“A Billion here, a billion there, pretty soon it adds up to real money.” – Senator E. Dirksen (R-IL)

News and comment about Indian policies,law and politics.

By Ed Des Lauriers

Cobell v. Norton (The Indian Trust Case)*

This is the case to watch since it involves many (somewhere between $2.3 and $18) billions of dollars the government has lost, mismanaged or maybe even misappropriated.

Since the case was brought in June of 1996, this continues to be the case that has everything but an end in sight. Three cabinet secretaries have been held in contempt, the Federal Judge has imposed personal fines on Justice Department attorneys, the trust investigator has recently resigned in disgust. And 8 years later, through two administrations, two Secretaries of the Interior, the wrangling and maneuvering goes on.

To oversimplify, Elouise Cobell, a member of the Blackfeet tribe in Montana, and her co-plaintiffs, have brought a class-action lawsuit to force the government to account for the billions of dollars of revenue from land placed into trust by the government for the Indians. Money that has been collected and invested over the last 116 years from timber sales, grazing, oil, gas and mineral revenues has simply disappeared! Or at least is unaccounted for. Did it go to build dams and water projects? Was it used for economic development? Did it simply line the pockets of a corrupt bureaucracy? It somebody knows, nobody’s talking, but now a cadre of Justice Department lawyers is trying to sort through the mess of unkept and lost records and, thanks to the tenacity of Judge Royce Labertson and the plaintiffs, we believe there will be an equitable settlement eventually.

Does it strike you as ironic that the Indian Reorganization Act of 1934 was passed because our legislators felt we could not allow individual Indians to own or sell or manage their own lands? The government would have to do it for them. When was the last time you heard about a landlord who forgot to collect the rent? Do you think the Indians would forget if the land was truly theirs in their name, and not “in trust?” These are the same Indians who run nearly 300 casinos in 28 states with revenues near $13 billion a year, about $5 billion of that in profit, according to the December 16, 2002 issue of Time Magazine. It’s probably much larger by now. This puts Indian gaming among Fortune magazine’s 20 most profitable US Corporations, with earnings exceeding those of J.P. Morgan Chase and Co., Merrill Lynch, American Express and Lehman Bros. Holdings combined. But we can’t trust Indians to collect fees on their own land? This is the 21st Century, isn’t it about time we gave Indians the rights and responsibilities of any other citizen of the United States? It took until June 2, 1924, for America to declare all Indians born in the United States “naturalized” citizens of the United States, and citizens of the states they live in, even though they may live on a reservation. Imagine, any child born by an immigrant to this country is a full, natural born citizen. Indians were only “naturalized” citizens and given the vote in 1924.

*See http://www.indiantrust.com for a complete history and latest developments in the case.

Gaming yields the best politicians money can buy.

It is said that money is the mother’s milk of politics, and thanks to the estimated $5 billion in profits from Indian gaming nationwide, America’s politicians are awash in the stuff. In California, Indian tribes have become far and away the largest campaign contributors, giving more than $130 million to candidate and ballot measure campaigns since 1998, and nearly $70 million on the California recall campaign alone. The Viejas Band of Kumeyaay Indians’ $2 million contribution to Cruz Bustamante may be the largest donation ever made to a candidate!

This kind of giving puts them ahead of groups like the California Consumer Attorneys, the Teachers Association, and the California Medical Association. According to Common Cause, The Agua Caliente tribe was the third largest contributor to candidates in 1998, and was among the 10 largest contributors to state legislative campaigns in both the 2000 and 2002 election cycles, contributing more than $12 million in the past six years. There are 300 members of the Agua Caliente tribe.

In Minnesota, where the state is threatening to get into the gambling business in competition with the Indian casinos, the hard, soft and lobbying money is flowing freely. In 2002, Indians accounted for about 87% of the lobbying money related to gambling. By 2003 the percentage had fallen to 58% because other gambling interests had joined the fray. But together the groups had spent $3.2 million that was visible in a year. Below the radar, the Minneapolis Star Tribune estimates there might be hundreds of millions of dollars worth of activity, most of it aimed at the DFL (about 99% to 1%) since most Democrats feel the tribes should not have competition. This despite the fact that Minnesota is the only state that does not get any revenue from gaming and has no provision to review the compact—a legacy left by Skip Humphrey just before he left his Attorney General post to run for Governor. (Then lost to Jesse Ventura and returned to private life.) Minnesota Republican Senate Minority Leader Dick Day routinely describes the DFL as a “wholly owned subsidiary” of the tribes, since they get about a quarter of their senate caucus money from the tribes.

