awaited multicolored polka-dotted dog was finally, amid great fanfare, out of the cage. But all it did was dart to the nearest hydrant.

I'm not one to expect much from The Buffalo News, but I was greatly disappointed to see that paper's first crisp color cover marred by racist reporting. The cover story, touted by News Editor Margaret Sullivan as an example of her paper's "enterprise reporting" focuses on the disparity in wealth in the Seneca Nation. It's good reporting based on solid research. The problem is that virtually all of The News' complaints against the Senecas also apply to their neighbors in the United States. So one really has to ask, why start out with a series attacking a neighboring nation for the same evils practiced without criticism right here in the U.S.?

The article, which threatens to be a series, starts out with an editor's praise of its authors, who report on "a nation deeply split between rich and poor, powerful and powerless." Sound familiar? It should. Because it's us. And this is where such reporting should begin -- with introspection, instead of sanctimonious condemnation of a captive nation emulating our economic model.

This would be especially apropos, since The News, owned by the world's second richest person, serves one of the United States' poorest cities. In essence, the paper itself embodies everything it condemns in the Seneca Nation.

The article opens by describing "a couple dozen Seneca merchants" who "earned an estimated $162 million last year." Just so readers understand what the number represents, they explained that this is equivalent to what the Neiman Marcus department store chain, with 62 locations in 24 states, earned in 2002. Yeah, we got it. It's a lot of money. They quickly juxtaposed this with the fact that "nearly one third of all Senecas live in poverty."

This is all legitimate, and under other circumstances, I'd be praising The News for taking such a strong position against the greed of an unabashed capitalist market. The fact is, however, that they never followed the lead of other American newspapers such as the Philadelphia Enquirer, writing the same story about growing economic disparities in their own community or country.

The $162 million dollars earned last year by "a couple dozen" Senecas, for instance, pales in comparison to the approximately $3.5 billion dollars that The News' owner, Warren Buffett, "earned" during each of the last eight years.

And yes, the poverty rate among Senecas is around 30 percent and this is shameful. But the poverty rate in Buffalo, according to the pre-Bush II era 2000 U.S. census, was 27 percent. So why the sanctimony? It gets worse. On the East Side of Buffalo, the poverty rate is over 50 percent. And things certainly haven't gotten better under Bush. Suddenly the Seneca numbers have a new context.

The News reports that the child poverty rate among Senecas is between 39.8 percent and 41.6 percent. The poverty rate for families with pre-school children in Buffalo, by comparison, is 43.3 percent overall and 65.3 percent on the East Side. Again, why launch a new re-grooved newspaper attacking the Senecas for problems that are more severe in the Buffalo News' own community?

You also can't write this story devoid of history. The U.S. forced this model upon the egalitarian Senecas after invading their territories, forcibly dismantling their economic system. The construction of both elite and impoverished classes among the formerly egalitarian Seneca is an all-American construct.

Yes, the current distribution of income in the Seneca Nation is inequitable. But consider this -- The Buffalo News' owner, Warren Buffett, "earns" more per year than all of the workers in Buffalo combined (see actual numbers below). In this light, examine this line from The News' article: "Those [Seneca] mini-mart barons and others refuse to formally share their new millions -- even if the sovereignty that allows them to make their fortunes belongs to all Senecas."

Given The News' newly found communism, doesn't this condemnation of the Seneca elite also apply to Buffett, whose wealth is protected by an American sovereignty that belongs to all Americans? Or, more to the point, when should we expect our checks?

(Here are some numbers: Buffett's net worth increased by $27.9 billion from 1996 to 2004. This is an annual average of $3.48 billion per year. Buffalo had a population of 223,437 in 2000, earning $14,991 apiece for a grand total income of $3.34 billion.)

Michael I. Niman Ph.D., is a professor of journalism at Buffalo State College, a syndicated columnist and the recipient of a 2003 Project Censored Award. His previous columns are archived at http://www.mediastudy.com.

Seneca Nation in positive mode, despite hack attack

Posted: May 28, 2004 -- 10:29am EST

The Buffalo News, a rich monopoly of a newspaper, recently launched a cynical and trouble-baiting series ("Special Report: The Seneca Nation") lambasting the Seneca Nation of Indians, its government and the very potentials it might have to identify and resolve its own issues and problems.

