Joe Pakootas steers Colvilles in positive direction

When Joe Pakootas was a junior at Inchelium High School, he took a course in which each student studied a political system and reported on it.

“Everyone else chose things like China and Russia, governments you could see on TV or read about in the newspaper,” recalled Pakootas.

“I chose the Colville tribal government, because most people on the reservation didn’t know much about it.

“When I finished my presentation, the teacher, Tom Flugel, asked if I’d ever want to be involved in tribal government, and I said, ‘No way in hell!’ ”

Yet Pakootas eventually served 16 years on the Colville Confederated Tribes’ governing council.

Four years ago, he was named CEO of the Colville Tribal Federal Corp., which manages three casinos, three grocery stores, two smoke shops and a half-dozen other tribal businesses.

Last month, the corporation received the University of Washington’s Minority Business of the Year Award for taking the tribes’ enterprise arm from the brink of bankruptcy in 2009 to solid profitability today.

During a recent interview, Pakootas discussed the corporation’s financial turnaround, challenges that remain, plus a major announcement he plans to make later this month.

S-R: Where did you grow up?

Pakootas: In Inchelium, on the east side of the Colville Reservation.

S-R: What were you interested in as a teen?

Pakootas: I was mostly into athletics: football, basketball, baseball and track. I wasn’t involved with student government at all.

S-R: Did you have a mentor?

Pakootas: John Donnelly, the Inchelium High School football and basketball coach, was probably the biggest factor in my life back then. He taught me about discipline and focus and desire, how to work hard.

S-R: What was your first job?

Pakootas: I started logging when I was 17, but that didn’t last long. We’d get up at 3 or 4 o’clock in the morning and start work about 6. Then we’d get off at 5 or 6 in the evening, come home, eat dinner and go right to bed.

S-R: Did you attend college?

Pakootas: I went to Eastern Washington University for one year, but couldn’t afford it after that, so I quit and went into construction.

S-R: How long did you do that?

Pakootas: From 1978 until ’85. Toward the end, I was mostly drilling and blasting.

S-R: Why did you decide to try politics?

Pakootas: I got some coaxing from tribal members. I was elected to the Business Council (the Colville Confederated Tribes’ governing body) in 1987, and served six two-year terms, including five years as chairman. I lost in 1999, and then was re-elected in 2001 and served two more terms.

S-R: Did you get any more formal education after your year at Eastern?

Pakootas: I never earned an undergraduate degree, but I got an executive MBA from the University of Washington in 2006. I was only the second person accepted into the program without an undergraduate degree, and the first without a degree to complete the program.

S-R: What did you take away from the UW program?

Pakootas: A better understanding of the outside corporate world, including off-shore economies such as China and India.

S-R: Then what?

Pakootas: I applied for CEO of the tribes’ business operation. But the board of directors said I didn’t meet the minimum qualifications. So I went to work for the Kalispel Tribe as executive director of Camas Path, which oversees that tribe’s medical and dental clinic and other health and education programs. I helped create a succession management plan for the tribe, and left that job after 3 1/2 years because I trained one of their tribal members to replace me.

S-R: And that’s when the top job at the Colville Tribal Federal Corp. opened again?

Pakootas: Yeah. I’m the 25th CEO since the corporation was formed in 1984. I think the longest one before me lasted about a year and a half.

S-R: Why?

Pakootas: Most of them were non-Indians, and it’s a real tough position if you don’t understand tribal culture.

S-R: Give me an example.

Pakootas: Non-Indians wrote our employee policy manual, not taking into consideration a lot of our traditions. The best example might be the death of a tribal member. In the outside corporate world, you might get two or three hours off to attend the funeral. But tribal members may need a week or two to mourn the loss of an elder or an immediate family member. That’s something I understand. I let our employees take the time needed, because if they’re at work and still grieving, they’re not very productive.

S-R: The first time you applied for the job in 2005, you weren’t qualified. So you go to work for another tribe, come back four years later and you’re qualified. What changed?

Pakootas: A different board of directors.

S-R: What was the corporation’s financial situation when you took over in January 2010?

Pakootas: The Colville tribal council activated the federal corporation two months before I started. The previous corporation, which also included the tribes’ two lumber mills and the Lake Roosevelt houseboat concession, was $8.1 million in the red. By the end of the fiscal year in September 2010, we were $2.3 million in the black.

S-R: What caused the turnaround?

Pakootas: When they closed down the mills (in 2009), they sent home the production workers, but they kept all the managers on the payroll, and it was costing us $200,000 a month. We couldn’t fire them, so I closed both businesses completely and laid everybody off.

S-R: Where else did you save money?

Pakootas: The houseboat operation on Lake Roosevelt had lost an average of $250,000 a year for 20 years. The council kept it going because of jurisdictional issues on Lake Roosevelt. I closed that down, too.

S-R: How did you generate more revenue?

Pakootas: We refinanced $28 million in debt. Also, we’d just completed a new casino at Lake Chelan and made some improvements in our other two casinos, and that increased our revenue quite a bit. Since then, gaming revenue has gone up 15 to 20 percent a year.

S-R: How would you characterize the corporation’s health today?

Pakootas: Revenue-wise, we’re very successful. The first year we replaced the business structure, we had $49 million in total gross revenue. Last year, we had $86 million and, this year, we hope to be up around $120 million to $140 million. But we still have a long way to go. We have 55 to 60 percent unemployment on the reservation.

S-R: Not all tribal members want to work in casinos, do they?

Pakootas: No, not at all. And the Lake Chelan casino is 50 miles from our reservation, so only about 10 percent of the people working there are tribal members.

S-R: What is the biggest challenge the corporation faces today?

Pakootas: Capital. We still have to borrow money to operate existing businesses and start new ones. A lot of banks don’t want to finance tribal enterprises because our land is held in trust, so they can’t collateralize it. They can only collateralize the equipment or the building. So if the business went bankrupt, they’d have to come in and operate it or find another operator.

S-R: What one change would make the corporation more prosperous?

Pakootas: Greater diversification, particularly manufacturing. Indian Country can offer manufacturers the same sort of advantages they currently get offshore – tax credits, cheaper labor and cheap electricity.

S-R: What are you most proud of about your job?

Pakootas: The team we’ve put together. We’re 100 percent Native American at the director level, the board level, and all our managers are Native American. It’s the first time in our history that’s happened.

S-R: What frustrates you?

Pakootas: Gaming used to cover the cost of the other tribal businesses. Now we insist that all our businesses be self-sufficient. That’s tough, because things like our grocery stores are never going to make much profit. They’re just there to provide a service for tribal members.

S-R: Do friends call and say, “Joe, I’ve known you for 40 years. Can you find me a job?”

Pakootas: I get a few of those, and I tell them to be patient – that we’re on the move, and eventually we’re going to be the largest employer in north central Washington again.

S-R: What’s ahead for you?

Pakootas: I haven’t officially announced it yet, but the word is out that I’m seeking the Democratic nomination in the 5th Congressional District.

S-R: Can you do that in addition to running the tribal corporation?

Pakootas: I can until March or April, because right now I’m still in fundraising mode. But once the campaign starts, I’m hoping to take a leave of absence.

S-R: What are your chances against the incumbent, Republican Cathy McMorris Rodgers?

Pakootas: It’s going to be a heavy lift, but Republicans have been making some mistakes and rural America has really noticed it.