Tag Archives: Economy

Economy, Taxes

Weekend Updates

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It has been a great couple of weeks for our friends at Hawaii Reporter, who even scored a Drudge mention and a Tonight Show one-liner out of their coverage of the Obama family vacation (see below).  So how about a quick round-up of things that cost us money?

John Carroll has an examination of the Jones Act and how it damages the Hawaii economy.  You know, the Jones Act debate isn’t exactly glamorous.  Most people can’t even get past the fact that it’s about maritime law before getting a tad sleepy.  But if you live in Hawaii, this is important.  Ever wondered why you practically need to a second mortgage in order to buy a box of cereal?  The Jones Act is the answer.  A small group of politicians and activists have been trying for a long time to get a Hawaii exemption to this federal law, and it’s time that their reforms got a fair hearing.

And then there’s the analysis of how the current Administration’s policies are going to mean higher gas prices.  Not good news for those in the Islands–where even when things aren’t bad, mainlanders blanch at our average per-gallon cost.  And no, the answer is not light rail.  Higher fuel prices trickle down, and it’s about more than just what you pay at the pump.  You pay those higher gas prices when you buy bus tickets, toilet paper, and just about anything else.

And finally, a lighter note.  Here’s the Tonight Show monologue with the mention of the Obama vacation cost.

Contracts, Hawaii

More on Native Hawaiian Companies

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For those who were intrigued by the Hawaii Reporter investigative work on the rise of Native Hawaiian Companies (and their somewhat incestuous relationship with government spending and granting), there’s more to be learned via the rise of Alaska Native Corporations.  A recent piece from the Alaska Dispatch sends about the success (and questions it raises) of the ANCs that gives a clue to where Hawaii may soon be headed:

In the face of explosive growth, and the huge financial successes and sometime extreme abuses that have occurred along the way, Alaska Native Corporations have come under heightened scrutiny, most notably by U.S. Senator Claire McCaskill (D-Mo.), who has pushed to end the contracting privileges of ANCs. It seems that for every success story about a company that’s used 8(a) contracting as a springboard to independence, there’s a concern raised somewhere about someone abusing the system. To combat the negative press and defend the privileges of indigenous people to fully engage their rights as uniquely situated business owners who are working for not just a handful of individuals but for entire communities, advocacy groups like Native 8(a) Works have also cropped up.

. . . .

This year news stories in Alaska and beyond have chronicled questionable contracts, high paid executives, and whether the money is making it back to the people Alaska Native Corporations are congressionally mandated to help — the impoverished people and communities of their region of origin. Most recently, articles by the Washington Post and ProPublica demonstrate how imperfect and thorny the intersection the of the U.S. government’s tribal obligations with politics, wealth and poverty, corporations and shareholders, taxes and accountability, can be.

Native Hawaiian organizations and their subsidiaries have only in the last several years begun to navigate the government contracting privileges that Alaska Native corporations have spent two decades learning to fully engage. If NHOs continue to follow the path cut by ANCs, they may well encounter great success. Should they find it, they can expect plenty of tough questions about what they’re doing, how they’re getting it done, who’s making money and who’s not, and whether taxpayers are getting a good value along the way.

Contracts

Native Hawaiians and Fed Contracting Preferences

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If you have a strong stomach for pork and no family history of high blood pressure, I highly recommend the latest article in Hawaii Reporter on federal contract preferences for Native Hawaiian companies. If you live in a cave without access to television or radio (which might make me wonder how you’re reading this blog), you’ll even be surprised to see that Senator Inouye figures heavily in the awarding of lucrative federal contracts to Native Hawaiian-owned businesses.  If nothing else, the article demonstrates that the stereotype of Native Hawaiian businesses as struggling shoestring operations desperately in need of help is rather ludicrous.  Unless one is so fortunate as to consider $738 million over ten years mere pocket change.  Some highlights from the article:

A handful of Native Hawaiian-owned companies used federal contracting preferences authored by U.S. Sen. Daniel Inouye, D-HI, to land some $500 million in non-bid or reduced competition government work since 2005, according to federal purchasing records.

Officials, employees and partners of many of the same companies donated nearly $100,000 during the same period to the Inouye election campaign and $100,000 more to other members of Hawaii’s congressional delegation, files of the Federal Election Commission show.

. . . .

One of the most successful local companies to land federal contracts is Akimeka Technologies, LLC.

From 2005 to 2010, Akimeka received some $67 million in federal contracts, according to two U.S. government procurement websites.

The company that changed its name this year to Ke’aki Technologies (http://www.keakitech.com/) is now part of a joint business venture called Manu Kai.

Last year, Manu Kai received a $738 million, 10-year contract award from the U.S. Navy to support base operations at the Pacific Missile Range Facility on Kauai.

. . . .

Officers and employees of Akimeka/Ke’aki donated $57,500 since 2005 to the political campaigns of Inouye and other prominent Hawaii Democratic politicians, including former Congressman and now-Governor Neil Abercrombie and Congresswoman-elect Colleen Hanabusa.

. . . .

None of the NHO subsidiaries operating here that have received federal contracts is willing to discuss in detail the amount of money they have dedicated to improving the lives of Native Hawaiians.  Few even responded to requests for such information.

