Casino conflicts threaten federal Indian policy

Ivan Makil, who for 12 years served as chairman of the Salt River Pima-Maricopa Indian Community near Scottsdale, Arizona, isn’t taking sides in a bitter dispute that has divided the state’s American Indian tribes.

It saddens him that Tohono O’odham in December opened a casino in the Phoenix suburb of Glendale, angering tribes and state officials who promised voters in a 2002 ballot initiative there would be no new gambling in the city.

But he also is discouraged that his tribe and the Gila River Indian Community in May abruptly left the Arizona Indian Gaming Association (AIGA), frustrated that the group took a neutral position in the Glendale dispute.

For 22 years, AIGA has been a unifying force for Arizona’s 16 casino tribes, lobbying lawmakers and educating the public about the jobs and economic gains achieved through government gambling. Losing its two most lucrative member tribes will hurt.

“While tribes are becoming very successful individually, we still have many challenges that require us to be unified in our efforts,” says Makil, a pioneer in tribal economic development and founder of Generation Seven Strategic Partners, a consulting firm.

“No one likes to see tribes not working together.”

Tribal Turmoil

Makil is one of a growing number of indigenous leaders who fear intertribal disputes over casino competition in Arizona, California and elsewhere threaten to unravel long-established federal Indian policy, eroding tribal sovereignty and self-governance.

They also believe casinos on newly acquired Indian trust lands—dubbed “off-reservation gambling”—are aggravating tribal relations with congressional and state officials.

Opposition to the $29 billion Indian gaming industry is blamed for congressional efforts to give state and local governments a larger role in Department of the Interior decisions to place land in trust for indigenous governments, hindering tribal efforts to reacquire ancestral territory.

Opposition to federal Indian policy comes despite the fact that of 2,151 land/trust applications processed by Interior since 2009, only 20 were for casinos. Interior under the Obama administration is hoping to place 500,000 acres of land in trust for tribal governments.

Meanwhile, tribes frustrated with ambiguities in the Indian Gaming Regulatory Act (IGRA), implementing regulations and Interior policies dealing with gambling on newly acquired trust lands are seeking to amend the act, an unprecedented move opposed by much of Indian Country.

“It’s getting to be a free-for-all out there,” a prominent tribal attorney says of tribal disputes arising out of efforts to establish new casinos in a maturing, if not saturated, Indian gambling market with some 480 casinos in 28 states.

Proposed federal legislation rising out of gambling controversies in Arizona and California could have a residual impact on the nation’s indigenous communities.

The Keep the Promise Act (HR 308/S 152)—promoted by the Gila and Salt River Indian communities—would let the federal government renege on terms of a land claims settlement that enabled Tohono O’odham to build the Desert Diamond Casino on property adjacent to the Phoenix suburb of Glendale.

The Gila Bend Indian Reservation Lands Replacement Act of 1986 allowed Tohono O’odham to acquire the land as partial compensation for 10,000 acres of reservation flooded out in the 1970s by a federal dam project.

Gila and Salt River, who own competing Phoenix-area gambling resorts, contend Tohono O’odham used deceit and vague Interior policy to open the casino against the wishes of voters and state and tribal officials.

Federal courts have ruled the tribe’s acquisition of the land for gambling did not violate the tribal-state compact. Judges were precluded by the tribe’s sovereignty from considering allegations of fraud and misrepresentation, which may arise in subsequent litigation.

The three tribes have spent more than $25 million in a bitter lobby war for and against the bill.

“Keep the Promise would forcefully amend Tohono O’odham’s compact and undermine their land claim,” says a tribal official who requested anonymity. “This has never happened in modern history. And it’s being pursued because two tribes want to protect their gambling markets.

“Every tribe in the United States should be concerned about the precedence this sets. For any tribe with a land or water rights settlement… this means the federal government can step in 25 years later and say, ‘We’re going to change the terms.’

“There’s a tendency to think this is only an Arizona issue. It’s not.”

