5 Ways The Government Keeps Native Americans In Poverty

Indian Reservation

Native American Reservation

By Shawn Regan | Forbes

Imagine if the government were responsible for looking after your best interests. All of your assets must be managed by bureaucrats on your behalf. A special bureau is even set up to oversee your affairs. Every important decision you make requires approval, and every approval comes with a mountain of regulations.

How well would this work? Just ask Native Americans.

The federal government is responsible for managing Indian affairs for the benefit of all Indians. But by all accounts the government has failed to live up to this responsibility. As a result, Native American reservations are among the poorest communities in the United States. Here’s how the government keeps Native Americans in poverty.

Indian lands are owned and managed by the federal government.


Chief Justice John Marshall set Native Americans on the path to poverty in 1831 when he characterized the relationship between Indians and the government as “resembling that of a ward to his guardian.” With these words, Marshall established the federal trust doctrine, which assigns the government as the trustee of Indian affairs. That trusteeship continues today, but it has not served Indians well.

Underlying this doctrine is the notion that tribes are not capable of owning or managing their lands. The government is the legal owner of all land and assets in Indian Country and is required to manage them for the benefit of Indians.

But because Indians do not generally own their land or homes on reservations, they cannot mortgage their assets for loans like other Americans. This makes it incredibly difficult to start a business in Indian Country. Even tribes with valuable natural resources remain locked in poverty. Their resources amount to “dead capital”—unable to generate growth for tribal communities.

Nearly every aspect of economic development is controlled by federal agencies.

All development projects on Indian land must be reviewed and authorized by the government, a process that is notoriously slow and burdensome. On Indian lands, companies must go through at least four federal agencies and 49 steps to acquire a permit for energy development. Off reservation, it takes only four steps. This bureaucracy prevents tribes from capitalizing on their resources.

It’s not uncommon for years to pass before the necessary approvals are acquired to begin energy development on Indian lands—a process that takes only a few months on private lands. At any time, an agency may demand more information or shut down development. Simply completing a title search can cause delays. Indians have waited six years to receive title search reports that other Americans can get in just a few days.

The result is that many investors avoid Indian lands altogether. When development does occur, federal agencies are involved in every detail, even collecting payments on behalf of tribes. The royalties are then distributed back to Indians—that is, if the government doesn’t lose the money in the process.

Reservations have a complex legal framework that hinders economic growth.


Thanks to the legacy of federal control, reservations have complicated legal and property systems that are detrimental to economic growth. Jurisdiction and land ownership can vary widely on reservations as a result of the government’s allotment policies of the nineteenth century. Navigating this complex system makes development and growth difficult on Indian lands.

One such difficulty isfractionated land ownership. Federal inheritance laws required many Indian lands to be passed in equal shares to multiple heirs. After several generations, these lands have become sofractionated that there are often hundreds of owners per parcel. Managing thesefractionated lands is nearly impossible, and much of the land remains idle.Energy regulations make it difficult for tribes to develop their resources.Darrin Old Coyote, chairman of the Crow Tribe in Montana, puts it plainly: “The war on coal is a war on our families and our children.” Coal provides the greatest economic opportunity for the impoverished tribe, but regulations are making it hard for the tribe to capitalize on their natural resources. Some are even trying to prevent the tribe from exporting coal to Asia.The federal government has repeatedly mismanaged Indian assets.

Screen-Shot-2014-03-13-at-3.03.58-AMTribes historically had little or no control over their energy resources. Royalties were set by the Bureau of Indian Affairs, but the agency consistently undervalued Indian resources. A federal commission concluded in 1977 that leases negotiated on behalf of Indians were “among the poorest agreements ever made.”

Unfortunately, it hasn’t gotten much better. A recent class action suit alleged that the government mismanaged billions of dollars in Indian assets. The case settled in 2009 for $3.4 billion—far less than what was lost by the feds.

Reservations contain valuable natural resources worth nearly $1.5 trillion, according to a recent estimate. But the vast majority of these resources remain undeveloped because the federal government gets in the way. Ron Crossguns of the Blackfeet Tribe recently put it this way: “It’s our right. We say yes or no. I don’t think the outside world should come out here and dictate to us what we should do with our properties.”