David Cooper, president of The Hana Group, Inc. http://www.thehanagroup.com and HBC Management Services, Inc., http://www.thehanagroup.com/ two NHO subsidiaries that have received some $53 million in federal contracts since 2005, said the companies provide financial support to their non-profit parent, Pacific American Foundation.

Akaka Bill, Economy, Gaming

Guest Series on Tribal Gaming (Part 3)

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Today, we continue with the third part of our guest series on the development of Indian casino gaming in California, by Jim Marino.  (This series originally ran in the Santa Ynez Valley Journal.)

Sometimes it seems as though the issue of gaming is an unspoken controversy that advocates of the Akaka Bill are desperately trying to avoid.  As though the fact that it is not allowed under the current version of the bill is a sufficient guarantee forevermore.  But, as today’s installment demonstrates, a state can move from no casino gaming of any kind to a flood of Indian casinos in a surprisingly short time–and with little to no real input from the public.  Those who are concerned about Akaka being the path to Hawaiian casino culture would do well to take note of California’s experience. . .

RESULTS OF I.G.R.A AND THE PASSAGE OF PROPOSITION 1A AND THE FLOOD OF INDIAN GAMBLING CASINOS IN CALIFORNIA
Santa Ynez Valley Journal
By Jim Marino, Guest Columnist
April 29, 2010

(Part 3)

The first week I discussed what led up to the enactment of the IGRA. Last week I wrote about all of the antiquated, ambiguous and contradictory aspects of federal Indian law and policy in existence, when the ill-advised Indian Gaming and Regulatory Act [IGRA] was enacted by Congress, in a feeble attempt to provide an economy for Indian tribes.

As you may recall from last week, the controversial Indian gambling law was enacted by Congress without even considering the impact the existing body of federal Indian law and policy would have. This resulted in the authorization of tax free, lawless and unregulated casino gambling by Indian tribes and related businesses in which patrons, workers and the nearby communities are, in effect, deprived of all their legal and Constitutional rights and cannot sue for injuries or damages occurring in those casinos and businesses. I also wrote of how that Act has also enabled these tiny often questionable tribes to make hundreds of millions in profits, while still collecting federal welfare and grant monies that are monies needed by real Indians still living on remote reservations and living in conditions of abject poverty.

This week’s article deals with how Indian gambling was legalized in California and some of the impacts of the IGRA and the Indian casinos it spawned in California, has had on nearby non-Indian communities.

To give Congress the benefit of the doubt, Congress created the only method that States had available to them in order to control and regulate Indian casino gambling under the IGRA. That mechanism was the requirement that prior to engaging in Class III gambling casinos the tribe and state government would have to enter into a compact (or contract). They did this by including section 2710 d.(3) in Title 25. Under that provision, Indian tribes seeking to engage in class III casino gambling were required to negotiate and have the affected state approve, a compact. If the state lawfully approved a compact, then it was lawfully in effect according to State law.

Following the enactment of the IGRA in 1988 many bands of Indians in California, some with only one or two members, began operating class II Bingo games with unlimited money pay-offs. The Santa Ynez Chumash built a cinderblock building as a “Bingo casino” funded at least in part by the Las Vegas singer Wayne Newton and other Las Vegas gambling investors and apparently did so under questionable circumstances. It soon closed down amongst rumors and controversy, but with a view toward reopening in the future.

Class II “Bingo” gaming under the IGRA does not require a tribal-state compact, only a license from the National Indian Gaming Commission [NIGC] and is in effect unsupervised gaming beyond licensing and annual audits. Before the Supreme Court struck down the provision in the IGRA, giving the tribes the right to sue the state when they claimed the State was not negotiating in good faith, California tribes threatened the State with several suits if the State did not negotiate compacts for full-scale Class III casino gambling. The California Constitution Art. 4, Section 19, prohibited full-scale casino gambling including slot machines, blackjack, craps, roulette and so forth.

Because slot machines generally make up 85 percent of the revenue any casino brings in, the tribes were threatening lawsuit if the State would not negotiate for slot machines and banked card games like blackjack. (Remember the Cabazon case discussion earlier. The State had the absolute right to refuse to allow all forms of gambling by any Indian tribe, as long as those types of games were also prohibited for everyone else in the state to operate.) Slot machines had been illegal in California for years and use, possession or transport was a violation of the California Penal Code.

One lawsuit brought by Indian tribes in the 1990s claimed the lotto terminals the State had licensed to bars and cocktail lounges all over the state were, in effect, state run “slot machines.” Therefore, the tribes claimed they had a right to install slot machines in their casinos. The court denied that assertion but was highly critical of the definition of “slot machines” set out in the California Penal Code. As a result, the state pulled all these machines from bars all over the state and stored them in a warehouse, where I believe they still sit today.

