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Archive for Monday, February 26, 2007

Tribe leads American Indian business away from casinos

February 26, 2007

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— Rising from the bluffs of eastern Nebraska, on the sparsely populated, historically poor Winnebago Indian reservation, stands a glass-paneled office building.

The out-of-place structure is home to Ho-Chunk Inc., a $100 million business with more than 500 employees in six states, Mexico, Iraq and Afghanistan.

Ho-Chunk, the economic development arm of the Winnebago Tribe, is similarly remarkable in the world of American Indian business, because its success has little to do with gambling.

Employees of one of the company's 16 subsidiaries pose as civilians on faux battlefields in Indiana so U.S. soldiers can hone their combat instincts.

A Ho-Chunk subsidiary in Mexico provides technical support for a new DNA laboratory used in criminal cases. And since 2005, Ho-Chunk subsidiary All Native Systems has had a multimillion dollar contract with the U.S. State Department to provide support for rebuilding Iraq's governmental infrastructure.

A housing project financed by Ho-Chunk Inc. rises from the plains of eastern Nebraska. On the sparsely populated, historically poor Winnebago Indian reservation, stands a glass-paneled office building. The out-of-place structure is home to Ho-Chunk Inc., a $100 million business with more than 500 employees in six states, Mexico, Iraq and Afghanistan.

A housing project financed by Ho-Chunk Inc. rises from the plains of eastern Nebraska. On the sparsely populated, historically poor Winnebago Indian reservation, stands a glass-paneled office building. The out-of-place structure is home to Ho-Chunk Inc., a $100 million business with more than 500 employees in six states, Mexico, Iraq and Afghanistan.

Ho-Chunk, derived from a Winnebago term that translates to "The People," is trying to end the cycle of poverty that has plagued many reservations for hundreds of years. In Winnebago, median household income is around $20,000 and more than 40 percent of people don't make enough to live above the federal poverty line.

"It's not like we're a rich tribe," said Ho-Chunk CEO Lance Morgan. "We're just one of the best of the poor tribes."

Ho-Chunk is part of a growing trend of diversification by American Indian tribes.

Casino revenue is inherently unstable in many states. Contracts must be renegotiated with each new governor, legal fights over casino issues drain income from tribal budgets and legalized gambling in some states brings new competition.

"Tribes are finding that gaming, while it's been successful for many, it's not the only answer," said Kip Ritchie, a vice president of the economic development arm of the Forest County Potawatomi Community in Wisconsin and touts a portfolio of investments and assets of more than $26 million.

Ho-Chunk and the Winnebagos are ahead of the game when it comes to sustaining a diversified economy, said Prof. Joseph Kalt, co-director of the Harvard Project on American Indian Economic Development.

U.S. tribes now have more than $22 billion in annual revenues from gambling, according to government figures.

But casino profits deflated for the Winnebago Tribe after a 1994 Iowa law allowed casinos to be built just across the river from Omaha, a 1 1/2-hour drive from the Winnebago reservation.

Fortunately, tribal members took $8 million in casino money in 1994 and 1995 and put it toward a new venture.

Ho-Chunk started out with what Morgan calls "stereotypical Indian business," tobacco and gasoline. It started companies to serve primarily tribal members, then branched out once they were established. The group's biggest project has been Ho-Chunk Village, a development northeast of town.

A homey village square surrounds a sculpture garden filled with 12 statues representing the original clans of the Winnebago Tribe. A hair salon, art studio, Dollar General store, and an Indian gift store are mixed with the headquarters of several of Ho-Chunk's businesses.

The key to pulling Winnebago out of poverty is to keep young people from fleeing the reservation, Ho-Chunk leaders say.

Young people such as 25-year-old Victoria Kitcheyan, a former intern for the company who now works at Ho-Chunk administrating government contracts. She spent her early childhood on the reservation, then moved to Connecticut with her family, which moved back to Winnebago her senior year of high school.

Kitcheyan went to Haskell Indian Nations University in Lawrence, Kan., then returned to Winnebago for Ho-Chunk's internship program in the summers of 2004 and 2005.

When Kitcheyan graduated in May 2006 she already had a job with Ho-Chunk lined up, but if not for the company, she wouldn't be living near family in Winnebago now. Fifteen years ago, there weren't jobs in business administration in the town.

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