For all its hyperbole the work failed to meet expectation. In fact, on matters of perspective and context we challenge the series in this issue with some focused dedication to the Seneca Nation and its recent agenda of economic advancement. While generally direct in the stories it chose to present, The Buffalo News can be seriously faulted in its attitude; in its lack of simple respect for a wide variety of Seneca people, its entrepreneurs, professionals and journeymen, and those who make up the government, its many departments, policy and action groups. The seemingly blatant attack against the Seneca Nation in The Buffalo News follows the example of other media that assume the worst of Indian nation strategies that pursue political and economic advantages for their tribal enterprises. We recommend to all Senecas to cast a wary eye on this piece of reporting. Beware hatchet jobs that exploit whatever dysfunction they can find. While the series may point out particular problems that need attention in your nation and your government, the articles seek to indict, not to resolve issues and problems facing Indian peoples.

Four Haudenosaunee nations in New York state are pursuing intense economic and political strategies: Oneida, Mohawk, Seneca and, negotiating hard, Cayuga. These governments are leading the charge to establish pragmatic economic bases for their peoples. The Seneca Nation, Western Doorkeeper of the Six Nations Confederacy, is going great guns behind an agreement with New York state that opened the door for three Seneca casinos that will essentially dominate gaming in the whole Western region of New York state -- that is already tapping into Canada's highly-populated region of Southern Ontario as well as significant markets in Pennsylvania and Ohio. As you will see reported in these pages (and in last week's edition), the process by which Seneca Nation leadership pieced together and executed the strategy that now fuels its enterprise is as fascinating and unrelenting as it is incomplete. Whatever the pitfalls (and they are many) of nation building in Indian country, and however the Seneca people ultimately deal with the substantial potentials of their current agenda, we fully endorse the positive nature and direction of the recent Seneca Nation protagonism. After centuries of dispossession, nothing is more important to Native peoples than governments and individual families that finally can move, can accomplish by initiating large and difficult and ultimately necessary actions. The launching of a major economic recovery by a long-disempowered people is always a wonderful story for Indian country.

Painting darkly with a wide brush what many are seeing as a great success story, the News would lead us to believe the Seneca Nation is mostly a crime-infested, chaotic wasteland of a community, from which only trouble and corruption can be expected. Inferring the wrongdoing of individuals and their own misconceptions about American Indian rights to indict the whole Seneca government, the loudly projected series by News reporters, Michael Beebe, Dan Herbeck and Jerry Zremski is a nasty piece of work, clearly intended to heighten tensions and disunity among the various sectors of the Seneca people. But we're not buying it. The series comes lightly wrapped in a couple of sympathetic profiles of individuals but any trained media observer will see that the approach is fundamentally to malign the nation's leadership and structure of government.

The style tells the perspective. Immediately, the News stresses the contrast between a very successful Seneca millionaire and a very poor Seneca man. Throughout the series, the authors identify poor or disadvantaged Senecas, only to pit the emotion of the reader against the success of what the News calls "a couple of dozen" but who in fact constitute over 100 Seneca fuel and tobacco products enterprises.

We know this much: the Seneca Nation is on the move economically. True enough, most of its businesses are based on tribal rights predicated upon their own powers of taxation (or non-taxation) and other advantageous tribal jurisdictional regulatory powers. Nevertheless, just the Seneca trade and commerce in fuel and tobacco products generates over a thousand jobs on and around the reservations. The News refers to "a couple of dozen" such rich businesses; in fact, there are over 100, with a combined payroll of $100 million and some $400 million in estimated purchasing. The resort hotels and casinos development process now being brought online by the Seneca Nation, which will add thousands of jobs and hundreds of millions of dollars to the regional economy over the next decade, the News attacks, even as it just begins to grow. The necessary activities that come with economic success -- costly political lobbying, entertainment of high-rolling clients (all standard industry operating practices) -- the News dismisses as a "spending spree" by the nation. As with the example of TIME Magazine and The Wall Street Journal hatchet jobs on American Indian economic interests, The Buffalo News chimes in with disparagement and seething negativity.

The dark tone of The Buffalo News, symbolic of so much knee-jerk coverage of the Indian process these days, is in itself a predictable, misguided approach to the growing strength of Indian peoples as nations and as major economic players. The economic revolution in Indian country is a great story, we believe, and rather than negative, the metaphor that truly describes it should be positive. In the scope of two to three years, the long-impoverished Seneca Nation has fielded an efficient, decisive team and has emerged as a major economic and political player in Western New York.

