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The Honolulu Advertiser
Posted on: Sunday, March 4, 2007

Winnebago Tribe finding success in diversification

By Anna Jo Bratton
Associated Press

HO-CHUNK INC.

Companies owned by Ho-Chunk Inc., the economic development arm of the Winnebago Tribe of Nebraska:

  • All Native Systems, a telecommunications, computer and networking firm with a mix of government and private contracts. Based in Winnebago with offices in Bellevue, Neb., and Washington, D.C.

  • HCI Distribution Co., based in Winnebago, which blends and sells gasoline and sells American Indian tobacco products. A division, HCI Logistics, is a transportation services provider.

  • An online American Indian catalog gift shop, AllNative.com.

  • A firm that markets office products and office furniture, AllNative Office Products.

  • All Native Solutions, which markets computer hardware, software and other products throughout the United States,

  • Indianz.com, an American Indian news and information site on the Internet that gets about 9 million hits per month.

  • Dynamic Homes, a Detroit Lakes, Minn.-based prefabricated housing manufacturer.

  • A general contracting firm, HCI Construction Co., based in Winnebago with offices in South Sioux City, Neb.

  • Ho-Chunk Builders, an electrical services and construction management company with offices in Winnebago and Bellevue.

  • AllNative Resources, which operates a variety of business services including interior design services, warehousing, marketing and public relations

  • Native Plains Pharmacy, a national distributor of pharmaceuticals based in Winnebago.

  • A marketing and advertising agency, Blue Earth Marketing.

  • Rez Cars, a car dealer with locations in Winnebago and South Sioux City.

  • Winnavegas Inn, near the Tribe's WinnaVegas Casino.

  • Seven gasoline and convenience stores in Nebraska and Iowa, including two in Winnebago and one each in Walthill, South Sioux City, Lincoln, Emerson, Wayne, Sioux City, Iowa, and Sloanm, Iowa.

    Ho-Chunk also has investments in more than 50 hotels and 5,000 apartments in more than a dozen states.

    — Associated Press

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    LEARN MORE

    Ho-Chunk Inc.: www.hochunkinc.com

    Winnebago Tribe of Nebraska: www.winnebagotribe.com

    All Native: www.allnative.com

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    WINNEBAGO, Neb. — Rising from the bluffs of eastern Nebraska, on the sparsely populated, historically poor Winnebago Indian reservation, stands a glass-paneled office building.

    The out-of-place structure is home to Ho-Chunk Inc., a $100 million business with more than 500 employees in six states, Mexico, Iraq and Afghanistan.

    Ho-Chunk, the economic development arm of the Winnebago Tribe, is similarly remarkable in the world of American Indian business, because its success has little to do with gambling — besides getting seed money from casino revenue.

    Employees of one of the company's 16 subsidiaries pose as civilians on faux battlefields in Indiana so U.S. soldiers can hone their combat instincts.

    A Ho-Chunk subsidiary in Mexico provides technical support for a new DNA laboratory used in criminal cases. And since 2005, Ho-Chunk subsidiary All Native Systems has had a multimillion-dollar contract with the U.S. State Department to provide support for rebuilding Iraq's governmental infrastructure.

    Ho-Chunk, derived from a Winnebago term that translates to "The People," is trying to end the cycle of poverty that has plagued many reservations. In Winnebago, median household income is around $20,000, and more than 40 percent of people don't make enough to live above the federal poverty line.

    "It's not like we're a rich tribe," said Ho-Chunk CEO Lance Morgan. "We're just one of the best of the poor tribes."

    Ho-Chunk is part of a growing trend of diversification by American Indian tribes.

    Casino revenue is inherently unstable in many states. Contracts must be renegotiated with each new governor, legal fights over casino issues drain income from tribal budgets, and legalized gambling in some states brings new competition.

    "Tribes are finding that gaming, while it's been successful for many, it's not the only answer," said Kip Ritchie, a vice president of the economic development arm of the Forest County Potawatomi Community in Wisconsin that touts a portfolio of investments and assets of more than $26 million.

    Ho-Chunk and the Winnebagos are ahead of the game when it comes to sustaining a diversified economy, said professor Joseph Kalt, co-director of the Harvard Project on American Indian Economic Development.

    "All these tribes are very much like emerging democracies and developing countries around the world," he said.

    Tribes across the country are at different stages of success in diversification, said Peter Homer, president of the National Indian Business Association.

    "We are changing a culture that is a very giving culture into a hard-knocking, business-thinking," Homer said. "We were horse traders. We never were used to making money and sticking it in our pocket."

    U.S. tribes now have more than $22 billion in annual revenues from gambling, according to government figures.

    But casino profits deflated for the Winnebago Tribe after a 1994 Iowa law allowed casinos to be built just across the river from Omaha, a 1 1/2-hour drive from the Winnebago reservation.

    Fortunately, tribal members took $8 million in casino money in 1994 and 1995 and put it into a new venture.

    Ho-Chunk started out with what Morgan calls "stereotypical Indian business," tobacco and gasoline. It started companies primarily to serve tribal members, then branched out once they were established. The company learned how to obtain federal grants and low-interest loans by taking advantage of its tribal status.

    Ho-Chunk posted revenue of $111.3 million in 2005, up from $22.9 million in 2000, and assets have grown to $39.8 million from $8 million. It recorded nearly $691,000 in net profits in 2005.

    Ho-Chunk's board of directors acts independently of the tribal council, which keeps short-term political ups and downs from stopping Ho-Chunk's progress, said John Blackhawk, who serves on the tribal council.

    Balancing distance with helping people is a problem for some tribes, Kalt said. American Indians in poor communities see for the first time a chance at income — and it's hard to convince them that money must be reinvested.

    To help maintain the balance, Ho-Chunk helped start the Ho-Chunk Community Development Corp., a nonprofit group that has raised $11 million since it was founded in 2000 to help improve the Winnebago reservation.

    The group's biggest project has been Ho-Chunk Village, a development northeast of town.

    A homey village square surrounds a sculpture garden filled with 12 statues representing the original clans of the Winnebago Tribe. A hair salon, art studio, Dollar General store, and an Indian gift store are mixed with the headquarters of several of Ho-Chunk's businesses.