Sitting Bull’s Revenge

Native American tribes own hundreds of casinos and the world famous Hard Rock Café chain. Now they are making inroads into the financial world.

Sitting Bull was a great freedom fighter. He was also a victim of capitalism. In 1876, he led the Sioux nation to a legendary victory over General Custer’s 7th Cavalry at Little Bighorn. In his later years, he had to appear in the white man’s Wild West shows – for $50 a week, slave wages even back in those days.

Well and good: Fast forward 100 years to where Sitting Bull’s descendants have proven that they have long since taken capitalism’s lessons to heart. A North Dakota branch of the Sioux tribe announced on Wednesday they had taken over the New York fund management firm Westrock, whose 150 employees manage more than $1.4 billion in investments. Chief Michael Jandreau crowed about the new access to capital. It is the first time that Native Americans have swallowed up a financial organization.

Native Americans have been active in other sectors of the economy for years. Thanks to legal advantages, Native American tribes control many facets of the gambling industry. They own hundreds of casinos that account for billions of dollars of income each year. The Seminole tribe caused a sensation in 2006 when it purchased the Hard Rock Café chain for some $1 billion, having outbid financial investment firms such as Permira. The Sioux, meanwhile, who are now acquiring Westrock, also own Lakota Foods.

The special tax status helpful to Native American owned casinos may also give them a competitive edge in the financial sector. Tribes pay no income taxes, which is why Westrock may well be able to offer more advantageous deals than their competitors. Laws protecting minorities may also provide new possibilities: Up to 30 percent of investments in pension funds, for example, must be made in firms headed by minorities.

Jandreau, who calls the deal a “historic event for all American Indians,” also wants to use Westrock as a vehicle to support his 3,600 tribe members, where the unemployment rate currently stands at 44 percent. “This will serve the members of our tribe in the areas of education, health and employment,” Jandreau said.

Jandreau himself is satisfied with being chairman of LBC Western Holdings LLC, the holding company for Westrock. Current Westrock CEO Don Hunter will remain chief executive officer. The white man, you may recall, proved to be far less generous in victory: The police shot Sitting Bull to death in 1890, years after the last Indian uprising had been put down.