Many tribes like the Santa Ynez Chumash simply ignored the law prohibiting slot machines and the requirement of a tribal-state compact in 25 USC 2710 d (3) requiring such a compact before Class III gambling could be allowed. Then one night in 1995, the Chumash moved more than 600 slot machines into the cinderblock former Bingo casino and began illegally offering slot machines to the public and position player backed blackjack games. The installation of these slot machines also constituted a violation of the Johnson Act, a federal law prohibiting the unlawful transportation, use, procurement and possession of slot machines. After all, the delaying litigation was exhausted in 1997. The State Attorney General and federal authorities including the F.B.I. informed the illegal casino tribes like the Santa Ynez Chumash that they intended to raid them, seize the slot machines, all monies and other illegal fruits of the illegal gambling operations and even arrest the operators. The tribes then launched a public initiative-drive entitled Proposition 5 in 1998.

Proposition 5 was an initiative to amend the California Government Code to allow Indian tribes to operate slot machines on Indian lands in California. Besides sponsoring that initiative the tribes, many of whom were operating illegal casinos with slot machines at the time, like the Santa Ynez Chumash, pumped millions of dollars into an advertising campaign to depict pictures of poverty-stricken Indian tribes self-sufficient.

In addition to this advertising campaign, these casino Indians pumped millions into the campaign coffers of Grey Davis, a career politician who was running for Governor in 1998. In November 1998, Proposition 5 was approved by the voters and Grey Davis was elected Governor. Commencing in 1999, Gov. Davis began negotiating gambling compacts with California Indian tribes, all of which was done behind closed doors. None of the traditional power groups in California such as local governments, taxpayers groups, law enforcement organizations, environmental groups, trial lawyers, workers compensation and consumer lawyer groups, women’s rights groups, union and others were allowed the opportunity to participate in the discussions and influence the terms of these tribal-state class III gambling compacts.

As a result, the compacts Gov. Davis agreed to were weak, giveaway compacts with many provisions so poorly written that they were virtually unenforceable. These compacts provided no revenue at all to the state and made no provisions to mitigate the significant negative impacts the flood of Indian casinos that resulted would have, and subsequently did have, on local communities.

In the meantime, Proposition 5 was challenged in a lawsuit and in August 1999 the California Supreme Court ruled that Proposition 5 was unconstitutional because it only amended the Government Code not the State Constitution, which contained the prohibition on casino gambling like slot machines and house banked card games in Art. 4, sec. 19.

Undaunted by the Supreme Court’s striking down Proposition 5, Gov. Davis executed some 59 of these giveaway tribal state compacts and then had the State Legislature approve them in September and October 1998. He made no effort to determine if the tribes he was negotiating with, and granted gambling compacts to, were lawfully created Indian tribes or if the land on which their casinos or proposed casinos were to be sited were legally “Indian Lands” eligible class for III gambling under federal law. In fact, many of these questionable Indian tribes were on land or acquired land that was clearly not eligible to build and operate any class II or class III gambling casinos under the IGRA.

To remedy the fact that these compacts were executed and approved when there was no longer any legal authority to do so, the Legislature put a “Legislative initiative” on the ballot for March 2000 the following year at Gov. Davis’ behest, some 6 months after they were executed and approved. That initiative, called Proposition 1A, by its language proposed to amend the California State Constitution Art. 4, sec. 19, to authorize the Governor to negotiate future compacts with California Indian tribes. The voters were never informed that a vote in favor of Proposition 1A would, in effect, retroactively ratify the 59-weak giveaway, virtually unenforceable compacts that Gov. Davis has already signed without legal authority and which were approved at his instance by the State’s Legislature. It is not coincidence that so many State legislators also received hundreds of thousands of dollars in campaign contributions from these casino tribes, often funneled throu gh campaign committees and PAC’s with unassuming names. My favorite was the one calling itself “The California Native Peace Officers Association.” That PAC was funded by $5,000,000 million entirely from the Pechanga Indian Casino and the State Correctional Officers Union and was distributed to key politicians in Sacramento. The use of PACs is one of the ways politicians use to disguise receipt of gambling monies by disguising them through innocent-sounding groups. Once legalized in 2000 by Proposition 1A, the onslaught of Indian casinos in California began.

NEXT TIME: PART 4, THE EXPANSION OF “INDIAN CASINO GAMBLING IN CALIFORNIA AFTER PASSAGE OF PROPOSITION 1A AND THE NEGATIVE IMPACTS ON LOCAL GOVERNMENTS AND COMMUNITIES.”

Gaming, Guest Commentary

Guest Series on Tribal Gaming (Part 2)

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Today, we are continuing our guest series on the history of Indian gaming in California by Jim Marino.  Today’s excerpt (originally published in the Santa Ynez Valley Journal)  looks more specifically at how we arrived at the legal definition of “Indian”–at least as far as the federal government and Indian gaming regulation is concerned.  As accustomed as we generally are to the notion of an intrusive and exacting federal bureaucracy, it is shocking to learn exactly how loosely this term is interpreted.   Other items of note in today’s excerpt is the way that land is defined (or acquired) as “tribal land” for the purposes of casino construction and the liability loopholes that Indian casinos are able to operate under.

THE INDIAN GAMING AND REGULATORY
ACT OF 1988: A WELL INTENDED LAW GONE AWRY
Santa Ynez Valley Journal
By Jim Marino, Guest Columnist
April 22, 2010

(Part 2)

Last week I wrote about the history of Indian gambling and the 1987 landmark case of Cabazon Tribe v. California leading up to the hasty enactment of the IGRA.