As long as tribes are denied the right to control their own resources, they will remain locked in poverty and dependence. But if tribes are given the dignity they deserve, they will have the opportunity to unleash the tremendous wealth of Indian nations.

Originally curated by Forbes 3/13/2014

8 thoughts on “5 Ways The Government Keeps Native Americans In Poverty

  1. George Wilson

    there have been hundreds if not thousands of “reports” on the indian problems and i can’t think of more than a few that were actually helpful. one Harvard Business School report on economic development was so poorly researched and written that it was useless as a guide and i suppose somebody got a masters degree out of it. my point is that it will take a long term investment of money and resources to really develop a useful plan for economic development on reservations. and, this must take into account social development as well in order to be effective. there are many indian people with the necessary skills and education to carry out this type of report but we are generally left out in favor of a more academic approach. and to say that all our assets are under the control of the bia is a total misunderstanding of fact, it isn’t that way at all except for the issue of trust responsibility regarding land and realty transactions. these transactions are doable and not that hard but there is the process to deal with and it is a drag. there is so much to deal with on this issue that a person can get lost in it.


  2. Tim Thompson

    Not Living Up To Their Fiduciary Responsibility:
    Since the time the “Illegal Aliens” arrived here to America from Europe on their boats and our ancestors welcomed them, we have been viewed as a problem to them. Once they established themselves here in our lands that has been our home since time immemorial and organized their governments and proclaimed america theirs be discovery, our people were in the way of their progress. After they defeated our people and tried to exterminate us with their diseases they put our people on reservations through the use of treaty’s that they did and don’t live up to to this day. They designated themselves our guardian and we are like their stepchildren, and we have been treated very poorly throughout the years and if we allow it for many years to come. One of the stipulations that they are responsible for as our guardians is their fiduciary responsibility to look out for our best interests according to our treaties and they have been and are still failing badly in carrying out their fiduciary responsibility. Over the years we have been allowing this to happen over and over again and no one bothers to ask why. Our people lost on the battlefield and now we are losing in the courtrooms, as they continue to whittle away at our rights and sovereignty and they will not stop until they take every little thing that we have left. It just seems like we should stand together as one Tribal Nation as the original natives of this land and assert ourselves against this wrongs that are taking place everyday. We have become too comfortable being obedient and not wanting to make waves,

    Liked by 1 person

  3. Judy

    To many of the leader of the Native Americans putting the money in their pockets and not where it goes. I have living around the Native Americans for 46 years. Some good friends and have some grandkids that are part native American. There is two sides to this story, why not show them both sides and then everyone will know the true.


  4. Greg

    Go solar, jobs, export, taxes, where is the congressional pressure, a four corner partnership for power and prosperity…there, even the tag line for ya, I’ll help and I’ll start with the gaming partners, call Andy Ebona, American Native Gaming Assoc. Tell him I asked you to run it by a frog, oh, and Grandmother, peace


  5. Purusha

    I do agree that the land should be there for the people to do as they wish, but that doesn’t mean that greedy and dishonest developer won’t try and destabilise a community for there own gain and the people will end up with nothing but a poisoned whole for their children…If all the natural resources are used and the Indian Nation follows the path of the rest of the west by raping the land they will end up worse off..the call of wisdom is needed and renewable energy and industries around these so as bring in jobs and security for the people can develop..Ripping up the land for coal,gas and oil is white mans way as that hasn’t work for white man black man red man or yellow man…May the wisdom of all ancestors guide your people and show the world how a country should be cultivated for its people health and wealth, starting with your spirit and love for the land…

    Purusha David


  6. Rory Michael Jackson

    We are up against “White Privilege” America in our struggle for existence. We are locked into this vicious cycle of having to posture stupidity in order to continue to receive government aid. Our women are being raped, beaten, and abducted at alarming rate. We are subjected to sub-standard health and welfare services. We reside in what are known as the worst places in the US (Native American Indian Reservations). Highest infant death mortality and teen suicide rate in the world. Yes, the entire world!


  7. george wilson

    this article is very biased towards resource development and there are many factual errors in it. while it isn’t a piece of cake developing on my reservation most of our members don’t want resource development unless it is solar or wind. i don’t know what this organization that sponsored this article is after but for our native american nations i would really be cautious about relying on the veracity of this report.


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