“It’s going to have a far-reaching impact on other tribes, not just in Arizona but all over the country,” Tohono O’odham Chairman Edward Manuel says of the proposed legislation. “It sends the message you can’t trust the federal government. They make promises and then they break their promises.”

Alison Binney of Akin Gump Strauss Hauer and Feld, lobbyist for Gila River, says the bill is Arizona-specific, and has a termination date preventing it from establishing legal precedent or federal policy.

“We’ve been very careful” in wording the bill, Binney says, adding that restricting property use is common in tribal land/trust matters.

“Any time land is taken into trust for a tribe there’s a gaming restriction on it. Most settlements include some sort of gaming prohibition,” she says. “The argument it sets bad precedence is not valid. There have been a number of parochial bills with gaming restrictions.”

Golden Slumbers

Meanwhile, California tribes opposing efforts by the North Fork and Enterprise rancherias to establish casinos are lobbying for congressional legislation to amend provisions of IGRA allowing gambling on newly acquired lands.

It marks the first serious effort by politically powerful casino tribes to amend IGRA. The National Indian Gaming Association (NIGA), National Congress of American Indians (NCAI) and California Nations Indian Gaming Association (CNIGA) enacted resolutions opposed to opening the landmark federal law to amendments.

The California Compact Protection Act (H 5079), sponsored by Rep. Doug LaMalfa with financial support from the nearby Picayune Rancheria of Chukchansi Indians, operators of the Chukchansi Gold Resort & Casino, would require the Department of the Interior to reject “off-reservation” casinos not otherwise approved in a state referendum or by the state legislature.

The LaMalfa bill would limit Interior’s ability to use secretarial procedures to impose tribal-state regulatory compacts in situations where states refuse to negotiate agreements.

California tribes pushing for the legislation include Pala Band of Mission Indians, Cachil Dehe Band of Wintun Indians and Maidu Indians of Mooretown Rancheria. Several Southern California casino tribes also support the bill.

Indian lobby firms (notably IETAN and Pace LLP) have met with NIGA officials asking that the organization remain neutral, and calling the LaMalfa legislation California-specific. Other states with casino-related disputes are also seeking clarity with IGRA and Interior land/trust policy.

“We need to get with our tribal leadership and find out where everyone is at on this issue,” NIGA Executive Director Jason Giles says.

“The problem with IGRA is that it has a ton of ambiguities in it, as do the regulations for implementing the law,” Binney says. “That’s a main reason there is so much strife.

“There’s a general consensus in Indian Country not to open up IGRA to amendments. But many problems can’t be resolved without either amending the law or redoing the regulations to provide more clarity and transparency.

“The rules change every time there is a new Interior secretary or assistant secretary for Indian affairs.”

Reacting to a 2012 Supreme Court ruling extending the deadline for opposition lawsuits, Interior placed property in trust for North Fork and Tohono O’odham in the midst of ongoing litigation, enabling the tribes to open Class II, bingo-style casinos not subject to state taxes and regulations.

“The feds, in arriving at policies, hide behind the law in some ways,” one lobbyist says. “They don’t make clear how they’ll exercise discretion. That leads to decisions like North Fork, Enterprise and Tohono O’odham. They end up causing significant disunity among tribes.”

Many of the same California tribes opposed to North Fork and Enterprise also fought recent Interior efforts to streamline what most call a “broken” federal process of granting official recognition to Indian groups. Indian leaders said they feared newly recognized tribes would open casinos in Los Angeles and elsewhere.

The LaMalfa bill stands little chance of succeeding, at least during the summer session. But the legislation has bipartisan support from members of Congress who, one lobbyist says, are “fed up with Indians fighting each other” over casinos.

Hands Off IGRA

Former Interior Counsel Bryan Newland, a citizen of the Bay Mills Indian Community in Michigan, calls the attempt to amend IGRA dangerous.

“I have a problem with tribes that use a stick of dynamite to kill a fly,” Newland says. “That’s what I see in California.

