The Mystery of Hawaiian History

Today, we have the final installment of Jim Marino’s series on Indian casino gaming in California (originally published in the Santa Ynez Valley Journal).  If you’ve been following the series, you’ve seen Marino build a case for the inherent problems of tribal gaming–from its end-run around initial state opposition to the damage it can cause a community or local economy.  But perhaps you thought that the federal government would catch any truly serious abuses of the system–especially considering the power of the BIA to regulate tribal gaming in the US.  Not so fast.  As Marino lays out below, the federal government is often unwilling or unable to regulate Indian gaming–a point to ponder for anyone who puts their trust in the compromises and limits outlined by the Akaka Bill when it comes to regulation of a new Native Hawaiian government.

WHY NO FEDERAL OR STATE AGENCY ENFORCES
LAWS OR RULES WHEN IT COMES TO INDIAN CASINOS
Santa Ynez Valley Journal
By Jim Marino, Guest Columnist
May 27, 2010

(Part 7)

This is the concluding article in a series of articles on Indian gambling casinos in California. In recognition of the ten-year anniversary of the legalization of some of the Indian gambling in California, I thought it was an opportune time to talk about its origins, the failures and inadequacy of Congress in enacting the Indian Gaming and Regulatory Act in 1988, and the political process and corruption involved in the negotiation and execution of the 59 original compacts, negotiated in California by now deposed governor Gray Davis who received massive contributions for his 1998 election from the illegal Indian casinos operating here before March 2000.

Once Indian gambling was introduced into California I went on to discuss the impacts on communities where they are located and some of the irony of tiny recognized “tribes” of one or two people, or perhaps a handful of members, often tracing only fractional descent [if any] to a real California Native Indian Band and claiming they were sovereign governments because they have been “recognized” by bureaucrats in the Bureau of Indian Affairs. These tiny “sovereign governments” pay no taxes and provide no services or infrastructure to their “tribe”. Rather they depend on the public services and infrastructure paid for by non-Indian taxpayers and the federal government for their welfare.

I discussed how these claims of “sovereignty” were not only used to evade paying the taxes needed to fund local public services and infrastructure, but also used to evade all the many laws enacted for the protection of the public, customers in Indian casinos and businesses, their workers and the environment and quality of life in the host communities.

I discussed the false economy of Indian gambling casinos that promise “jobs” and claim to be a destination “resort” bringing in tourist dollars when, in actuality these are unprotected, transient and generally low paying “jobs” that are created. This job creation is far-outweighed by the fact that the many gamblers losing money at an Indian casino, come from nearby communities where they are not spending those discretionary dollars in non-Indian businesses. These nearby non-Indian businesses often cannot compete with an Indian casino or business that pays no taxes, operates above the laws and which cannot be sued by customers, workers (or anyone else) for their misdeeds because of an outdated court-created legal doctrine giving Indian tribes, their casinos, businesses, agents and employees complete immunity from lawsuit no matter how outrageous their actions or conduct may be.

That in addition to siphoning millions of dollars in discretionary money from gamblers drawn to these casinos from nearby communities these patrons are gambling with money they often cannot afford to lose. That produces increases in crimes of theft, robbery and embezzlement, divorce and family neglect, financial problems, foreclosures and bankruptcies, gambling addictions, substance abuse, even increased suicides that are an inevitable result of the introduction of Indian casino gambling.

I quoted Warren Buffet who astutely pointed out a few years ago that there has always been gambling activities. The problem with Indian gambling casinos is that they have made gambling much more convenient so those losing vast amounts of money do not have to travel great distances to places like Las Vegas to do so.

Finally I discussed the inherent corruption and decay in the political and moral fiber that arises with Indian gambling casinos and which is virtually impossible to measure the negative impacts of that in dollars and cents and which is equally difficult to detect because addicts, corrupt politicians and drug and alcohol abusers rarely admit to such things like gambling away food and rent money or stealing money to gamble more. I knew a foreign car dealer in this area years ago (now deceased). A client and friend who had accumulated a comfortable retirement nest egg, only to lose it all at the Chumash casino. He was a proud man who never admitted to his gambling addiction. Within the past year alone several embezzlers have admitted to stealing thousands of dollars from local employers in this area to fuel their gambling habits at the Chumash casino. Even a reported armed robber arrested in Oxnard admitted to robbery in order to have money to gamble in Indian casinos including the Chumash casino.