The first mistake Congress made in trying to clarify for the states the impact of the Supreme Court in the Cabazon case was in the name of the Act itself. To me, games are checkers, chess, basketball, etc. The gambling industry came up with the name change, calling gambling games “Gaming.” They apparently hoped to shed the inherent stigma associated with gambling activities and transform gambling into what they classify as recreational entertainment.

If it were really a “game” then the visitors, who nearly always lose, would have the worst record of anyone competing in any “game” against the home team. Not only the fact that the odds of winning anything are so poor, it is hard to imagine that anyone could describe losing large amounts of money as “entertainment.” What Congress failed to realize, or perhaps intentionally ignored, was that when they enacted the IGRA, there was already in place a long and confusing set of laws, rules and case decisions loosely called “Indian Law.” Some of the obscure, often irrational and unintelligible provisions of this body of law would shock most reasonable people. The advent of Indian gambling, however, exposed this body of existing laws to widespread public scrutiny, particularly when the extent and application of these principals, are now being applied to the non-Indian public who frequent the expanding numbers of Indian casinos and other Indian businesses.

One would think the first simple question that Congress would have asked before enacting this controversial legislation is, “Who is an Indian?” More particularly before giving any Indian tribe the right to operate an essentially unregulated gambling casino, Congress would have also needed to understand “What is an Indian tribe?”

In the former case, an Indian is anyone who claims to be part Indian or who is a member of any self-styled “Indian tribe,” or in the eyes of the federal government, an Indian is whoever a recognized Indian tribe decides is an Indian. Once one of these often questionable tribes attains official acknowledgement status, the BIA never questions tribal government’s assertion or representations about who is a tribal member, who isn’t a member or who they decide to kick out as no longer members: a practice euphemistically described as “disenrollment.” Until relatively recently, there were not even any objective criteria to be applied by the BIA in making a determination to acknowledge or recognize who constitutes an “Indian tribe.” Ever since the adoption of at least some rules and objective criteria, as set out in 25 CFR part 83, those rules and criteria are, never the less, often ignored. So in a nutshell, an Indian tribe is whoever the federal government says is an Indian tribe.

That is why there are now more than 600 Indian tribes in this country, many with only a handful of members, some with only one or two and many with highly questionable, if any, fractional ancestry linking them to a real Indian. Since the advent of federal programs providing grant monies to “Indian tribes” and particularly since the advent of Indian gambling, there have been many more groups claiming to be Indians and seeking federal acknowledgment as a “tribe” or “band” of Indians.

In fact, Indian tribes like the so-called “Mashantucket Pequot Indians,” which started with “Skip” Hayward and a couple of relatives, parlayed a faux tribal recognition, into the billion-dollar-a-year “Foxwoods Casino” in Ledyard, Conn. They have set as an enrollment criteria, a 1/32nd Indian ancestry or blood quantum and it is no wonder that these tribal members literally came out of the woodwork and the tribal enrollment now exceeds 700. Having that minute a fraction of Indian ancestry, however, did not prevent them from owning and operating that billion-dollar-a-year gambling casino at Foxwoods, all done with the sanction of the Bureau of Indian Affairs and the National Indian Gaming Commission, just because there are and were no objective standards applied.

So there is no surprise that hundreds heretofore never heard of “Indians” and “Indian tribes,” are lining up for recognition and the right to own and operate lucrative gambling casinos, and hiring lobbyists and paying off politicians to grease the wheels of recognition in Washington.

Lobbyists like the now disgraced and imprisoned Jack Abramoff, whose assistance was instrumental in obtaining recent recognition for the Mashpee Wampanoag is now seeking to build a casino on or near Cape Cod, Mass. This is a recent federally recognized Indian tribe, which was determined by a federal judge to lack the very criteria for recognition needed, in a case decided during the 1970s, when the tribe tried to take over acres of land around Mashpee, Mass., including the massive multi-million dollar New Seabury country club and resort development.

Not only did Congress fail to clarify what constitutes an “Indian tribe” and who is an Indian when they enacted the IGRA, they also failed to clearly define what lands are the “Indian Lands” required by that Act, and which are the lands a tribe is required to have before they can build, own and operate any gambling casino.

This failure has opened the door to real Indian tribes as well as highly questionable tribes alike, to buy or acquire fee land usually, with money furnished by non-Indian gambling investors, and then claim it is eligible “Indian Lands” on which they can build and operate a gambling casino and can do so wherever they believe there is a lucrative non-Indian gambling market to be had in the area. This has fostered a practice now called “reservation shopping!”

Not only did Congress enact the IGRA without addressing these important issues and weaknesses in federal Indian policy, regarding who is an Indian, what constitutes an Indian tribe and what constitutes “Indian Lands” that are eligible for gambling casinos, Congress failed to address another important legal doctrine. A legal anomaly created by various federal court decisions giving Indian tribes, their officers, agents, casinos and other businesses, total immunity from lawsuit no matter how outrageous their conduct may be.