Who would have thought this achievement possible when set against the limitations of single two-year terms of office for its presidential administrations? But what the Seneca have lacked in constitutional structure it has more than made up through adherence to forward-thinking policies shared by several successive presidents -- including Cyrus Schindler, who forged the gaming compact with New York Governor George Pataki in August 2002, and Rickey Armstrong, who is currently overseeing a dramatic expansion of the nation's enterprises. Their efforts, and those of the council and professional staff, is setting the table for a Seneca future based upon opportunities for all who pick themselves up and work hard.

Regional power brokers are well aware of this new reality. Lobbying, working and allying with key politicians, fielding media campaigns -- most of it as expensive as it is necessary given the historical reality of anti-Indian backlash -- has now become an essential component of the agenda for any responsible Indian government. These activities, all legitimate and quite normal for tribal governments and their corporations, The Buffalo News besmirches as somehow dishonest or unethical, again, since so many Seneca are impoverished. Of course, they know and the Seneca leadership knows, the game does not work that way. A people on the move must lobby and do public programs and contribute to political campaigns and all of it must be done when needed without fail.

Curiously, since the News could apply this standard to any successful American business as well, the three reporters single out one thriving Seneca businessman, Barry Snyder, and critique him (as symbol of other Indian businessmen) for running a profit-making enterprise by using nation sovereignty advantages, while other Seneca people (they note a Mr. Skip Gates) are poor. Therein our question: whatever his motivations, is Barry Snyder a bad guy because he allegedly has not donated to this poor man, to whom readers will of course be sympathetic. The implication is that Mr. Snyder is actually responsible for the fate or financial state of Mr. Gates. Buffalo State College Journalism Professor Michael Niman notes in these pages, however, that by its own logic, the News might demand the same of its owner, Warren Buffett, the second richest man in the world. Writes Niman: "Yes, the current distribution of income in the Seneca Nation is inequitable. But consider this -- The Buffalo News' owner, Warren Buffett, "earns" more per year than all of the workers in Buffalo combined." So, who can claim the seat of perfection? Moreover, how is this one man's poverty attributed to the financial success of another? Entrepreneurial opportunities exist for all Senecas who are so inclined. And if not inclined, thousands of jobs have already been created in Seneca territories with thousands more on the way. The Seneca Nation already has in place an active recruitment and employment program for its citizens needing employment.

No doubt, as The Buffalo News so willingly bemoans, there are many disparities and economic problems in the Seneca communities of Cattaraugus and Allegany. The business sector has grown quickly and powerfully and would do well to strive for an image and reality of magnanimity and generosity toward the more disadvantaged in their midst. This is simply good human being culture and certainly within the superlative teachings found in Seneca tradition. As the government gains strength, which would be greatly aided by a constitutional referendum extending the elected term of Presidential service to four years, it will become increasingly empowered to institutionalize and enforce its own policies.

We report elsewhere in these pages that the nation leadership is quite aware of the need to lead in this respect. Contrary to the condescending tone in The Buffalo News, much is in the offing to tackle the grave housing, educational and health issues that have plagued the Seneca population for centuries. The News makes much of the alleged fact that while the Seneca government has attempted to tax or assign tribal fees to their business sector it has not been able to enforce these laws. But this issue, too, requires more accurate investigation. Tribal officials dispute the assertion stating that what the News article describes does not match up with their legislative and law enforcement history. In the meantime, the nation supports its citizens' businesses as they remain competitive in regional markets -- to the apparent chagrin of The Buffalo News and its perceived constituency.

Increasingly educated and progressive, the Seneca Nation leadership has conducted a major campaign for its 7,300 members over the past several years. A strong economic framework, staffed with an increasingly educated professional base of talented and dedicated Indians, is the remedy for inefficient or weakened Indian governments. We caution the Seneca people, stalwart guardians of the Western Door, to not succumb to the inducements of those who would exacerbate tribal dysfunction and assign failure at a time of success, great hope and opportunity. The problems pointed out by The Buffalo News are quite old. The solutions must be new, and must come from the inside. We are confident the Seneca Nation and its people face wonderful, challenging and productive days ahead.