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Playing Politics

Arizona casino creates some strange bedfellows

Playing Politics

The steel and concrete first phase of a planned 0 million casino resort is slowly rising near the Phoenix suburb of Glendale, Arizona, testimony to the perseverance and economic progress of the Tohono O’odham Indian Nation.

West Valley Resort—going up on property purchased with a federal land claim settlement—portends to far eclipse the $68 million generated annually by the tribe’s three casinos on its otherwise remote and largely impoverished 2.8 million-acre reservation.

“We continue to face great challenges in achieving economic self-sufficiency,” says outgoing Tohono O’odham Chairman Ned Norris, with the nation’s 32,000 citizens generating a yearly $8,000 per-capita income.

“We need a way to provide for our government and our people, without relying on the federal government,” says Norris, who lost a May election to former chairman Edward Manuel. “West Valley is a major component of our strategy for achieving economic independence.”

But after five years of ongoing court battles and $20 million in lobby spending by the nation and nearby tribes opposed to the project, West Valley Resort may remain shuttered long after its scheduled December completion, the victim of federal and state disenchantment with the encroachment of largely rural tribal casinos into urban areas.

Direct to D.C.

Anger over the Glendale project has reached the halls of Congress and, many believe, could impact federal Indian policy and the U.S. government’s willingness to stand by land and water rights promises made to the first Americans.

The dispute between Tohono O’odham and Gila River and Salt River Pima-Maricopa Indian communities, who together operate five Phoenix-area casinos, pits the country’s largest lobby firm (Akin Gump) against one of the nation’s most prominent law firms (Denton).

The project has dragged U.S. Senator John McCain (R-Arizona) into a questionable partnership with a longtime friend and lobbyist.

And a Glendale city councilman who switched his allegiance on the casino now faces a recall election.

The furor is being generated by a planned casino that under state law would be limited to 1,089 slot machines, far fewer than the country’s prominent Indian casinos and less than half what industry analysts say is justified for such a lucrative market. (See related story, page 34.)

Yet, companion legislation working its way through the U.S. House and Senate could block Tohono O’odham and other Arizona tribes from building new casinos in the Phoenix area before tribal-state regulatory compacts expire in 2027.

Sponsors of “Keep the Promise” bills accuse Tohono O’odham of surreptitiously purchasing 54 acres of unincorporated Glendale for a gambling resort despite vows Arizona tribes made to voters in a 2002 ballot initiative that there would be no new urban casinos.

Meanwhile, state Department of Gaming Director Daniel Bergin, acting on behalf of Governor Doug Ducey, says he would not license the casino because of “fraud perpetuated by (Tohono O’odham) upon the state, Arizona gaming tribes and the state’s voters.”

A hastily drafted follow-up letter from Assistant Attorney General Roger Banan pledged to comply with federal and state regulations.

“I wasn’t sure it was possible, but the opposition has stooped to a new low,” Norris says of the latest threat to halt the project.

Perhaps Norris doth protest too much.

Loving the Loophole

State and tribal officials contend Tohono O’odham was duplicitous, if not dishonest, in working with tribes negotiating a 2002 tribal-state regulatory compact and crafting an initiative campaign that barely won voter support largely on a pledge there would be no new Phoenix casinos.

The nation contributed $1.8 million to the voter drive that today gives 17 tribes the exclusive right to operate 23 Las Vegas-style casinos.

But just a year after the compact went into effect, the nation through a shell corporation purchased land near Glendale, and in 2009 announced it would build a casino on the property.

“They looked us in the face and lied,” says Diane Enos, former president of the Salt River Tribe. “They broke faith with us and the voters of Arizona.”

An attorney involved in compact talks is a bit more charitable.

“It’s not so much that they lied,” says the attorney, who requested anonymity. “They didn’t make a material disclosure everybody feels they were obligated to make.”

Courts have over the past five years repeatedly ruled that compact language does not prevent the nation from building a Phoenix-area resort.

But federal judges have been precluded by the nation’s sovereign immunity from deliberating issues of fraud and misrepresentation. Norris calls allegations he vowed not to build a Phoenix casino a “phantom promise.”

“Even if there was some secret, backroom promise, which is not true, the compact itself said no other agreement applies,” says a tribal official who requested anonymity. “Tohono O’odham did not violate the compact.”

Arizona Democratic Rep. Raul Grijalva, whose district includes the Tohono O’odham reservation, says the proposed legislation is “essentially asking taxpayers to pay for special-interest legislation designed to protect” Gila and Salt River casino markets.

Gila River has three casinos south of Phoenix. Salt River operates Talking Stick, a casino and resort hotel east of Scottsdale, and a second casino near Tempe.

Potential Fallout

The Gila Bend Replacement Act of 1986, co-sponsored by McCain, mandated that the Interior Department replace 10,000 acres of Tohono O’odham land flooded out in a 1960s dam project.

The act provided the tribe with funds to purchase replacement property in “Pima, Pinal or Maricopa” counties, the latter of which includes Phoenix.

The act also states the land “shall be deemed to be a federal Indian reservation for all purposes,” which the courts and Interior later construed to include casinos.

Political insiders give the legislation a good chance of passing the House and Senate.

Some tribes fear “Keep the Promise” legislation would set a dangerous precedent in allowing the federal government to renege on land and water rights agreements.

“It would be the first time Congress reneges on an Indian land and water settlement in the modern era—it would mark a very unfortunate return to the treaty-breaking era,” Denton attorney Heather Sibbison told the Politico newspaper.