On top of that, with a few exceptions, Indian tribes and their businesses operate without complying with almost all state and local laws enacted for the protection of all customers, consumers, workers and the nearby communities based on the legal and political fiction they are somehow a sovereign political governmental entity. These numerous laws were enacted by virtually every state to protect workers and customers, the environment and quality of life for adjacent communities everywhere. However, they do not apply to Indian casinos and businesses. Finally, Indian tribes can evade all of the many state and local taxes, which are clearly needed to fund all the infrastructure and public services that these Indian tribes and their casinos and businesses uses regularly at the rest of the non-Indian taxpayer expense.

This common law [court-made] legal immunity doctrine barring injured and damaged persons from suing an Indian tribe, its casinos and business was described in 1998 U.S. Supreme Court case as having been created, “almost by accident” by the earlier Turner case decided in 1921 and was described by the Court as a legal anachronism in need of elimination. In that case, [Kiowa Tribe of Oklahoma versus Manufacturing Technologies, Inc.] after concluding this doctrine should be eliminated in this day and age where the Indian tribes own and operate lucrative gambling casinos, hotels, restaurants, amusement parks, marinas, shopping centers and other businesses – all open to the public and employing non-Indians – a majority of the court nevertheless concluded that it was up to Congress to fix legal anomaly created by a succession of cases decided by liberal federal judges in court decisions decided over the past 70 years.

Even though that Kiowa case was decided 12 years ago in 1998, and despite the fact the court informed Congress could simply amend the Foreign Sovereign Immunity Act, which federal law provides that any foreign country or business operating in the United States must obey all the same laws, pay all the same taxes and can be sued just like everyone else can be for their misconduct.

Because Congress has not acted, then to this day, customers who patronize any Indian casino or business, or anyone who works in an Indian casino and business, have no legal or Constitutional rights. In other words, they patronize these casinos and businesses at their own risk. As one Florida judge said, while reluctantly dismissing a woman’s valid lawsuit for injuries caused by an Indian tribe in their casino, “The law should require a large sign at the entrance to all Indian casinos and businesses warning people that are entering at their own risk.” When one thinks of the hundreds of state and local laws defining and regulating many things necessary for the public welfare and safety, one has to wonder what Congress was thinking, or perhaps not thinking, by passing a federal law allowing Indian tribes to own and operate gambling casinos and a wide variety of businesses that are not subject to state and local laws, are not taxable for all public services and infrastructure they use regularly and are immune from lawsuits by anyone who has been damaged or injured by misconduct of the tribe, its agents and employees or businesses.

Lastly when Congress enacted the IGRA, allowing some tiny federally acknowledged “Indian tribes” to make tens of millions in profits from gambling losses, they did nothing to amend the many existing laws that provide millions of dollars in tax monies via grants and welfare funds set aside for Indians in general. Consequently, these fractional “Indian” descendants and often questionable “tribes” making hundreds of millions of dollars in casino profits, still get millions in federal grant monies and welfare aid while thousands of real Native American Indians still live on remote reservations in conditions of abject poverty and get nothing more that the pittance they live on.

Clearly enacted by Congress with good intentions, but it is a law done badly awry.

NEXT TIME: “THE RESULTS OF THE I.G.R.A. THE PASSAGE OF PROPOSTITION 1A AND THE FLOOD OF INDIAN GAMBLING IN CALIFORNIA.”


Economy, Taxes

Account(in)ability

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Imagine for a moment that you had a few thousand dollars in loose change and bills behind the cushions of your couch, in your old jacket pockets, a spare wallet or two, and spread out through a few pairs of pants.  How big a jerk would you be in this situation if you then went to your best friend, told him you were totally broke, and asked to him to give you money to pay your rent?  If you answered, “No more a jerk than your average local politician,” you win.  Congratulations!  You truly understand the nature of Hawaii politics.

According to a recent report from the Grassroot Institute of Hawaii, the state has more that $1.4 billion in unspent excess funds sitting in “special funds” accounts–several of which have long been noted by the state auditor for repeal.  What is a “special fund”?  In short, it’s a little niche set-aside of state money for some specific purpose–say, public art education–funded through anything from state license fees to legislative appropriations.  You may recall that the 2009 Legislative Session included a finance bill that gave the Hawaii director finance authority to “raid” these special funds if necessary to pay government expenses.  This, not unnaturally, got some of us wondering exactly how much money there was available in these state special funds.  In light of the nearly relentless efforts to raise taxes and raid our wallets, the knowledge that there are untold millions of state dollars sitting around in untouched “special funds” is just a wee bit infuriating.

Thus, the Grassroot Institute launched its own investigation into the extent of Hawaii’s “special funds”.  You can read the full report here, but some highlights include:

  • In a review of 20 State Department reports, they found 186 accounts identified as special funds.
  • This accounts amounted to a combined excess balance of $1,412,357,203.
  • Divided equally among the population of Hawaii, these combined excess balances have a refund value of $1090.47.
  • The Hawaii Department of Transportation was the worst offender, with $582,449,161 reported as unspent, while the Hawaii Health Systems Corporation had the smallest excess at $34,837.