“When you talk about amending IGRA—cutting across the core of a federal-tribal compromise that led to compacted gaming 30 years ago—all because you have a narrow focus on one or two projects that might impact you, that’s not good for Indian Country.”

Indian advocates believe the LaMalfa bill and Keep the Promise legislation play into the hands of legislators on Capitol Hill seeking to abridge tribal rights on gambling and pan-Indian issues.

“It is self-defeating to go to Congress and say, ‘You need to take action directed at specific tribes in specific circumstances because it impacts our competitive situation.’ That’s terrible policy,” says a prominent Indian lawyer who requested anonymity.

“When someone in Congress conflates that to other issues—land management or jurisdictional issues, for example—you find efforts to change longstanding federal Indian policy.”

Tribal unity and the impact of gambling and casino competition on federal and state Indian policy is a sensitive issue in Indian Country because it often strikes at the heart of a tribe’s right to self-governance.

“We must remember that each tribal leader is primarily responsible to his or her constituents, not to Indian Country as a whole,” says Kevin Washburn, former assistant secretary for Indian affairs and University of New Mexico law professor.

“That said, Indian Country tends to remember best the tribal leaders who have forged strong coalitions and work hard for the betterment of all tribes,” says Washburn, a member of the Chickasaw Nation. “Those are the tribal leaders who are remembered as heroes.”

“A lot of times what a tribe does can be viewed as short-sighted,” Newland says. “But tribes have to look out for their best interest. What is in one tribe’s best interest may not be in the best interest of Indian Country.

“On the other side of the coin, tribes have a responsibility, in defending their interests, of not jeopardizing or negotiating away the rights of other tribes. That’s where the problem lies.”

Washington tribal lobbyist Michael Anderson says pan-Indian issues in Congress, such as the Tribal Law and Order Act and General Welfare Exclusion Act, often compete for House and Senate floor time with parochial gambling-related issues.

“Arizona is a case where a compact dispute affecting a handful of tribes was nationalized,” Anderson says. “The House of Representatives prioritized that for a floor vote when there were more important national issues Indian Country cared about.

“Gaming issues are so fiercely contested and vigorously supported with financial and lobbyist efforts, it does distract from truly national issues.”

A Matter Of  Trust

Tohono O’odham is accused of breaking a ballot initiative promise made when Arizona tribes negotiated a tribal-state compact in 2002 that implicitly limits the number of casinos in metropolitan Phoenix.

The Glendale property was purchased the following year for Tohono O’odham by a shell company. The casino project was publicly announced in 2009.

The federal courts have ruled the compact does not prohibit the Glendale casino. But tribal sovereignty precluded alleged fraud and false representation from being part of the legal arguments.

Gila and Salt River feel particularly aggrieved because they each ceded their rights under the prior contract to open an additional Phoenix-area casino in an effort to appease state officials who pressed for no additional urban casinos.

“They really feel as though they’ve been hoodwinked by another tribe,” a Phoenix attorney says. “They’ve lost a significant amount of money.”

The Keep the Promise legislation, co-sponsored by Senator John McCain of Arizona, stands little chance of success because it would close the casino, put 500 out of work and, according to the Government Accounting Office, cost the federal government $1 billion in damages.

Arizona tribes fear retribution when they again go to the voters to approve new tribal-state compacts scheduled to expire in 2023. They are also wary of continuing efforts by legislators to legalize commercial gambling at state racetracks.

A 1996 ballot initiative on tribal gambling was approved by 61 percent of the voters. But the 2002 vote was very close, a victory credited to AIGA unity and the promise of no more urban casinos.

“We skimmed by,” Makil said of the 2002 initiative. “Fourteen years later we have a different situation in terms of how the public views tribes and gaming issues. At one time there was public support for the tribes and the need for revenue to build their economies. My observation is over the years the public has become numb to that need.”

“AIGA very clearly took a stance that no additional casinos would be built in metropolitan Phoenix,” Governor Stephen Lewis of the Gila River Indian Community said in a prepared statement. “AIGA’s staff laid out this position in public documents, including an election publicity pamphlet that went to millions of voters.”