In last week’s article I discussed the pervasive undue influence, insidious corruption and political pay-offs inherent with Indian gambling casinos and the avarice of Sacramento politicians ready and willing to accept those gambling dollars, much of which is paid quietly and secretly, funneled and laundered through Political Action Committees and political party channels. Some received in the form of perks, free concert and sports tickets, free chips, spa treatments and free rooms as set out in a recent Los Angeles Times story about the failure of 27 California legislators to report these Indian casino “gifts.”

Besides the failure to enact enough effective laws to control and regulate Indian gambling this concluding article discusses the failure of federal, state and local government to take any meaningful steps to curtail the improper and illegal activities occurring within casino tribes in the course of the daily operations. This is true even where there are enforceable laws, thereby rendering Indian casinos operations virtually lawless.

Here I will pick up where I left off last week. Section 2710(2)(B) of the Indian Gaming and Regulatory Act of 1988 spells out the only five categories where the net proceeds of Indian gambling casinos can be spent. They are:

(i) To fund tribal government operations or programs

(ii) To provide for the general welfare of the Indian tribe and its members

(iii) To promote tribal economic development

(iv) To donate to charitable organizations; or

(v) To help fund operation of local government agencies.

As I related in the last article, the Louisiana Coushetta and the Mississippi Choctaws gave now imprisoned lobbyist Jack Abramoff and his sidekick Michael Scanlon some $85 million dollars to “distribute” to various politicians in Washington D.C. to block the Alabama Coushetta and Texas Tigua tribes from opening a casino nearby that would have competed with their casinos. Besides participating in what amounts to these fairly obvious bribery attempts, where could any Indian tribe justify a scheme like that into any of the five exclusive statutory categories of 2710(2)(B) set out above? Nothing was done to the tribal officials, their lawyers and advisors for this scheme but Abramoff wound up in prison. The whole thing was spun as “overbilling” to the tribal governments by Abramoff and Scanlon. Ultimately the identity of the many recipients of this money was concealed and buried in a perfunctory “investigation” conducted by the Senate Indian Affairs Committee.

Three years ago Butch Crawford from Plymouth California and I met with the solicitors for the Bureau of Indian Affairs in their Washington offices. He presented the investigators with a copy of an application for more than $900,000 in grants monies for claimed improvements to be made to Indian fee lands in Amador County. Those lands were actually owned by a group of individual Miwok Indians from the same tribe but a different faction of the tribe. The application had been submitted by the newly elected tribal chairman who was at the time, the spokesperson for the other break away dissident group or faction of the same tribe. The original smaller faction consisting of these individuals and families actually owned the 40-acre parcel of land in fee divided amongst them individually. It was not reservation or trust lands it was privately owned. The $900,000 grant application was submitted by the larger dissident faction of the tribe. Those members owned no land at all, yet the application they submitted was for a grant for “physical improvements to tribal land.” At or about the same time this dissident faction, now constituting the majority of tribal members, was desirous of building a gambling casino. To facilitate that effort they made application to the B.I.A. to bring land near Plymouth Cal., [on which they held an option], into federal trust status to render it eligible for gambling operations. To fit into one of the exceptions allowing gambling on lands acquired by an Indian tribe after 1988 they asserted in that application that they were entitled to do so under the IGRA exception allowing for gambling on land acquired by a tribe after 1988, if they were a “landless” tribe. So for purposes of obtaining a large federal grant for “improvements” on non-existent tribal land, they succeeded in obtaining nearly a million dollars in federal grant money. At the same time and for purposes of trying to qualify to bring the Plymouth land into trust for a gambling casino they stated in their federal application they were landless! The investigative lawyers we spoke with at B.I.A. were not interested in how a group of Indians received a $900,000 grant for land improvements at the same time they applied to buy land and bring it into trust under a legal exception only available for tribes that had no land! The response of the B.I.A. investigative lawyers was that half their 60 or so investigators were still working on the Abramoff case and they didn’t have the manpower or time. This in the face of the fact the Abramoff case had already been concluded and nothing has happened in that case in the three years since that meeting.