Really, how outrageous is the situation when the smallest, most responsible excess is still more money that many Hawaiians make in a year?  An economist once pointed out that there are four ways to spend money: 1. You can spend your own money on yourself, in which case you look for the best possible value in quality and price; 2. You spend other people’s money on yourself, in which case you look for the best quality and damn the price; or 3. You spend your money on other people, and look for the best value in terms of price and might compromise on value; and 4. You spend other people’s money on other people, and to heck with quality, value, price, or anything other than getting home from work a little earlier than usual.  Most government spending–especially as practiced in Hawaii–falls into Category 4.  We get nothing but sob stories from every possible state representative about lack of revenue.  We get tax increases and “Furlough Fridays” and guilt trips about the plight of government workers.  And all this time, they’ve been hoarding funds to the tune of $1.4 billion.  It boggles the mind.

Economy, Grants

Depend On It

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The Heritage Foundation has released its 2010 Index of Dependence on Government, and you will be unsurprised to hear that American dependence on government programs continues to grow–especially in the health and welfare sectors.  Now, I will be the first to admit that, when confronted by a bevy of charts and words like “index” and “variables,” my eyes begin to glaze over and I think longingly of cool drinks and reality TV reruns.  But there is a reason to pay attention to what the number-crunching prognosticator-types are talking about.

For example–do you have (or are you working towards) a government pension?  Do you want it to still be there when you need it?  Because when budget crises reach a certain critical point (*cough* California *cough*), one of the first things that they look to cut are pensions and state salaries.

So what does this have to do with government spending on Hawaiians.  Because while a few hundred million is nothing to sneeze at, spending on Native Hawaiians seems minor in a year that included the massive stimulus bill.  But there’s more to the problem of creating a dependency on government programs than just the dollars and cents of it.  As the authors of the index explain:

To be clear: Every person will be dependent on others many times during his or her life, and there is nothing wrong with that. People spend most of their childhoods utterly dependent on their parents, and many people will rely on caregivers during their last years. Dependence on family, neighbors, fellow members of community groups, and—yes—local government is the normal, everyday stuff of life.

When people receive aid from someone in their social circle, they are given an opportunity to repay that aid someday in a similar way. Mutual aid is the glue that binds communities together; it gives strength to families and the greater civil society. Most Americans know instinctively that creating strong communities and families is a matter of caring for each other.

When the federal government provides aid, that aid also binds the dependent person to the aid giver. This aid, however, is anything but mutual. No one expects the dependent person one day to give similar aid to the federal government. And government aid certainly does not strengthen communities and families: If Americans have learned anything about the federal welfare system, it is how effectively it undermines family structure and hollows out communities.

Worse, dependence-creating programs quickly morph into political assets that policymakers all too readily embrace. Voters tend to support politicians and political parties that give them higher incomes or subsidies for the essentials of life; but no matter how well-meaning policymakers might have been when they created government aid programs like Medicare, unemployment insurance, and subsidized housing, these same programs quickly grow beyond their mission and turn into a mechanism that creates and sustains a never-ending cycle of dependence—and entitlement thinking.

Is there a clearer delineation of the problem inherent in depending on government to shore up the health of a community, be it racial, ethnic, or otherwise?  I’ve been worried for a long time about the slowly dissolving sense of ohana in the Islands, and I begin to wonder if this is part of the explanation for it.

Akaka Bill, Economy, Taxes

Casinos–Now With a Different Kind of “Stimulus”

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Today, I have a guest article for you from Elaine William of CERA (Citizens Equal Rights Alliance).  Many of those who are acquainted with the problems of tribal law, federal policy regarding tribes and reservations, and the financial issues that abound there are watching Hawaii carefully to see how those same factors will come into play if the Akaka Bill passes. If you’re concerned about Akaka, these are issues that you cannot afford to overlook.  (And for those who are interested in the complex problems that arise out of the conflict between civil liberties and tribal government, you’ll want to check out their website at www.citizensalliance.org.)

Indian Casinos:

The New Industry That Is…Too Big To Fail!”

By Elaine Willman, Board Member

Citizens Equal Rights Alliance

Imagine a major Indian casino, the Mohegan Sun in Connecticut, reporting that its slot revenues reported to the state in April have “stabilized,” slipping only 1 percent. The same casino reported $1.3 billion (with a “B”) in gross revenue for 2009. However, the economy is still dark, customers have less disposable income to slough into the tax-exempt slots, and the casino is facing a $15 million lawsuit for a head-on wreck caused by a drunken customer.

So every member of Connecticut’s congressional officials (except for one on travel) wants to ensure that the Mohegan Sun does not fail; that its “job creation” is always protected. These fool elected officials have promoted and now awarded Stimulus funding of $54 MILLION dollars) in the form of a guaranteed loan from USDA to this mega-wealthy tribe.

And if they default? No problem. Tribes have sovereign immunity. Taxpayers whose taxes are already annually subsidizing this and 565 other Indian tribes in 35 states for all basic needs—housing, health, law enforcement, roads, environment, scholarships, language, cultural preservation—Yes, you and I, our children and grandchildren, will just continually pay off the casino debts in perpetuity across the country.

