news040709

Posted April 7, 2009 - Murphy, NC

Meeting to Be Held in Birdtown Over Minor's Fund Losses

Staff Reports

CHEROKEE - April 8 at 6 p.m. in the Birdtown Community Building, a meeting is being held by community members to discuss the losses experienced by Minors' Fund account holders in the past year. Many parents were surprised and upset when they received statements revealing losses in their children's accounts, some as much as $20,000. Three members of the Investment Committee, which oversees the investment of those funds, reportedly resigned.
Per capita disbursements for minor tribal members are placed in accounts to accrue value and interest up to the point of 18 years of age or 21 should they not have finished high school. These accounts, of which a portion is invested in the highly volatile stock market, are said to have lost a total of $60 million total, since the end of last December. That amount is expected to be more since January and February were bad months for the markets as well.
Much anger has been expressed by parents, some of whom were under the impression that tribal government had "stolen" from their children. The fund was created in 1996 with the purpose of not only holding the disbursements for children, but to grow in value. Concerns over how the funds are invested were raised after the markets took a dive in 2001. Back then parents were expressing opposition to putting any of the funds in risky investments. Principal Chief Michell Hicks, who was then Director of Budget and Finance, was quoted in the Smoky Mountain News in 2003 saying, "When I go to these community clubs, I get grilled. The reality is, we’ve never had money before. It’s a new animal for us. The question is how do we invest to first protect the principal and also earn reasonable interest." Even after losses then, Hicks defended placing investments in the stock market. "The process in place is a good process. My recommendation to council is that we take a look at other investment vehicles."
However, current Vice Chief, then Tribal Council Vice Chairman Larry Blythe disagreed. "How do you create something that grows, but still protects the principal. I’m not sure we want to play this roller coaster thing. I’m leaning towards protecting the principal. That’s what I want to see for my kids." To this day, a portion of per capita disbursements to minors are invested in the stock market.