Maine Indians move into a new, brighter era. Passamaquody and Penobscot tribes investing new wealth in the future

Yesterday, on a patch of meadow where the locals used to catch rabbits and pheasant, construction began on a cassette tape factory. To the inhabitants of Indian Island, a 375-acre enclave in the Penobscot River here, the project is an embodiment of progress.

It is the latest in a succession of business enterprises springing from the $81.5 million federal land claims settlement awarded Maine's two Indian tribes nearly five years ago. As such, it represents the most recent attempt of one of those tribes, the Penobscot, to realize what once seemed a virtually unattainable goal: cultural and economic independence.

``Ever since we gave up our nomadic way of life 200 years ago, we have been dependent on the federal government for survival,'' says Timothy Love, governor of the Penobscot reservation. ``We became wards of the state -- bums. It was a vicious cycle that we couldn't seem to break out of. Now, I think we're finally doing it.''

After two centuries of struggle, the Penobscot and Passamaquody tribes in Maine are reviving ancient languages and traditions. They are reacquiring hundreds of thousands of acres of land in northern and eastern Maine that once belonged to their ancestors. Their communties are being transformed from rural slums to model communities. Their tribal governments are now represented in the state legislature.

The two Native American tribes -- some 1,800 Penobscots and 2,200 Passamaquodys -- own the largest single pool of investment capital in Maine. With an investment strategy that could pump as much as $26 million into the state's economy over the next few years, they have become one of the state's most significant economic forces.

The irony, tribal leaders say, is that the land settlement was opposed by most state leaders during a decade of litigation and negotiations. Some ``called it a giveaway,'' says Mr. Love. Now the tribal trusts look more like a boon to capital-poor Maine.

``By the end of this year we'll really be exploding,'' declares Love. ``We'll be doing things that are revolutionary -- never been done by any tribe.''

All this has come to a people long viewed as victims of economic discrimination, systematically excluded from the mainstream political process and subject to the suppression of their own culture and heritage.

Says David Cheever, press secretary for Maine Gov. Joseph Brennan: ``They've become Maine's greatest success story.''

At the Penobscot reservation on Indian Island the tribe is building a $3 million school to replace an old, cramped structure. Recently completed was a $1.5 million ice arena where high schools in Old Town as well as in neighboring Orono and Brewer can run full-blown varsity hockey programs for the first time.

A telemarketing company, employing mostly members of the Penobscot tribe, should be getting under way in the fall. Like the audio-cassette factory, it will feature a profit-sharing plan as a centerpiece -- part of Love's strategy to instill a work ethic into inexperienced employees. ``It's simple. The better they work, the more they'll make,'' he says.

Some investments represent pure business propositions: The tribe has already established a successful credit-enhancement agency for small companies. More deals, says Love, are in the offing. ``We'll look at anything,'' he insists.

The Passamaquody have bought a cement plant in the central-coast region, a 1,000-acre dairy farm and a radio station in Bangor, and 6,000 acres of blueberry barrens in central Maine.

Together, the two tribes have bought about 225,000 acres of timberland in their continuing land-acquisition program.

The list will continue to grow, says Portland attorney Tom Tureen, who orchestrated the landmark 1980 settlement and now devotes his entire law practice to Indian affairs. ``It's moving more quickly than I had anticipated, but there's still a lot to be done,'' he says. ``They are at the beginning of a very lengthy process. You really haven't seen anything yet.''

Nevertheless, the evidence of change at Indian Island is unmistakable -- particularly in the minds of many of its residents. ``Twenty years ago there was nothing,'' says Philip Lowler.

Born here 64 years ago, he worked many years for the Otis Elevator Company in Boston, returning to Indian Island in 1978. ``It was all dirt roads -- no plumbing, no heat, no bridge. The houses were falling apart,'' he recalls, shaking his head at the memory.

Today, preparations are under way to replace the single-lane bridge that links the island to the rest of Old Town with a two-lane design this summer. Coming off the bridge and passing by Chief Poolaw's moccassin teepee and the St. Ann's Roman Catholic Church, one notices that many of the houses are freshly painted. Some have aluminum siding.

Farther into the island is a vast community center that houses the tribal administration offices, a basketball court, and a large area until recently used for a brand of high-stakes bingo that the tribe was forced by the state to abandon as illegal. Nearby is the new ice rink, and construction has begun on the new community school and a new sewage-treatment plant.

There is even a taste of modern urban development, instigated by a severe housing crunch that developed in the late 1970s. On sweeping lanes and cul-de-sacs with names like Burnuseurbeck Lane and Rolling Thunder Drive, the tribal housing authority has built contemporary row houses.

Less tangible, tribal leaders say, is the element of hope that has been injected into the lives of many of the Penobscot and Passamaquody. ``It's hard to put your finger on it,'' says Love, ``but there's more confidence among the young people than before.''

More than 30 Penobscot youths are attending college or taking some form of post-secondary school training -- an all-time high, according to Sister Helen McKeough, who runs the Indian Island school system. Just as significant, ``they're staying with the programs and seeing them through,'' she says. ``There is a feeling of growth and rejuvenation here that is quite inspiring.''

It is not to the land settlement that Indian leaders attribute all or even most of this turnaround. Many of them think momentum for the changes developed during the civil rights crusades of the 1960s. The specific changes themselves, they say, were made possible through a district court ruling that resulted in official federal recognition of the Maine tribes and made them for the first time eligible to receive $5 million a year in federal benefits for housing, education, and health care.

``After that, the land settlement almost didn't matter,'' recalls Ralph Dana, who was governor of the Passamaquody reservation at Pleasant Point (near Eastport on the coast) during the time of the settlement. ``The money from the federal government allowed us to build new schools, improve the standards of health care. It set the style for future work.''

Since the 1980 settlement, that style has included a pattern of conservative investment favoring the long-term buildup of the tribes' resources rather than lump-sum payments to individuals. Investment ideas come from Mr. Tureen's law firm and a recently established investment bank called Tribal Assets Management. With a go-ahead from the individual tribal governments, the lawyers and investors analyze a possible investment and then design a financing plan for it.

``We've all come to the conclusion here that their apetite for risky investments is rather limited,'' says Daniel Zilkha, who heads up Tribal Assets Management. ``And the tribal leaders have been willing to look at their investments from the long-term point of view.''

That approach has not been welcomed by all tribe members, some of whom expected a quick reversal of their economic fortunes. Some tribe members have reportedly been upset by the pragmatic investments made by the leadership. Many of the new enterprises do not give job preference to Indians over non-Indians.

``I'd say it's split about 50-50,'' says Mr. Dana, who owns a construction company employing nine people, only three of whom are Indians. ``A lot had the idea that they'd suddenly be millionaires and could spend the rest of their days lolling on a beach somewhere. The ones who were for the deal realized that there was a lot of work to be done.''

Tribal leaders say training and education are their top priorities. ``We've just started on a very long road,'' says Love, at the end of which is ``our independence.''

It will be, Dana says, ``a society that non-Indians will envy.'' -- 30 --