By Andrew Westney

Law360 (April 17, 2020, 10:33 PM EDT) -- Six tribes hit Treasury Secretary Steven Mnuchin with a lawsuit Friday in D.C. federal court over the department's plan to give Alaska Native Corporations funding meant for tribal governments to fight the coronavirus, saying that the funding is a zero-sum game and that the corporations' share could cost federally recognized tribes billions of dollars.

Three federally recognized tribes from the Lower 48 states and three from Alaska said in their complaint that Mnuchin "threatens to defy Congress's mandate" in the $2 trillion Coronavirus Aid, Relief and Economic Security Act by allowing the for-profit corporations, known as ANCs, to receive part of $8 billion in direct tribal funding in the $2 trillion Coronavirus Aid, Relief and Economic Security Act.

The ANCs are not tribal governments, the federally recognized tribes argued, and can seek funding through other parts of the CARES Act that the tribes can't, according to the complaint.

"Congress is clear that Title V relief funds are to supplement 'government' budgets, not corporate coffers," said the plaintiffs: the Confederated Tribes of the Chehalis Reservation and the Tulalip Tribes, located in Washington; the Houlton Band of Maliseet Indians, in Maine; and the Akiak Native Community, Asa'carsarmiut Tribe and Aleut Community of St. Paul Island, in Alaska.

If the Treasury Department decides to divide the $8 billion equally among the 574 federally recognized tribes, they would receive nearly $14 million apiece, but would receive under $10 million each if the 12 Alaska Native regional corporations and 225 Alaska Native village corporations are included in that split, according to the complaint.

And if Treasury relies on information it has requested from applicants for the funding, including population, land base and employees of each tribe, the share of each federally recognized tribe "will be vastly reduced, given their more modest population, land base, and economic size" relative to the ANCs, the plaintiff tribes said.

The "defined, limited pool" of funds for tribes must be distributed by April 26, the plaintiffs said, and once that happens, tribal governments "will lose any access or ability to receive the portion of that limited pool illegally appropriated to the ANCs."

"Plaintiffs are in dire need of these funds to cover the governmental costs resulting from the increased and necessary expenditures associated with the COVID-19 pandemic," they said.

The $8 billion "tribal stabilization fund" in Section 601 of the CARES Act makes emergency funds available for costs incurred fighting the virus that causes COVID-19 from the Treasury Department, in consultation with the DOI's Bureau of Indian Affairs.

The controversy over the inclusion of ANCs in the funding centers on language in the CARES Act that defines "Indian tribes" based on a definition from the Indian Self-Determination and Education Assistance Act that includes Alaska Native Corporations, as well as a definition of "tribal governments" in the new law.

Specifically, the ISDEAA, the law that governs federal self-determination contracts with tribes, defines "Indian tribe" as "any Indian tribe, band, nation, or other organized group or community, including any Alaska Native village or regional or village corporation as defined in or established pursuant to the Alaska Native Claims Settlement Act, which is recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians."

In their complaint Friday, the six tribes said that the ANCs don't meet the last part of the definition because they are not "recognized as eligible" for those federal programs.

And the CARES Act additionally defines a "tribal government" for purposes of the law as the "recognized governing body of an Indian tribe," which cuts out the ANCs because they "are not governments, they do not govern, and they do not provide government services," the tribes said.

"Even if [ANC boards of directors] could be characterized as 'governing bodies,' which they cannot, these boards are not 'recognized,'" as they don't have a government-to-government relationship with the United States, according to the complaint.

And if ANCs receive funding, because some shareholders in the corporations are also tribal members, "some entities in Alaska would effectively 'double dip' (in some cases 'triple dip') from the limited pool of funds, with the same community receiving duplicative funding – one allotted to the corporation(s), and the other directly to the federally recognized tribal government," the plaintiff tribes said.

Chehalis Tribe Chairman Harry Pickernell Sr. said in a statement from the plaintiffs Friday that while they oppose the ANCs receiving funding, they "fully support the ability of tribal governments to transfer any relief funds that they receive from Treasury to ANCs or other nongovernmental entities if those tribal governments determine that is in their best interest."

Representatives for the Treasury department did not immediately respond to request for comment Friday.

The tribes are represented by Riyaz Kanji and Cory J. Albright of Kanji & Katzen PLLC; Harold Chesnin of the Confederated Tribes of the Chehalis Reservation, and Lisa Koop Gunn of the Tulalip Tribes.

Counsel information for Mnuchin was not immediately available Friday.

The case is Confederated Tribes of the Chehalis Reservation v. Mnuchin, case number 1:20-cv-01002, in the U.S. District Court for the District of Columbia.

—Additional reporting by Stephen Cooper and Andrew Kragie. Editing by Peter Rozovsky.

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