Taxpayers get to: 1) annually fund all basic needs of tribal governments: 2) cover all tribal uncollectible debt due to “sovereign immunity;” and 3) keep throwing dollars into tax-exempt tribal slot machines across the country so our local economics get sufficiently and systematically drained of tax revenues and small businesses. To make this work, taxpayers must faithfully commit to frequenting tax-exempt tribal government businesses. But now it doesn’t matter if you choose not.  They’re too big to fail; the federal agencies will step in and bill you for their losses, anyway.

There are 245 other tribes in the lower 48 states entitled to the same perks as the Mohegan Sun. Fortunately, the 228 tribes in Alaska who receive the basic-needs funding, at least don’t have casinos yet. Alaskan tribes are non-profit corporations without jurisdictional authority or gaming so they focus almost entirely on their culture. What a concept!

First a few facts:  565 federally recognized (tax-exempt) tribes are located in 35 hosts states, of which 246 tribes are gaming under the Indian Gaming Regulatory Act of 1988.  Every host state to numerous tribal tax-exempt and tax-eroding tribal governments and reservations are coincidentally the states experiencing the largest state budget deficits.

The impossibility is calculating the annual cost of this race-based socialist system spreading across the country. Commerce Secretary Gary Locke reports $94 million in Stimulus Funding for the tribes in Washington State alone. We’re hearing 4 billion annually just for tribal health care; many more billions for housing, law enforcement, etc. And these dollars do not include the “Tribal Priority Allocations” doled out annually by the Bureau of Indian Affairs. There are 29 federal agencies – each with a separate budget for funding the 565 tribes. And worse, state governments that have no “trust relationship” with Indian tribes  (such as Washington, Oregon, Montana and others) have set up separate state budgets to supplement federal dollars going out to tribes. Strike Two for taxpayers.  All of these federal and state dollars are serving less than 1 million enrolled tribal members of our 300+ million American population.

Who can blame the Native Hawaiians for wanting in on this lucrative industry, forever chaining down American citizens to the galley oars of a feudal federal Indian policy system? Pray that the Akaka Bill (Native Hawaiian Government Reorganization Act) fails again in Congress this year, or these numbers will considerably worsen.

Since the Indian Reorganization Act of 1934 federal Indian policy has been a 76-year private conversation between federal agencies, elected officials and tribal leaders, with the whopping bills deducted from your federal and state tax contributions annually. We simply can no longer afford to sustain and grow this socialist erosion spreading across 35 and perhaps 36 (Hawaii) states.

One of our astute Supreme Court Justices assessed our predicament accurately when he noted the following, over fifteen years ago:

“Individuals who have been wronged by unlawful racial discrimination should be made whole; but under our Constitution there can be no such thing as either a creditor or a debtor race. That concept is alien to the Constitution’s focus upon the individual. …To pursue the concept of racial entitlement – even for the most admirable and benign of purposes – is to reinforce and preserve for future mischief the way of thinking that produced race slavery, race privilege and race hatred. In the eyes of government, we are just one race here. It is American.” Justice Antonin Scalia, Adarand Constructors, Inc. v. Mineta, 534 U.S. 103 (1995)

Here is the problem:  Over 35 years ago, in 1975 Congress passed the Indian Self-Determination and Education (IDEA) Act to promote economic self-sufficiency for tribal governments. Apparently this was not working well enough, so 22 years ago, Congress added the economic steroid of a tax-free gaming monopoly for Indian tribes when it passed the Indian Gaming Regulatory Act in 1988.

In March of this year, George Skibine, an Assistant Secretary at the Bureau of Indian Affairs (BIA) was a keynote speaker at the 2010 Citizens Equal Rights Alliance (CERA) conference in Washington, D.C. Mr. Skibine was asked: “Has the Department of Interior (DOI) or Bureau of Indian Affairs ever developed criteria or measuring systems by which a tribal government might be deemed economically self-sufficient, and no longer in need of federal funds?” The answer was no. Not in 35 years so far. Not even with a gaming monopoly. The follow-up question: Does the DOI/BIA have any interest in establishing such economic indicators so that federal subsidies could be redirected to either write down our national deficit, or redirected to the poorest tribes? The answer was no again. Why should they? The behemoth BIA bureaucracy grows as the number and needs of tribes grow.

Also at the CERA Conference Mr. Skibine was asked if the BIA or federal government could ascertain the total annual federal funds expended for tribal governments? His response: “We tried to do that once, but were unable to.”  Astounding! No one knows the annual bottomless pit of taxpayer dollars supporting tribal governments.

So there you have it. We are enslaved forever by our Congressmen to a burgeoning number of private tax-exempt governments that we are forced to fund unknown annual billions in perpetuity. And now we must assume the responsibility for all failed tribal government debts. This is on top of the disastrous oil spill, the failing housing and banking industry, and government takeover of health care.

What can you do?  Try any or all these suggestions:

  1. Howl at every talking head on radio and television.
  2. Get firm commitments from incumbents or candidates to put a “sunset” or end game in place for this tax-enslavement.
  3. Get federal legislation that prohibits gaming tribes from receiving stimulus funds of any sort.
  4. Get legislation in place that ends any further “federal recognition” of wannabe tribes.
  5. Educate everyone you know by circulating this article, and getting it web-posted everywhere you can.

We are stuck with the horrendous oil spill disaster. We are stuck with the present administration throwing more huge tax dollars out to tribes. We are stuck with the government takeover of multiple industries in this country under the present administration.