In another more local instance, we had a meeting with an agent of the Federal Bureau of Investigation concerning the use of casino credit cards by Chumash government officials. Records indicated charges had been made, among other things, for a $10,000 “diamond ring, breast implants, a funeral,” luxury travel and other clearly inappropriate charges that were made, amounting to tens of thousands of dollars.

He informed us that unless it involved a theft of over $75,000 they would not even open a case file. I pointed out that if a robber went into a bank, pulled a gun and robbed the teller of $1,500 they would put 5 agents on the case and if it happened a few more times that same robber would make the 10 most wanted list. Nothing was ever done by the F.B.I. or anyone else about these improper credit card charges.

The current Chumash tribal chairman Vince Armenta went into the casino a few years ago and sat at a blackjack table with his son and some friends. He demanded chips from the dealer for he and his friends to play “on the house.” When the dealer offered only some one dollar and five dollar chips, he demanded “the greenies” [$25 chips], this was done despite the fact these actions would normally constitute a federal felony under Title 18 entitled “theft from an Indian tribe.” When angry tribal members reported this incident to the National Indian Gaming Commission (N.I.G.C.) investigator in Sacramento he said it was up to the tribal Gaming Committee to deal with it and basically shined the incident off. That tribal gaming committee was chaired at the time by the tribal Chairman’s brother, Raul Armenta and the committee later suspended the blackjack dealer for a week.

On another occasion, the cardroom manager at the time, Tony Armenta, was instructing a gambler who had won over $10,000 dollars playing blackjack, how he could avoid the reporting requirements for any cash transaction over $10,000, required by the United States Banking Act. He informed him he could do so by splitting the winnings with his girlfriend, bringing them below the $10,000 threshold, the casino security officer, called to the cardroom at the time, informed Mr. Armenta that was illegal. When nothing was done that same officer, a former police sergeant, reported the incident to the I.R.S. The agent did nothing except inform the Chumash tribal government, who then disciplined the security officer for reporting this incident to the I.R.S.

Even now when drug trafficking at the Chumash casino is rampant, the County Sheriff is doing little about it, although federal law provides that local and state law enforcement authorities have jurisdiction over all crimes committed on Indian lands. It is the Sheriff’s duty to police all Indian lands, not the security guards employed by the tribe. A few years ago the N.I.G.C. had promulgated a set of rules called the Minimum Internal Control Standards [M.I.C.S.]. The Colorado River Indian tribes filed suit and challenged these rules on the grounds the I.G.R.A. gave no authority to the N.I.G.C. to police class III, full scale casino gambling. Their jurisdiction only extended to the licensing of class II Bingo halls. The 10th Circuit agreed and those M.I.C.S. were held unenforceable.

The only authority left to enforce any rules and regulations other than criminal laws, was through the tribal state compacts. In California this has proven to be a standing joke. Neither the Governor, the Attorney General, or the inept and ineffective State Gambling Control Commission [which at last report had only 3 investigators], has ever done anything. Nor have effective rules been adopted or any enforcement of the compacts been undertaken by any state or federal agency.

A few years ago I testified in front of that Gambling Control Commission at the request of Cheryl Schmit [Stand Up for California] concerning a number of illegal and questionable practices occurring at Indian casinos including the Chumash casino. During a recess the Commission chairman and legal counsel, Herb Boltz, approached me and asked that I document the incidents testified to and send it to him, which I did in a 12-page letter complete with several exhibits and attachments. I did that within a week of that hearing. I never heard another word, not even a thank you for the effort.

Not long ago the Chumash casino brought in a roulette wheel. This is a clear violation of state law because Art. 4 section 19 of the amended Constitution only authorizes slot machines and house-banked card games conducted by Indian tribes by compact and on Indian lands. Use of roulette wheels are also a violation of the compact. One local group took a picture of it and sent it with a letter demanding enforcement of the law to the Gambling Control Commission. After several unanswered letters the State Gambling Control Commission finally wrote a letter to the Chumash tribal government that December, telling them they would be down to inspect the casino in March and suggested they remove the illegal roulette wheel before then.

