Federal aid to Alaska Native corporations on hold amid legal dispute over their eligibility

A judge has put a temporary halt to the distribution of federal CARES Act aid to Alaska Native corporations in response to a lawsuit brought by Lower 48 tribes and a trio of Alaska tribes that challenges the for-profit corporations’ eligibility for the $8 billion in aid.

U.S. District Court Judge Amit Mehta issued a temporary restraining order on Monday afternoon, finding that distributing the coronavirus relief funds without first addressing the legal questions in the lawsuit could cause irreparable harm to the tribes. The funds had been planned to be distributed according to a yet-to-be-published formula this week.

The order specifically halts any distribution to ANCs but allows the distribution to other qualified tribal governments to go ahead as planned. Mehta said that the money could be released to ANCs once the lawsuit is resolved—though he noted it was unlikely they would—or be spread to the remaining eligible tribal governments. It’s not immediately clear when a final ruling could be expected in the case and whether appeals might be filed.

“To be sure, the more limited remedy could mean that plaintiffs will receive a lesser share of Title V funds in the short term, if the secretary decides to award some money to ANCs and withholds those payments to comply with the court’s order,” Mehta wrote in a 34-page memo. “But at least such funds will remain available for later disbursement to federally recognized tribes for coronavirus-related public services, if the court ultimately enters a final judgment in Plaintiff’s favor.”

The issue of the inclusion of ANCs in the CARES Act has been a flashpoint. It turned particularly ugly with allegations that Assistant Secretary for Indian Affairs Tara Sweeney, who’s Alaska Native and an Arctic Slope Regional Corporation shareholder and former employee, had improperly funneled money to ANCs. The fight then fell into old political ruts as Senate Majority Leader Chuck Schumer gave platform to those allegations and Alaska’s all-Republican Congressional Delegation came to the defense of Sweeney and ANCs.

Several lawsuits were filed by different groups challenging the inclusion of ANCs, and the lawsuit was defended by the federal government though the Alaska-based ANCSA Regional Association and Alaska Native Village Corporation Association both filed legal briefings supporting the eligibility of ANCs.

Mehta noted that issuing a temporary restraining order requires plaintiffs to show that they would suffer irreparable harm and that they’re likely to win. Mehta agreed on both counts, finding the federal government’s position unconvincing.

When it comes to irreparable harm, the federal government argued that distributing the funds to ANCs—and therefore reducing the amount that other tribal governments would receive—didn’t qualify as immediate harm because the money should be solely considered in an economic context.

“To characterize plaintiff’s claimed harm as merely ‘economic’ is terribly misguided,” Mehta wrote. “These are not funds appropriated to carry out secondary or residual government functions. These are monies that Congress appropriated on an emergency basis to assist Tribal governments in providing core public services to battle a pandemic that is ravaging the nation, including in Indian country. … The diminishment of these funds, which cannot be recovered once disbursed, makes a ‘very strong showing of irreparable harm.’”

Mehta also ruled that ANCs are unlikely to legally qualify as tribal governments despite assertions from the Alaska Congressional delegation that ANCs were specifically covered by the CARES Act. He turned to the eligibility clause under the the Indian Self-Determination and Education Assistance Act for guidance.

“For purposes of this preliminary injunction, the court is persuaded that, presently, no ANC satisfies the definition of ‘Tribal government’ under the CARES Act and therefore no ANC is eligible for any share of the $8 billion allocated by Congress for Tribal governments,” he wrote. “For starters, neither defendant nor any ANC amici has identified an ANC that satisfies the eligibility clause under ISDEAA’s definition of Indian tribe; that is, no ANC ‘is presently recognized as eligible for the special programs and services provided by the United States to Indians because of their status of Indians.’”

Following the ruling, Alaska’s senators both said they were disappointed by the ruling while talking with reporters on Monday night. They said the CARES Act has specifically sought to ensure ANCs were eligible.

“As one in the delegation who worked to make sure the intent within the CARES Act was very clear that Alaska Native corporations would be considered as tribal governments for purposes of the CARES Act, I am very, very disappointed,” said U.S. Sen. Lisa Murkowski.

It’s unclear how much other Alaska Native tribal entities–like tribes, non-profits and other groups–might be eligible for but Sweeney has previously said many wouldn’t qualify.

ANCSA Regional Association and Alaska Native Village Corporation Association released a joint statement saying they were looking forward to the final ruling, noting that the restraining order would ultimately harm Alaska Native people.

“We are disappointed in this decision. We still believe our position will find success in the court system, as the law is clear. This will mean a delay in necessary resources and economic assistance for Alaska Native people in our communities and our state. However, Alaska Native people have a history of resilience and strength. Together we will prevent the spread of COVID-19, care for those who are sick, and repair our economies,” explained the statement. “We look forward to a ruling that will allow us to receive additional, much needed aid for our people and communities.”