Tribes are using casinos to strengthen governments, relations

The August 9 meeting of the California Senate Government Organization Committee was, by any objective analysis, a love fest of committee members, American Indian leaders and city and county officials gathered to discuss new and amended tribal-state casino compacts.

Legislators, mayors, labor leaders and others praised six tribes represented at the meeting for using casino resources to strengthen their governments, build diversified economies and create jobs and prosperity for surrounding non-Indian communities.

Committee members commended tribal leaders for working with counties and municipalities on zoning and development, traffic, and fire and police protection.

And labor leaders acknowledged tribes for creating quality jobs, providing generous wages and benefits and, most importantly, making it easier for workers to unionize.

Meanwhile, those who paused to reflect on the birth and evolution of Indian gaming in the Golden State breathed a sigh of relief.

Proposition 1A—the 2000 ballot initiative which planted the seeds of what is today a $7.9 billion gambling industry with 60 state-licensed casinos employing 56,000 mostly non-Indian workers—prompted fears tribal casinos would negatively impact local communities.

“There was a lot of apprehension,” recalled Republican Senator Patricia Bates. “There was a lot of worry as to whether there would be the kind of mitigation” necessary to address traffic, environmental and other impacts of Indian casinos development.

“There was such suspicion,” agreed Democratic Senator Steve Glazer. “Critics didn’t realize it was always in the tribes’ interests to do things right—to treat their employees well, to work with the communities. Tribal concerns about public safety equaled or exceeded everyone else.”

Local Reactions Mixed

Traffic and infrastructure problems did, indeed, ignite local opposition as new Indian casinos sprung up in largely rural communities while existing tent and prefabricated gambling halls quickly evolved into upscale casino resorts.

Yolo County farmers complained of heavily trafficked roads leading to Cache Creek Casino, owned by the Yocha Dehe Wintun Nation. Similar complaints were voiced by neighbors of River Rock Casino, operated by the Pomo Indians of Dry Creek Rancheria in Sonoma County.

Water wells dried up near a casino resort golf course owned by the Barona Band of Mission Indians in remote San Diego County. And San Bernardino County neighborhoods complained of congestion created by a popular casino operated by the San Manuel Band of Mission Indians.

“I don’t believe people thought tribes were going to develop the luxury hotels, the spas, the fitness centers, the golf courses. All that came as a surprise,” says Cheryl Schmit of Stand Up California, a gambling watchdog group. “We held press events and rallies. We had a meeting with 22 community groups in the governor’s office.”

But the large-scale traffic, crime and other casino-related problems predicted by many elected officials, anti-gambling zealots and major newspapers did not materialize; quite the contrary.

Working with local officials, the mostly small indigenous communities (there are fewer than 40,000 members of the state’s 110 federally recognized tribes) managed to smooth out much of the traffic, public safety and other casino impacts.

In the process, tribes strengthened or built governments from the ground up, many establishing for the first time municipal service agreements (MSAs) and memorandums of understanding (MOUs) with nearby counties, towns and villages.

“Tribes have become very competent, well-resourced governments that are, usually, very good partners to local communities,” says Kevin Washburn, who stepped down late last year as the Department of the Interior’s assistant secretary for Indian affairs. “They share the same goals.”

“I do believe we have maturing governments,” says Robert Scheid, who until recently directed community relations for the Viejas Band of Kumeyaay Indians in San Diego County. “It’s a new era of tribal gaming and sophisticated tribal governments.”

“The tribes that have their casinos up and running—and have been running for a while—I think they’re doing a better job,” Schmit says.

Tribes today provide nearby communities with enhanced fire and police protection, emergency medical services, elder care facilities and hospital and school programs.

“You have gone way beyond expectations. You have been a role model,” Bates told Barona Chairman Clifford LaChappa, one of 17 tribes signing new and amended tribal-state regulatory compacts since Governor Jerry Brown took office in 2011. 

“I say that for all the tribes,” Bates said. “Congratulations and thank you so much for your partnership.”

Legislators at the meeting also heralded the tens of millions of dollars in annual tribal charitable contributions to schools, hospitals and civic and community organizations.

“It’s fantastic to have a tribal casino in any one of the districts for what tribes do for the schools, the roads, the hospitals,” Senator Tom Berryhill said.

Compacts in Evolution

Many tribal leaders in California and elsewhere credit the evolution of tribal-state gambling compacts required in the Indian Gaming Regulatory Act (IGRA) of 1988 for creating constructive government relations between tribes and surrounding communities.

But others worry that the compacts, particularly in California but also in several of the other 28 states with Indian casinos, are encroaching on tribal sovereignty, subjecting indigenous communities to the governmental jurisdiction of nearby counties and municipalities.

IGRA requires tribes seeking to operate casino-style gambling on Indian lands to enter into tribal-state agreements, or compacts, that mandate tribes reimburse states for regulatory oversight costs.

But while it was the intent of IGRA to limit compact negotiations to the scope and regulation of gambling, agreements in California and other states have extended beyond gambling to include revenue sharing, labor relations, non-casino development and tobacco and sales taxes.