Several tribes, apparently aware no enforcement action would ever be taken by their friends in Sacramento, brought in craps tables. Craps games are also illegal for the same reasons as roulette. The offending tribes asserted, apparently to the satisfaction of state regulators, that it really wasn’t craps after all because instead of rolling dice on the craps table they had two stacks of six cards each numbered 1 through 6 and the player would turn over one card from each stack constituting the numbers “rolled.”

At a meeting two years ago with George Skibine in Washington D.C. [at the time he was head of Indian Gaming at the B.I.A.] he is now acting commissioner of the N.I.G.C. We discussed a number of issues concerning illegal activities occurring in Indian casinos including tribes operating gambling casinos on ineligible lands. In the course of the discussion he postulated the following incredible and illogical policy which probably best explains why the federal government is doing nothing about all of the illegal activities involved in Indian casino gambling.

Chairman Skibine said this: Our [meaning the N.I.G.C. and B.I.A. and Department of Interior] authority and jurisdiction over Indian gaming comes from the Indian Gaming and Regulatory Act. If any Indian tribe is operating a gaming facility that is not on eligible Indian lands or otherwise not complying with federal gaming laws then it is outside of the provisions of the I.G.R.A. which requires such gambling to be on eligible Indian land in order to be authorized and sanctioned by that Act.

Therefore it is beyond our authority and jurisdiction to do anything about it because if it is outside of the Act it is outside of our jurisdiction. If Indian gaming not being conducted on eligible “Indian Lands” pursuant to the I.G.R.A. then it is up to the State in which it is occurring to enforce State laws against illegal gambling, if that gambling activity is against that state’s laws. This “hot potato” game is thus played when the state claims that enforcement is the responsibility of these federal agencies. The federal government then says it is the responsibility of the state or, as in the Armenta blackjack case, claim that it is a matter for the tribal government to resolve.

Likewise local law enforcement often passes the buck to the state or federal government, who passes the buck back to the state or perhaps to the tribal government. So the answer to the original question, why no one is enforcing the laws that do apply and which are enforceable, it is because no one is willing to do so.

The reasons they are not willing to do so are complex but generally fall into a few recognizable categories. The first is that it is politically incorrect and unpopular to take any action against “Indians” even if they are not really Indians at all, because the public has been indoctrinated about historic injustices to “Indians” centuries ago. Politicians don’t want to evoke the “race card.” The second reason is political corruption plain and simple. The casino Indians are funneling hundreds of thousands of dollars into the pockets of politicians and the bureaucrats who are responsible to regulate and police these tribal casinos and businesses and they are routinely ignoring numerous violations. The third reason is that many of the federal laws are poorly written, lack adequate specific enforcement provisions and directions and the tribal-state compacts that are in place are also poorly written. Even where they contain enforceable provisions, they are never enforced, like the 59 Gray Davis compacts in California. The last reason is that many of the federal agencies that should be taking enforcement actions in these areas are dominated by Indians, or part Indians, even wannabe Indians, or those who are simply “enrolled” members of some tribe someplace, and they ignore the law, stonewall inquiries and investigations, and exercise biased interpretations of the laws and rules that they have been given wide discretion over by enabling statutes, thereby thwarting any effective enforcement. As I mentioned in a previous article, where one would expect the media to expose this scandalous scenario, they don’t and they have haven’t done so, because they are afraid of offending their biggest and most profitable advertisers, Indian gambling casinos.

This concludes the series on Indian gambling in California, meant to be educational, because the more people who know and understand what has happened and is still happening, the more likely people will call for positive changes and perhaps elect ethical and responsible representatives and not politicians or corrupt bureaucrats holding out their hand for casino cash and perks to get elected or re-elected or appointed to the offices that they are supposed to hold to protect and fairly and impartially serve the 38 million people of California.

