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Youth Movement

The 'new' National Indian Gaming Commission looks for a kinder and gentler relationship with the tribes

Youth Movement

There is always a certain amount of tension between the regulators and those they are regulating. Therefore, it wasn’t surprising to see a degree of animosity between the National Indian Gaming Commission, as headed up by Phil Hogen of South Dakota’s Oglala Sioux, and the tribes that answer to the NIGC.
 

Hogen, who served as chairman of the commission for seven years, led a commission that was viewed—rightly or wrongly—as forcing unwanted regulations on tribes. The ascension of the Obama administration and its commitment to a more open and transparent process in its relations with Indian Country has filtered down to the NIGC and its new members.

Even the appearance of the commission is a marked difference from the Hogen panel, which was comprised of three older men, most with law enforcement experience. The new commission, led by Tracie Stevens, a member of the Tulalip tribe of Washington state, is made up of another young woman, Steffani A. Cochran, a member of the Chickasaw Nation of Oklahoma; and Daniel J. Little, a member of the Mashantucket Pequot tribe, who is well under 50 years old, as well.

The relative youth of the group is balanced out by deep experience with tribal operations, governments, regulations and gaming overall. Stevens worked for the Tulalip gaming operations and the tribal government before coming to Washington to take the first of several posts at the Interior Department’s Bureau of Indian Affairs. Cochran has most recently served as general counsel for the Pueblo of Pojoaque in New Mexico after working in the state attorney general’s office as special counsel for Indian affairs. And Little was the director of national government affairs for the Pequots. All three have had interaction with and are fully knowledgeable about the activities of the NIGC.

“Part of my job was to watch the NIGC and how it affected the tribes,” says Stevens. “Their decisions impact almost everything you do, so I was pretty plugged in to what they were doing. I had been watching and following the NIGC’s activities for eight years. And through my experience at Interior I had the opportunity to hear from tribes about what was important for them, so that was great preparation for the consultation and meaningful government-to-government interaction.”

Little says everything he has done in his career has led to this point.

“Over the last 15 years,” he says, “I worked for state and tribal governments, so I have a clear understanding of IGRA and the implementation of that law. There’s a vital role that the NIGC plays, there’s a vital role the tribes play and in Class III, there’s a vital role the states play. So having a clear understanding of that relationship is crucial.”

Since Cochran was the first to come on board, in January 2010, she used that time to familiarize herself with the day-to-day functions of the agency.

“When I came on,” she says, “it was just (acting NIGC chairman) George Skibine and myself. I spent a lot of time trying to educate myself about the agency and how it works. My legal background and my experience in tribal government helped enormously.”

    
Goals and Aspirations
Both Stevens and Little say that Cochran’s early arrival—Little joined the commission in April and Stevens in July—allowed them to hit the ground running and focus on policy rather than operations. Weekly meetings on priorities and goals quickly formed the new commission’s early agenda.

“The first thing we did was to sit down and do some leadership development and prioritizing of our goals and objectives,” says Stevens. “We looked at what was needed from the tribal and the NIGC perspective. What’s most interesting is we all had the same views.”

Stevens says that four objectives were quickly developed:

  1. Consultation and relationship building. “This emphasizes the need to rebuild the relationship with the tribes,” says Stevens. “We heard that over and over. When we consult, we are now respectful and honorable as it pertains to the tribes’ status as sovereigns.”
  2. Technical assistance and training. “This is required by statute,” Stevens admits, “but more importantly it’s one way to pre-empt compliance problems. We should be able to look at our audit findings and issues that arise repeatedly. That should be a roadmap for training.”
  3. Regulatory review. “It is the prerogative of every administration to come in and look back on what the past administrations have done,” says Stevens. “Is it appropriate and relevant to what’s going on today? And we will do this in consultation with the tribes.”
  4. Agency operational review.

