Commentary         El Dorado at Last  -  The Casino Boom

By Micah Morrison. Mr. Morrison is a senior editorial page writer at the Journal.

Gambling sponsored by Indian tribes has exploded from bingo games in the late 1970s to full-fledged casinos owned by 196 legally designated "gaming tribes" and generating $10 billion in revenues last year -- with approximately 175 more groups petitioning for tribal recognition and casino rights. Gaming, often viewed as an economic self-sufficiency program for exploited Native Americans, is now shadowed by controversy and, critics charge, mounting scandal.

In the last weeks of the Clinton administration, two top officials of the Interior Department's Bureau of Indian Affairs made controversial decisions rejecting staff recommendations and issuing three valuable tribal designations. Both then returned to private practice in Indian law, taking high-paying jobs in firms handling gambling issues. The two officials also issued rulings in three Connecticut tribal cases that have prompted a lawsuit by the state attorney general designed to stop further casino development.

Under current law, little-known groups -- some with only the thinnest ofgenealogical or historical links to American Indian identity -- can qualify for recognition as a federal tribe and open a casino. Indian gaming has become so controversial that late last year Rep. Frank Wolf (R., Va.) and Rep. Chris Shays (R., Conn.) wrote President Clinton asking for a moratorium on new tribal recognitions. Mr. Clinton ignored the request. Rep. Wolf now is calling for "a sweeping investigation" of the BIA. With state legislatures and local communities also sounding alarms, it's time to take a closer look at the new El Dorados.

Wealth and Power
Champions of Indian gaming say it brings wealth and power to tribes mired in poverty and attendant miseries. Revenues from casino gambling are leveling the playing field with the white man after centuries of mistreatment, its advocates say. Opponents say that only a tiny portion of the Native American community actually benefits from the casino bounty and that gambling is an insidious evil -- destroying lives, attracting loan sharking and money laundering, drugs and organized crime. Critics charge that many of the Indians seeking to open casinos do not qualify as tribes, and may, in fact, not even be Indians. Groups of dubious Indian descent, critics say, often act as front-men for powerful non-Indian investors hoping to reap gambling riches.

The Indian casino boom was born in 1987, with the Supreme Court's ruling in California v. Cabazon Band of Mission Indians. Concerned by the possible infiltration of organized crime, California had attempted to restrict bingo and card games on the Cabazon Indian reservation. But the court affirmed the right of Indian tribes to conduct gambling operations on reservations, free of state regulation. "The State's interest in preventing the infiltration of the tribal bingo enterprises by organized crime does not justify state regulation," it ruled. "State regulation would impermissibly infringe on tribal government."

Congress responded by passing the 1988 Indian Gaming Regulatory Act. Any "recognized" Indian tribe complying with the provisions of the act could open gambling enterprises. An "Indian tribe" was defined as any "tribe, band, nation, or other organized group or community of Indians" that would be "recognized as eligible" by the Secretary of the Interior and "possessing powers of self-government." The casino gold rush was on.

What this currently entails is evident in the controversy over Clinton administration decisions by then-BIA director Kevin Gover and deputy director Michael Anderson. The decisions were documented in a Boston Globe expose in March, but not widely reported elsewhere. On his last day in office, Mr. Gover rejected staff findings and granted federal recognition to the Chinook Indians of Washington state. Mr. Gover "personally rewrote the staff's findings," the Globe's Sean Murphy reported, "inserting his own conclusions to affirm the tribe's authenticity while editing out years of work by government historians, anthropologists, and genealogists."

Mr. Gover stepped aside on Jan. 3 and named Mr. Anderson acting director. Mr. Anderson thenrecognized the Duwamish of Seattle as a tribe, reversing an earlier Interior Department finding. OnPresident Clinton's last day in office, Mr. Anderson recognized the Nipmuc of Massachusetts as a tribe, rejecting the findings of Interior Department historians, according to the Globe. Earlier this month, the Nipmuc signed a casinodevelopment deal with Lakes Gaming, aMinnesota-based corporation that manages a casino in Louisiana and has other Indian casino development agreements in Michigan and California. The deal calls for Lake's continued support in recognition battles and development of a casino in return for 35% of net income for seven years.

Mr. Gover, a member of the Pawnee Tribe, is now an attorney with the Washington law and lobbying firm Steptoe & Johnson, where he is building an Indian gaming practice. After leaving the administration, Mr. Anderson, a member of the Muscogee Creek Nation, joined the law firm of Monteau, Peebles and Crowell, specialists in Indian gambling issues.

Mr. Anderson declined to comment on details concerning the Duwamish and Nipmuc cases, but noted that both are under review by the Bush administration, and said that in the Nipmuc case he had denied one branch of the tribe federal recognition. In the Chinook case, Mr. Gover says, "I disagreed with the staff findings, but the decision was mine to make." While there may have been an appearance of impropriety in the last-minute decisions, Mr. Gover added, "these applications had been hanging around for years and were past due."

