Herman Red Elk stoops to peer into the open workings of the furnace in Angie Thunder Hawk’s basement, his big hands sliding deftly around wires and valves to make an adjustment.

In a flash, the flames rise and the furnace rumbles to life.

“See, lads?” he says over his shoulder. “I’m too good at this. I take one look and I know what needs to be fixed.”

Red Elk has been fixing people’s furnaces, air conditioners and plumbing for years on Fort Peck Reservation in northeast Montana. He started more than 20 years ago, learning the trade working for the tribal housing authority.

With more than 1,000 tribal-owned houses on Fort Peck, the housing authority is the leading employer of construction and maintenance contractors on the reservation.

But Angie Thunder Hawk’s house isn’t owned by the housing authority and Red Elk doesn’t get work from the authority anymore.

The housing authority hires by Indian preference, which means it will hire a contractor who is a tribal member over another contractor if the bids are within 10 percent. And while Red Elk is a full-fledged tribal member, he hasn’t paid the $75 fee to register his business with the Tribal Employment Rights Office.

Red Elk is protesting the fee, which he thinks unfairly targets Indians.

Because non-Indian contractors do not have to pay the TERO fee, Red Elk says they have an unfair advantage to come on the reservation and take jobs away from tribal members.

“At first I bought the license,” he says. “But after a few years I thought, this has never done anything for me. Why am I paying a fee that doesn’t help me?

“To charge Indians a fee when the white contractors don’t have to, to me, that’s a form of prejudice.”

TERO is a federal program that aims to ensure fair hiring practices on Indian reservations. On each reservation, regulations are set and governed by the tribal council, and enforced by TERO officers.

All construction contractors who work on the reservation must, in theory, register with TERO, a tribal agency that makes sure companies carry sufficient insurance, are properly licensed and hire 80 percent Indian employees.

At Fort Peck, non-Indian contractors are not required to pay a fee for a TERO license because they do not receive benefits from the agency, such as insurance coverage.

TERO rules are in place to ensure jobs for Indians on the reservation, but off-reservation contractors have found ways to skirt the rules using the vague language and loopholes to their advantage, Red Elk says.

On a reservation where more than 70 percent of the residents are unemployed, a construction job can mean the difference for an entire family. For Red Elk and his family it’s critical.

After his wife, Bonnie, lost her job unexpectedly earlier this year, Herman Red Elk looked for work subcontracting in order to make ends meet, but was refused work by the housing authority.

“Other contractors have offered me work, but the housing people have said, ‘You can’t use Herman, because he is not TERO-certified,’” Red Elk says.

Contractors hired by the housing authority get more work because the authority controls the large amount of property owned by the tribe.

“It is always nice to have that source of income through HUD. The people who get those contracts are doing the most work,” he says.

But another factor grates on Red Elk. “The majority of their furnace people, I taught,” he says. “To have this history with them and the way it is now, to me it is just a slap in the face.”

Among family and friends, Red Elk has a reputation for being stubborn, gruff and often aloof. But his softer side shows in the work he does in their homes, often free of charge.

“Herman will go out at 3 in the morning if someone calls,” Bonnie Red Elk says. “He can’t turn them down. He’ll fix their furnace no matter what.”

Bonnie Red Elk supports her husband’s protest, even if it does mean less income.

“He’s been able to work without housing, but he just wants to fight it,” she says. “All these years that TERO has been around, and they didn’t enforce it (the licensing) until recently. There are more people working for TERO that aren’t certified than just Herman.”

But TERO director Denver Atkinson denies that.

Atkinson says all contractors who work through the TERO office have paid their fees. And while it is true that only Indians have to pay to register their businesses with TERO, he claims that isn’t prejudice.

“Indians are getting the preference,” Atkinson says. “The fee is a small price to pay for that preference. It is their land, and they are entitled to work on it. If others choose not to pay, they are not entitled to the preference.”

Atkinson’s office is a small side room in a converted one-story building, formerly home to the Bureau of Indian Affairs. It resembles a meeting hall, one large open room with small offices stuck on the side. The main area is a labyrinth of soundproof walls and cubicles. Paper signs label each department.

On the wall of Atkinson’s office is a large black and white map of the reservation, with survey plots of land labeled in bold red marker strokes.

Atkinson has been familiar with these plots for 26 years. He first saw them up close in the late 1970s while monitoring oil well operations as a TERO field inspector. Back then, the office had a team of inspectors, a pair of office administrators and a director. Atkinson spent all day in the field making sure that every contractor followed TERO regulations.

Now the oil speculators are gone, at least on the reservation. Big oil-drilling companies left town in the late 1970s, taking the jobs with them.

Today on the Fort Peck Reservation the TERO office is just two people — Atkinson and his secretarial assistant. Enforcement of TERO regulations rests solely in Atkinson’s hands.

But according to Darrell Red Eagle, who took over the office for nine months last year, while most contractors were willing to pay the fee, Indian preference isn’t enforced. For nine months in 2004, Red Eagle stepped into the role of TERO director after a tribal council shake-up, during which Atkinson was removed from his job for alleged misconduct. He was accused by the tribal chairman of handing out contracts to friends and family first, and accepting money in exchange for contracts. But the chairman was later removed from office and Atkinson was reinstated.

Though Atkinson scoffs at Red Eagle’s accusations about TERO enforcement, they can’t be ignored.

As acting TERO director, Red Eagle says he found many contractors were working for the tribe without the proper TERO documentation.

“When I started at TERO, we found 80 to 90 contractors who hadn’t paid to register, but were on the books,” Red Eagle says.

At first, he thought he was reading things wrong.

“I talked to other TERO directors when I first got going, trying to figure out what was the process,” Red Eagle says. “I talked to other directors and told them we have this many registered workers, and there are these contracts being given out, and they told me what was going on was wrong. They helped me, because I had no idea why these things were popping up.”

Red Eagle told contractors to renew their TERO registration but was met mainly with confusion. They didn’t see the logic behind a fee for Indians to work on their own reservation, he says. “They (contractors) didn’t understand the TERO regulations because no one had ever sat down and told them how it works,” Red Eagle says.

As Red Eagle settled into the job, he became increasingly frustrated with what he found in the TERO rules themselves.

Click Images to Enlarge

Kevin Azure, an employee of A & E Construction, rips the siding off of a Fort Peck Housing Authority house being renovated in Poplar. The construction firm has paid the TERO fee. "Everyone has to pay, except the white guys," said Azure.

Maurice "Moose" Lambert, director of Fort Peck Housing Authority, acknowldges there are some contracts that are not sent out for Indian-preference bids.

Denver Atkinson, the only non-Indian TERO director in the country, has been accused of being racist in his position. Atkinson, who is married to a Fort Peck tribal member, said "There is no color in my life, only fairness and honesty."

Adam Colgan, an employee of Culbertson Plumbing and Heating, installs a furnace. TERO certification allows contractors to work on Fort Peck Housing Authority houses on the reservation.

Russell Shields, left, blows smoke while waiting with friends Eugene Hale Jr., Barry Red Eagle, and Art Cantrell on Main Street in Poplar after signing up for work at the TERO office. They register for work at TERO and wait for a call.