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In Depth: Profits give tribes financial, political power

30 May 2007

by Joan Whitley

LAS VEGAS, Nevada -- Take a ledger sheet. Title it "Indian gaming." Divide it into two columns. Label one, "following in Vegas' footsteps." Label the other, "forging a unique Indian path."

Into the first -- the copycat -- column, put these points:

FINANCIAL INTEGRITY

Indian casinos are no more vulnerable than commercial casinos to financial crimes, argue tribes and their financial consultants.

"Certainly in its infancy, Indian gaming was a target of card cheaters and others who take advantage of inexperience," says Timothy O'Dell. Those criminals target any new casino operation, adds O'Dell, a partner in Joseph Eve, a Montana accounting and consulting firm that caters to tribes.

Skimpy is what skeptics call the $12 million annual budget of the National Indian Gaming Commission to provide federal oversight. But the National Indian Gaming Association, the tribes' trade association, is quick to counter. It calculated that gaming tribes in 2006 also spent $255 million to fund their individual gaming regulatory agencies. Tribes paid another $70 million that year to state agencies that regulate gaming, according to the association.

About three-quarters of its 184 member tribes belong to EagleIntel, a confidential network that the trade association started in 2005 for tribal casinos to share incident information to prevent crimes. Some members don't join EagleIntel because their casino management gets data from other sources.

Federal law enforcement acknowledges tribal gaming is a rich mark. In 2003, the FBI and the National Indian Gaming Commission created a coalition of agencies to tackle law-breaking in Indian gaming. Called the Indian Gaming Working Group, the coalition also involves personnel from FBI sections on corruption, fraud and racketeering, as well as from the U.S. Department of Justice, Bureau of Indian Affairs, Internal Revenue Service and Treasury Department.

POLITICAL CLOUT

As gaming tribes gain economic power, some have attempted to exert influence in the political arena. Results range from beneficial to disastrous.

An inarguable low point for Indians has been the Jack Abramoff lobbying and corruption scandal.

A range of gaming tribes, both newcomers and well-established, had paid millions in the early 2000s to the D.C.-based lobbyist and Michael Scanlon, a public-relations man, with the understanding the two would advance the tribes' agendas with lawmakers, voters and vendors.

Instead, Scanlon and Abramoff pocketed most of the money, and spent some to illegally influence lawmakers with gifts, with little benefit to the client tribes.

The scandal surfaced in 2004. Starting in 2005, Scanlon and Abramoff -- as well as a congressman, congressional aide and several others -- pleaded guilty to charges related to the influence-peddling. Abramoff and Scanlon are now cooperating with investigators, opening the possibility that more individuals may be charged.

Tribes have been characterized as victims in Abramoff's swindle, not as co-conspirators. But the tribes have lost precious resources and stature.

"Since the advent of Indian gaming, Congress as a whole has been much more hesitant to act to help Indian tribes. And since Abramoff, that dynamic has worsened," lobbyist Heather Sibbison said in the April 10 issue of Roll Call, a newspaper that covers Capitol Hill.

In a positive use of clout, tribal leaders and gaming company officials in Oklahoma in 2002 helped elect a gaming-friendly governor. Gov. Brad Henry then shepherded the state and its tribes through negotiations to a 2004 agreement that expanded Oklahoma gambling.

At the national level, Indians in 2006 effectively voiced their opposition to an attempt by the National Indian Gaming Commission to tighten casino regulations. One proposed change would have significantly dented tribal revenues: It firmed the line between Class II and Class III gaming technology in such a way that many acceptable Class II gaming machines would become illegal.

The commission decided to pull its proposal and rework it, after it "heard a clear message directly from tribal governments and the industry manufacturers. Basically there was a consensus in the industry, 'This just isn't going to work,'" says Ernest Stevens Jr., chairman of the trade association.

PHILANTHROPY

Some tribes are sharing their new wealth and expertise with the greater community.

The Table Mountain Rancheria Tribe donated $10 million to a research library at California State University, Fresno. The Mashantucket Pequot tribe in Connecticut loaned its facial identification system, which is a crime prevention tool, to Rhode Island authorities to help identify charred bodies after a nightclub fire.

The Ysleta del Sur Pueblo in El Paso, Texas, periodically donates its fitness center for use by military families at Fort Bliss.

The center was built with proceeds from the casino that the state shut down in 2002, in a conflict between tribal sovereignty and state law. Because of financial hardship caused by the closure, the tribe has drastically cut back the hours the center is open for its own members. It had hoped to regain full gaming, but several bills are stalled in the Texas Legislature.

"The work we accomplish in this industry (gaming) brings many benefits to communities nationwide, tribal and non-tribal," Stevens wrote in the trade association's 2006 economic impact report.

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