The Department of Interior’s Division of Capital Investment (DCI) (which delivers the Indian Loan Guarantee and Insurance Program, 25 USC 1481 et seq.) was once the crown jewel of the federal government’s tribal economic development programs. However, gross mismanagement over the past several years has reduced it to a smoking ruin.
From 2014 until its leadership was abruptly sidelined in May 2022 and replaced by someone wholly unsuited for the job, it was capably managed and year after year distributed to tribal borrowers all appropriated funds, sometimes early in the fiscal year. Its performance was so stellar, in fact, that Congress routinely augmented its budget.
After the change of program leadership, four key employees filed EEO claims alleging a toxic work environment. Complainants won settlements in three of the cases, with the fourth still in process. Of the program’s four credit managers operating the program four years ago, one retired as part of her EEO settlement, another fled the turmoil to work in another federal agency, and a third is embroiled in an EEO complaint.
The result has been catastrophic. In recent years, DCI has not used anything close to the financial ceiling Congress and OMB provide. The program DCI delivers used to guarantee and insure a total of $130 to $180 million in private loans to Indian-owned businesses every year. In the past two years, DCI’s productivity has been less than half that. The program’s dismal performance can be traced to the absence of qualified personnel.
Dereliction is also a factor as no one from the Office of the Assistant Secretary, Indian Affairs has intervened to stem the exit of veteran staff or removed the program's manager, despite the agency having to pay thousands of dollars to settle the EEO claims.
With the program now a shadow of its former self, it is in jeopardy of forced reductions from OMB or of being moved to another federal agency like Department of Commerce.
Can the Trump Administration rebuild this critical program before it is too late? At stake is the only federal lending program specifically for Indian businesses, one that has provided $1.5 billion in needed financing for Indian enterprises over the past 50 years.
The Hotel Santa Fe in downtown Santa Fe, the Indian Pueblo Cultural Center in Albuquerque, the tourist facility and dock in Hoonah, Alaska, and the Navajo Tribal Utility Authority's acquisition of its wireless subsidiary are among the better known projects financed by the program.
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