Lewis and Salt River President Delbert Ray, in written statements, said they regretted leaving AIGA but accused the organization of not speaking out against the Glendale project.

Neither Lewis nor Ray would discuss what impact tribal disunity could have on compact renegotiations or other statewide gambling issues.

Tohono O’odham Chairman Manuel does not believe the dispute will antagonize tribal-state relations, but he anticipates the state will seek a bigger share of tribal revenues when talks resume on new compacts. Tribes currently give the state 8 percent of their casino revenues.

Tohono O’odham’s concern is the impact disunity in Indian Country will have on IGRA.

“Now that we’re having all these internal conflicts, even with the Indian gaming organizations, there’s the possibility Congress may come back and redo the federal gaming regulatory act, or even do away with it. That’s our concern,” says Manuel. “As far as the state of Arizona, I don’t think it’s going to have an impact as far as our relations on state and tribal gaming issues.”

Others predict the controversy will result in greatly diminished public support in Arizona for Indian gambling, which has generated roughly $1 billion for education and other programs.

“This mess has all tribes concerned. And they should be concerned,” says a prominent Arizona tribal attorney who asked not to be identified.

“The tribes need to have good relationships with the governor. They also need to have good relations with the public. If they don’t have those things, they’ve got a real problem.”

AIGA Executive Director Valerie Spicer says the group’s leadership elected to stand mute on the controversy. A number of Arizona tribes believe with the court rulings and the casino opened for business, it was time to move on.

“It’s unfortunate. It was really a sad day when it happened,” Spicer says of the decision by the two tribes to leave AIGA, putting the group’s membership to 15 tribes. “Their leaving will have an impact, of course. But the focus of the organization has not changed. We have big issues on the horizon that we must keep our eyes on.”

Top on the list of those issues is the continual threat of commercial gambling, specifically slot machines at state racetracks.

“The threat is always there. It is always real,” Spicer says. “It’s important now more than ever for the tribes to stay unified and prevent that from happening.”

California Tribes Anything But Unified

Tribal unity in California dissipated shortly after 61 tribes signed identical, landmark agreements in 1999 and 2000.

About a dozen tribes seeking additional slot machines began individually renegotiating compacts in 2004 with then-Governor Arnold Schwarzenegger, ceding revenue sharing payments to state General Fund which the 9th Circuit Court of Appeals in 2010 ruled to be an illegal tax in violation of IGRA.

Renegotiated compacts with Schwarzenegger and Governor Jerry Brown also include mandatory and costly local government agreements and revised TLROs giving labor organizations easier access to workers.

Meanwhile, CNIGA membership fell from nearly 80 tribes to the current 34 members.

CNIGA in late May published an op-ed in the Sacramento Bee correcting errors in a Bee editorial endorsing the LaMalfa bill.

“I don’t think the vast majority of Indian Country wants amendments to IGRA, especially where an initiative or referendum process can be used to restrict the ability of tribes to operate under the provisions of the act,” says CNIGA Chairman Steve Stallings, a councilman with the Rincon Band of Luiseno Indians.

Stallings says he received criticism from some California tribes, but noted CNIGA passed a resolution opposing amendments to IGRA.

“An association has to have a set of principles on which it can stand its ground,” he says.

Stallings agrees that tribal disputes over gambling issues “empower our critics.”

Makil encourages leaders of wealthy casino tribes to consider the consequences of their actions on Indian Country.

“Sometimes I fear we’ve lost that ability to step back and see the vision of what’s happening and what can happen, from the bigger perspective,” Makil says. “We’ve become very myopic, looking at how only we as a tribe benefit.”

Author: Dave Palermo

Dave Palermo is an award-winning metropolitan newspaper reporter. He has written about American Indian governments for more than 20 years, working as an advocate for several tribes and tribal associations. He also has co-authored books on gambling and gambling law. He can be reached at dgpalermo1@gmail.com.