In two other controversial BIA cases, Mr. Gover and Mr. Anderson overruled staff and issued rulings helping pave the way for new Indian casinos in Connecticut, a state already staggering under the weight of the Foxwoods and Mohegan Sun casinos, each owned by a federally recognized tribe. Each casino generates about $1 billion in annual revenues and skirmishes with the state over legal, social and regulatory issues. Nine other Indian groups in Connecticut are seeking federal recognition.

In one Connecticut case, Mr. Gover reversed preliminary findings by professional BIA historians that two Connecticut Indian groups did not qualify as tribes. The groups, the Eastern Pequot and the Paucatuck Eastern Pequot failed to meet two key criteria for tribal status: continuous existence as a community and continuous political governance. The Eastern Pequot have not "demonstrated the existence of a modern community" or shown "the existence of political authority or influence," states a BIA analysis obtained by the Journal. The Paucatuck likewise did not meet the community standard and have "not demonstrated the continuous existence of a political process from 1883 to the present."

The Eastern Pequot (650 members) and the Pauckatuck Eastern Pequot (150 members) share a 220-acre state reservation in North Stonington, Conn., and have been bitterly feuding for decades, each group claiming the other is an imposter. According to genealogical studies commissioned by local towns fighting casino development, neither group in fact may be descended from the historic Pequot Nation, the basis of their tribal claims. But both groups have powerful financial backers. The Pauckatuck have signed a development agreement with Donald Trump. The Eastern Pequot are working with a wealthy Connecticut golf course developer, David Rosow.

In January, Connecticut Attorney General Richard Blumenthal and three towns near the Pequot reservation filed a federal lawsuit against Mr. Gover in his official capacity as BIA head and other senior Interior Department figures, charging that "rogue federal bureaucrats" had hijacked the tribal acknowledgment process. Mr. Blumenthal wants the withdrawal of the Gover ruling in the Pequot case and a review of BIA procedure. Mr. Gover calls the suit "a classic stall tactic."

In a second Connecticut case, Mr. Anderson re-opened a tribal application after the group had been rejected because it failed to show Indian descent. Connecticut's 80-member Golden Hill Paugussett group was rejected for tribal status in 1996. According to the BIA finding, the Golden Hill "did not descend from a tribe, but from a single individual whose Indian ancestry has not been determined."

Mr. Gover recused himself from the case because earlier in private law practice he had represented the Golden Hill in its tribal recognition bid. In 1999, Mr. Anderson re-opened the application, concluding that the BIA should not have based its rejection solely on genealogical grounds.

The Golden Hill plan to build a big casino in Bridgeport. They are backed by New York developer Thomas Wilmot. A heavy Democratic Party contributor and Hillary Clinton fundraiser, Mr. Wilmot told a Connecticut newspaper that he had invested $4 million in the effort to win federal recognition.

The Golden Hill case also is noted in Mr. Blumenthal's lawsuit. Last year, the towns near the state-recognized Pequot reservation unsuccessfully sought Mr. Gover's recusal in the Pequot cases, citing his earlier involvement with the Golden Hill tribe and BIA rulings during his tenure that gave increased weight to state recognition of Indian groups. The Pequot and Golden Hill cases await final determinations.

Outraged by BIA conduct, Rep. Wolf in March called for "a sweeping investigation" of the BIA affair, saying that many Indian groups had become "pawns in a billion-dollar battleground" for tribal recognition. In a letter to Attorney General John Ashcroft, Mr. Wolf requested "an investigation into the pattern of conduct over the past four years at the BIA." The General Accounting Office also is probing tribal recognition at BIA.

The Clinton administration was very active in tapping new and prospective Indian wealth for campaign contributions. An October 1994 memo from Clinton-Gore campaign chief Terry McAuliffe to Deputy White House Chief of Staff Harold Ickes lists Richard Hayward, then-chairman of Foxwood Casino's Mashantucket Pequot Indian tribe, as one of the "top supporters of the President," contributing "$650,000 to the DNC this year." During the Clinton era, millions poured into Democratic Party coffers from pro-gaming Indians and their allies.

An Indian gambling lobbyist in New Mexico during much of the 1990s, Mr. Gover worked closely with the Clinton fundraising effort as director of Native Americans for Clinton/Gore before being named to head the BIA. In a June 1995 memo to White House political directors, Mr. Gover wrote that there "is a lot of money in Indian country, and a lot of it has gone to the DNC." He urged the White House to send operatives to a convention of the Indian casino lobby, the National Indian Gaming Association (NIGA). "Send your top people to these meetings," he wrote. "The NIGA tribes are political powers and must be courted."

The White House responded. During the campaign, tribal leaders went to the White House for coffee with the president and dined with Vice President Gore. Top DNC officials met with the NIGA. Mr. Gover pressed the Indian agenda, much of it related to gambling. "The tribes' anger at the Administration's failure to state plainly its opposition the gaming tax is justified," Mr. Gover wrote White House political director Craig Smith on Oct. 4, 1995.

