WASHINGTON — In a motion filed Monday in a DC court, the Prairie Band Potawatomi Nation accused the Treasury Department of using a wrong formula when calculating the initial distribution of $4.8 CARES Act funds for tribal governments. 

As a result, the Prairie Band claims its population was undercounted by as much as 80 percent, denying the tribe nearly $8 million in much-needed relief aid, the lawsuit claims.  

The remaining $3.2 billion of $8 billion earmarked for American Indian tribal governments is expected to be distributed this week.

The Prairie Band is seeking an injunction to halt payment for 21 days until such time as a more accurate funding formula consistent with the CARES Act can be developed.

“The Tribal Council and I are appalled that the Treasury Department wrote off a significant portion of the Prairie Band Potawatomi Nation’s membership when making the initial CARES Act distribution. This suit is intended to restore justice to our Tribe and other similarly situated tribes,” Joseph Rupnick, chairman of the Prairie Band said,  “We don’t want to see Treasury distribute any more CARES money until it fixes the problem from Round 1 and we have a chance to see the formula that Treasury intends to use for Round 2.”

In the motion, the tribe alleges the Treasury Department’s approach was flawed when it used Indian Housing Block Grant (HUD) information, instead of the tribe’s population numbers that were submitted by tribal officials at the Treasury Department’s request.

“Treasury’s approach undercounts 3,689 Prairie Band Potawatomi citizens, resulting in a Population Award shortfall of approximately $7.65m for the Prairie Band Potawatomi. Prairie Band’s claim to these funds will be forever foreclosed by their delivery to other Tribal governments,” the lawsuit states.

“While the Prairie Band has over 4,500 members, the HUD formula that was adopted by Treasury undercounted the Nation’s enrolled population by 80 percent. Many tribes had had their population listed as zero. As a result of this absurd decision, the Nation was denied nearly $8 million in funding that it otherwise would have received,” the Prairie Band said in a press release distributed on Monday.

“In this motion, plaintiff seeks to restrain Treasury from disbursing $3.2 billion dollars of CARES Act funds to ‘Tribal governments’ until it adopts an allocation methodology that corrects its underfunding of tribes like Prairie Band Potawatomi that resulted from Treasury’ arbitrary and capricious decision to ignore tribal enrollment when making distributions on the basis of Tribal population,” the lawsuit reads.

The motion is among several lawsuits against the Treasury Department brought by over a dozen tribes relating to the CARES Act funds. At issue in most of the lawsuits was the inclusion of Alaska Native corporations into funds intended by Congress.

Last month, three leading universities, Harvard University, the University of Arizona and UCLA, released a study that showed the Department of Treasury used “arbitrary and capricious” data that either overrepresented or underrepresented the tribes’ populations.

READ Motion

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