Tag Archives: Indian Affairs

New Court Decisions in Native American Law

As we’ve mentioned here more times than I can count, it’s important that we stay apprised of developments and impact of Native American law, as the Akaka Bill seeks to bring those precedents to Hawaii.  With that said, here are some of the more significant decisions of late. (Note that two of the cases have to do with child custody and parental rights–further underlining the need for a full study of the possible impact of the Indian Child Welfare Act on post-Akaka Hawaii.)

Southern Ute Indian Tribe v. Sebelius

Court: U.S. 10th Circuit Court of Appeals

Docket: 09-2281

Opinion Date: September 19, 2011

Judge: Seymour

Areas of Law: Contracts, Government & Administrative Law, Native American Law

This was the second appeal in litigation arising from the Secretary of Health and Human Services’ (HHS) decision not to enter into a self-determination contract with the Southern Ute Indian Tribe (Tribe). In an initial order, the district court ruled that HHS’s decision was unlawful, granted summary judgment to the Tribe, and directed the parties to prepare a proposed order for injunctive relief. After the parties were unable to agree on the proposed order, the district court issued an interlocutory order in which it endorsed HHS’s approach to the contract’s start date and contract support costs. The Tribe appealed, and the Tenth Circuit dismissed the appeal for lack of jurisdiction. On remand, the district court issued a final order, directing the parties to enter a self-determination contract including HHS’s proposed language regarding the contract start date and contract support costs and denying the Tribe’s request for damages. Both parties appealed. Upon review, the Tenth Circuit affirmed the district court’s determination that HHS was required to contract with the Tribe and regarding the contract start date, but reversed the court’s decision regarding contract support costs.


Samish Indian Nation v. United States

Court: U.S. Federal Circuit Court of Appeals

Docket: 10-5067

Opinion Date: September 20, 2011

Judge: Gajarsa

Areas of Law: Government & Administrative Law, Native American Law

The Court of Federal Claims dismissed, for lack of jurisdiction, the most recent claims brought by the Samish Indian Nation in its continuing quest for federal recognition and benefits. The claims court reasoned that some of the allegations were not premised upon any statute that was money-mandating, and that allegations reliant on money-mandating statutes were limited by other statutes, so that they fell outside the scope of the Tucker Act (28 U.S.C. 1491(a)) and the Indian Tucker Act (28 U.S.C. 1505). The Federal Circuit affirmed with respect to some of the allegations because the Tribal Priority Allocation system (25 CFR 46.2) is not money-mandating. The court reversed dismissal of claims under the Revenue Sharing Act, reasoning that the court’s ability to provide a monetary remedy under that law is not limited by operation of the Anti-Deficiency Act, 31 U.S.C. 1341.

Yancey v. Thomas

Court: U.S. 10th Circuit Court of Appeals

Docket: 10-6239

Opinion Date: September 20, 2011

Judge: Hartz

Areas of Law: Constitutional Law, Family Law, Native American Law

Petitioner Christopher Yancey filed an action in district court contending that Oklahoma state-court rulings terminating his parental rights over his Indian child were invalid under the Indian Child Welfare Act (ICWA). The district court dismissed his action, determining that either federal abstention was mandated, or the action was barred by the Full Faith and Credit Clause of the United States Constitution. Tiffany Leatherman and Petitioner are the natural parents of Baby Boy L. Petitioner was a member of the Muscogee (Creek) Indian Nation of Oklahoma, but Leatherman was not a member of any Native American tribe. Petitioner and Leatherman were teenagers when the child was conceived, and they never married. Before the child was born, Leatherman decided to place him for adoption, and she located Timothy and Tammy Thomas who were interested in adopting him. In December 2002, Leatherman brought an action in Oklahoma state court to terminate Petitioner’s parental rights and to determine the child’s eligibility for adoption without Petitioner’s consent. Leatherman appeared in court, relinquished her parental rights, and consented to the adoption. Petitioner appeared in the proceedings and objected to the adoption. On May 18, 2010, the Oklahoma trial court entered an order terminating Petitioner’s parental rights. The court found that the ICWA had been complied with and that the Thomases had proved beyond a reasonable doubt that Petitioner’s custody of Baby Boy L. would likely result in serious emotional or physical damage to the child. There was no indication in the record that Petitioner appealed that order. On the day after the Oklahoma trial court entered its order, Petitioner filed this action against the Thomases. Upon review, the Tenth Circuit found that the district court did not err in dismissing Yancey’s federal-court action because it was barred by res judicata. Accordingly, the Court affirmed the district court’s decision terminating Appellant’s parental rights.

In re Adoption of G.D.J.


Court: Oklahoma Supreme Court


Docket: 108889

Opinion Date: September 20, 2011


Judge: Combs


Areas of Law: Family Law, Native American Law


Petitioners-Appellees, Teryl Pearson and Robert Pearson (Pearsons) petitioned to adopt Teryl Pearson’s (Pearson) grandson, G.D.J. The natural mother, Respondent-Appellant Tessia Bre Stubbs (Stubbs) contested the adoption. The trial court entered two orders on August 11, 2010, in favor of the Pearsons on their Application to Adjudicate Minor Eligible for Adoption Without Consent of the Natural Mother and in its Order Adjudicating Minor Eligible for Adoption Without Consent of the Natural Mother. Stubbs raised multiple issues in her attempt to block the adoption. Among them, she argued that the trial court erred in finding that she failed to contribute to the support of G.D.J., and failed to maintain a meaningful relationship with G.D.J. Upon careful consideration of the trial court record, the Supreme Court found the evidence presented was sufficient to support the trial court’s decision to allow the adoption to proceed.




The Myth of Government “Help”

It should be of interest to those affected by the Akaka Bill (in other words, pretty much everyone in Hawaii) to know that Native Hawaiians are not the only ones encountering controversy over the question of federal recognition of tribal status.  Columnist and investigative reporter John Stossel writes of the Lumbees of North Carolina, who (despite their lack of federal recognition as a tribe) have been doing very well:

Lumbees own their homes and succeed in business. They include real estate developer Jim Thomas, who used to own the Sacramento Kings, and Jack Lowery, who helped start the Cracker Barrel Restaurants. Lumbees started the first Indian-owned bank, which now has 12 branches.

The Lumbees’ wealth is not from casino money.

“We don’t have any casinos. We have 12 banks,” says Ben Chavis, another successful Lumbee businessman. He also points out that Robeson County looks different from most Indian reservations.

“There’s mansions. They look like English manors. I can take you to one neighborhood where my people are from and show you nicer homes than the whole Sioux reservation.”

In other words, the Lumbees are a living contradiction to the notion that federal recognition (and its accompanying financial “help”) are necessary to–or even capable of creating–the success of a Native American tribe.  It is an interesting lesson to those who see federal aid and recognition as the way to greater success for Native Hawaiians.  Especially when one considers the millions of dollars in federal grants that already go to help Native Hawaiians (and which you can view in our research wiki here) . . . not to mention the millions in federal contracting preferences that Native Hawaiian businesses enjoy.  In fact, as Stossel illustrates, the “help” of the federal government is a double-edged sword, that is as likely to eat away at tribal culture and foster dependency as anything else:

The government has made most Indian tribes wards of the state. Government manages their land, provides their health care, and pays for housing and child care. Twenty different departments and agencies have special “native American” programs. The result? Indians have the highest poverty rate, nearly 25 percent, and the lowest life expectancy of any group in America. Sixty-six percent are born to single mothers.