On the eve of his Senate confirmation hearings in 1997, Mr. Gover deflected charges by New York Times columnist William Safire that as a lobbyist for New Mexico gambling interests he had represented a "criminal enterprise" -- a casino run by the Tesuque Pueblo Indian tribe. During the dispute over the legality of gambling in New Mexico, a federal judge had called the Tesuque casino a "criminal enterprise" that used money "derived from unlawful conduct." Mr. Safire warned that as head of the BIA, Mr. Gover "will be in a position to use federal power to encourage generous criminal gambling enterprises to blossom on reservations across the land."

Mr. Gover says there was "no pressure at all" from the White House or its allies during his tenure at BIA, and that he "made it a point not to know" which tribes were contributing to the Democrats, to insulate himself from campaign-finance controversies.

The 1996 campaign also entangled Mr. Anderson in controversy. According to the final report of the Senate Governmental Affairs Committee investigation into the campaign-finance scandal, Mr. Anderson was a "figurehead" for a controversial Interior Department decision denying Chippewa Indian tribes the opportunity to build a casino in Hudson, Wis. The Interior Department denied the Chippewa's application that Interior take land at a failing dog track into trust for conversion into a casino; such "off-reservation" trust acquisitions were provided for in the 1988 Indian gaming act, as a path toward tribal economic self-sufficiency.

The Senate report concluded there was a "direct relationship" between the White House, the Interior Department, and donations received by the Democrats from local casino-owning tribes opposed to the competition in Hudson. An independent counsel probe into the matter concluded that there was not enough evidence to charge Interior Secretary Bruce Babbitt with lying to Congress about his role in the affair.

Concerned about losing market share, a group of Wisconsin tribes lined up against the Chippewa. The opposition tribes hired a powerful Washington lobbyist and poured over $300,000 into Democratic coffers. When their land trust application stalled, the Chippewa hired a lawyer, Paul Eckstein. Mr. Eckstein later testified to Congress that he went directly to Interior Secretary Babbitt, who told him the Chippewa application would be denied. He said Mr. Babbitt told him that "Harold Ickes had directed him to issue a decision that day."

Mr. Eckstein testified that Mr. Babbitt said, "Do you have any idea how much these Indians with gaming contracts have given to the Democrats? Half a million dollars."

When then-BIA head Ada Deer unexpectedly recused herself from signing the final letter denying the Chippewa application, the task fell to Mr. Anderson. The Governmental Affairs Committee concluded that Mr. Anderson was "simply a figurehead for the decision." Mr. Anderson dismisses the Senate report as "partisan" and says the independent counsel report concluded there was no evidence of wrongdoing.
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Yet viewed in light of the new BIA misconduct allegations, the Senate and independent counsel probes might be worth revisiting. Is there a pattern of influence-peddling between casino interests and senior Clinton administration figures? Were Mr. Gover and Mr. Anderson acting as figureheads for powerful political and financial interests? Beyond the allegations of possible corruption at the BIA, what is to be done about the Indian casino boom? Is it a blessing or a curse?

Congress may start looking for answers. Last month, Reps. Shays and Wolf introduced a bill to establish a commission to examine government policy toward Native Americans and give state legislatures more power in approving Indian gambling operations. "Nearly 80 percent of Native Americans don't receive anything from gambling revenues," Mr. Wolf said. Most tribes "continue to live in awful poverty, plagued by disease, infant mortality, unemployment and a lack of educational opportunities."

The new commission may take on organized crime as well. In their letter to President Clinton, Reps. Shays and Wolf noted that the "influence of organized crime on Indian gambling is alarming. Tribal leaders often find themselves forced into affiliations with members of organized crime rings. This stems directly from the lack of federal oversight for Indian gambling operations."

Reformers

Sen. Chris Dodd (D., Conn.) also has called for reform. "This is out of hand," he recently told the Associated Press. "This is all about casinos now." Sen. Dodd said he would discuss tribal recognition petitions with Sen. Daniel Inouye (D., Hawaii), the new chairman of the Indian Affairs Committee. But he shouldn't look for much help there. When Mr. Gover got in trouble at his 1997 confirmation as BIA head, it was Sen. Inouye who came to his defense, declaring himself "fully satisfied" with his credentials. The chief counsel for the Indian Affairs Committee recently told AP that Sen. Inouye "believes the process of petitions ought to be expedited rather than stopped."

It doesn't appear that reformers will get much help from the executive branch either. While the GAO report into the tribal recognition process promises to be thorough, the Justice Department punted Rep. Wolf's request for a full investigation to the inspector general of the Interior Department. An Interior official says the matter is "under review." Translation: Don't hold your breath.

President Bush's new BIA head, Neal McCaleb, was sworn in on July 4. At his confirmation hearing, Mr. McCaleb told Congress that the economic influence of Indian casinos had been "very beneficial." He promised to be an impartial judge of tribal recognition applications. Meanwhile, Interior Secretary Gale Norton is keeping her distance. The mess at BIA, a Norton aide says, "doesn't fit with our pro-active, forward-looking message."