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Whiteclay’s sales cost taxpayers tens of millions annually
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Whiteclay’s sales cost taxpayers tens of millions annually

From the Continuing coverage: Battle over Whiteclay beer stores series
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WHITECLAY -- Consider the consequences of this simple math: Seven cans of beer are purchased every minute of every hour of every day in Whiteclay.

Perched on the northern edge of Sheridan County, the unincorporated town of a dozen residents is home to four beer stores that collectively sold the equivalent of 3.5 million cans of beer in 2015 — almost all of it to Native Americans from the Pine Ridge Reservation, which hugs the state border on the South Dakota side.

The Whiteclay beer store owners, brewers, beer distributors, bootleggers, the state of Nebraska and the federal government all profit from beer sold in the town.

But each pop of a tab comes with costs that far exceed the money made from the simple sales transaction. They include:

* Costs to law enforcement handling violence and drunkenness in the town and on the reservation.

* Costs to health care providers treating alcohol-related injuries and illnesses, including an epidemic of babies born with Fetal Alcohol Spectrum Disorders.

* Costs to county, state and federal governments caring for unemployed alcoholics and their dependents.

* Costs to Natives of the Pine Ridge Reservation in lost lives and broken families.

No one — not the federal government, not the states of Nebraska or South Dakota, not local or national news organizations — has tallied up all of the costs. But months of research into data from tribal, county, state and federal sources make it evident the total is in the tens of millions of dollars annually. While the costs may be murky, one thing is crystal clear: Who picks up the tab.

“It all comes from taxpayers,” said Matt Walz, a founding member of the South Dakota Alcohol Policy Alliance. “No matter which way you slice it.”

But those are just the costs in dollars and cents. For the Lakota of the legally dry Pine Ridge Reservation, the bill is paid in pain and suffering.

“It’s in every single one of our families,” said 40-year-old Olowan Martinez, a longtime Whiteclay activist and Pine Ridge resident. “No matter how educated, no matter how nice our homes and how good we live. We could be some of the haves, of have-nots, and still be affected by it.”

* * *

At the end of a long day in October, Sheridan County Sheriff Terry Robbins points his new white Ford F150 north toward Whiteclay. At just a tick under the speed limit, the 22-mile journey up Nebraska 87 from Rushville takes about 25 minutes. He wears a standard-issue brown shirt and sandy-colored pants accessorized with a big silver belt buckle. His cream-colored cowboy hat rests on the dash.

Robbins says he usually travels to Whiteclay a couple of times each week — the town accounts for about 5 percent of his department’s calls — and he spends no more than a few hours there total. Most of the problems go unattended, Robbins says, because no one is monitoring the town 24/7.

Just before Robbins arrives at Whiteclay’s short, dusty main street, he turns onto a gravel road. There, in a grassy ditch under the shade of a tree, sit two Lakota men. One hides his beer behind his back; the other pulls down an open can of Camo Black Ice from his mouth.

“Is that open?” the sheriff asks.

“I’ll spill it out,” the man replies. He tips the can upside down, and watches as 24 ounces of high-octane malt liquor splash onto the gravel road.

It’s easy to get drunk on a few bucks in Whiteclay, where beer is cheaper than water. Most of the Lakota drink big cans of “high gravity” malt liquors, such as Hurricane and Camo Black Ice. For about $1.50, each 24-ounce can delivers the equivalent of a six pack of beer or four shots of whiskey.

That’s about 38 cents a shot.

Of that $1.50, about a quarter is taken out for taxes. The state of Nebraska receives 7 cents in sales tax and 6 cents in excise tax, which is paid on products such as alcohol and gasoline. The federal government receives 11 cents. That leaves $1.26 for the brewers, distributors and the four Whiteclay beer store owners. The breakdown of who gets what isn’t publicly available. But $2,142,000 — what you get when you collect $1.26 for each of the 1.7 million 24-ounce cans sold in 2015 — is a lot of money to divvy up.