It goes without saying that Native Americans have endured injustice at the hands of the federal government, and that this very injustice is behind the demand for aid and recognition that have led to the current state of affairs.  A similar motivation lies behind many of the demands for Native Hawaiian recognition.  But this may also be a case of being careful about what you wish for.  As Stossel points out, there are many among the Lumbees who are opposed to federal money for the Lumbees, arguing that it will end the independence that has helped them prosper:

Tribal governments and the Bureau of Indian Affairs manage most Indian land. Indians compete to serve on tribal councils because they can give out the government’s money. Instead of seeking to become entrepreneurs, members of tribes aspire to become bureaucrats.

. . . .

Because a government trust controls most Indian property, individuals rarely build nice homes or businesses. “No individual on the reservation owns the land. So they can’t develop it,” Chavis added. “Look at my tribe. We have title and deeds to our land. That’s the secret. I raise cattle. I can do what I want to because it’s my private property.”

Supporters of the Akaka Bill would be well-advised to consider all the ramifications of inviting the government bureaucrats to become administrators of the culture and future of Native Hawaiians.  After all, as Ronald Reagan once quipped, the scariest phrase in the English language is, “I’m from the government and I’m here to help.”

Auditing American Indian Funds

From time to time, we like to look at the state of law, policy, and economics regarding the many federally-recognized Indian tribes.  What does this have to do with Hawaii?  Simple–one of the functions of this project is to explore the full story behind the implications of and motivations for the Akaka Bill.  Mostly, we look at granting and policy related to Native Hawaiians.  But, the relentless push for federal recognition of a Native Hawaiian “tribe” means that the political and economic implications of tribal policy is of vital importance to anyone who wants to fully consider what an Akaka Bill-based “tribe” will mean for Hawaii.

One of the ironies of this is that–as incomplete a picture that we may have of spending related to Native Hawaiians (and this project is a pioneer in that field), less is known about the details of federal spending regarding the more than 500 tribes listed in the Federal Register as Indian Entities Recognized and Eligible To Receive Services From the United States Bureau of Indian Affairs. Fortunately, through the work of some dedicated researchers, we are able to offer this initial list–an audit of federal Indian policy dollars.  Of course, there’s a lot more work to do, and we can always use some more help.  So check it out and contact us at 4hawaiiansonly@gmail.com if you’re interested in helping add to the research.

Click Here to Download the Audit of Federal Indian Policy Dollars.

The Stossel Effect

One of the complaints I hear from time to time about our catalog of Native Hawaiian grants is that I must be wrong about the amount of money and number of grants involved since Native Hawaiians still have so many troubles (economic or otherwise).  Well, yes and no.

Far be it from me to pass judgment on how much trouble anyone has, regardless of his or her ethnicity.  Times are tough out there for (mostly) everyone, including Native Hawaiians.  Though quite a few of them (the ones who benefited from the multi-million dollar federal contracting preferences leap to mind) who appear to be doing pretty well.  But all that is beside the point.  The question is how so much money can be put to use for so little (in the opinion of the complainer) result.  And to that, I can only say . . . what else do you expect from government-based efforts to help?  I bring up American Indian tribal affairs from time to time on this blog–not just because there can be some interesting parallels, but also because the drive for the Akaka Bill’s passage tells us that these examples are signs of things to come.  So I think it might be worthwhile to look at Barry Farber’s recent column about John Stossel’s recent piece of investigative journalism (I’ve left a bit of a historical cliffhanger, so you’ll have to go the full article to finish the story):

Now here comes John Stossel, fellow WND columnist, over the weekend of March 26 with one of the best pieces in television history: “Freeloaders,” a Fox News special delivering stomp-down proof that Indian tribes that are not recognized as tribes by the government and get no federal handouts are more successful than those on the federal dole. Stossel visited the Lumbee tribe of North Carolina, whose members get nothing from the government. They’re generally successful in business. Many live in luxury mansions. In contrast, the Indians embraced by the feds live in what look like tar-paper shacks.

In boxing, John Stossel’s interview with Elizabeth Homer, who used to be the government nanny of the recognized tribes, would have been canceled as a mismatch or halted on a TKO early in Round 1. She was pitifully unable to defend government stewardship over Native Americans as anything but the failure of socialism.

I’ll never quit thanking Stossel for giving me Part 4 of my standard answer to the question, “How can you flat-out say that capitalism is better for the masses than socialism?” Up to now I’ve had three examples: free and prosperous Finland, which began its national life simultaneously with its dysfunctional Communist Russian neighbor; West Berlin, delivering mortal embarrassment to Communist East Berlin every day of the latter’s existence; and Hong Kong, when it was British and free right next to Communist China. Now I add: the Lumbees, up against all the tribes spoon-fed by Washington.

So, pleasure-wise, what’s in this for me? Unless Stossel over-Googled, I’ll bet you he didn’t know something real nice about the Lumbees, whose independent prosperity he covered so splendidly. It’s something I’ve known for years.

In January 1958, the Ku Klux Klan in Robeson County, N.C., staged a rally to put the allegedly uppity Lumbee Indians back in their “proper” racial place. The Lumbees are totally integrated Americans, but they bought some feathers and face-paint and, just as the Klansmen were about to torch the giant cross, able-bodied male Lumbees costumed like the “Indians” of our childhood stormed into the Klan clearing from all directions, war-whooping and putting the white-clad racists to rout.

No Reservations: The Case for Dismantling the Indian Bureaucracy

By Carl Horowitz

This column was originally published in Townhall.

If ever a federal agency were a candidate for termination, the Bureau of Indian Affairs (BIA) would make for a good choice. The BIA combines patronage and ethnic separatism into a single package, wasting sizable tax dollars in the process. Yet few in Congress have the stomach for a fight with supporters of the bureau, now with a roughly $2.7 billion annual budget. That’s not the only Indian agency in need of serious downsizing.

The Bureau of Indian Affairs actually goes back nearly two centuries. Secretary of War John Calhoun virtually single-handedly created the BIA in 1824 to oversee treaty negotiations, conduct trade, establish budgets, and operate schools. In 1849, Congress moved the bureau from the War Department to the new Interior Department, where it since has been housed. In recent decades, the agency has become a conduit through which tribal leaders and their allies can accrue money and influence. It’s a variation on what public choice economists call “regulatory capture,” in which firms – especially large ones – effectively dictate policies and practices to the regulator, so as to maximize competitive advantage.

The current system is a by-product of periodic warfare beginning in the early-17th century and lasting through most of the 19th century. There are now 565 federally-recognized Indian (including Alaskan) tribes in this land of ours, representing nearly two million persons. Indian territories comprise some 55 million surface acres. Crucially, a tribe operates under a federal grant of sovereign status. Taken as a whole, Indian tribes are a loose confederacy of mini-nations, each with its own elected tribal government overseeing courts, schools, job training, health care, infrastructure development, and on due occasion, casinos.

Within their respective reservations, tribal leaders enjoy enormous power. Too often, they and employees use this power as a cover for corruption. Recent cases abound. At the Fort Peck Indian Reservation in northeastern Montana, for example, six office employees – two federal and four tribal – pleaded guilty last year to embezzling roughly $400,000 from a tribal credit program. In Oklahoma, Dawena Pappan, former secretary-treasurer for the Tonkawa tribe, pleaded guilty in federal court that year to stealing hundreds of thousands of dollars in casino proceeds with help from other Tonkawa officers.

Want more? Emily Anne Sauppity, secretary-treasurer of the Apache of Oklahoma, was found guilty by a federal jury of embezzling $46,068 in oil and gas royalty taxes, though her actual thefts amounted to nearly $108,000. Evelyn James, former president of the San Juan Southern Paiute Tribe in Arizona pleaded guilty to theft and money-laundering of nearly $300,000 in Justice Department community policing funds. And about a dozen persons, including two former tribal officials, pleaded guilty or were found guilty in Oklahoma City federal court to embezzling about $750,000 from the Lucky Star Casinos, operated by the Cheyenne and Arapaho of Oklahoma.

