Gambling is the elephant in the Carcieri debate

The devastating impact recent U.S. Supreme Court decisions have had on the ability of the federal government to place land in trust for American Indian tribes was again the focus of a congressional hearing earlier this month on Capitol Hill.

As was the case in previous hearings, tribal leaders and members of the Senate Committee on Indian Affairs called for a congressional remedy to the rulings, primarily the 2009 Supreme Court decision in Carcieri v Salazar.

“Throughout my term as chairman of this committee I’ve made it clear one of my top priorities is passing a … Carcieri fix, this session,” Chairman Sen. Daniel Akaka (D-Hawaii), told those at the Sept. 13 hearing.

Justices in Carcieri ruled the U.S. Department of Interior had no authority to take land into trust for Indian tribes not “under federal jurisdiction” when the Indian Reorganization Act (IRA) was enacted in 1934.

The ruling stemmed from efforts by the Narragansett Tribe of Rhode Island to place 31 acres in trust for a housing development opposed by Gov. Donald Carcieri, who feared the land would instead be used for a casino.

Carcieri disregarded the congressional intent of IRA, new deal legislation to restore tribal lands lost as a result of the Dawes General Allotment Act of 1887, which reduced tribal land from 139 million acres to 48 million acres in 1934. Tribes today have 55 million acres in federal trust.

Those testifying at the Senate hearing spoke of Carcieri’s devastating impact on indigenous communities, delaying hundreds of trust applications pending with Interior intended to provide land for economic development, housing, health care and government services to tribal citizens.

But neither Akaka nor tribal leaders who spoke at the hearing mentioned the one thing standing in the way of a congressional remedy to Carcieri.

There was not a single remark about the elephant in the room: off-reservation gambling.

“We’ve always advanced the position Carcieri should be fixed,” Wilson Pipestem, founding partner of IETAN, a government consulting firm, told tribal leaders at an April 2011 conference.

“But a number of senators said, ‘There’s no way we’re going to advance [a Carcieri fix] without addressing off-reservation gaming.’”

Allison Binney, former counsel to the Senate committee, told those at the conference senators poised to halt a bill to remedy Carcieri were peeved by what they termed “reservation shopping” by newly recognized and landless tribes financed by non-Indian developers.

“We didn’t have the votes,” Binney said. “We couldn’t get enough Democratic support, yet alone getting any Republicans on board.

“In my estimation…there is no chance of legislation passing without some willingness” to compromise on off-reservation gambling, Binney said. “Gaming’s on this. We have to figure out how to deal with it.”

Nothing has changed since that conference. A handful of those on Capitol Hill, notably Sens. Dianne Feinstein, (D-Calif.), John Kyl (R-Ariz.) and the congressional delegation from Rhode Island hold hostage any Carcieri fix that does not include amending the Indian Gaming Regulatory Act (IGRA) to further limit casinos off existing reservations.

The Senate Indian Affairs Committee last year passed a Carcieri fix bill by voice vote, but the bill has only gained nine co-sponsors, all Democrats. Two similar bills in the House also are languishing.

“The notion you can get a clean Carcieri fix without doing anything to limit off-reservation gaming, I personally think that’s the right substantive approach, but it’s politically naïve,” said a prominent tribal lobbyist who requested anonymity. “It can’t be done.”

Carcieri was exacerbated by a second Supreme Court decision earlier this year that John Patchak of Michigan could proceed with a lawsuit attempting to close the Gun Lake tribal casino near Grand Rapids, which Patchak claims has a detrimental economic, environmental and aesthetic impact on his neighborhood.

“The rulings have led to a burdensome and uncertainty to the trust process,”said acting Assistant Secretary of Indian Affairs Donald ‘Del’ Laverdure, requiring the department to undertake “time-consuming and costly” research to determine whether a tribe was “under federal jurisdiction” when IRA was enacted.

“A system where some federally recognized tribes cannot enjoy the same rights and privileges available to other federally recognized tribes is simply unacceptable,” Laverdure said.

Justices in Patchak v Salazar remanded the case to a lower court, stating that private individuals had up to six years to file legal challenges to Interior decisions to place land in trust for tribes, a ruling that tosses the 1972 Quiet Title Act in the proverbial toilet.

“Before Patchak, [Interior] decisions to place a parcel of land into trust only could be challenged prior to the finalization of the trust acquisition,” Laverdure said.

“Following the Patchak decision, tribes, Indian homeowners, neighboring communities and the [Interior] Department will be forced to wait for six years or more to achieve that finality.”

Fitch Ratings immediately sent out a press release stating that raising capital for Indian economic development projects would be more difficult and expensive.

“[Patchak] creates a lot of uncertainty for financial institutions,” said Professor Colette Routel of the William Mitchell College of Law in St. Paul, Minn.

“Financial institutions don’t want uncertainty. At a minimum it will raise interest rates for tribes that could actually prevent them from getting financing.”

If the Gun Lake Band of Potawatomi Indians does not prevail in Patchak’s lawsuit, the impact on tribes will be “catastrophic,” Routel said. 

John Echohawk, executive director of the Native American Rights Fund, said the two rulings have spawned 14 legal challenges to tribal efforts to place land in trust, a figure that will likely grow dramatically without a congressional remedy.

“The true scope of the negative impact to all Indian tribes of the court’s decisions in Carcieri and Patchak cannot yet be determined,” Echohawk said.

