PRESIDENT CLINTON' S NEW MARKETS TRIP

Highlighting the Need for Investment in Native American Communities and

on the Pine Ridge Indian Reservation

July 7, 1999

TODAY, PRESIDENT CLINTON WILL VISIT THE PINE RIDGE INDIAN RESERVATION, HOME OF THE OGLALA SIOUX NATION. The first sitting President to visit a reservation since Franklin Roosevelt, President Clinton today will continue his New Markets trip by visiting the Pine Ridge Reservation and emphasizing investment in Native American communities. Despite our growing economy, many Native American communities have not shared in the national prosperity. The President remains committed to building on his strong record of supporting economic development by launching the New Markets initiative and mobilizing corporate America to recognize the untapped potential of Native American communities.

While he is at Pine Ridge today, the President will talk with residents, visit a housing construction site, participate in a Presidential proclamation signing ceremony in recognition of the Pine Ridge Oglala Sioux Empowerment Zone, and speak to the Oglala Sioux Nation, as well as to HUD' s "Shared Visions" conference on Native American homeownership and economic development.

NATIVE AMERICAN COMMUNITIES HAVE NOT SHARED IN THE NATION' S ECONOMIC PROSPERITY.

  • The unemployment rate for Native Americans living on or near reservations is 50% -- and it is 73% for the Oglala Sioux Tribe in Pine Ridge. (Bureau of Indian Affairs, Indian Labor Force Report, 1997)
  • 29% of Native Americans are homeless, and 59% are in substandard housing. (Indian Health Service, 1997)

THE PRESIDENT WILL BE JOINED TODAY BY CORPORATE EXECUTIVES AND ECONOMIC DEVELOPMENT LEADERS TO HIGHLIGHT THE NEED AND POTENTIAL FOR NEW INVESTMENTS IN NATIVE AMERICAN COMMUNITIES. To focus attention on the infrastructure needs, such as housing and information technology, and investment potential of Native American communities, President Clinton will be joined by Franklin Raines, CEO, Fannie Mae; Bart Harvey, Enterprise Foundation; Roger Haughton, CEO, PMI Mortgage Insurance; Donald Lange, President, Mortgage Bankers Association; Rev. Jesse Jackson; Walter Young, CEO, Champion Enterprises; Mark Oman, CEO, Norwest Mortgage; Patrick Conway, Pres., Federal Home Loan of Des Moines; Bruce Morrison, Pres., Federal Housing Finance Board; Stan Kurland, Pres., Countrywide; Jeff Wick, CEO, Wick Building Systems; Curtis Steinbert, CEO, Manufactured Housing Institute; representatives from MetLife; among others.

CORPORATE LEADERS HAVE JOINED THE PRESIDENT IN THE NEW

MARKETS EFFORT BY MAKING REAL COMMITMENTS TO NATIVE AMERICAN COMMUNITIES

Fannie Mae

  • $1 million Tri-Party agreement among Fannie Mae, the Oglala Sioux, and Norwest Mortgage that will assist tribal members in purchasing homes on trust lands.
  • Fannie Mae will commit to invest up to $3 million over the next five years through its American Communities Fund, which is an equity investment vehicle.
  • A Fannie Mae Partnership Office will be opened in Sioux Falls by October 1. Part of the Investment Plan will be a partnership with the South Dakota Housing Development Authority for first time homebuyers. Fannie Mae will commit to purchase $35 million in mortgage revenue bonds. Of this amount, $2 million will be set aside exclusively for Pine Ridge residents to purchase homes at below market interest rates.

Norwest Mortgage

Norwest, in partnership with Fannie Mae, is providing $1.4 million in loans and providing mortgage counseling to families.

Citibank

Citibank South Dakota announced a $150,000 Citigroup Foundation grant to fund installation of Classroom, Inc. -- career simulation software in public schools throughout the state. Under the program, Classroom, Inc. software will be installed in 125 schools over the next two years. More than 200 teachers will also receive related computer training.

The Enterprise Foundation

The Enterprise Foundation is working with HUD on the Pine Ridge effort with the Oglala Sioux Tribe. Enterprise has also been part of a team of consultants working with HUD and PriceWaterhouseCoopers to create the non-profit Oglala Sioux Tribe Partnership for Homeownership, which will provide financial help, private-sector low cost financing, downpayment assistance, and homeownership counseling.

The Native American Homeownership Initiative

The Mortgage Bankers Association will team with Countrywide, Norwest, Bank One, FirstStar, M&T, National Bank of Alaska, Washington Mutual, Bank of America, and other private mortgage lenders to more than double the number of government insured or guaranteed home mortgages in Indian Country for each of the next three years. This Initiative will mean 1,000 additional Native American homeowners.

Bank One and George K. Baum & Company

Bank One Capital Markets and George K. Baum & Company have committed to underwrite $300 million in bonds per year for the next five years to raise funds to be lent to tribes, tribal housing authorities and individual Native American homebuyers. This new initiative will also result in lower interest rates on mortgages in Indian Country.