It isn’t just Bureau of Indian Affairs funds that have made their way into the pockets of crooks. In mid-2008, for example, the Government Accountability Office (GAO) issued a report revealing that the Indian Health Service (IHS), part of the Department of Health and Human Services, during fiscal years 2004-07 “lost” about 5,000 pieces of medical equipment with an acquisition value of $15.8 million. In a follow-up evaluation audit released in June 2009, the GAO noted: “IHS continues to lose property at an alarming rate, reporting lost or stolen property with an acquisition value of about $3.5 million in a little over a year…” Missing items included a $170,000 ultrasound unit, a $100,795 mammography X-ray machine, and various dental chairs and diagnostic monitors.

Far bigger piles of loot, however, can be made legally. Class-action lawsuits are one route. Over the past few months, Indian plaintiffs and their attorneys managed to coax massive settlements from the federal government in two longstanding unrelated civil suits. Last October, lawyers for tens of thousands of Indians corralled a $760 million agreement from the U.S. Department of Agriculture as compensation for credit discrimination against Native American farmers and ranchers. Known as Keepseagle v. Vilsack and originally filed by a Sioux couple in North Dakota in 1999 as a copycat of the Pigford (i.e., “black farmer”) lawsuit, the case did not uncover any specific acts of willful discrimination. In the other lawsuit, Congress in November created a $3.4 billion trust fund to be shared by an estimated 300,000 to 500,000 Indians, pursuant to the settlement in Cobell v. Salazar, in which the plaintiffs had alleged that the Interior Department for decades had squandered royalties due individual Indians for extracted oil, gas, timber and other natural resources from tribal lands. The details of the case suggest a well-planned and executed plaintiff shakedown.

An even bigger street-legal money maker is casino gambling. In 1988, Congress enacted and President Reagan signed the Indian Gaming Regulatory Act (IGRA), which recognized “the right of Indian tribes in the United States to establish gambling and gaming facilities on their reservations as long as the states in which they are located have some form of legalized gambling.” This legislation effectively conferred monopoly rights upon a tribe to operate a casino on its property, subject to regulation by the National Indian Gaming Commission. These enterprises are immune from state regulation. Moreover, they are exempt from federal income taxation, though state governments may tax a portion of slot machine revenues.

Currently, some 220 recognized Native American tribes operate a combined roughly 400 Class I, II and III (casinos fit under the latter category) gaming facilities. Given the seemingly limitless capacity of Americans to place wagers, this has meant big bucks. The Foxwoods Resort Casino in southeastern Connecticut, owned by the Mashantucket Western Pequot Tribal Nation, thanks to several expansions, has become the largest hotel-casino complex in the U.S. Featuring 7,200 slot machines and 380 table games, the luxury facility takes in roughly $1.5 billion annually from combined gaming and non-gaming sources. Right down the road is the nation’s second largest casino venue, the Mohegan Sun Resort & Casino. Owned by the Mohegan tribe, this high-end getaway destination features 300,000 square feet of gaming space within three casinos. The Pechanga Resort and Casino in Temecula, California isn’t exactly small time either, containing 200,000 square feet of gaming space and 3,400 slot machines.

All told, Indian gaming in 2009 took in $26.5 billion in revenues. This represents an explosive increase from $100 million in 1988, the year of IGRA passage.

Someone out there is getting rich. And it isn’t just tribal leaders and outside investors. Tribes operate with a grant of monopoly privilege. Remaining shielded from competition requires gaining access to federal and state legislators to vote the right way. That’s where lobbyists come in. The 2006 final report of the Senate Indian Affairs Committee, chaired by John McCain, R-Ariz., revealed that Jack Abramoff, though an extreme example (hence, the superficially satisfying cliché, “disgraced lobbyist Jack Abramoff”), was part of a larger “come and get it” political culture. A former BIA official, Wayne Smith, grandson of a Sioux chief, explained to CBS News at the time: “I had lobbyists…tell me that ‘It was our time, this is our time to make some money in the Indian game arena. We worked hard to get this president elected, and we expect to be rewarded for it.’” What matters here is that influence-buying is a product of tribal sovereignty and monopoly privilege. “Lobbyists” – love them or hate them – will always be around to service an Indian client’s political needs under this scenario.

If all this theft and influence-peddling amounted to nothing more than a few anecdotes, it would be easy to minimize their importance. Such behavior can be found in any type of organization, whether government agencies, corporations, unions, philanthropies or churches. Yet these cases, in fact, represent a fraction of widespread criminal and otherwise ethically-challenged activity. It is hard to avoid the conclusion that the system of tribal governance, with an able assist from Washington, is dysfunctional.

Bureaucratic client capture offers a partial explanation for this state of affairs. The ultimate problem is the setting aside of territory and public funds to accommodate Indian “nations.” Indian identity politics, at bottom, is about irredentism – the condition of two or more ethnic, linguistic or religious groups claiming sovereignty over the same territory. Many Indians have a deep attachment to ancient lands they believe were stolen by the white man. The federal government can’t bottle up their sense of moral entitlement. But it doesn’t have to subsidize it either.

Despite our best efforts, separatism and corruption appear to have become more pronounced over the past few decades. The late Sixties and early Seventies witnessed the aggressive rise of Indian identity politics, culminating in passage by Congress of the Indian Self-Determination and Educational Assistance Act (1975) and the Indian Child Welfare Act (1978). Lawmakers further encouraged decentralization of authority in 1991 with the Tribal Self-Governance Demonstration Project Act. With larger budgets and fewer strings attached, opportunities for corruption have increased, especially as the BIA itself has come to be heavily staffed by Indian activists.

Ending the network of incestuous relationships and accompanying corruption requires that Congress do the unthinkable: Abolish the Bureau of Indian Affairs, the Indian Health Service and all other federal agencies that serve Native American interests. These agencies have outlived whatever usefulness they had. Lawmakers also ought to end the practice of formal tribal recognition. Why should Cheyenne, Choctaw, Mohawk or Sioux sovereign “nations” exist within our borders, any more than Dutch, Irish, Italian or Polish ethnic ones? It is one thing for members of a particular tribe to live in close proximity, preferring their own company. It is entirely another for Americans as a whole to be coerced into subsidizing this tribal confederacy, an arrangement that is not only costly, but also corrosive of national identity.

Back in the late 1940s, Congress set up a commission on executive branch reorganization, chaired by former President Herbert Hoover. Among its hundreds of recommendations, the Hoover Commission concluded that assimilation of Indians into the mainstream of American society must be a top priority. More than six decades later, our nation remains a long way from realizing that goal. Dismantling the Indian bureaucracy would be a major step in that direction.

Carl F. Horowitz is director of the Organized Labor Accountability Project of the National Legal and Policy Center, a Townhall.com Gold Partner organization dedicated to promoting ethics in American public life.

Interior Ignorance, Caught on Tape

Want to know how big and unusual an endeavor a research project like the 4hawaiiansonly site is?  As of October 2010, the Federal Register listed 565 Native American tribes as Indian Entities Recognized and Eligible To Receive Services From the United States Bureau of Indian Affairs. Federal funds flows to those tribes, just as it does to Native Hawaiians, but as you can see in the video below (captured at the 2010 CERA Conference), even the Department of the Interior doesn’t know the scope of the money involved.  Watch carefully as George Skibine, Director of the Office of Indian Gaming within the Department of the Interior and Acting Assistant Secretary of the Bureau of Indian Affairs, confesses that the federal government doesn’t really follow the money, and clearly isn’t interested in doing so:

The Immunity Question

When Governor Lingle announced, with all due flourishing, her newly acquired support for the Akaka Bill, a big part of her new-found appreciation for divisive race-based legislation was in the compromise over criminal immunity that was theoretically being added to the bill.  (I say “theoretically” because–while that language was added to the House version of the Bill–there is no guarantee that it will survive to a final version.)  Lingle was understandably concerned that Native Hawaiians under a new tribal government might be immune from prosecution of criminal activity under state law.  Before anyone starts planning to discover a Native Hawaiian ancestor and set up a counterfeiting ring, I should point out that tribal governments can still prosecute such crimes (and are generally expected to do so).  In short, the question of immunity in a new Native Hawaiian government was a critical one.  So at least that has been addressed, right?