IGRA and the 9th Circuit U.S. Court of Appeals in Rincon Band of Luiseño Indians v. Schwarzenegger in 2010 discouraged states from taxing tribal casino revenues. But IGRA allows payments to mitigate local impacts from casino development, a process Indian law experts say has been abused in California and elsewhere.

Landmark 1999 compacts agreed to by more than 60 California tribes, scheduled to expire in 2020, call for tribes and local governments to voluntarily enter into “good faith” negotiations on casino mitigation issues.

But 38 new and amended ’99 agreements negotiated by Brown and former Governor Arnold Schwarzenegger mandate that tribes enter into judicially enforceable local government mitigation agreements, earmarking up to 15 percent of tribal casino revenues.

Brown agreements—which are tailored to address individual tribal and community development and planning issues—also require payments to an Indian college fund and a Revenue Sharing Trust Fund for non-gaming tribes and those with fewer than 350 slot machines.

In addition, tribes under the Brown compacts receive tax credits for renewable energy, recycling and water conservation projects and investments in non-gaming economic development and health care facilities.

Most lucrative casino tribes have embraced the Brown compacts and amended tribal labor relations ordinances (TLROs) requiring tribes to remain neutral in union elections, making it easier for the politically powerful hotel workers union to organize workers.

“This new agreement reflects the mature and respectful government-to-government relationship that we’ve cultivated between the state of California and local governments,” Mark Macarro, chairman of the Pechanga Band of Luiseño Indians, says of his tribe’s amended compact. “The compact reflects many of the progressive values the state and Pechanga share.”

“Our strategy was to make sure there was a fair opportunity” for workers seeking to organize, says Vincent Armenta, who negotiated a Brown compact for the Santa Ynez Band of Chumash Indians before stepping down as chairman earlier this year. “I think the amended TLRO reflected that, very clearly.”

Brown Compacts Generating Criticism

Not all tribes are pleased with the direction Brown is taking with the compacts.

Twenty-five tribes still operating under the ’99 compacts—and negotiating jointly as the Compact Tribes Steering Committee (CTSC)—oppose mandatory local mitigation, labor provisions and other components of the Brown agreements.

CTSC Chairman Dale Miller, chairman of the Elk Valley Rancheria, says the group is seeking a compact that closely adheres to the ’99 agreement, which calls for voluntary mitigation and TLROs with union organizing provisions resembling federal labor law.

“That’s certainly correct,” Miller says. “That’s certainly true.”

CTSC members contend the successful tribal/local government cooperation over the past 16 years has been achieved under the voluntary mitigation provisions in the ’99 compact, not the agreements negotiated by Brown and Schwarzenegger.

“The tribes are saying, ‘Let’s just stay with the ’99 compact,’” says Lee Acebedo, executive director of the California Nations Indian Gaming Association. “It’s good. It works.”

Attorney Scott Crowell, who litigated the Rincon federal case, says the state is circumventing IGRA prohibitions against taxing tribal casino revenues by mandating tribes pay into a local government mitigation fund rather than the state general fund.

“I applaud the Brown administration for getting off the Schwarzenegger platform,” Crowell says, which demanded that 20 percent or more of a tribe’s gaming revenue be paid into the state General Fund in exchange for additional slot machines.

“Rincon was a major step in the right direction,” Crowell says. “But a compact that includes a smaller illegal gaming tax is still an illegal gaming tax.

“Tribes can provide for that local casino mitigation without involvement by the state, thank you very much.”

Tribal-state compacts are subject to review by the U.S. Department of the Interior, which acts as legal trustee for the tribes.

All 38 new and amended compacts under the Brown and Schwarzenegger administrations were “deemed” approved by Interior, meaning the agency had reservations about the agreements that didn’t rise to the level of rejection. Two other compacts were rejected.

“As to mitigation, I would say they are legitimate issues, but they may not need to be in compacts,” says Washburn, who reviewed many of the Brown agreements. “And indeed, gaming compacts may be inappropriate places to address those issues.

“Some of these issues may well exceed the scope of what Congress intended compacts to address under IGRA.”

CTSC tribes are bound by a signed protocol not to publicly discuss details of negotiations with Brown aide Joginder Dhillon.

But sources close to negotiations who requested anonymity say CTSC tribes are pushing back against mandatory mitigation provisions.

“The idea that the state should require the tribes and local governments to enter into binding agreements—which obviously gives local governments a tremendous amount of negotiating leverage—is a non-starter with the CTSC tribes,” one source says. “They don’t agree with that.”

“The state has wanted a binding, enforceable agreement with the county as a precondition for new construction, expansion or renovation,” another CTSC source says. “This group has been very, very opposed to that concept. I would say it’s close to a non-starter for most of these tribes.”

 Sources said CTSC tribes are also discouraged by compact provisions calling for an increase in state regulatory authority, including audits.

“The newer compacts involve the state in regulatory roles far beyond what’s in the ’99 compacts,” says a tribal source who requested anonymity. “The tribes don’t think that’s necessary or appropriate.”

