Las Vegas Sun

March 28, 2024

Casino investments help Choctaws escape poverty

PHILADELPHIA, Miss. -- Raenell Vaughn and her three young daughters will never share similar childhood memories -- and for that she is grateful.

The 38-year-old Indian remembers pumping water from a well, standing in line to use an outhouse and hearing her mother and grandmother tell of backbreaking days picking cotton in the sticky heat of a Mississippi summer.

But Vaughn's daughters -- ages 10, 12 and 14 -- will remember having a mother who's a chief justice of the Choctaw Supreme Court for the Mississippi Band of Choctaw Indians. They will remember a grandmother who lives in a nice house and drives a late-model car and a great-grandmother who went back to school to get her high school diploma.

It is precisely such stark contrasts between two generations' memories that highlight why the Mississippi Choctaws are often singled out as being among the most economically successful of the nation's 559 federally recognized tribes.

How did the 9,000-member tribe rise from dire poverty to become an economic powerhouse whose various business enterprises generate about $450 million a year -- and do it within one generation?

Chief Phillip Martin, the 77-year-old democratically elected head of the Choctaw Tribal Council since 1979, says simply, but proudly, "We developed an economy."

That's an understatement.

Just 40 years ago -- even in a state that's traditionally been among the nation's poorest -- the Choctaws' poverty stood out: The tribe's unemployment rate was 80 percent; 88 percent of tribal households had annual incomes under $3,000, according to tribal records. Just over two dozen tribal members could say they had at least some college.

"It was not the easiest thing living here," Vaughn said.

But by 2001, tribal median household income was $25,000. Unemployment was down to 4 percent. And 400 of the tribe's young people were enrolled in college on full scholarships paid for out of bulging tribal coffers.

The Choctaw reservation -- spread across 10 counties but mostly in Neshoba County -- nearly doubled in land area to 35,000 acres. Tribal members began returning to the reservation, and tribal membership tripled to 9,000.

"I grew up in Brandon, and I just moved here a year ago," said Tonka Wallace, 29, who got a business administration degree from Belhaven College with the help of a tribal scholarship. "When they paid for my college I wanted to pay back the tribe."

There's little argument that it was Martin's vision and leadership, coupled with federally directives to encourage tribal sovereignty, that ignited the Choctaw's economic renaissance. And that the crowning touch was the decision to use the 1988 Indian Gaming Act to get into casino gambling.

The still raven-haired Martin also says the tribe began aggressively pursing federal grants and other federal funding for housing, health care, infrastructure and education projects.

Martin says he doesn't know exactly how much the tribe receives every year in federal assistance. A recent cover story in Time magazine, citing government audit reports, said that in 2001 the Choctaws collected $50.4 million from close to 70 government programs.

Federal money has helped pay for eight schools, a 43-bed hospital, 120-bed nursing home, ball fields, paved roads and new subdivisions.

Then there was the tribe's 1979 decision to invest in businesses to create jobs and income for its members. Starting with a $2 million loan to open an auto wire harness plant to serve General Motors Corp., the tribe has opened 22 businesses and is majority owner in three joint ventures.

Its biggest venture: The $600 million Pearl River Resort in Neshoba County with its two casino-hotels, water park and recently opened Hard Rock Beach Club.

"It was the best decision we ever made," Martin said. "We needed to create more jobs and there's no business outside gaming that can generate as big a return on investment."

The Choctaw tribe, whose sovereign nation status exempts it from most government taxes, says its 2002 economic impact on the state was $1.2 billion and that it has created more than 8,000 jobs, more than 60 percent of which are held by non-tribal members. It values its assets at $1.4 billion.

Net revenue for the Choctaw Resort Development Enterprise, which controls the resort, was $248.2 million in its 2002 fiscal year. But the expense of opening a second casino-hotel last fall and a softer economy took a toll: Net income fell more than 50 percent each of the last two quarters, forcing the resort to renegotiate terms with its lender.

The tribe also deals with the jealousy and anger that sometimes erupts over its success and special status as a sovereign nation -- a status that allows it to avoid the 12-percent state gaming tax paid by the state's 29 other casino operators.

The tribal used a statewide public relations campaign to fight off a 2001 lawsuit, ultimately unsuccessful, that sought to force it to pay gaming taxes. Last year, some Mississippi auto dealers unsuccessfully fought the tribe's acquisition of a Ford franchise in Carthage, saying the tribe's sovereign nation status gave it an unfair competitive advantage.

"There are people who think we have bushels of money laying around all over the place," Vaughn said. "But when we were down and out, where was the state? Now, everybody wants to ride the winning train."

Behind the scenes, the tribe uses its newfound affluence to wield political clout.

Of the $7 million Indian tribes gave to federal political candidates and groups in 2001-02, the biggest donor was the Mississippi Choctaw tribe: It gave $615,000, according to information compiled by the Associated Press from the Federal Election Commission and PolitcalMoneyLine.

More than money spent to grease political wheels, tribal members credit Martin with their economic revival. Earlier this month, they expressed their approval by re-electing him to a seventh term.

"I think people are quite satisfied in the direction that the tribe is going overall," Vaughn said. "We're in a renaissance. We are standing on the shoulders of those who struggled and here we are in the sunshine. And life is good."

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