The Ute Paradox

A small Colorado tribe takes control of its energy resources and becomes a billion-dollar corporation — but has it gone too far?

  • Tradition meets modern glam in the parking lot of the new Sky Ute Casino on the Southern Ute Reservation in southwest Colorado.

    Paul Pennington
  • An eight-member delegation from the Ute Tribe, including Ouray, fourth from the right, traveled to Washington, D.C., in 1868 to sign the Kit Carson Treaty, granting the Utes 1.5 million acres of land in southwestern Colorado. Ouray would spend the rest of his life trying to get the U.S. government to honor the terms of the treaty.

    Western History/Genealogy Dept., Denver Public Library
  • Pumpjacks dot the landscape of the Southern Ute Reservation in southwest Colorado -- home to one of the richest gas deposits in the country.

    Paul Pennington
  • The Southern Utes developed the Three Springs "new urban" project outside Durango, and donated land for the Mercy Regional Medical Center.

    Paul Pennington
  • The new Southern Ute Growth Fund headquarters, gives tiny Ignacio, Colorado, a worldly look. The Growth Fund's mission: "... to provide economic prosperity for the Southern Ute Indian Tribe by managing the Tribe's businesses effectively, building new businesses prudently, and investing its money wisely."

    Paul Pennington
  • Orville Hood and James Jefferson say off-reservation energy-development projects are bad for the tribe. The two head up an effort to recall the tribal council.

    Paul Pennington
  • Southern Ute Tribal Chairman Matthew Box, right, tours the Solix plant near Ignacio, where the tribe is a partner in an effort to create biodiesel from algae.

    Jerry Mcbride/Durango Herald

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On April 22, the U.S. Senate Indian Affairs Committee held a hearing to discuss the draft Indian Energy Promotion and Parity Act, a project of Sen. Byron Dorgan, D-N.D., who wants to make it easier for both tribes and outsiders to develop energy on tribal lands. Southern Ute Tribal Chairman Matthew Box was there to provide input. He wore long braids in his gray-streaked black hair, and his oversized bolo tie sported a colorful beaded buffalo. Tom Shipps sat right behind him, almost shadowing him.

The Department of Interior estimates that there are 5 billion barrels of oil, 37 trillion cubic feet of natural gas, and 53 billion tons of coal on undeveloped Indian lands. Dorgan's bill would encourage drilling and mining, as well as development of solar, wind and geothermal; Indian land holds an estimated 10 percent of all renewable potential in the U.S. The prospects are exciting for Westerners in particular: If more tribes use their energy resources to achieve just a fraction of the success that the Utes have, it could alter the region's economic and political landscape.

Tribes had a great deal of input in drafting the bill, and their influence -- especially the Southern Utes' -- carried into the hearing. Box even told the senators that his lawyers could help them get the bill introduced. The senators expressed admiration -- maybe a bit of awe -- at the Southern Utes' success "without the help of the BIA."

Watching Box assert his clout with the nation's lawmakers was like watching justice incarnate: After decades of oppression and poverty, one tribe has taken on the federal government, the centuries-old colonial system of resource exploitation, and today's oil industry giants. And it has won. "The Southern Ute doesn't need the Bureau of Indian Affairs or the Department of Interior anymore," says Jurrius. "The student is the master now. They are the model."

Yet if the perspective is altered just slightly, the picture of Box is transmogrified; he looks less like a tribal leader than the chairman of the board of a giant corporation whose tentacles reach further and further afield while it amasses more and more wealth. Are the Southern Utes' many businesses actually arms of the tribal government, or are they freestanding corporations? They are ultimately owned and run by the government, so you could theoretically label the whole thing as socialist. Yet the tribe's fleet of limited liability corporations can behave like any other capitalist conglomerate, investing in potentially lucrative but risky schemes in far-off places.

Matthew Fletcher, director of the Indigenous Law Center at Michigan State University, says the tribal companies remain unique: Their money goes through the government, while a private corporation's goes to profit-hungry stockholders. "The perception I'm trying to avoid is that the tribes are any old private enterprise and for-profit machine," says Fletcher. The Southern Ute financial empire is not a corporation; it's a government.

That's an important distinction for a number of reasons. The first has to do with tribal sovereignty and sovereign immunity from lawsuits filed by critics and possible victims. If the Utes' many companies are considered corporate rather than governmental, they are less likely to be imbued with the tribe's sovereignty. Though the tribe waives its immunity on a limited basis in order to enter into contracts with other businesses, it's not about to let its sovereignty be weakened. It's a tricky area: In 2005, the state of Colorado went after a payday loan organization in response to consumer complaints. The company, which was owned by Oklahoma tribes, tried to avoid prosecution by invoking sovereign immunity; the case is still in the courts. It raises the uncomfortable question of how sovereign immunity might play out if, say, one of Red Willow's offshore rigs were to explode and leak oil into the Gulf of Mexico.

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