Asked to discuss the situation in Whiteclay, three of the beer store owners declined to comment on the record. The fourth owner could not be reached.

As for the taxes, the federal government received $192,221 in 2015 and the state of Nebraska $102,739. All of the state’s money goes into the general fund.

South Dakota, where nearly all Whiteclay beer is consumed, doesn’t see a penny in tax receipts. Instead, every can consumed by South Dakota residents costs their state $1.59, according to a 2015 report from the Centers for Disease Control and Prevention. Based on a standard-size alcoholic drink, like a shot of whiskey or a 12-ounce beer, the CDC number takes into account all costs attributable to excessive drinking, including those in the health care, law enforcement and criminal justice systems as well as the cost of reduced workplace productivity.

But $1.59 is an average cost to South Dakota for each alcoholic beverage consumed in the state. Whiteclay alcohol is likely to carry an even higher price tag; at 24 ounces, cans of Hurricane and Camo Black Ice are twice the size of a standard beer and four times the alcohol content.

Back in Whiteclay, Robbins pulls up next to a man lying on the ground, just yards away from the highway. The sheriff steps out of the truck, walks over and helps him sit up.

“Get up,” Robbins says.

“I will,” the man replies as he sits up and slouches against a fence, his eyelids stuck in a drunken droop.

“Are you drunk, or are you just chillin?”

The man mumbles something inaudible.

“What have you been drinking? Beer?” the sheriff asks.

“Just Kool-Aid.”

The sheriff makes sure the man stays sitting up before driving away. There’s not a lot he can do to help.

Taking a drunk home is rarely an option — the reservation is about the size of Delaware and Rhode Island combined. Plus, there’s not an easily accessible detox. From Whiteclay, the nearest one is 37 miles away in Gordon. The reservation does have an eight-bed detox — but there’s a year-long wait.

The sheriff’s realistic options are to take a Whiteclay drunk to the county jail in Rushville or to the Pine Ridge Hospital just a few miles down the road.

But the hospital has no detox unit or the money to pay for one. Still, it often bears the brunt of the cost of dealing with the problems related to Whiteclay alcohol. Robbins said he takes street people to the hospital at least once each week. In 2015, the hospital handled 152 ambulance calls to the tiny town. With the nearest Nebraska hospital in Gordon, the Pine Ridge ambulance is often the sole responder to a Whiteclay call.

As for the jail, Robbins said he doesn’t like to burden the Sheridan County taxpayers with the cost of detaining Whiteclay street people.

County Commissioner James Krotz has said a third of the Sheridan County budget goes to Whiteclay. When asked further to explain that number, he said it was “roughly” attributed to an 8-year-old study on the county jail, which found a third of the people detained in Rushville had Pine Ridge addresses.

At an Oct. 11 hearing at the Nebraska State Capitol, Sheridan County Commissioner Jack Andersen succinctly summarized the county’s Whiteclay problem: “We really need help with law enforcement.”

But Paul Thibeault, a lawyer at Legal Aid of Nebraska, said his research has found Sheridan County actually has minimal involvement in Whiteclay.

“The truth is that they ignore Whiteclay, and they minimize their expenses to Whiteclay,” he said. “Without any compensation, without any agreement, they transfer the burden to the reservation.”

Four hundred yards north of Whiteclay is the reservation’s law enforcement counterpart to Sheridan County. The Oglala Sioux Tribe Department of Public Safety is on the frontline of Whiteclay troubles.

Interim Police Chief Mark Mesteth says Whiteclay, a town just barely out of his department’s jurisdiction, is responsible for 80 percent of his calls.

That makes Mesteth a busy man.

In October, the only place he could meet to talk about Whiteclay was a reservation jail in the small town of Kyle, South Dakota, where he was meeting federal investigators to discuss a drug-related killing outside a reservation youth complex. He only had 10 minutes for an interview that had been scheduled to take place six hours earlier and 34 miles away.

