Published in Economic Development

Michigan tribes face ‘circular exclusion’ from key minority business certification

BY Sunday, July 19, 2020 05:20pm

As a citizen of the Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians and CEO of its non-gaming enterprise, Kurtis Trevan wants to leverage other corporations’ diversity and inclusion goals to the economic benefit of his fellow tribe members, as well as further the tribe’s own inclusionary spending. 

Trevan is a Native American working for a company that’s owned by one of Michigan’s 12 federally recognized American Indian tribes. 

Since the profits from Gun Lake Investments’ portfolio benefit the tribe’s enrolled members, the company in many ways is akin to a family-owned business enterprise where the beneficial shareholders are the tribe’s more than 400 enrolled members. Each of them, like Trevan, is a Native American. 

So imagine Trevan’s frustration when in late December the Michigan Minority Supplier Development Council, the arbiter of the “Minority Business Enterprise” certification in the state, declined Gun Lake Investments’ application to become a certified minority-owned business. 

“For us, it’s not so much that we want to be part of an organization that doesn’t want to accept us,” Trevan said, noting that “large corporations rely on the MMSDC certification to be able to help promote their own diversity and inclusion programs within their companies.”

Before that denial, Gun Lake Investments had joined the MMSDC as a corporate sponsor because, like many businesses around the country, it wants to be intentional in engaging with and supporting other minority-owned companies. The benefit of the corporate membership lies in the access it provides to the MMSDC database of certified Michigan-based minority-owned businesses.

“As soon as we asked to access their database of other Michigan minority-owned companies, they kicked us out from being a corporate member. When I contacted them to just help through what I thought was an obvious misunderstanding, they had explained that it was not a misunderstanding: Minority-owned companies cannot be corporate members,” Trevan said. 

As such, Trevan said he is left wrestling with the “circular exclusion” on the part of the MMSDC.

“We are not permitted to be a corporate sponsor because in MMSDC’s judgment, we are minority owned, but MMSDC will not certify us as minority owned,” he said, adding “there’s just artificial or arbitrary obstacles that are being created for us to continue to help us promote our own values and access other diverse companies.”

Lack of communication

As it turns out, Gun Lake Investments is not alone as a tribally owned entity in struggling to work with the MMSDC. 

Grand Rapids-based Waséyabek Development Co., the non-gaming investment arm of the Nottawaseppi Huron Band of the Potawatomi, submitted an application in December 2019 for business turnaround and consulting firm DWH LLC, of which it is the majority owner.

“They’ve stopped communicating with us altogether. We’ve sent several inquiries about the status of that application, and we just get no response,” said Deidra Mitchell, president and CEO of Waséyabek. “I understand that one of the rules they have right now doesn’t fit strictly for tribes. That is not the point for diversity and inclusion.”

Andrew Sims, vice president of Central and Western Michigan marketing and communication at MMSDC, told MiBiz he could not discuss or disclose information about individual applications. 

“However, the MMSDC has and maintains stringent certification guidelines that adhere to the national standard and reflect our uncompromised commitment to minority businesses, including those owned by Native Americans,” Sims said in an email to MiBiz

The Detroit-based MMSDC is part of a network of 23 regional offices under the National Minority Supplier Development Council. In turn, the MMSDC operates the Detroit Minority Business Development Agency, a program from the U.S. Department of Commerce that was originally established as the Office of Minority Business Enterprise by President Richard Nixon in 1969. 

What’s confounding for Trevan and Mitchell is that tribally owned entities like theirs have worked with regional offices in other states to achieve Minority Business Enterprise certification. 

That includes D.A. Dodd, a portfolio company of Mno-Bmadsen, the non-gaming economic development arm of the Pokagon Band of Potawatomi in Dowagiac. The Rolling Prairie, Ind.-based mechanical contractor secured its Minority Business Enterprise certification through the Indianapolis-based Mid-States Minority Supplier Development Council, according to a spokesman for Mno-Bmadsen. 

Milwaukee-based Greenfire Management Services LLC, a construction management firm wholly owned by the Forest County Potawatomi Community via its Potawatomi Business Development Corp. subsidiary, also received the certification. 

Greenfire President Kip Ritchie said the company successfully sought Minority Business Enterprise certification from the Minneapolis-based North Central Minority Supplier Development Council about seven years ago. He said the designation “opens doors” for the 10-year-old firm, which expects to perform about $140 million in construction management work this year. 