Not so fast.

In addition to the fact that there is no guarantee that the criminal immunity provisions survive to a final version of the Akaka Bill, there is also the fact that the problem doesn’t end with criminal immunity.  Consider this story:

On November 29, 2005, Robert Gutierrez, an employee of the Pueblo of Santa Clara in New Mexico, was driving a car owned by the Pueblo on Pueblo business.   That business took him outside of the tribal boundaries of the Pueblo, into a town in the state of New Mexico.  It was while he was off of tribal land (though still in a tribe-owned car on tribe-business) that Gutierrez made an improper turn into oncoming traffic and caused a car accident.  Peggy Reed and Timothy Reed, a husband and wife who were injured in the accident, sued Gutierrez and the Pueblo for damages arising from their injuries. The Pueblo and Gutierrez didn’t deny their part in the accident–they merely argued that the doctrine of tribal sovereign immunity protected them from the lawsuit.  And sadly for the Reeds, the court agreed, dismissing their lawsuit–a decision that was then upheld by the New Mexico Court of Appeals.  And all based on the concept of tribal sovereign immunity.

How does this relate to the Akaka Bill?  Well, if the bill is passed and Native Hawaiians are provided with the same tribal immunity, it brings an unfair and divisive element to our islands.  If you are crossing the street with your spouse/husband/grandmother, and you’re hit by a Love’s truck doing some deliveries, you can sue Love’s and the driver for your injuries.  That’s how you can recoup the cost of your medical bills, lost pay at work, chronic pain, and so on.  However, under the post-Akaka immunity scenario, if that truck is owned by the Native Hawaiian government and driven by one of their employees, you’re just out of luck.  Tribal sovereign immunity prevents you from being able to sue the Native Hawaiian government for your hospital bills, your Grandmother’s wheelchair, the 3 months of work you missed, or anything else.

These are the kinds of problems we’re speaking of when we warn the people of Hawaii that the Akaka Bill poses a real danger to our state and the spirit of aloha that makes it such a special place to live.

Guest Series on Tribal Gaming (Part 7)

Today, we have the final installment of Jim Marino’s series on Indian casino gaming in California (originally published in the Santa Ynez Valley Journal).  If you’ve been following the series, you’ve seen Marino build a case for the inherent problems of tribal gaming–from its end-run around initial state opposition to the damage it can cause a community or local economy.  But perhaps you thought that the federal government would catch any truly serious abuses of the system–especially considering the power of the BIA to regulate tribal gaming in the US.  Not so fast.  As Marino lays out below, the federal government is often unwilling or unable to regulate Indian gaming–a point to ponder for anyone who puts their trust in the compromises and limits outlined by the Akaka Bill when it comes to regulation of a new Native Hawaiian government.

Santa Ynez Valley Journal
By Jim Marino, Guest Columnist
May 27, 2010

(Part 7)

This is the concluding article in a series of articles on Indian gambling casinos in California. In recognition of the ten-year anniversary of the legalization of some of the Indian gambling in California, I thought it was an opportune time to talk about its origins, the failures and inadequacy of Congress in enacting the Indian Gaming and Regulatory Act in 1988, and the political process and corruption involved in the negotiation and execution of the 59 original compacts, negotiated in California by now deposed governor Gray Davis who received massive contributions for his 1998 election from the illegal Indian casinos operating here before March 2000.

Once Indian gambling was introduced into California I went on to discuss the impacts on communities where they are located and some of the irony of tiny recognized “tribes” of one or two people, or perhaps a handful of members, often tracing only fractional descent [if any] to a real California Native Indian Band and claiming they were sovereign governments because they have been “recognized” by bureaucrats in the Bureau of Indian Affairs. These tiny “sovereign governments” pay no taxes and provide no services or infrastructure to their “tribe”. Rather they depend on the public services and infrastructure paid for by non-Indian taxpayers and the federal government for their welfare.

I discussed how these claims of “sovereignty” were not only used to evade paying the taxes needed to fund local public services and infrastructure, but also used to evade all the many laws enacted for the protection of the public, customers in Indian casinos and businesses, their workers and the environment and quality of life in the host communities.

I discussed the false economy of Indian gambling casinos that promise “jobs” and claim to be a destination “resort” bringing in tourist dollars when, in actuality these are unprotected, transient and generally low paying “jobs” that are created. This job creation is far-outweighed by the fact that the many gamblers losing money at an Indian casino, come from nearby communities where they are not spending those discretionary dollars in non-Indian businesses. These nearby non-Indian businesses often cannot compete with an Indian casino or business that pays no taxes, operates above the laws and which cannot be sued by customers, workers (or anyone else) for their misdeeds because of an outdated court-created legal doctrine giving Indian tribes, their casinos, businesses, agents and employees complete immunity from lawsuit no matter how outrageous their actions or conduct may be.

That in addition to siphoning millions of dollars in discretionary money from gamblers drawn to these casinos from nearby communities these patrons are gambling with money they often cannot afford to lose. That produces increases in crimes of theft, robbery and embezzlement, divorce and family neglect, financial problems, foreclosures and bankruptcies, gambling addictions, substance abuse, even increased suicides that are an inevitable result of the introduction of Indian casino gambling.

I quoted Warren Buffet who astutely pointed out a few years ago that there has always been gambling activities. The problem with Indian gambling casinos is that they have made gambling much more convenient so those losing vast amounts of money do not have to travel great distances to places like Las Vegas to do so.

Finally I discussed the inherent corruption and decay in the political and moral fiber that arises with Indian gambling casinos and which is virtually impossible to measure the negative impacts of that in dollars and cents and which is equally difficult to detect because addicts, corrupt politicians and drug and alcohol abusers rarely admit to such things like gambling away food and rent money or stealing money to gamble more. I knew a foreign car dealer in this area years ago (now deceased). A client and friend who had accumulated a comfortable retirement nest egg, only to lose it all at the Chumash casino. He was a proud man who never admitted to his gambling addiction. Within the past year alone several embezzlers have admitted to stealing thousands of dollars from local employers in this area to fuel their gambling habits at the Chumash casino. Even a reported armed robber arrested in Oxnard admitted to robbery in order to have money to gamble in Indian casinos including the Chumash casino.

In last week’s article I discussed the pervasive undue influence, insidious corruption and political pay-offs inherent with Indian gambling casinos and the avarice of Sacramento politicians ready and willing to accept those gambling dollars, much of which is paid quietly and secretly, funneled and laundered through Political Action Committees and political party channels. Some received in the form of perks, free concert and sports tickets, free chips, spa treatments and free rooms as set out in a recent Los Angeles Times story about the failure of 27 California legislators to report these Indian casino “gifts.”

Besides the failure to enact enough effective laws to control and regulate Indian gambling this concluding article discusses the failure of federal, state and local government to take any meaningful steps to curtail the improper and illegal activities occurring within casino tribes in the course of the daily operations. This is true even where there are enforceable laws, thereby rendering Indian casinos operations virtually lawless.