Tags: Gaming, Indian Affairs

Today’s entry in our continuing series on Tribal Gaming in California by Jim Marino looks at the false economy of Indian casinos.  For the state, that is.  And any other residents who aren’t fortunate enough to have a profit stake in said casinos.  You know, this has always been one of my particular stumbling blocks.  After all, when one is dazzled by the glitter of Vegas or the sheer amount of cash changing hands in a casino, it’s hard to imagine that they can actually have a negative economic impact on the community.  But, as Marino explains (in this piece originally published in the Santa Ynez Valley Journal), there’s a lot more to the economy of tribal gaming than meets the eye . . .

THE FALSE ECONOMICS OF INDIAN GAMBLING CASINOS
AND ITS CORRUPTION OF THE STATE’S GOVERNMENT
Santa Ynez Valley Journal
By Jim Marino, Guest Columnist
May 13, 2010

(Part 5)

Last week I wrote about the many negative impacts Indian casinos imposed on the host communities. I wrote about the underhanded way the 59 tribal compacts were negotiated secretly and executed and then the clandestine ratification of them by the passage of the “Legislative Initiative” called Proposition 1A, months after former Gov. Grey Davis signed them and the Legislature approved them illegally with no Constitutional authority to do so.

I also wrote about the worthless content of these “sweetheart” compacts and how they provided no benefit to the state or local communities, except the massive political contributions these casino tribes now make regularly to the many politicians in the hip pocket of their gambling casino benefactors.

These casinos were thrust into communities under the claim the federal Indian Gambling Act [I.G.R.A.] and the state compacts made them a “done deal” and the local communities had nothing to say about it.

But if they didn’t oppose them, these local communities might get some of the gambling dollars in lieu of the many taxes local and state government could not collect. If the local government did not cooperate, on the other hand, they would get no money and often would be accused of being anti-Indian racists and insensitive to the plight of “Indians” in America. After wielding this political stick, these gambling investors and tribes would then wave the carrot, telling local government they would create “jobs” and thus be a great benefit to the community.

This week I’ll discuss the false nature of these claims and the negative economic impacts on every community that are easily identifiable and those that are more difficult to measure. Lastly, I will discuss the manner in which a literal handful of casino Indians and their gambling cartel have totally corrupted the State of California and its 38 million citizens.

One does not have to be an economist to understand the false economy of gambling casinos in general. The vast sums of money lost there in the name of entertainment are often monies lost by people who cannot afford to lose that money. Slot machines are the favorite vehicle to lose money, accounting for about 85 percent of the profits raked in by all casinos.

The difference between a casino in Nevada and an Indian casino is stark: The gambling casinos in Nevada pay taxes; Indian casinos do not. The Nevada casinos are strictly regulated and policed. Indian casinos are not. Nevada casinos require minimum fair rates of return for slot machines. Indian casinos do not and are free to change out the random operating chips in these slot machines whenever they want.

The tremendous costs of providing public services like police, fire, schools, jails, hospitals, public works, social services, etc., used regularly by Indian casinos and related businesses, and the demands placed on infrastructure like roads, bridges, public buildings, and other facilities, are all paid for by the non-Indian taxpayers because these tribal businesses are exempt from property taxes, bed taxes, sales taxes, personal property taxes, corporate taxes and state income taxes among others.

As an example, the Chumash casino grossing between $250 and $300 million a year in gambling losses, is able to evade approximately $20 million in combined taxes annually. The Chumash put sales tax as an item on bills and receipts and in an amount identical to what the state requires for all others, in order to make customers think the tribe pays the state tax monies. But that money does not go to state and local governments; it is kept by the tribe who recently allocated some $3 million from that fund to buy property in Solvang.

Similarly, the per capita profit distributions to each of the 152 tribal members amounts to about a half-million dollars a year to each tribal member. The state income taxes on that amount of money would be almost $9 million a year that the state does not get.

The amount of money that trickles down into the local economy from the salaries of employees and the costs of goods and services is nowhere near enough to make up for lost tax revenues or to pay the tribe’s fair share of the costs to the community for increased demands on public services and infrastructure. Neither are the occasional gifts tribes like the Chumash make usually to the police or fire agencies which gifts are often less than the $2 million the tribe still receives in federal welfare and grant monies every year.