Tribes commend Dhillon for being receptive to allowing tribal courts to handle tort matters and player disputes.

Dhillon through a spokesperson declined comment.

Dhillon previously said the UNITE HERE hotel workers union is invited into compact negotiations only when permitted by the tribes. But tribes contend it would be difficult to get compacts approved by the state legislature without union involvement in the talks.

“That’s disingenuous on Joe’s part,” says a tribal official who requested anonymity. “The union embarked on a strategy of telling tribes, ‘You can reach whatever compact you want with the governor. But if you don’t reach agreement with us, we’ll kill it in the legislature.’”

The CTSC talks have yet to take up the TLROs.

CTSC Chairman Miller declined to discuss specifics of negotiations, but expresses optimism the tribes will be able to work out a deal with Dhillon.

“I personally have a good relationship with the man,” Miller says.

A Special Distribution Fund established under the ’99 compacts to deal with local mitigation was depleted in the Schwarzenegger administration, prompting the California State Association of Counties (CSAC) to lobby for the mandatory mitigation agreements.

“Our main concern is that the Brown compacts address local impacts… and allow counties to maintain input over how those impacts are addressed,” CSAC legislative representative Kiana Valentine says. “It appears from a first glance that they do so. But each compact is different and the devil is in the details.”

Crowell is concerned not just with the compact mitigation, but provisions requiring tribes to submit development plans for review by county and municipal building inspectors.

“Of course the cities and counties are going to attest that these compacts are wonderful for them,” he says. “It is a sledgehammer for cities and counties to extort tribes for fees not directly related to the costs of mitigating the impacts of gaming.

“I understand at the end of the day, tribes feel the agreement is better than fighting the state of California for what’s right. But that doesn’t make it right.”

Yocha Dehe pays some $6 million a year to largely agricultural Yolo County, far beyond the $1.3 million in economic impact created by the casino, tribal Chairman Leland Kinter says.

But the tribe values its local relationships, he says, and is pleased to contribute its highly regarded fire department, a child care center and, to date, $28 million in charitable contributions.

“Even while the cost the county incurs because of our casino is much lower than the amount of money the tribe pays… we continue to contribute funds and build our relationships,” Kinter says.

“In the beginning, we faced a great amount of uncertainty,” Kinter says of the birth of reservation gambling. “Our leaders worked hard to build trust among our neighbors and local governments.”

Agua Caliente Band of Cahuilla Indians has a checkerboard, 32,000-acre reservation in the arid Coachella Valley. Its compact allows the tribe to augment its two casino resorts with four 500-machine casinos on newly acquired trust lands.

The band shares borders and municipal agreements with Palm Springs, Rancho Mirage and Cathedral City.

“The tribe is our friend, our neighbor and our partner in the continued growth of the city of Palm Springs,” Mayor Robert Moon says.

‘Give Us Time … We’ll Catch Up’

Because of their small enrollments, tribal governments in California are normally staffed by non-Indian professionals, many with limited experience working with indigenous Americans. This is particularly true with tribes that began building their governments and economies with the birth of compacted casino gambling 16 years ago.

“Tribes didn’t know how to run businesses or a government, so they hired people to do the job,” says Nikki Symington, a longtime Indian advocate who now works in political and public affairs for the Rincon.

“I think gaming is assimilating tribes more than anything ever has. They are copying, merging into and being co-opted by the dominant culture in both business and government.

“Soon, the tribe becomes a typical local government,” Symington says, rather than a culturally rich, indigenous community.

Scheid, however, commends tribes for using casino resources to preserve culture, traditions and language.

One veteran tribal attorney who requested anonymity says tribal leaders often must balance issues of sovereignty and self-governance with the need to work with state and local governments for the benefit of their citizens.

“I’ve seen tribes—because of gaming and tribal-state compacts—go from horrific rates of unemployment and high school dropouts to full employment and near 100 percent graduate rates,” the attorney says.

“I could sit out on my tribal lands and say, ‘I am sovereign,’ yet have nothing. I could have no housing, no health care, no education, no cultural programs, but damn it, I’m sovereign. The state doesn’t have the right to tell me what to do with the dirt that is my reservation.”

Anthony Pico, former chairman of the Viejas Band of Kumeyaay Indians, in a 2007 speech before the San Diego Association of Governments spoke of the challenges facing tribal communities.

“We are growing the governmental experience and expertise necessary to partner with state, county, regional and municipal agencies in confronting issues of growth and preservation of our precious resources,” Pico said.

“It’s not easy, strengthening a government, building a diversified economy and rebuilding a tribal community decimated by generations of poverty and neglect. Some tribes are vastly more sophisticated in their governmental operations than other tribes.

“Our political and approval processes are very democratic, but different from those of a state or local government,” Pico said. “We are new to working with other governments. We are still learning your rules as we develop many of our own.

“Tribes have only had the resources to begin the process of nation rebuilding for, what, six, seven years? We are trying to do what it has taken our neighboring counties and municipalities several generations to accomplish.

“Give us some time. I assure you, we’ll catch up.

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.