Here I will pick up where I left off last week. Section 2710(2)(B) of the Indian Gaming and Regulatory Act of 1988 spells out the only five categories where the net proceeds of Indian gambling casinos can be spent. They are:

(i) To fund tribal government operations or programs

(ii) To provide for the general welfare of the Indian tribe and its members

(iii) To promote tribal economic development

(iv) To donate to charitable organizations; or

(v) To help fund operation of local government agencies.

As I related in the last article, the Louisiana Coushetta and the Mississippi Choctaws gave now imprisoned lobbyist Jack Abramoff and his sidekick Michael Scanlon some $85 million dollars to “distribute” to various politicians in Washington D.C. to block the Alabama Coushetta and Texas Tigua tribes from opening a casino nearby that would have competed with their casinos. Besides participating in what amounts to these fairly obvious bribery attempts, where could any Indian tribe justify a scheme like that into any of the five exclusive statutory categories of 2710(2)(B) set out above? Nothing was done to the tribal officials, their lawyers and advisors for this scheme but Abramoff wound up in prison. The whole thing was spun as “overbilling” to the tribal governments by Abramoff and Scanlon. Ultimately the identity of the many recipients of this money was concealed and buried in a perfunctory “investigation” conducted by the Senate Indian Affairs Committee.

Three years ago Butch Crawford from Plymouth California and I met with the solicitors for the Bureau of Indian Affairs in their Washington offices. He presented the investigators with a copy of an application for more than $900,000 in grants monies for claimed improvements to be made to Indian fee lands in Amador County. Those lands were actually owned by a group of individual Miwok Indians from the same tribe but a different faction of the tribe. The application had been submitted by the newly elected tribal chairman who was at the time, the spokesperson for the other break away dissident group or faction of the same tribe. The original smaller faction consisting of these individuals and families actually owned the 40-acre parcel of land in fee divided amongst them individually. It was not reservation or trust lands it was privately owned. The $900,000 grant application was submitted by the larger dissident faction of the tribe. Those members owned no land at all, yet the application they submitted was for a grant for “physical improvements to tribal land.” At or about the same time this dissident faction, now constituting the majority of tribal members, was desirous of building a gambling casino. To facilitate that effort they made application to the B.I.A. to bring land near Plymouth Cal., [on which they held an option], into federal trust status to render it eligible for gambling operations. To fit into one of the exceptions allowing gambling on lands acquired by an Indian tribe after 1988 they asserted in that application that they were entitled to do so under the IGRA exception allowing for gambling on land acquired by a tribe after 1988, if they were a “landless” tribe. So for purposes of obtaining a large federal grant for “improvements” on non-existent tribal land, they succeeded in obtaining nearly a million dollars in federal grant money. At the same time and for purposes of trying to qualify to bring the Plymouth land into trust for a gambling casino they stated in their federal application they were landless! The investigative lawyers we spoke with at B.I.A. were not interested in how a group of Indians received a $900,000 grant for land improvements at the same time they applied to buy land and bring it into trust under a legal exception only available for tribes that had no land! The response of the B.I.A. investigative lawyers was that half their 60 or so investigators were still working on the Abramoff case and they didn’t have the manpower or time. This in the face of the fact the Abramoff case had already been concluded and nothing has happened in that case in the three years since that meeting.

In another more local instance, we had a meeting with an agent of the Federal Bureau of Investigation concerning the use of casino credit cards by Chumash government officials. Records indicated charges had been made, among other things, for a $10,000 “diamond ring, breast implants, a funeral,” luxury travel and other clearly inappropriate charges that were made, amounting to tens of thousands of dollars.

He informed us that unless it involved a theft of over $75,000 they would not even open a case file. I pointed out that if a robber went into a bank, pulled a gun and robbed the teller of $1,500 they would put 5 agents on the case and if it happened a few more times that same robber would make the 10 most wanted list. Nothing was ever done by the F.B.I. or anyone else about these improper credit card charges.

The current Chumash tribal chairman Vince Armenta went into the casino a few years ago and sat at a blackjack table with his son and some friends. He demanded chips from the dealer for he and his friends to play “on the house.” When the dealer offered only some one dollar and five dollar chips, he demanded “the greenies” [$25 chips], this was done despite the fact these actions would normally constitute a federal felony under Title 18 entitled “theft from an Indian tribe.” When angry tribal members reported this incident to the National Indian Gaming Commission (N.I.G.C.) investigator in Sacramento he said it was up to the tribal Gaming Committee to deal with it and basically shined the incident off. That tribal gaming committee was chaired at the time by the tribal Chairman’s brother, Raul Armenta and the committee later suspended the blackjack dealer for a week.

On another occasion, the cardroom manager at the time, Tony Armenta, was instructing a gambler who had won over $10,000 dollars playing blackjack, how he could avoid the reporting requirements for any cash transaction over $10,000, required by the United States Banking Act. He informed him he could do so by splitting the winnings with his girlfriend, bringing them below the $10,000 threshold, the casino security officer, called to the cardroom at the time, informed Mr. Armenta that was illegal. When nothing was done that same officer, a former police sergeant, reported the incident to the I.R.S. The agent did nothing except inform the Chumash tribal government, who then disciplined the security officer for reporting this incident to the I.R.S.

Even now when drug trafficking at the Chumash casino is rampant, the County Sheriff is doing little about it, although federal law provides that local and state law enforcement authorities have jurisdiction over all crimes committed on Indian lands. It is the Sheriff’s duty to police all Indian lands, not the security guards employed by the tribe. A few years ago the N.I.G.C. had promulgated a set of rules called the Minimum Internal Control Standards [M.I.C.S.]. The Colorado River Indian tribes filed suit and challenged these rules on the grounds the I.G.R.A. gave no authority to the N.I.G.C. to police class III, full scale casino gambling. Their jurisdiction only extended to the licensing of class II Bingo halls. The 10th Circuit agreed and those M.I.C.S. were held unenforceable.

The only authority left to enforce any rules and regulations other than criminal laws, was through the tribal state compacts. In California this has proven to be a standing joke. Neither the Governor, the Attorney General, or the inept and ineffective State Gambling Control Commission [which at last report had only 3 investigators], has ever done anything. Nor have effective rules been adopted or any enforcement of the compacts been undertaken by any state or federal agency.

A few years ago I testified in front of that Gambling Control Commission at the request of Cheryl Schmit [Stand Up for California] concerning a number of illegal and questionable practices occurring at Indian casinos including the Chumash casino. During a recess the Commission chairman and legal counsel, Herb Boltz, approached me and asked that I document the incidents testified to and send it to him, which I did in a 12-page letter complete with several exhibits and attachments. I did that within a week of that hearing. I never heard another word, not even a thank you for the effort.

Not long ago the Chumash casino brought in a roulette wheel. This is a clear violation of state law because Art. 4 section 19 of the amended Constitution only authorizes slot machines and house-banked card games conducted by Indian tribes by compact and on Indian lands. Use of roulette wheels are also a violation of the compact. One local group took a picture of it and sent it with a letter demanding enforcement of the law to the Gambling Control Commission. After several unanswered letters the State Gambling Control Commission finally wrote a letter to the Chumash tribal government that December, telling them they would be down to inspect the casino in March and suggested they remove the illegal roulette wheel before then.

Several tribes, apparently aware no enforcement action would ever be taken by their friends in Sacramento, brought in craps tables. Craps games are also illegal for the same reasons as roulette. The offending tribes asserted, apparently to the satisfaction of state regulators, that it really wasn’t craps after all because instead of rolling dice on the craps table they had two stacks of six cards each numbered 1 through 6 and the player would turn over one card from each stack constituting the numbers “rolled.”

