Published On: Thu, Apr 9th, 2020

Council discusses Investment Committee authority in Special Session 

 

By SCOTT MCKIE B.P.

ONE FEATHER STAFF 

 

Tribal Council met in a specially-called session on Thursday, April 9 and discussed new authorities for the EBCI Investment Committee to better help the Tribe in its investments going forward.  Council amended and then passed Res. No. 172 which authorizes and directs the Investment Committee to “analyze and execute, with Tribal Council approval, direct investment opportunities using established criteria and shall ensure that direct investment opportunities executed by the committee are reviewed according to this criteria”.  

The legislation, submitted by Principal Chief Richard G. Sneed, passed unanimously and further states, “The Tribe is regularly presented with business investment opportunities that may fall outside of the constructs of a traditional investment strategy or that may not fit the business rules established by Kituwah, LLC for investment consideration and the Tribe is in need of a mechanism to thoroughly inspect those opportunities for the potential inclusion in an overall diversification strategy.”  

It continues, “…the Investment Committee can serve as a mechanism to assess those investment opportunities and oversee the deployment of capital toward those investments that are reasonable to the Eastern Band of Cherokee Indians.”  

During discussion on the legislation on Thursday, Chief Sneed said, “So, essentially, what we’re proposing is we already have the Investment Committee which this body has empowered to make investment decisions on behalf of the Tribe.  The Tribal Council has also created the Cherokee Sovereign Wealth Fund.  We have the Investment Committee, which is comprised of tribal members who are subject matter experts in finance.  They are highly educated.  There are going to be opportunities for investments that are outside the scope and guidelines that the LLC has established…”  

He said the main proposal is to empower the Investment Committee to properly vet projects and investment opportunities to present to Tribal Council for its approval.  “All this is is another vehicle for us to be able to vet projects and investment opportunities in a timely manner.  Opportunities that are going to present themselves on the back side of this crisis (COVID-19) are going to require timely decision-making.  Certainly, there are going to be some that are more long term.  There will be some that are going to have a shorter window of opportunity.”  

Chief Sneed spoke to the need for this move and noted, “We are, right now, in that moment of time that everybody never thought would happen in our lifetime which is – we have zero revenue coming in from our gaming right now.  I don’t think anybody in this room, and I don’t think anybody watching at home ever thought that would happen in our lifetime.  We say in conversation, ‘we have to diversify’, ‘we must diversify’, ‘the cash cow might not always be producing for us’.  But then, there’s that little voice in the back of our mind that says, ‘that won’t happen while I’m here’.  It’s happened.  We’re there.”  

Cory Blankenship, EBCI Secretary of Treasury, noted, “I do think this is another diversification measure.  What our consultants are telling us is when you look at the market and the market volatility, the market really only contains about 50 percent U.S. wealth and U.S. capital.  The other 50 percent is going to be in private equity that are not publicly traded and are not on public exchange.  They could be well-established businesses.  They may be start-up businesses.  And, so this private equity space is really where we need to focus.” 

He added, “When we set up the LLC, Council gave them the authority to make business decisions and to create their own business rules, and there will be investment opportunities that fall outside of the rules of the LLC.  And, that doesn’t mean that they’re bad investments, it just means that it doesn’t fit what they’re looking for.”  

Earlier in Thursday’s session, Tabled Ord. No. 170 (2020) was deemed read and tabled.  Submitted by Chief Sneed, it would amend Cherokee Code Section 117-41 (Investment Committee) by adding the following at Section 117-41(d)(4), “Analyze direct investment and private equity investment opportunities on behalf of the Tribe and execute such investments deemed reasonable and appropriate by unanimous approval of the committee through resources available in the Endowment Fund No. 1, Endowment Fund No. 2, Debt Service Sinking Fund, and Cherokee Sovereign Wealth Fund LLC in accordance with criteria established by the committee and approved by the Tribal Council.”  

That legislation is tentatively set to be on the agenda for the May regular session of Tribal Council.  

Birdtown Rep. Boyd Owle made the motion to pass Res. No. 172 and commented, “There’s going to be opportunities out there for us…I think this is a wonderful opportunity.”  

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