 

“This is a look back at ourselves; looking at the man in the mirror,” she says. “What do we need to do to operate more efficiently so we can give better service to tribes? We should be as concerned with how we operate as we are with how tribes operate.”

“These are only four things, but they’re important. It’s going to be a lot of work and we have very little time.”

Serving the Process
Stevens and the other commissioners recognize the divisive nature of the relationship between the tribes and the NIGC in the previous administration, particularly when the commission was trying to set technical definitions for Class II slot machines. While the NIGC did conduct meetings to discuss the standards, designed as tribal consultations, the sessions often degenerated into tension and name-calling as a result of a perceived disrespect from the NIGC side. Stevens says she wants to avoid that at all costs.

“I don’t want to stumble on process,” she says. “Part of the reason for the heated discussions concerning the Class II standards was because the process was not respectful. I’d rather argue with tribes about substance rather than process because if you get the process right, the substance disagreements are easier to manage and allow us to come to a point where you either disagree respectfully or come to some sort of compromise.”

In September, the NIGC announced that it would delay the implementation of the Class II standards set under the Hogen commission for one year. Stevens says that’s just a factor of the regulatory review that the new commission has just begun.

“We’ll be looking at all the regulations but we know there are certain regulations that are more controversial,” she says. “We’ve all committed to looking at the regulations and that includes those, as well. That’s the reason behind the delay. We want to have time to ask tribes if those standards that were finalized in 2008 need to be amended in total or in part.”

Cochran says there’s also a more logical reason for the delay.

“To put those standards into effect,” she explains, “we would have had to implement other regulations that have not gone into the final stage, so it really didn’t make sense. We are aware we are going to have to revisit this issue and we want to do it in a comprehensive fashion.”

When the former chairman decided to the draw the “bright line” between Class II and Class III machines, Hogen claimed he was simply trying to protect the tribes from action by the Department of Justice, which would have made its own determination about what was a Class II or a Class III machine. If the commission established clear regulations, reasoned Hogen, the DOJ would be reluctant to cross that line. Stevens says there is no indication that the Obama Justice Department is considering such a move.

“This Department of Justice has been very collaborative,” she says. “I have not heard this is a concern for them. We’ll continue to have a very positive relationship with DOJ.”

And the tribes are also content to leave the situation as it stands, she says.

“We haven’t heard from tribes that this is a priority, so it will be included in our regulatory review, but I can’t say what will come of it. There may be more than one way to address that issue.”

Federal Funding
One of the misconceptions about the NIGC is that it is supported by taxpayer money, when in fact, it is funded by a complicated formula of fees derived from tribal gaming operations. Under the previous leadership, regulations were promulgated that allowed the NIGC to tap up to .08 percent of the gaming revenues reported to the agency.  Stevens says that the operating funds derived from the revenue will be examined.

“This will be part of our internal operations review,” she says. “We’ll take an inventory and make sure we’re offering our service in an optimal way.”

Little believes that certain stability in tribal gaming will allow the commission to assess its needs more effectively now.

“Prior to us arriving at the commission the industry had grown by double
digits every year,” he explains. “Now we have stabilization and that may continue until the economy fully recovers. We’ll take a very close look at the way we spend our money. We want to make sure the priorities take precedence. We consider it a serious responsibility about how we spend these fee assessments. We need to be good stewards of these funds.”

Part of that stewardship is being accountable for the use of the funds, something that has been lacking up to now, according to Cochran.

“This agency operates off tribal fees but we have not had a process in place that allows us to be fully accountable to the tribes who pay those fees,” she explains. “We are still under the cap. We are operating on a .06 percent right now, so we’re still well below the cap.

“We do have some large expenses coming up. For example, our lease is up in Washington and we have to move. And that’s not in the budget. But thoughtful allocation of our human capital—which is 75 percent of the budget—is the key.”