At a meeting two years ago with George Skibine in Washington D.C. [at the time he was head of Indian Gaming at the B.I.A.] he is now acting commissioner of the N.I.G.C. We discussed a number of issues concerning illegal activities occurring in Indian casinos including tribes operating gambling casinos on ineligible lands. In the course of the discussion he postulated the following incredible and illogical policy which probably best explains why the federal government is doing nothing about all of the illegal activities involved in Indian casino gambling.

Chairman Skibine said this: Our [meaning the N.I.G.C. and B.I.A. and Department of Interior] authority and jurisdiction over Indian gaming comes from the Indian Gaming and Regulatory Act. If any Indian tribe is operating a gaming facility that is not on eligible Indian lands or otherwise not complying with federal gaming laws then it is outside of the provisions of the I.G.R.A. which requires such gambling to be on eligible Indian land in order to be authorized and sanctioned by that Act.

Therefore it is beyond our authority and jurisdiction to do anything about it because if it is outside of the Act it is outside of our jurisdiction. If Indian gaming not being conducted on eligible “Indian Lands” pursuant to the I.G.R.A. then it is up to the State in which it is occurring to enforce State laws against illegal gambling, if that gambling activity is against that state’s laws. This “hot potato” game is thus played when the state claims that enforcement is the responsibility of these federal agencies. The federal government then says it is the responsibility of the state or, as in the Armenta blackjack case, claim that it is a matter for the tribal government to resolve.

Likewise local law enforcement often passes the buck to the state or federal government, who passes the buck back to the state or perhaps to the tribal government. So the answer to the original question, why no one is enforcing the laws that do apply and which are enforceable, it is because no one is willing to do so.

The reasons they are not willing to do so are complex but generally fall into a few recognizable categories. The first is that it is politically incorrect and unpopular to take any action against “Indians” even if they are not really Indians at all, because the public has been indoctrinated about historic injustices to “Indians” centuries ago. Politicians don’t want to evoke the “race card.” The second reason is political corruption plain and simple. The casino Indians are funneling hundreds of thousands of dollars into the pockets of politicians and the bureaucrats who are responsible to regulate and police these tribal casinos and businesses and they are routinely ignoring numerous violations. The third reason is that many of the federal laws are poorly written, lack adequate specific enforcement provisions and directions and the tribal-state compacts that are in place are also poorly written. Even where they contain enforceable provisions, they are never enforced, like the 59 Gray Davis compacts in California. The last reason is that many of the federal agencies that should be taking enforcement actions in these areas are dominated by Indians, or part Indians, even wannabe Indians, or those who are simply “enrolled” members of some tribe someplace, and they ignore the law, stonewall inquiries and investigations, and exercise biased interpretations of the laws and rules that they have been given wide discretion over by enabling statutes, thereby thwarting any effective enforcement. As I mentioned in a previous article, where one would expect the media to expose this scandalous scenario, they don’t and they have haven’t done so, because they are afraid of offending their biggest and most profitable advertisers, Indian gambling casinos.

This concludes the series on Indian gambling in California, meant to be educational, because the more people who know and understand what has happened and is still happening, the more likely people will call for positive changes and perhaps elect ethical and responsible representatives and not politicians or corrupt bureaucrats holding out their hand for casino cash and perks to get elected or re-elected or appointed to the offices that they are supposed to hold to protect and fairly and impartially serve the 38 million people of California.

Guest Series on Tribal Gaming (Part 6)

Today, our sixth installment of Jim Marino’s series of articles on tribal casino gaming in California (originally published in the Santa Ynez Valley Journal) looks at the corruption in California that followed the explosion of Indian casinos.  “Tribes” of one person . . . lobbying slush funds . . . it’s all there, proving that money, politics, gaming, and corruption are natural bedfellows.  Those who oppose the introduction of casino gaming to their communities are often wrongly characterized as puritans.  True, opposition to gambling may be a factor for some, but there’s so much more to the issue than just the issue of gambling.  As this article makes clear, no one should walk blindly into creating Indian gaming in their community without knowing more about the social impact of it–from crime rates to the powerful influence of gaming profits on local government.  It’s something to keep in mind as we consider the far reaching implications of the Akaka Bill.  (And recall that–even though the current version of the Bill does not allow for Native Hawaiian casinos, there was a time when such casinos weren’t permitted in California too.)

Santa Ynez Valley Journal
By Jim Marino, Guest Columnist
May 20, 2010

(Part 6)

In a 5-part series, I outlined what led up to the advent of the Indian Gaming and Regulatory Act of 1988. How Congress engaged in a feeble attempt to wean Indian tribes from total federal dependence and at the same time clarify the 1987 U.S. Supreme Court decision in Cabazon Tribe versus California. How Congress completely failed to take into account the complex and confusing body of Indian law, including the court-created doctrine of Indian tribal immunity from lawsuit.

Then I discussed the tortured history of how Indian gambling found its way into California illegally and the attempts to legalize it by corrupt politicians and Gov. Gray Davis, who executed 59 tribal-state compacts for casinos with several tiny bands of questionable Indian descent, and who had no legally eligible lands on which to build and operate a gambling casino and even allow questionable “tribes” to purchase land near perceived gambling markets in a practice that came to be known as “reservation shopping.”

These often ridiculous policies and events led to the rapid expansion of Indian gambling casinos all over California being thrust into many communities who didn’t want them and which provided no benefit despite the creation of “jobs.” That was because of the many negative impacts of such a casino and the demands placed on public services and infrastructure, which the Indian casinos and businesses used regularly while paying no taxes.

This continuing article is to demonstrate how pervasive the corruption from Indian gambling dollars has become. Although there are many examples, this limited space only allows for the recounting of some of the typical and more outrageous examples of it.

As set out in the earlier series, Gov. Davis owed his election to the massive contributions from Indian casinos operating illegally in California at the time and the massive campaign instituted by those tribes, many of which had only a handful of members, and fractional and often questionable claims to being “Indian” at all. A campaign to enact a tribal initiative to amend the California Government Code known as Proposition 5 was circulated in an attempt to legalize the illegal Indian gambling casinos operating in California at the time.

To repay this largesse, once elected, Gov. Davis negotiated 59 tribal-state compacts through the summer of 1999 with these illegal existing casino tribes and many other questionable groups, several with no eligible land upon which gambling would be allowed under federal law. These compacts had been negotiated behind closed doors under the authority of Proposition 5 enacted in November 1998 at the same time Davis was elected.

These secretive negotiations took place behind closed doors, away from all of the major public forces that usually shape laws, such as city and county governments, unions, law enforcement, women’s rights groups, environmental protection groups, local and consumer rights groups and lawyers’ organizations. Even though the California Supreme Court had struck down Proposition 5 in August 1999, undaunted, Gov. Davis executed these give-away “sweetheart” compacts in September 1999 and had the democratically controlled legislature approve them in October 1999. To overcome the fact there was no statutory authority to execute and approve those compacts after the August 1999 Supreme Court decision, Gov. Davis and the Legislature put a “legislative initiative” on the March 2000 ballot called Proposition 1A. Although this initiative amended the State Constitution to authorize the Governor to negotiate future tribal-state compacts, it was, in effect, an initiative designed to retroactively ratify the 59 compacts signed earlier without lawful authority and without informing the voters.

As if this corrupted set of events was not enough, it was but the opening bell in a bruising round of corrupt practices that followed at both the state and federal level.

Proposition 1A established two funds: The Revenue Sharing Trust Fund and the Special Distribution Fund. The former was a fund established by the state into which those tribes with casinos would pay money. That fund would then make annual payments to “Indian tribes” in California that did not have casinos, or had casinos with fewer than 300 slot machines. Each “tribe” would receive an annual distribution of $1,100,000 over and above the hundreds of thousands they receive in federal welfare and grant monies.