Appointed interim chief in July, Mesteth inherited an understaffed and overworked department. As of October, he had only 26 officers to police a population of 32,152 spread over 3,469 square miles. By comparison, Rapid City, South Dakota, just north of Pine Ridge, has a force of 125 officers and a population of 70,812. That’s one officer for every 566 people.

On the reservation, it’s one officer for every 1,237 people.

Mesteth said his department struggles to keep up with the Whiteclay problems. He’d like more officers. In fact, he has the money to hire another 18. Applications are scarce, however, and the department has a high turnover rate because it’s a burnout job.

He said there needs to be a solution to the deluge of Whiteclay-related calls, such as shutting down the town’s beer stores or legalizing alcohol on the reservation.

“We could be cops instead of chasing drunks,” he said.

* * *

The frontline of Whiteclay first responders stretches along U.S. 18 from the reservation’s police headquarters to the Pine Ridge Hospital 3 miles away.

Rainey Enjady, CEO of the hospital, echoed Mesteth’s assessment. Alcohol, she said, is a huge expense — one the hospital can’t afford. Like Mesteth, Enjady is an interim appointment, arriving from New Mexico at the beginning of September. She directs the reservation’s only hospital and its $51.8 million annual budget.

In 2015, just $4 million of that budget was supplied by payments from private insurance. The rest came from the government: $502,000 from Veterans Affairs, $22 million from Medicaid, $5.1 million from Medicare and an estimated $20 million from Indian Health Services, also a federally funded organization. That means only about 8 percent of the budget is privately funded.

While it’s easy to say where the money comes from, it’s difficult to pin down how the hospital spends it. Enjady was uncertain about alcohol-related expenses. She said the hospital tracks the number of alcohol-related illnesses, but she couldn’t find it. Lack of numbers notwithstanding, Enjady said the cost of alcohol is a big one.

“Alcohol-related items that we see are very expensive and contribute to a lot of our deficit,” she said.

Other high-ups on the reservation also couldn’t quantify the impact. According to Cleve Her Many Horses, superintendent of the Bureau of Indian Affairs in Pine Ridge, no one tracks alcohol consumption or alcoholism on the reservation.

Alcohol plays a role in a variety of diseases. Well known are cirrhosis of the liver and eight types of cancer, including liver and breast cancers. Assigning a specific cost to the role of alcohol in some diseases can be problematic. But there’s one disease in which alcohol’s cost can be clearly assigned: Fetal Alcohol Spectrum Disorders.

FASD is not widely known to the general public, but it has occurred at epidemic proportions on the Pine Ridge Reservation. At one point, The New York Times reported, as many as one in four babies on the reservation was born with FASD.

Drinking alcohol while pregnant causes FASD. Its effects vary according to when during the pregnancy the alcohol was consumed and how much was consumed. Mild effects can be as simple as learning disabilities, such as having difficulty focusing. More severe effects include abnormal organ development — most lethally of the heart — seizures, brain damage and relatively low IQs. In the most severe cases, the fetus doesn’t survive.

FASD carries a high price. The disorder costs the federal government about $4 billion annually, according to the CDC, and caring for a child with FASD costs $2 million over a lifetime.

That’s the average, though.

In a double-wide trailer 40 miles west of Rapid City, Nora and Randy Boesem raise and care for nine adopted children. Each has some form of FASD. By age 3, their daughter, Arianna, had required surgeries, medications and hospitalizations costing more than $3 million. To meet the family’s needs, Nora said, the local pharmacy had to hire someone specifically to fill their medications. The Boesems couldn’t begin to afford these astronomical health care costs. So, the state of South Dakota, through its Medicaid program, picks up the tab.

Frank LaMere, a member of the Winnebago Tribe and long-time campaigner for change in Whiteclay, said alcohol sold there is a tragedy because of what it does to babies and future generations.

“We continue to export the misery of Fetal Alcohol Syndrome north to Pine Ridge,” he said, “while sending revenue and tax dollars south to Nebraska.”