Class Issues
Four years ago, a federal court upheld a lawsuit brought by the Colorado River Indian Tribes challenging the NIGC’s authority to implement minimum internal control standards in their Class III casinos, claiming that the commission’s powers aren’t clearly delineated in the Indian Gaming Regulatory Act of 1988.

The CRIT decision shook tribal gaming to its foundations and the NIGC appealed. Since no resolution has been forthcoming, the commission’s role in implementing these MICS standards is still questioned. But Stevens says that the NIGC’s oversight of Class III is unquestioned.

“There is language in the act right now that gives us authority under certain circumstances, so we do have some general oversight over Class III just by statute,” he says. “What CRIT did was address issues on MICS standards for Class III and our authority to enforce them. In some circumstances we have the authority and it has been implemented.”

Stevens says that an examination of CRIT’s impact will be included in the commission’s early stages.

“It’s been four years since that decision was released and I think the fears that NIGC would have to withdraw completely from Class III oversight have been unfounded,” she says. “We’re going to examine the post-CRIT world to see if those fears are appropriate. Until we have more information we’re not going to take a position on that.”

Financial Follies
The current slump in the gaming economy extends far beyond the Las Vegas Strip and the Atlantic City Boardwalk. Indian Country has not been immune to the financial downturn and the changing pattern of customer visits and spending. In several regions of the country, tribal casinos are not meeting their loan obligations and the lenders are seeking ways to get their money back.

The role of the NIGC is limited in these instances. The disputes are often over the loan contracts between the tribes and the banks, which do not require review from the NIGC. And the contracts all have different amendments and codicils so finding a common solution may be impossible.

“Our authority here is very limited,” says Stevens. “It’s really a contract and we’re an outside party to that contract. But it’s all going to be judged on a case-by-case basis. That said, nothing has reached our desks right now on this issue. But both the tribes and the lenders are talking to us beforehand so we can sort this out before it officially gets on our agenda.”

Little believes that it’s in the interest of both parties to come to an agreement before any regulators get involved.

“Tribes have realized they have to work out some kind of agreement with their lenders,” he says. “These casinos are the economic engines that drive the economies of these reservations so it’s in their best interest to work out a compromise. And they are doing that because they know they are going to have to borrow again. These facilities will be getting older and they’ll have to have the money to renovate and upgrade them. But it’s also in the best interests of the financial institutions as well, so we’re seeing cooperation on both sides.”

Cochran thinks the NIGC can become a resource for the tribes in this area.

“We are mindful of the financial issues that are coming up, the refinancing issues,” she says. “I personally believe it’s going to be a large part of what we do over the next five to 10 years. I’m in favor of encouraging the parties to reach agreements via negotiations. But not every tribe has the tools available to them, and we’re willing to help them review those contracts and give them advice on how to proceed. It will be taken decision by decision and any role we can play to help reach agreements, we’d be willing to do so.”

Cochran believes that there will be solutions, but it will take time.

“Each one of the disagreements seems to have a different context and you can’t compare one with another,” she says. “They are different agreements. It’s interesting to see which is the first party to complain or the first to ask for help. We’re in the very early stages of this situation and it’s unfair for the regulated community to expect something from the commission until we understand the complex issues.”

Intergovernmental Relationships
The NIGC works with many agencies of the federal government, but none quite so close as the Department of the Interior, specifically, the Bureau of Indian Affairs. And since Stevens worked at the BIA for George Skibine, who is the acting principal deputy assistant secretary for Indian Affairs, and Skibine served as the acting chairman of the NIGC between the terms of Hogen and Stevens, the sometimes-rocky relationship between the organizations may be over.

“We have a better relationship with Interior than we ever have in the past,” says Stevens. “In addition to the consultation we’re doing with the tribes, we’re doing the same thing with Interior, as well as other federal and state partners. We are better off trying to do something together than trying to do it alone.”

Under IGRA, Interior and NIGC are given specific responsibilities that require consultation across the boundaries and Stevens says the recent cross-pollination between the agencies has been a good thing.