Mortgage Insurance Companies of America' s Five Year Alliance with Tribes

Members of the Mortgage Insurance Companies of America (MIC) will work to meet the homeownership needs of Native Americans. In all, commitments include insuring a total of $37 million of home mortgages. Commitments under this initiative include the following:

  • The PMI Mortgage Insurance Company recently announced that it has expanded its Native American mortgage insurance initiative nationwide and increased the amount of the commitment by $20 million. PMI is insuring home mortgages for members of four Indian tribes and is negotiating with others. Under the initiative, PLMI agrees to insure loans that require as little as 1% downpayment from the homebuyer with flexible underwriting guidelines and risk shared between the Indian tribes and PMI. Over 76 loans have already been made and over 100 loans are in process.
  • GE Capital will start a pilot program to insure $2 million in mortgage loans in Indian Country.
  • Republic Mortgage Insurance Company will launch the Native American "Financial Independence" pilot project, which will help teach 2,000 Pine Ridge students each year the financial knowledge and tools they need to achieve their financial independence.
  • The Mortgage Guaranty Insurance Corporation will create homeowner education courses for the country' s over 30 tribal colleges and develop new home financing mechanisms tailored to the specific needs of Native Americans.

New $6 Million Manufacturing Facility

Champion Enterprises has partnered with the Gila River Indian Tribe to open a new $6 million manufactured housing facility on the Gila River Reservation in Arizona. When it begins operations in late July, the plant will employ approximately 300 new workers. Champion is actively recruiting members of the Gila River Tribe to fill those jobs.

State of the Art Construction Certification Program for Tribal Colleges

  • Owens Corning and all of the nation' s tribal colleges will work together to bring the Certified Energy Professionals program to Indian Country.
  • Owens Corning will train instructors from every tribal college on housing technology and energy efficiency and on the best methods for teaching their students in these areas.

Job Training in Steel Framing

  • The North American Steel Framing Alliance, Amity and Worthington Industries will help establish job training courses in steel framing at all of the tribal colleges.
  • The companies will also facilitate business relationships between other private companies in the construction industry and Native American economic development organizations.

Cellular Telephone Industry Association' s Wireless Foundation

  • CTIA' s Wireless Foundation has announced its commitment to expand its three national programs to help address some of the communications challenges facing Native American communities.
  • Over the next year the wireless industry has agreed to donate 1,000 phones and airtime to improve education and other community activities on Indian reservations across the country.

The United States Telecommunications Training Institute

At the request of the FCC, the United States Telecommunications Training Institute, a non-profit venture between leading U.S. communications corporations and the federal government, will provide training and advice to Native Americans. The USTTI provides tuition-free training each year to communications officials throughout the developing world.

Gateway

Gateway has agreed to work with the Oglala Lakota Community College to develop a curriculum and donate materials to teach Indian students data processing and computer programming. They have committed $50,000 to the program.

NEW PUBLIC SECTOR EFFORTS WILL FURTHER ADDRESS THE INFRASTRUCTURE AND INVESTMENT NEEDS OF NATIVE AMERICAN COMMUNITIES

Department of Housing and Urban Development

  • HUD will expand Ginnie Mae' s successful Targeted Lending Initiative (currently available only in Empowerment Zones and Enterprise Communities) to increase lending in Indian Country by $1.5 billion. Targeted Lending attracts mortgage lenders by cutting the fees they pay to place their loans in Ginnie Mae securities by up to 50%.
  • HUD has awarded 28 grants totaling $8 million to tribes and Native American non-profits. The grants will go toward projects such as new housing, utilities, water and sewer lines, and economic development projects.
  • HUD' s new program, Homeownership South Dakota, a five-year, $650 million investment plan, will finance affordable housing for 7,500 families. The plan is a comprehensive strategy to assist the state in addressing its housing needs.

Federal Communications Commission

  • Informed by recent field hearings, the FCC will be announcing in August several regulatory solutions to improve universal service support for telecommunications in underserved areas, including Native American reservations.

United States Department of Agriculture

  • The Department of Agriculture has designated an Empowerment Zone on Pine Ridge and eight Enterprise Communities in Indian Country. The signing ceremony for the Empowerment Zone and Enterprise Communities will occur during the Pine Ridge visit.
  • The Rural Utilities Service (RUS) will hold workshops to improve telecommunications and utility infrastructure in Indian Country. RUS is the federal government lead agency to promote reliable, affordable utility services in rural America.
  • The U.S. Department of Agriculture' s Water 2000 initiative seeks to bring important infrastructure -- running water and sewer systems -- to Indian Country. Current plans include 12 water projects in 8 states with a total of $15.9 million in loans and grants.