The 59 Grey Davis compacts had a provision requiring the signatory tribes make a good-faith effort to comply with the California Environmental Quality Act [CEQA]. That provision provided that if tribal compliance was unsatisfactory then the Governor could demand a renegotiation of that provision. Tribal compliance was woefully inadequate, so in March 2003 Gov. Davis sent all the tribes a timely notice of required renegotiation. Not long after that, Gov. Davis was recalled for his inept leadership and Gov. Schwarzenegger was elected to replace him. During that campaign, Gov. Schwarzenegger assured the public he would make the casino tribes pay their fair share of the costs of providing public services and infrastructure to them at public expense, describing these casinos as “ripping the State off.” He also stood on the steps of the Capital, waving a broom and assuring the public he was going to sweep the corruption out of Sacramento. Once elected, he did neither.

In fact, he championed five expanded amendments a year or so later, creating compacts allowing those affected tribes to double and triple the number of slot machines and in doing so, making exaggerated claims as to how much money that would bring the state, it hasn’t come close to the amount claimed. In fact a recent court case in the 9th Circuit has held these tribes don’t have to pay any more money, going back to original giveaway compacts Gray Davis negotiated to pay back the tribes for his election and these five tribes can keep the extra slot machines and the revenue from them.

Shortly after Davis was recalled and just before his term was to end prematurely, he withdrew the notice to tribes demanding a renegotiation of the environmental protection clause in the compacts apparently out of pure spite because the public had ousted him from office and leaving environmental protection for all of the casino communities up to the “good-faith efforts” of the casino tribes in their neighborhood.

So despite the initial bluster and pontificating, Schwarzenegger did nothing to improve the false economics of Indian casinos. Most impartial studies, that is those that are not bought and paid for by Indian casinos, indicate that once the construction phase of a casino is finished, that it costs the host community $3.50 for every dollar the casino brings in.

Another economic myth is that by calling the casino a “resort” it will somehow become a destination location for tourists. This myth is debunked by several studies showing the vast majority of gamblers come from a one- to two-hour drive or fewer than 50 miles and come to gamble only.

Therefore, an Indian casino essentially siphons dollars from the immediate surroundings. Those are dollars and local monies not spent in other non-Indian businesses and entertainment venues where such discretionary income would otherwise be spent. Non-Indian businesses nearby often cannot compete with an Indian business that pays no taxes, is exempt from state and local laws, rules and regulations workers compensation and public liability insurance and cannot be sued for any of its misdeeds, no matter how outrageous they may be.

There are also the intangible and subtle negative impacts which are hard to place a monetary value upon. For example gambling addiction, substance abuse, family neglect, financial problems, bankruptcy and foreclosures, increased crimes of theft and embezzlement even increased suicides. Generally, chronic gamblers and addicts are not willing to stand up and admit they have gambled away food and rent money on the foolish belief they might win something in an unregulated, unpoliced and uninspected Indian casino, making monetary assessment of these negative impacts difficult to calculate.

Lastly, how can one measure the negative impacts of the corruption gambling dollars has brought to government and the impossibility of measuring in dollars the loss of integrity and honesty in state and local governments.

So widespread is this corruption I have written a concluding piece for next week’s Valley Journal.

It is more than clear at this point that Indian casinos are a false economy that creates far more detrimental and negative impacts on every community, and those costs and negative impacts are not offset by the creation of a few largely low-paying, unprotected and transient jobs in Indian casinos and businesses, nor by the purchases of goods and services. Nor do they come close to offsetting the millions in lost tax revenues needed to pay for all the public services and infrastructure used regularly by these casino tribes and their businesses.

NEXT TIME: THE CORRUPTION OF CALIFORNIA’S GOVERNMENT BY INDIAN GAMBLING DOLLARS AND THE LACK OF ANY EFFECTIVE POLICING AND SUPERVISION OVER ALL INDIAN GAMBLING CASINOS.

Tags: Gaming, Indian Affairs