Some of these “tribes” had only one or two members, like the Valley Miwoks and the Buena Vista MeWuks and Mary Ann Martin’s Augustine Band of Cahuilla Mission Indians. She was the only member of that “tribe” and not only entitled to receive a $1.1 million dollar distribution but also hundreds of thousands of dollars each year in federal welfare and grant money for “tribal government,” “tribal economic development,” “tribal housing,” and so forth. Many other bands or tribes had perhaps a handful of members.

The first thing that happened once Indian gambling became openly legal was that these casino tribes began contributing monies large and small to various politicians at the state and local level.

Many of you may recall how Jack Abramoff, the now imprisoned and disgraced lobbyist, got $80 million from one “poor” Indian tribe in Alabama with orders to spread it around Washington politicians, in order to block another Indian tribe’s attempt to open a competing casino. When the scandal finally broke, the Indian tribal governments and liberal media castigated Abramoff and his partner Scanlon for his activities, but carefully concealed the fact it was the Indian tribal governments, lawyers and lobbyists that furnished the tribal ‘pay-off” monies and that Abramoff was just the bag man delivering the tribal gambling monies to the many corrupt politicians he knew and who willingly took it.

One tribal government operating a gambling casino near Palm Springs gave Abramoff $10 million and then later refused to disclose what it was for, even to the tribal membership. State Senator Jim Battin from Palm Springs received tens of thousands of dollars in Indian casino contributions deposited into committees mostly called “The Friends of Jim Battin.” These committees were very generous in handing out tens of thousands of those casino dollars to other Sacramento politicians, lending a new meaning to the expression “it pays to have friends.” When he finally got in trouble with the state F.P.P.C. and they filed complaints against him, he and these Indian casinos set up the “Jim Battin Defense Fund.”

Senator Battin, (now termed out), was a champion of Indian gambling causes of all kinds. A year or two ago, the former chairman of the Indian Gaming Commission, Phillip Hogen, had been trying to change the federal rules defining more clearly what a slot machine was. Casino Indians and slot machine manufacturers had designed machines they called Bingo machines. Bingo under the IGRA is a class II gambling game that can be operated by a tribe without needing a tribal-state compact. Such a tribal-state compact is required for class III casino gambling, including the use of slot machines.

The compact requirement is the only way states can require tribes to pay money for all of the public services and infrastructure they use at the taxpayers’ expense. The compacts are also the way states can impose rules and regulations on gambling tribes. Commissioner Hogen had been trying to change the rules for years and reclassify these “Bingo machines” as facsimile slot machines subject to state control and the tribal-state compact requirements.

Sen. Battin wrote a letter, at the time, to Commissioner Hogen urging him not to change the rule, and he had 20 other Senators sign it. So, here we have fully one-half of our state’s Senators opposing a federal rule change that would be a direct benefit to the State of California, the state that they are supposed to be representing.

As I wrote in an article last year for this Valley Journal titled “Pay to Play,” this Indian casino corruption is rampant. Locally the Chumash and other tribes pushed for a bill early on in the gambling casino saga. They urged adoption of a bill in the Legislature that required local communities to come hat in hand for monies from the special distribution fund that were paid into it by gambling tribes. This money was originally intended to mitigate the negative impacts of casinos on local communities. That bill established local committees, controlled by the very Indian tribes causing the negative impacts who would then either approve or disprove any requests for grants by local governments to be made from the monies that were originally in that fund to mitigate those impacts.

On another occasion when the IRS refused to allow Indian tribes to issue tax-free bonds for gambling casino construction, arguing that such bonds were for public works projects, the tribes went to their friends in Sacramento – and introduced a bill to have the State of California issue tax-free bonds on their behalf.

When the gambling tribes wanted to eliminate any competition, they went to Sacramento again and had a bill introduced to place a long moratorium on the issuance of any more private non-Indian card room licenses that is still in effect. In fact, they just got their buddies in the Legislature to extend it.

When they wanted to eliminate competition from charities conducting Bingo games for charitable purposes, they got their Legislative friends to pass a bill banning the use of these Bingo machines by charities. You remember, the same machines they argued to the federal government were not slot machines at all, but then when they wanted to block their use by charities in California, they claimed that the state should not allow this use because it infringed on their exclusive right to operate “slot machines,” as provided for in the tribal-state compacts and in Art. 4, section 19 of the State Constitution.

Even locally, you may recall, when the Chumash wanted to rename San Marcos Pass/Highway 154 “The Chumash Highway,” they went to another friend of the Indian casino tribes, Assemblyman Coto, who has taken thousand of dollars from casino tribes and is now doing so for a run for the State Senate. Assemblyman Coto represents a San Jose District some 300 miles from here.

After receiving a generous political contribution of several thousand dollars from the Chumash, he introduced a resolution to rename Highway 154 as the Chumash Highway.

This was done without any local notice or knowledge and/or a resolution from the Santa Barbara County Board of Supervisors, which resolution was required by a section of the California Streets and Highways Code. It was then shepherded quietly through the legislature by a number of elected officials in record time, many of whom had received thousands of dollars from the Chumash and tens of thousands from other casino tribes. The community only learned of the resolution when the tribe issued a press release after the fact.

In another recent episode of attempted corrupt influence, in order to further their ambitious acquisition and development plans, the Chumash gave State Sen. Florez a $15,000 “contribution,” and within a month or two he introduced a bill to relieve the Chumash (and ostensibly other Indian tribes) from complying with the limitations contained in the Williamson Preservation Act, apparently knowing they were going to purchase the 1,400-acre former Fess Parker property and other properties still restricted by Williamson Act limitations. Fortunately, that bill was soundly rejected by the Local Government Affairs Committee, with the chairman, State Sen. Cox stating, “You wouldn’t be here, Sen. Florez, if it wasn’t for the Chumash.”

This corruption from gambling dollars is bi-partisan. Two years ago, when four tribes wanted to expand the number of slot machines in their casinos, they not only spent well over $70 million promoting the amended compacts on the statewide ballot, they also gave the State Republican party $5 million. Not coincidentally, the Republican Party then spent about the same amount of money supporting those ballot propositions which were numbered 34-38 and ultimately were approved.

In addition, Indian casino tribes spent more than 35 million to oppose race track efforts to obtain slot machines at their tracks in propositions 93-95 on the ballot in that same election. Such slot machines would have competed with tribal casinos, having exclusive rights to have slot machines.

What is perhaps the most ironic, if not astounding aspect of all this corruption from these Indian gambling casinos and their political contributions, is the fact that these political pay-offs are not legal by federal law. Title 25 section 2710 of the I.G.R.A. provides as follows:

2710(2)(B) net revenues from any tribal gaming are not to be used for purposes other than –

(i) To fund tribal government operations or programs

(ii) To provide for the general welfare of the Indian tribe and its members

(iii) To promote tribal economic development

(iv) To donate to charitable organizations; or

(v) To help fund operation of local government agencies.

The obvious question is into which one of these categories could political contributions and pay-offs possibly fit? How, for example, could an Indian tribe justify putting money into a fund, like the Jim Battin Defense Fund, whose purpose is to defend a politician from state allegations of illegal acts and practices constituting violations of the Fair Political Practices laws?

When I put that very question to former Chairman of the NIGC Phillip Hogen, he could not answer it. That is most likely because such contributions do not fit into any one of these five categories of permissible uses.

That brings me to the last point and that is, where are the provisions to enforce the federal laws and state laws that should be regulating Indian gambling casinos but are not? I thought I could conclude this series in 5 installments but that has proven impossible.

So next time, the final installment: “Why no one enforces the laws intended to limit and regulate Indian gambling.”