“Clearly it would behoove us to work together,” she says. “Right now we have a great relationship with Interior and we have every intent of working collaboratively not only with Interior but with Justice, Treasury and other federal agencies.

“Just speaking for myself, it’s been very helpful for me to have that experience at Interior so I know exactly what goes on over there and how things work.”

While Interior has authority over the issue of land-into-trust for gaming purposes, there still can be a role for the NIGC.

“There’s certain Indian land determinations that may come to use once land is placed into trust, but that’s not a standard decision that we’ll be asked to make,” says Stevens.

Staffing Up
In addition to having a full commission, Stevens has added staff members that bring a new enthusiasm to the agency.

Larry Roberts has been named the chief counsel for the NIGC, replacing Penny Coleman, who was in place for eight years prior to the new commission taking their seats.

“Larry Roberts is from the Oneida Nation of Wisconsin and has experience in the environmental/natural resource division in the Department of Justice as a trial attorney,” says Stevens. “Larry brings a wealth of federal legal practice, which is invaluable when you are representing a federal agency. On the private practice side, he’s got a lot of experience representing tribes. He’s been a great addition.”

And a new chief of staff, filling a position that has been vacant for a while, also brings a high level of experience (and the youth of the commission members, as well).

“Paxton Myers is our new chief of staff who came on board in August. He’s from the Eastern Band of Cherokees and went through the training program instituted by Harrah’s there, eventually becoming a marketing director,” Stevens explains. “He then moved to tribal government where he became the chief of staff for his chief, Mitchell Hicks, for seven or eight years. Most recently, he was on the staff of Congressman Dale Kildee (D-Michigan), who is chair of the Native American Caucus in the House.”

“These folks have hands-on experience, people who know and understand Indian Country and gaming.”

Cochran spent the summer visiting the NIGC field offices and believes that they are the heart and soul of the agency. 

“The field offices are the face of this agency,” she says. “We need to give them the resources and the direction that they need. They are used to the last seven years of a certain direction. We’re asking them to change course. Some of them will need a little more guidance than others. And we need to make sure we’re there to give them that guidance. But they are very hard-working people, so I’m sure they’ll get it.”

All the commissioners realize that their three-year terms will be over quickly. Stevens points out that the terms are only half a senator’s and a little more than a representative’s. But she’s confident that the NIGC can have a big impact on tribal gaming by assisting the tribal regulators in doing their jobs.

“For example, in my tribe,” she says, “they have a bigger interest in protecting their operations than anyone does. It’s not unlike how some states operate. They operate casinos and also regulate them. The tribes do the same thing and they do a very good job. We have a great relationship with the regulators, especially our field staff in our seven regions. They are the boots on the ground. They are the face of the NIGC when it comes to the day-to-day oversight and relationships. I can’t give them enough credit.”

But Stevens says she, Cochran and Little will be working full speed ahead for the duration of their terms to reach the goals they have set.

“We’re making really good progress for having a full staff and commission for only three months,” she says. “We hit the ground running and we’re going to continue to speed up. We mean business.”

Roger Gros is publisher of Global Gaming Business, the industry's leading gaming trade publication, and all its related publications. Prior to joining Global Gaming Business, Gros was president of Inlet Communications, an independent consulting firm. He was vice president of Casino Journal Publishing Group from 1984-2000, and held virtually every editorial title during his tenure. Gros was editor of Casino Journal, the National Gaming Summary and the Atlantic City Insider, and was the founding editor of Casino Player magazine. He was a co-founder of the American Gaming Summit and the Southern Gaming Summit conferences and trade shows. He is the author of the best-selling book, How to Win at Casino Gambling (Carlton Books, 1995), now in its fourth edition. Gros was named "Businessman of the Year" for 1998 by the Greater Atlantic City Chamber of Commerce, and received the Lifetime Achievement Award from the American Gaming Association in 2012.

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