Department of Commerce Report on Technology Infrastructure

  • The Department of Commerce will release a report on technology infrastructure in Native communities showing that only 39% of rural households in Native communities have telephones, compared to 94% for non-Native rural communities. While the report shows that only 9% of rural households in Native communities have personal computers, it finds that nearly 90% of Native schools and libraries have both computers and Internet access.
  • The report concludes that the federal government should increase funding for Native communities and work to leverage private resources.

Federal Home Loan Bank of Des Moines

The Federal Home Loan Bank of Des Moines will award $1.3 million in grants to the Oglala Sioux Tribe Partnership for Housing, the Rosebud Housing Authority and the Native American Advocacy Project. The Oglala Sioux will use their grant of $499,000 to build 45 new single-family homes in Pine Ridge.

Construction of Lakota Sioux Heritage Culture Center and Related Infrastructure

  • The National Park Service will request $12 million to construct the Lakota Sioux Heritage Culture Center Complex to replace the current Center in Badlands National Park. The new Center would serve as a link between Mount Rushmore and Wind Cave National Park. The project also would bring revenue directly to Pine Ridge because the new visitor center will contract for its concessions services with the Tribe.
  • The Departments of Labor, Defense, Transportation, and Interior, and the State of South Dakota are partnering to build and repair the roads leading to the new Center. These agencies plan to provide job training to the Oglala Sioux Tribe in construction related to the roads and visitor center and to build skills for the long term.

BACKGROUND INFORMATION ON NATIVE AMERICAN COMMUNITIES

AND THE PINE RIDGE INDIAN RESERVATION

July 7, 1999

ECONOMIC DISTRESS AMONG NATIVE AMERICANS

The Native American population is made up of more than 550 tribes. Of the 1.43 million Native Americans living on or near reservations, nearly 33 percent are under the age of 15 -- compared to 22 percent for the nation as whole.

Half of the total Native American workforce is unemployed. Some reservations have unemployment rates much higher, such as the Cheyenne River Sioux Tribe (80% unemployment) and the Oglala Sioux Tribe in Pine Ridge (73% unemployment). (Bureau of Indian Affairs, 1997)

On Pine Ridge, 63% of the population lives below the poverty line. (USDA)

POVERTY AFFLICTS TOO MANY NATIVE AMERICANS AND MANY LACK BASIC NEEDS

  • More than one-third of Native Americans were in poverty, compared to 13 percent of the total US population. (Census Bureau, 1995).
  • 38 percent of Indians aged 6 to 11 live below the poverty level, more than twice the number for all races in the U.S. (18 percent). (Indian Health Service).
  • Just over 63 percent of young people graduated from high school, compared to 77 percent for the total US population. (Census Bureau, 1995; Bureau of Indian Affairs)
  • 29 percent of Indians are homeless, and 59 percent live in substandard housing. (Indian Health Service)
  • In 1990, almost 20 percent of American Indian households on reservations did not have a sink with piped water, a stove, and a refrigerator, compared to just 1 percent for US households. (Bureau of Census, 1995)
  • The majority (53.4%) of American Indian households on reservations do not have a telephone. (Bureau of Census, 1995).

BACKGROUND INFORMATION ON PINE RIDGE, SOUTH DAKOTA

Roughly two million acres, Pine Ridge is the second largest reservation in the U.S. and has a population of 38,000.

Located in the southwestern region of South Dakota and established by an 1889 Act of Congress, the reservation lies on the well-known Badlands National Park and is inhabited by the Oglala Sioux of the Lakotas, the largest of the seven bands that make up the Teton Lakota Nation.

The Native Americans who reside on the reservation suffer from poor health as well as high drop-out rates and unemployment. In 1990, only one industry, a uniform factory in Pine Ridge Village, employed more than a few Oglala. Since then, the tribe has seen an increase in small Indian-owned businesses including cafes, video stores, gas stations and bookstores. The nearest rail shipping center is 45 miles south in Gordon, Nebraska and the nearest international airport in 130 miles north in Rapid City. There is no public transportation within the reservation.

Shannon County One of the Nation' s Poorest. Shannon County covers more than 2/3 of the reservation and is consistently ranked one of the poorest of the nation' s 3,143 counties.

  • In 1997, per capita income in Shannon County was $9,753, 39% of national per capita income of $25,288 (U.S. Census Bureau, 1997)
  • Shannon County has a poverty rate of 46.7% (U.S. Census Bureau)
  • 57.1% of the people under 18 are in poverty (U.S. Census Bureau)
  • The majority of the population does not have access to credit or banking services. Currently, there are no banks within the boundaries of the reservation.

The Oglala Sioux Tribe Empowerment Zone

The Oglala Sioux Tribe Empowerment Zone which was named in January 1999 -- represents the first time that Indian tribal land has been designated as an EZ. Indian tribes are participating in two of the five Round Two Empowerment Zones, including the Oglala Sioux Tribe in Pine Ridge and the Desert Communities EZ in California with three participating tribes. Of the 20 Enterprise Communities, eight are tribal entities.

Pine Ridge EZ benefits include $2 million annually for ten years, employer tax breaks, and technical assistance.