Guest Series on Tribal Gaming (Part 5)

Today’s entry in our continuing series on Tribal Gaming in California by Jim Marino looks at the false economy of Indian casinos.  For the state, that is.  And any other residents who aren’t fortunate enough to have a profit stake in said casinos.  You know, this has always been one of my particular stumbling blocks.  After all, when one is dazzled by the glitter of Vegas or the sheer amount of cash changing hands in a casino, it’s hard to imagine that they can actually have a negative economic impact on the community.  But, as Marino explains (in this piece originally published in the Santa Ynez Valley Journal), there’s a lot more to the economy of tribal gaming than meets the eye . . .


Santa Ynez Valley Journal
By Jim Marino, Guest Columnist
May 13, 2010

(Part 5)

Last week I wrote about the many negative impacts Indian casinos imposed on the host communities. I wrote about the underhanded way the 59 tribal compacts were negotiated secretly and executed and then the clandestine ratification of them by the passage of the “Legislative Initiative” called Proposition 1A, months after former Gov. Grey Davis signed them and the Legislature approved them illegally with no Constitutional authority to do so.

I also wrote about the worthless content of these “sweetheart” compacts and how they provided no benefit to the state or local communities, except the massive political contributions these casino tribes now make regularly to the many politicians in the hip pocket of their gambling casino benefactors.

These casinos were thrust into communities under the claim the federal Indian Gambling Act [I.G.R.A.] and the state compacts made them a “done deal” and the local communities had nothing to say about it.

But if they didn’t oppose them, these local communities might get some of the gambling dollars in lieu of the many taxes local and state government could not collect. If the local government did not cooperate, on the other hand, they would get no money and often would be accused of being anti-Indian racists and insensitive to the plight of “Indians” in America. After wielding this political stick, these gambling investors and tribes would then wave the carrot, telling local government they would create “jobs” and thus be a great benefit to the community.

This week I’ll discuss the false nature of these claims and the negative economic impacts on every community that are easily identifiable and those that are more difficult to measure. Lastly, I will discuss the manner in which a literal handful of casino Indians and their gambling cartel have totally corrupted the State of California and its 38 million citizens.

One does not have to be an economist to understand the false economy of gambling casinos in general. The vast sums of money lost there in the name of entertainment are often monies lost by people who cannot afford to lose that money. Slot machines are the favorite vehicle to lose money, accounting for about 85 percent of the profits raked in by all casinos.

The difference between a casino in Nevada and an Indian casino is stark: The gambling casinos in Nevada pay taxes; Indian casinos do not. The Nevada casinos are strictly regulated and policed. Indian casinos are not. Nevada casinos require minimum fair rates of return for slot machines. Indian casinos do not and are free to change out the random operating chips in these slot machines whenever they want.

The tremendous costs of providing public services like police, fire, schools, jails, hospitals, public works, social services, etc., used regularly by Indian casinos and related businesses, and the demands placed on infrastructure like roads, bridges, public buildings, and other facilities, are all paid for by the non-Indian taxpayers because these tribal businesses are exempt from property taxes, bed taxes, sales taxes, personal property taxes, corporate taxes and state income taxes among others.

As an example, the Chumash casino grossing between $250 and $300 million a year in gambling losses, is able to evade approximately $20 million in combined taxes annually. The Chumash put sales tax as an item on bills and receipts and in an amount identical to what the state requires for all others, in order to make customers think the tribe pays the state tax monies. But that money does not go to state and local governments; it is kept by the tribe who recently allocated some $3 million from that fund to buy property in Solvang.

Similarly, the per capita profit distributions to each of the 152 tribal members amounts to about a half-million dollars a year to each tribal member. The state income taxes on that amount of money would be almost $9 million a year that the state does not get.

The amount of money that trickles down into the local economy from the salaries of employees and the costs of goods and services is nowhere near enough to make up for lost tax revenues or to pay the tribe’s fair share of the costs to the community for increased demands on public services and infrastructure. Neither are the occasional gifts tribes like the Chumash make usually to the police or fire agencies which gifts are often less than the $2 million the tribe still receives in federal welfare and grant monies every year.

The 59 Grey Davis compacts had a provision requiring the signatory tribes make a good-faith effort to comply with the California Environmental Quality Act [CEQA]. That provision provided that if tribal compliance was unsatisfactory then the Governor could demand a renegotiation of that provision. Tribal compliance was woefully inadequate, so in March 2003 Gov. Davis sent all the tribes a timely notice of required renegotiation. Not long after that, Gov. Davis was recalled for his inept leadership and Gov. Schwarzenegger was elected to replace him. During that campaign, Gov. Schwarzenegger assured the public he would make the casino tribes pay their fair share of the costs of providing public services and infrastructure to them at public expense, describing these casinos as “ripping the State off.” He also stood on the steps of the Capital, waving a broom and assuring the public he was going to sweep the corruption out of Sacramento. Once elected, he did neither.

In fact, he championed five expanded amendments a year or so later, creating compacts allowing those affected tribes to double and triple the number of slot machines and in doing so, making exaggerated claims as to how much money that would bring the state, it hasn’t come close to the amount claimed. In fact a recent court case in the 9th Circuit has held these tribes don’t have to pay any more money, going back to original giveaway compacts Gray Davis negotiated to pay back the tribes for his election and these five tribes can keep the extra slot machines and the revenue from them.

Shortly after Davis was recalled and just before his term was to end prematurely, he withdrew the notice to tribes demanding a renegotiation of the environmental protection clause in the compacts apparently out of pure spite because the public had ousted him from office and leaving environmental protection for all of the casino communities up to the “good-faith efforts” of the casino tribes in their neighborhood.

So despite the initial bluster and pontificating, Schwarzenegger did nothing to improve the false economics of Indian casinos. Most impartial studies, that is those that are not bought and paid for by Indian casinos, indicate that once the construction phase of a casino is finished, that it costs the host community $3.50 for every dollar the casino brings in.

Another economic myth is that by calling the casino a “resort” it will somehow become a destination location for tourists. This myth is debunked by several studies showing the vast majority of gamblers come from a one- to two-hour drive or fewer than 50 miles and come to gamble only.

Therefore, an Indian casino essentially siphons dollars from the immediate surroundings. Those are dollars and local monies not spent in other non-Indian businesses and entertainment venues where such discretionary income would otherwise be spent. Non-Indian businesses nearby often cannot compete with an Indian business that pays no taxes, is exempt from state and local laws, rules and regulations workers compensation and public liability insurance and cannot be sued for any of its misdeeds, no matter how outrageous they may be.

There are also the intangible and subtle negative impacts which are hard to place a monetary value upon. For example gambling addiction, substance abuse, family neglect, financial problems, bankruptcy and foreclosures, increased crimes of theft and embezzlement even increased suicides. Generally, chronic gamblers and addicts are not willing to stand up and admit they have gambled away food and rent money on the foolish belief they might win something in an unregulated, unpoliced and uninspected Indian casino, making monetary assessment of these negative impacts difficult to calculate.

Lastly, how can one measure the negative impacts of the corruption gambling dollars has brought to government and the impossibility of measuring in dollars the loss of integrity and honesty in state and local governments.

So widespread is this corruption I have written a concluding piece for next week’s Valley Journal.

It is more than clear at this point that Indian casinos are a false economy that creates far more detrimental and negative impacts on every community, and those costs and negative impacts are not offset by the creation of a few largely low-paying, unprotected and transient jobs in Indian casinos and businesses, nor by the purchases of goods and services. Nor do they come close to offsetting the millions in lost tax revenues needed to pay for all the public services and infrastructure used regularly by these casino tribes and their businesses.