For example, the certification gave Greenfire a competitive advantage in winning new business with motorcycle manufacturer Harley-Davidson Inc. and Rockwell Automation Inc., Ritchie said. 

“As you look at the growth of our company, it’s certainly been an aspect of it,” he said of the certification. “It’s not the biggest part of it, but we anticipate that as we grow and expand, that we’ll do more and more work in that space. … We realize that like anything, it’s extremely competitive and we need to continue to pursue it. It doesn’t happen overnight.”

Active investments

The disconnect in Michigan between tribally owned entities and the MMSDC initially surfaced last year as part of a tribal economic development roundtable hosted by MiBiz. In a follow-up story, a representative from the MMSDC said the tribally owned enterprises often fail the three-part test the organization uses to ensure that minorities own, operate and control the companies in question.

“We have very clearly defined rules for that. They’re going to struggle to be certified because they keep the white leadership in place and they don’t fit the three tenets of owned, operated, and controlled,” Sims told MiBiz last year. 

According to Trevan, tribal investment arms like Gun Lake Investments retain full control and management of portfolio companies, but often leave the former owners and existing executives in leadership positions to ensure continuity within the organizations. Under that structure, the companies still can achieve minority businesses certifications through other federal programs, including via the U.S. Small Business Administration, which has a “more stringent application process.” 

“No question, we rely heavily on leadership teams within those companies, but these aren’t passive investments for the tribe,” Trevan said. “We’re active within the companies and with the leadership within those companies.”

Trevan and Mitchell say they want to engage with MMSDC to figure out a way forward for their respective organizations, but those efforts have been hampered by the lack of communication from the certifying body. 

“The point is that tribes are a different entity. They are clearly minority-owned, so perhaps the rule needs to be looked at to take into account that we are not a single business owner,” Mitchell said. “We are an owner, in our case, on behalf of 1,500 tribal citizens. While we admittedly don’t fit into one set of rules, those rules probably need to be reevaluated to include all minorities.”

‘Evolving to do what’s right’

Greenfire’s Ritchie, who also serves on the board of directors at Gun Lake Investments, believes the certification could help “our brothers across the lake at Gun Lake Pottawatomi, or any other tribe for that matter” to build capacity, capabilities, infrastructure and business acumen for members. 

“Unfortunately, it’s 2020 and not everybody understands how Indian nations are structured,” Ritchie said. “We need to do a better job of educating and demonstrating where we fit and where we can add value and where we can build communities around us.” 

Especially in this moment in time when the country as a whole is taking a critical look at its past actions and inherent biases when it comes to issues of race and equality, Trevan argues it’s a perfect time for the MMSDC to revisit its rules to ensure the organization is being inclusive of all minority businesses, rather than excluding some on the basis of their cultural structures.

“History has shown time and time again the benefits of not taking a position solely on the language of arbitrary rules, but rather evolving to do what’s right. Without that mentality, women wouldn’t have gained the right to vote in 1920 and Native Americans in 1962,” Trevan said. 

Given the lack of communication and a way forward with the MMSDC, Gun Lake Investments is launching its own database and is asking minority- and women-owned businesses interested in seeking business with the tribe to sign up on its website. The list of companies will be available to any businesses that request it, Trevan said, noting that he’s “disheartened” by tribes’ ongoing struggle for recognition as minority business owners.

“If the MMSDC truly has a mandate to help promote diversity and inclusion, we fail to understand why they would deny applications such as Gun Lake Investments’ and not reply back to other tribal applications,” he said. “More so, I just hope that other large corporations start to understand that maybe MMSDC should not be the sole arbiter of who is or who is not a minority-owned company, and I encourage them to look for other paths or perhaps do their own diligence in understanding who else may be a minority-owned company that’s not able to access the certification by the MMSDC.

“I just don’t think (corporations) are aware that the system may only be working for some. But not only is it not working for others, it’s actually being prohibitive. … By them solely utilizing the MMSDC certification, we are arbitrarily being blocked out of this process to be able to access contracts, not only for Michigan companies, but around the country as well. It’s just been a very extremely frustrating process for us.”

Read 2109 times
SUBSCRIBE TO MIBIZ TODAY FOR WEST MICHIGAN’S FINEST BUSINESS NEWS REPORTING >