Treasury Says It's On Track To Send Tribes COVID-19 Funds

By Andrew Westney
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Law360 (May 22, 2020, 8:01 PM EDT) -- Treasury Secretary Steven Mnuchin told a D.C. federal judge Friday that the department is following through on its plan to send out $3.2 billion in COVID-19-related funding to tribal governments, as tribes spent the week furnishing more data requested by the department.

Mnuchin laid out his timetable on May 15 to deliver the remaining $3.2 billion owed to tribes to fight the pandemic, after U.S. District Judge Amit P. Mehta had denied a bid by the Agua Caliente Band of Cahuilla Indians and other tribes to force the department to distribute the money immediately but asked how the distribution would be done.

In a court-ordered status report Friday, the federal government said it is "implementing the plan that it previously articulated to the court" and that "consistent with that plan," Treasury's online portal for tribes to submit information is open.

Tribes now have until Tuesday, the day after Memorial Day, to finish filing the additional tribal employment and expenditure data Treasury says it needs to divvy up the Coronavirus Aid, Relief and Economic Security Act funding.

Representatives for the plaintiff tribes and the Treasury Department did not immediately respond to requests for comment Friday.

The Agua Caliente Band, the Ak-Chin Indian Community in Arizona and six other tribes filed an amended complaint May 3, saying they would suffer irreparable harm — including the need to cut off essential services and lay off staff — unless Mnuchin immediately disbursed the $8 billion in direct tribal coronavirus relief funding in the $2.2 trillion CARES Act, which President Donald Trump signed March 27.

The Treasury Department announced its plan May 5 to distribute the money, saying that the first $4.8 billion distribution would be based on tribal population information used for the Indian Housing Block Grant.

That money began going out May 5 and was mostly distributed by May 8, with only about $162 million being withheld for Alaska Native corporations if the court ultimately agrees with the department they are entitled to a share, Jason C. Lynch of the U.S. Department of Justice said during a May 8 hearing.

The government said at the time that the remaining $3.2 billion would be distributed based instead on the number of employees of each tribe and their businesses, as well as each tribe's expenditures in dealing with the coronavirus outbreak.

In his May 11 ruling denying the tribe's request for an injunction or mandamus relief, Judge Mehta found the plaintiff tribes hadn't shown Treasury's failure to deliver the full $8 billion it owes tribes under the CARES Act had gone so far past the law's April 26 deadline that he should compel the department to send the money.

In guidance posted on the Treasury Department website to assist tribes submitting data for the $3.2 billion distribution, the department asked for each tribe to provide the number of employees the tribal government and any majority tribe-owned entities had for each quarter of 2019.

The department also asked for each tribe's "total governmental expenditures" for 2019 for health, public safety, education, housing, economic development and many other programs — excluding "capital outlays and debt service costs" — as well as the total federal assistance the tribe received for the year.

Mnuchin said in his May 15 report to the court that the department had targeted a June 5 date to start sending out the leftover $3.2 billion, nearly six weeks after the law's deadline to distribute the money.

Treasury said at the time that tribes would have until just before midnight Alaska time on May 26 to respond, and the department then expects to review all the submissions from tribes and determine how much each will receive within another seven business days — by June 4 — and will start payments "no later than the next business day."

The tribes are represented by Keith M. Harper, Catherine F. Munson and Mark H. Reeves of Kilpatrick Townsend & Stockton LLP.

The Treasury Department is represented by Assistant Attorney General Joseph H. Hunt, Assistant Branch Director Eric Womack and Jason C. Lynch of the U.S. Department of Justice's Civil Division.

The case is Agua Caliente Band of Cahuilla Indians et al. v. Mnuchin, case number 1:20-cv-01136, in the U.S. District Court for the District of Columbia.

--Additional reporting by Kelly Zegers and Emma Whitford. Editing by Daniel King.

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April 30, 2020

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