The “carnage,” he said, must be stopped.

* * *

Sitting at a small table in Big Bats, the gas station and convenience store hub of reservation activity in the town of Pine Ridge, Bryan Brewer says, “Hi,” to all the regulars walking by. The current school board president and former tribal president, Brewer is well-known on the reservation.

Nursing his coffee, he recounts the first time he watched TV. It was in a bar in Whiteclay. He and other kids sat at the bar, watching the Ed Sullivan Show on a tiny screen, while their parents drank.

Brewer knows the cost of alcohol to his people far exceeds dollars-and-cents accounting. He’s heard the news of a teenage girl dying from cirrhosis of the liver and a 6-year-old boy attempting suicide. And he’s paid the price himself.

Brewer picked up his parents’ drinking habit as a teenager. Then he went to Vietnam, and his drinking worsened.

When he returned from the war, he and other vets spent much of their time in Whiteclay.

“We were the abusers,” he says today. “We were in Whiteclay in the bars fighting each other, abusing women, our wives.”

But he realized he had to change. So, he started attending Black Hills State University and quit drinking. He taught high schoolers on the reservation for 30 years, became tribal president and now sits as the head of the Oglala Lakota County School Board.

The reservation, he says, needs a lot of healing.

“The biggest cost is to our children and the adults that we’re losing because of alcoholism.”

But for Brewer alcoholism is a symptom of the bigger problem on the reservation — generational poverty. Brewer remembers an 18-year-old who walked into his office when he was tribal president and asked for a job. The teenager said he didn’t know how to get one. His parents never had a job; his grandparents never had a job. But he wanted his life to be different.

Fifty-five percent of Pine Ridge residents are unemployed, according to 2015 census data and the 2013 American Indian Population and Labor Force Report. The reservation has a few thriving businesses, like the Prairie Wind Casino & Hotel and Big Bats. Otherwise, reservation businesses are few and far between.

There’s not even a place to buy a coat.

As board president, Brewer says he’s seen too many kids walk into school without winter coats. And too many parents, he says, spend what little money they have on alcohol. So, each year, Brewer budgets money to buy coats for the kids.

On the reservation, coatless children too often end up as tragic victims of suicide and drunk-driving accidents. Adults don’t fare much better. Most people on the reservation do not live to retirement age. According to hospital data, the life expectancy for men on the Pine Ridge Reservation is 47 — the lowest in the world. For women, it is 55 — the seventh lowest in the world.

“It is not an exaggeration,” Frank LaMere said, “to say tens of thousands have died in Pine Ridge because of alcohol attributed to Whiteclay.”

Over the years, Brewer has tried to work with the state of Nebraska to resolve the problems the village of 12 has caused his people. He remembers one such attempt in particular.

While tribal president, Brewer had arranged a meeting with then-Nebraska Gov. Dave Heineman. He walked into the governor’s office, hoping to get a minute to talk about Whiteclay. The meeting was short.

“The governor told me that, ‘Whiteclay is your problem; it’s not mine.’ Meeting ended. It was not good,” Brewer recalls. “I never went back.”

As for the meeting, Brewer and Heineman agreed on one thing — it was short. The former governor had a different take. Heineman said he told Brewer, that as tribal president, he should educate his people on alcohol and alcoholism.

“I felt like that was a responsibility for him as a leader to help educate Native Americans about that. And he just didn’t want to talk about that,” said Heineman, who received $47,500 in campaign contributions from 2005 to 2012 from Anheuser-Busch Companies LLC — one of the brewers of Whiteclay malt liquor.

So, after all these years and all these efforts, what would Brewer do about Whiteclay? He says closing the beer stores wouldn’t resolve all of the problems the town has caused the reservation. And it isn’t the only answer to pulling Pine Ridge out of poverty.

But shutting down that “evil place,” he says, would be a good start.

“We don’t go sell meth in Nebraska or anything that would hurt your people,” Brewer says. “Why would you do it to us?”


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