Cherokee parents protest losses in children’s trust fund
A throng of about 150 angry members of the Eastern Band of Cherokee Indians turned out to the Birdtown Community Center last week, protesting that the Tribal government is to blame for losing $57 million that was to go to Eastern Band children.
The mob called for the impeachment of Principal Chief Michell Hicks, saying the buck ultimately stops with him. Hicks was not at the meeting and could not be reached for comment.
The money in question is the minor’s fund. Enrolled members of the Eastern Band receive payments twice a year called “per-capita” checks. The money comes from a share of profits made off Harrah’s Cherokee Casino. In 2008, enrolled members of the tribe received $8,779 in per capita.
The per-capita payments to children are held in trust by the tribe until the minor turns 18. If they have a GED or high school diploma, they get a large check upon turning 18. Otherwise, they can’t collect the money until they turn 21 or upon completing a high school diploma. The tribe invests the children’s annual payments, so over the life of the fund it will theoretically grow.
Teresa McCoy, who led the proceeding last week, said the Tribal Council and a five-member investment committee, are responsible for properly investing the children’s money until it can be withdrawn.
It turns out that the money was apparently invested in funds that took a big a hit when the bottom fell out of the market last year.
In 2008, $57 million of the children’s money was lost, according to McCoy.
McCoy said many parents received their children’s balance statements recently and found that their child had lost about $20,000. McCoy said her grandchild lost $21,000. For instance, McCoy said a child turning 18 this year should be getting about $72,000 after taxes but is only going to be able to get about $52,000.
EBCI members are angry that the Tribal government didn’t protect their children’s money better. They are considering filing a class action lawsuit against the tribe, the investment committee, Chief Hicks and Vice Chief Larry Blythe.
No one from the Tribal Council, except Susan Toineeta, attended the meeting. The residents were disappointed that their elected representatives didn’t show up at the meeting to address concerns.
“It added fuel to the fire,” said McCoy.
Tribal members believe they may have grounds for a lawsuit, saying there are policies that state the children’s money should have been invested safely and in a prudent fashion. McCoy said the Tribal government could have prevented the big losses by moving the money to more secure investments when the market began to fail.
Since 2007, the market was showing weakness, but the Tribal government continued to invest the money in high risk investments, she said. The Tribal government had some of the money invested in real estate, she said.
This is not the first time the management of the children’s money has come up. In 2003 parents became concerned when their children lost money due to a decline in the market.
At the time Hicks, said, “ The question is how do we invest to first protect the principal and also earn reasonable interest.”
At the meeting last week, angry tribal members said the tribal government is obligated to return the money that was lost to the children.
A three-member committee made up of elders — Don Rose, Dan McCoy and Joyce Bradley — was formed at the meeting to begin determining what should be done.
The meeting consisted of members of the audience taking to the microphone and venting their frustration. The comments from the audience members were followed by an attorney discussing some possible legal remedies to the situation.
EBCI member Sharon Queen said the elected officials need to be held accountable for the losses, and she wanted to know where the money was invested.
One woman said she is not hopeful that the money is going to be returned.
“We lost $58 million, and we’re not going to get it back,” she said, comparing it to how many Americans lost their retirement savings.
Cynthia Grant told the crowd that her son lost $21,000. Grant also put some of the blame on herself.
“I’m embarrassed to say that I didn’t know what was going on, and that’s my fault,” she said. “Now we need to find out what we can do for the children.”
Don Rose said the buck stops with the chief and the council who, he said, failed by not monitoring the investments. Rose urged the crowd to take the emotion out of the issue and bring pressure to the council to solve the problem.
One woman said her 10 grandchildren lost a total of $200,000 — “That’s a lot of money.”
A $100 bill with Hicks’ face on it was passed around the audience.
McCoy said that Hicks is a certified public accountant and that he should have known better about the investments.
The meeting also included several children telling the crowd that they lost $20,000 and want it back.
Per capita payments started around 1995, which means a child turning 18 years old today began receiving per capita contributions at age 4. Casino profits in early days were not nearly as large as they are now, however, or as large as they could be in the future. Children born today should have larger windfalls when they turn 18 than those turning 18 today.
Depending on the casino’s profits, children born today could have hundreds of thousands of dollars awaiting them when they turn 18. This shows the need for sound management of the children’s fund.