“If Congress allows more Carcieri related litigation to wind its way through the federal courts, at some point in the not so distant future the court will be substantially redefining the legal and political standing of Indian tribes in this country.

“Congress must act now,” Echohawk said. “Indians need Congress to step up and tell the courts in no uncertain terms that it got Carcieri wrong.

“If Congress remains silent, the courts will continue to fill the void with its current prevailing view that there is nothing exceptional about Indian law and there is nothing special to protect the relationship between the U.S. and its Indian people.”

The Indian Gaming Regulatory Act (IGRA) of 1988 – begrudgingly adopted by Congress when the U.S. Supreme Court acknowledged the inherent right of tribes to engage in gambling on Indian lands – largely limits casinos to reservations established when the act was passed.

But there are exceptions in the act for established, newly recognized or restored tribes that satisfy Interior’s “two-part determination,” which means approval by the state governor and a finding that a project is not detrimental to nearby tribal and non-Indian communities.

As a result, a handful of established tribes have acquired casino land off existing reservations while newly recognized and landless tribes have also gotten into the gambling business.

Annual Indian gambling revenues since the 2008 recession have flattened out at $27 billion with only a slight increase in the 460 tribal casinos now operating in 28 states.

But while there have been only a few new casinos, the growing public perception of tribes as purveyors of gambling, randomly building casinos throughout the country has generated a political backlash against Indian governments in the courts and on Capitol Hill.

Targeting the land/trust process in an attempt to slow the spread of Indian casinos appears misguided, if not mean-spirited.

There are hundreds of pending tribal applications with Interior to have land placed in trust. Only 14 involve casinos.

Despite Carcieri and Patchak, Interior under the Obama Administration has made 952 land/trust decisions involving 179,584 acres, according to figures supplied by Interior spokeswoman Nedra Darling.

Of those rulings, 138 decisions were for housing, 428 for agriculture, 76 for economic development and 297 for government and community infrastructure.

Eleven of the land/trust rulings involved gambling.

“It is unfortunate, but that is how the Carcieri fix is being frame, as a gambling issue,” said tribal consultant Joe Valandra. “That really shouldn’t be the issue at all.”

“Indian tribes are building economies from the ground up, and they must earn every penny to buy back their own lands,” said Jefferson Keel, president of the National Congress of American Indians.

“Still today many tribes have no land base. Many tribes have insufficient land to support housing, self-government and culture.

“Every time an Indian tribe acquires land the tribe uses the land to build housing or a health clinic; to protect natural or cultural resources; or to pursue economic development that creates jobs for Indian people and their neighbors.”

Feinstein’s role in combating tribal casinos and a Carcieri fix is particularly curious.

San Francisco had casinos decades before Las Vegas. And California had the nation’s sixth largest gambling industry before the first compacted tribal casino opened for business in 2000; its lottery, card clubs and racetracks generating well over $2 billion a year.

Should the senator wish to purchase a lottery ticket, says tribal lobbyist Tom Rodgers, Feinstein need only walk 0.4 miles from her San Francisco home at 2460 Lyon St. to the nearest lottery outlet, Wilking Wine and Liquor at 3273 Sacramento St.

If she cared to play poker, Rodgers says, the Lucky Chances Casino card room at 1700 Hillside Blvd. in Colma is a short, 7.8 mile drive.

If she had a hankering to play the horses, Rodgers suggests Feinstein visit Golden Gate Fields at 1100 East Shore Frontage Road in Berkeley, 9.6 miles from her home.

And, of course, bingo-style slot machines can be found at the San Pablo Lytton Indian Casino, 21.2 miles from the Feinstein household.

An associate of the senator who requested anonymity said Feinstein is adverse to all gambling, not just tribal operations.

“She is pretty opposed to gambling in general,” the person says. “The expansion of gambling in California has come from Indian casinos. So that’s where she’s been most vocal.”

The controversy has become convoluted because some tribes have been working with Feinstein to limit the ability of tribes to acquire land for casinos on the ancestral territory of other Indian nations. The alliance has fractured the strategic unity of tribes on the Carcieri issue.

Meanwhile, a number of tribal leaders are apparently in denial.

Ernie Stevens, chairman of the National Indian Gaming Association, the lobby and trade association for 184 tribes, was quoted in Indian Country Today Media Network as saying Carcieri was not a gambling issue.

Both the Carcieri and Patchak decisions involved gambling.

Brian Patterson, president of the United South and Eastern Tribes (USET), which is leading the lobby effort to achieve a Carcieri fix, last year rejected efforts by a GamblingCompliance.com reporter to discuss the issue.

“I’m not going to comment on gaming,” he said.

Patterson’s response may be an indication of why, after three years, USET has failed to get a Carcieri fix through Congress.

While IGRA has been tweaked over the years, lobbyists contend tribal leaders have a right to be concerned about opening the act to significant amendments. There’s no telling what additional changes to IGRA lawmakers may pursue once the door is opened.

But others are concerned about the political and legal fallout being generated by off-reservation gambling and the consequences Carcieri, Patchak and other court rulings may have on tribal sovereignty and self-governance.

“NIGA and others have said, ‘No, do not open up IGRA’” to amendments, said Leslie Lohse, chair of the California Tribal Business Alliance.

“I respect that opinion. There is the opportunity for mischief. But look where we are now? What’s going to happen to our sovereignty?

“We need to look to the future, long-term. We need to have an open, honest and frank discussion. Not investors, PR people and lobbyists.

“The tribes.”