“If this legislation passes, all tribes should question whether Congress can be trusted to keep its word in land and water rights settlements,” Norris says.

Akin-Gump attorney Allison Binney says the legislation was written to limit its application to the Glendale project, noting it is temporary and expires in 2027. Prohibitions on gambling are common in land/trust cases, she says.

“The argument that this sets bad precedence is not valid,” Binney says. “There have been a number of parochial bills with gaming restrictions.

“We feel very strongly there was fraud and misrepresentation made by (Tohono O’odham) and we’re trying to find the fairest way possible to resolve this. We made a lot of effort to address concerns raised by Tohono O’odham.

“We want to do this in a fair way that does not cause a detriment to any other tribe in the country,” Binney says. “We don’t want this to be used as leverage for larger discussions and debates” on off-reservation gambling.

“I agree with Allison that as a pure legal matter the bill is compartmentalized, so the Keep the Promise Act precedence should not be extended,” a tribal attorney who requested anonymity says. “But you’re not in a legal environment with legislation; you’re in a political environment.

“As a political matter, it sets a very scary and horrible precedent.”

“I don’t really know that (Keep the Promise) has a broader impact,” says John Tahsuda, principal in Navigators Global. “There are a lot of factual circumstances to limit the matter to this specific circumstance. You have a specific compact and a specific lands claim act.”

There are tribes opposed to what has been dubbed “off-reservation gambling” who suspect Denton will use the legal roadmap in the Glendale dispute in representing other clients seeking casinos on newly acquired lands.

Denton represents the Los Coyotes Indians in rural San Diego County, who are petitioning Interior to build a casino in Barstow, California.

The Glendale project is going up on a former Salt River reservation. And both the Barstow and Glendale projects involve tribes seeking to build casinos on the ancestral lands of other tribes.

Sibbison refused requests for an interview.

Arizona tribes fear that a conservative legislature, angry at the notion Phoenix could become a “little Las Vegas,” will urge voters to approve commercial casinos, which would generate more tax revenue than Indian operations.

There also is a concern that renegotiation of tribal-state casino regulatory agreements will result in demands for more tribal revenue in exchange for continued exclusivity. Tribes currently pay up to 8 percent of their revenues to the state.

And finally, tribes opposed to the project fear Tohono O’odham, if successful in Glendale, would close one of its other casinos and move it to Phoenix.

McCain In A Corner

“I share the objections of many Arizonans when I see a casino being air-dropped into the metro Phoenix area,” says McCain, co-sponsor of the Senate version of Keep the Promise legislation.

The senator’s hard line contrasts with prior commitments to remain out of the Glendale debate, leaving the matter to Interior and the federal courts. Critics contend his flip-flop on the issue stems from loyalty to Wes Gullett, a former campaign manager and attorney for Salt River.

“What I find particularly striking here is John McCain’s sudden involvement,” says Melanie Sloan, executive director of Triumph Strategy. “McCain wasn’t on board. Then (Salt River) hires Gullett and McCain is on board.”

McCain regards himself as a Capitol Hill maverick, and bristles at the suggestion he would cater to special interests.

“Anybody who alleges that somebody influences me—some lobbyists—that is an outrageous and disgraceful lie,” he told Politico.

Along with sponsoring the Gila Bend Act, McCain co-authored the Indian Gaming Regulatory Act. He claims the Glendale project violates the spirit of IGRA.

McCain had a heated exchange with Kevin Washburn, Interior’s assistant secretary for Indian affairs, at a July Senate Indian Affairs Committee hearing when Washburn said the Gila Bend Act made it mandatory for him to place the Glendale property in trust.

“Senator, it was your bill. You wrote the language. We’re just applying it,” Washburn said.

“You know something, Mr. Washburn? That’s a pretty smart-ass answer,” McCain replied, “and the fact is I’m telling you what the intent (of IGRA) was. OK?”


An Option For Interior

Opposing tribes asked Washburn not to take Glendale into trust until Tohono O’odham waived its sovereign immunity, allowing allegations of fraud and misrepresentation to be litigated in federal court.

“I don’t think it’s unreasonable,” Tahsuda says, for Interior to issue such an edict as a means of exercising its trust responsibility for both Tohono O’odham and opposing tribes.

Washburn dismissed the suggestion.

“The promise to the Tohono O’odham Nation in the Gila Bend Act is clear, and the act made the acquisition of land in unincorporated Maricopa County mandatory,” Washburn says. “It simply is not subject to any discretion at Interior.”

The question of whether IGRA permits waivers of sovereignty in disputed land/trust cases will be argued before the 9th U.S. Circuit Court of Appeals.

“IGRA does not permit tribes to make empty promises and repudiate them with immunity,” tribes argued in their brief to the court.

No date has been set for oral arguments.

In the meantime, tribes are hoping to mediate the dispute with newly elected Chairman Louis Manuel, who in a statement complained that “hopes and dreams” of tribal citizens “depend on highly paid consultants, lobbyists and public relations experts.”

“For too long the focus has been on one thing, the West Valley casino,” Manuel said, calling the dispute “an epic battle that threatens all tribes’ gaming interests in Arizona.”

He said he has a plan that “addresses the interests of our sister tribes,” but declined to elaborate.

A lawyer involved in the pending litigation suggests moving the casino 35 miles farther east of Glendale.

“Perhaps,” he says, “we can convince (Tohono O’odham) to move the casino to Buckeye.”

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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.

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