We are not stuck with our elected officials. We can get responsible commitments from federal and state elected officials, or get them out office, beginning in November 2010. We are not helpless.

And we best get busy. Tribal governments claim to plan for seven generations. That is a long time for Americans to be subservient custodians of our fellow U.S. citizens.  Menominee Tribal leader, Ada Deer once said, “We use the system to beat the system.”  It is time to end the abuse of the “system.”

Elaine Willman, MPA, is the author of Going to Pieces…the dismantling of the United States of America. Ms. Willman is past Chair and current Board member of Citizens Equal Rights Alliance, an organization focused on the equal rights of tribal members who have no protections under the 14th Amendment, and serve at the mercy of private tax-exempt governments annually subsidized without inquiry or consent of American taxpayers.

Contact Elaine Willman:  toppin@aol.com

Economy, OHA

Help, I’m Stuck in a Nutshell!

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When you’re a blogger, you dream about finding something as neatly symbolic as today’s OHA filing against the state for past due land revenues.  How lucky is it to find a perfect storm of problems and issues to define everything about Hawaii that makes you want to pull your hair out?  Race problems?  Economic issues?  A government that puts problems off for later so that they can get worse and more divisive?  It’s all there.

As you may have heard, OHA has filed a writ of mandamus against the State seeking to compel the legislature to act regarding the payment of hundreds of millions of dollars in past due ceded land revenues.  (OHA has submitted proposals for payment to the Legislature for the past three years, but the proposals have all been rejected.)  You gotta love the timing here, considering that the country (and state) are still reeling from the economic downturn.  Especially in light of the recent legislative session, teacher negotiations, and so on.  The State isn’t exactly swimming in funds, and OHA seems to be determined to make itself more unpopular in its ham-fisted approach to the issue.  I’m sure the average Hawaii taxpayer will be thrilled by this turn of events.

Though one wonders whether the average Hawaii taxpayer has given up and is busy drinking mojitos on the beach rather than deal with an elected leadership that has created a tradition of avoiding hard decisions.  Sure, there are those who buck the trend, but I don’t see OHA deciding that they’ll just write off $200 million any time soon.  So this isn’t a problem that is going away.  Instead, it promises to add to the already growing divisiveness about race, the ceded lands, sovereignty, and the Islands. Honestly, it’s a little depressing sometimes to watch the slow erosion of the island spirit thanks to these issues.

But hey, at least the weather is awesome and the beaches are great.  People from crummier locales probably have nothing better to do than engage in responsible governance.

Economy, Hawaii Legislature, Taxes

This Grade Is All Business

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For the longest time, the small businesspeople of Hawaii have comforted each other with rueful laughs and their club’s secret motto: “Hawaii: Live in paradise, work in hell.”  To put it mildly, Hawaii has not traditionally had the most business-friendly reputation.  At least not for the non-Doles and non-Hiltons among us.  And while some progress is being made (including a slight awareness that it isn’t necessary to completely handcuff small businesses from their inception and the election of more business-friendly politicians), there’s still a general lack on knowledge about how the Hawaii Legislature helps and hurts small business in Hawaii.  (And don’t disregard the importance of small business on the economy.  There are more than 100,000 small businesses in Hawaii bringing in over $2-3 billion in income annually (according to the Small Business Administration).

Enter PAYCHECKS Hawaii, a non-profit and non-partisan initiative of Smart Business Hawaii, whose unenviable job it is to rate all of Hawaii’s legislators on their business savvy.  The Paychecks ratings are based upon a combination of key votes (especially tax and fee increases); efforts to decrease or increase spending and the size of government; actions regarding employer mandates and labor bills (from worker’s comp to union issues and so on); conduct in hearings, responsiveness, and accessibility; and sponsorship/advocacy for initiatives to help the business climate.  Paychecks has just released its ratings for the most recent legislative session, and it looks like quite a few of Hawaii’s legislators need a remedial education in business and helping the economy.  Every legislator was given a grade from 1(the best) to 5(the worst).  So first the good news:

In the Hawaii Senate, two Senators got the highest score–Fred Hemmings and Sam Slom.  (Both Republicans.  Two Democrats, however, got the next highest score of “2”–Robert Bunda and Josh Green.)

In the House, the highest ratings went to Lynn Berbano Finnegan (R), Barbara Marumoto (R), and Kymberly Marcos Pyne (R).  Scoring the second best rating were Tom Brower (D), Corinne Ching (R), Cynthia Thielen (R), and Gene Ward (R)

And now the bad news.  There were so many second-worst “4” scores that listing them here would make this more like a roll call of the Legislature than a blog entry.  So let’s go with a simple Hall of Shame.

Scoring a worst score of “5” in the Senate were Gary Hooser (D) and Dwight Takamine (D).

And the dreaded “5”s in the House went to Michael Magaoay (D), Hermina Morita (D), Blake Oshiro (D), Marcus Oshiro (D), Calvin Say (D), and Roy Takumi (D).

Not good.  Maybe it’s time we had a few of them stay after school and write, “I will not handicap Hawaii’s economic future,” on the blackboard until it sinks in.