Financial firm new territory for tribe
The Lower Brule Sioux tribe is acquiring financial services firm Westrock, and is said to be the first Native American tribe to own a financial services firm. The purchase comes with several advantages for a minority group. Jeremy Hobson reports.
Flag of the Lower Brule Sioux Tribe (crazyhorsememorial.org)
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Steve Chiotakis: The financial services firm Westrock is going far from its headquarters in New York for an owner. The firm is being acquired by an Indian Tribe from South Dakota. And as Marketplace's Jeremy Hobson reports, it's said to be the first 100 percent Native American tribe to own a financial services company.
Michael Jandreau: We are a small tribe located in central South Dakota. We have approximately 3,600 members at this time.
Jeremy Hobson: That's Michael Jandreau, chairman of the Lower Brule Sioux tribe. Until today, the tribe made its money selling popcorn, farming, and doing construction. Now it's entering a whole new world.
Jandreau: As far as coming to Wall Street, it's new, it's exciting.
And it's potentially very lucrative. Because even though the firm will have the same regulatory oversight as any other broker dealer, its tax status will be different. Tribes are not subject to federal income tax.
And Westrock CEO Don Hunter says there are other advantages:
Don Hunter: Public pension funds have to set aside anywhere between 7 and 30 percent of their assets to minority corporations. So to go in and raise money, you have tremendous advantages by walking in the door just being a minority. And in fact Indians are, they go ahead of the other minority firms.
Professor Bruce Duthu teaches Native American Studies at Dartmouth. He says the deal is the latest evidence of a growing trend:
Bruce Duthu: Indian tribes are very well prepared and willing to enter into new markets and new activities that really stretch the bounds of their soveriengty, and not being tied to agriculature and more recently casinos.
But Duthu says because of the unique legal circumstances involved, both sides should be careful dealing with each other.
In New York, I'm Jeremy Hobson for Marketplace.
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