Tribal Trust Fund Disaster (Part 2)

[Steven Brown]

TRIBAL TRUST FUND DISASTER (PART 2)

In March 2009, Hicks ordered all of our enrolled members minors’ tribal trust fund money out of the stock market and into CDs. Let’s run the numbers to see how this “bold” decision panned out. Let’s be clear, under tribal law, the Chief has a legal duty to care for our enrolled children’s money from the time they are born until they graduate from high school or turn 21. The Tribe must account to every enrolled member about how this money is invested. There are several hundred million dollars in the trust fund.

In March 2009, Hicks made his “bold” decision to pull all minors’ trust fund money out of the market and put it into CDs paying 1%. The market was at 6500. Since then the market has risen to above 10,700--an increase of over 60%.

So let’s run the numbers: let’s say the Tribe had approximately $500 million total in the minors' trust fund last March. Had Hicks let the market rebound as it has historically always done after a market loss, our children would have gained over 60% as of January 2010. Our children would have made $305 MILLION in this market rally. Our minors’ trust fund would be worth $805 MILLION today.

Instead, of having $305 million more for the future of our children, Hicks, with his C.P.A., put all of their money into CDs. CDs over the past 10 month have earned a 1% return. With Hicks' “bold” March 2009 order, which violated virtually every principle of investing, our children’s money has grown from $500 million to $505 million in the last 10 months.

When you factor in inflation, which is over 1%, this means in real terms our children have actually LOST MONEY! All of this compared to the additional $305million that would be in the fund today had he followed the most basic principles of investing.

$305 MILLION down the tubes for the future of this great Tribe. The ineptitude here is off the charts and no one is talking about it. By himself, and with only himself to blame, Hicks has lost $305 MILLION that belongs to the children. This is a travesty.

It’s time for this to be known.

[Bill Killian]

A wealthy uncle once told me to never let your broker do your taxes and never let your accountant invest your money...

[shellramietim]

I'm sorry to hear they lost out. I was just as sorry when I read about how much had been lost in the stocks before. One thought does come to mind of the Rabbit and the Hare. Which way do ya go.

[lishishasha]

People aren't happy if moves are made "protect" the minors fund, and they aren't happy is nothing is done and the funds are left - and money is lost.
You can't play with other people's money - so this move was probably best in the long run. The chief is not alone in not following the principles of investing - that is why the bottom fell out of the market! Stop the blame game!

[Bill Killian]

Originally Posted by lishishasha

People aren't happy if moves are made "protect" the minors fund, and they aren't happy is nothing is done and the funds are left - and money is lost.
You can't play with other people's money - so this move was probably best in the long run. The chief is not alone in not following the principles of investing - that is why the bottom fell out of the market! Stop the blame game!

This isn't a blame game, it is pointing out the theft of Tribal funds.
Why wasn't the bleeding stopped after a $10 million dollar loss? $20 million?
Bernie Maydoff didn't steal as much from any one of the people and businesses he was convicted for stealing from.
Why did the investment committee, the chiefs, and tribal council stand by and watch this money blow away? They were given reports and chose to look the other way.
$160 million was lost and we will have to replace it.
$320 million total loss and we should just suck it up?
Like hell...