Minnesota Republican Senate Minority Leader Dick Day routinely describes the DFL as a “wholly owned subsidiary” of the tribes,...

What’s the problem? “The Indian loophole.”

There are those who say the situation is “delicious”. Indians finally have financial clout and political influence like other special interest groups. What’s the problem? The problem is that the new campaign finance legislation left a loophole big enough to throw a bank through. The Federal Election Commission has ruled that Indian tribes are not subject to the aggregate limit on annual giving by “individuals”. In a legal interpretation described by the Washington Post as “Clintonesque”, the FEC ruled that while a tribe is a “person” subject to individual limits on contributions to candidates, parties and political action committees, it is not an “individual” subject to the current $25,000 per individual limit on its annual contributions.

So, while Joe non-Indian is limited to giving 25 $1000 hard-money donations to 25 candidates during an election cycle, a tribe can use tribal funds to give unlimited “individual” donations of $1000 each to an unlimited number of candidates. Soft money magically becomes hard money, which gives tribes with casino profits a huge edge on other political donors. Of course it doesn’t come from “individuals”, who may have differing political views. It comes from the tribal fund, and it goes wherever the leaders decide it should go.

Is it legal?

The Indian Gaming Regulatory Act covers the use of Net Revenues from Gaming. It says there are only five legitimate uses for gaming revenues, and campaign contributions are not among them.

Do you see political contributions here? (From Tribal Gaming Ordinances 25 U.S.C. 2710 [SEC.11]

(B) net revenues from any tribal gaming are not to be used for purposes other than –

(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 operations of local government agencies;

So why doesn’t someone go after the tribes in court? Could it be they’re afraid to be labeled racist—the standard defense for all things in opposition to Indian political positions? Could it be that nobody has the resources, legal or financial, to do it? Could it simply be addiction to the money? It’s spread pretty evenly across both parties on a national basis. (See box score.) Ironically, John McCain, who co-authored the current campaign finance legislation is the largest recipient of Indian political contributions. Of course he is a senior member of the Indian Affairs Committee. But could there be hypocrisy amongst the campaign finance crusaders?

Recent Lobby Scandal

The really big bucks are in the lobbying realm, or totally off the radar, and once in a while they get big enough to call attention to themselves. (Sometimes money doesn’t just talk, it shouts.) On March 30, the Washington Post broke a story about Jack Abramoff, longtime Republican lobbyist in the Indian affairs realm, who received $10 million in “previously undisclosed payments from a public relations executive whom he recommended for work with wealthy Indian Tribes that operate casinos, congressional investigators determines.” The situation smelled bad enough that he “resigned” from his law firm, Greenberg Traurig. The allegation is that Abramoff had a financial arrangement with Michael Scanlon, 33, a former spokesman for House Majority Leader Tom DeLay, and that together they had persuaded four tribes to pay them fees of more than $45 million in three years!

While lobbying fees must be disclosed publicly in reports filed with Congress, public relations firms are under no such requirement. Abramoff may have advised the tribes to make not only campaign contributions, but contributions to organizations with no clear connection to Indian concerns, according to the Post article.

John McCain has called the fees “disgraceful”. Stay tuned to see if this one ever gets more press play.

Recent Court Decision on Disclosure: Good News. Bad News.

Good News. On March 3, 2004 the California Court of Appeal’s Third Appellate District ruled that the State Fair Political Practices Commission has the legal right to sue a Native American Tribe and make it comply with the state’s laws requiring public disclosure of campaign contributions and lobbying activities. Of course the Indians had argued they were sovereign and need not comply with US campaign laws guaranteeing a republican form of government.

(Actually, aren’t other nations forbidden to contribute to our elections? It’s nice if you can have it both ways.)

But the court ruled against the Agua Caliente band (remember them, the tribe of 300 that has given $7.4 million to California candidates and PAC’s?) The court ruled that the state’s right to preserve the political process trumps tribal immunity. Now, thanks to this new transparency, Californians will be able to better know who owns their representatives.

Bad News. The “Indian Loophole” is still alive and well. Indians represent roughly 1% of the US population. They can represent 25% or more of the campaign contribution clout, as they do in California. The money comes from tax free gaming profits, which they are not required to divulge. They are not “individual” contributions, unless you believe all tribe members think alike. (Maybe like all union members think and vote alike.) These are really “corporate contributions”. Does any of this bother anybody?

Political Party Box Score

In 2004, Democrats have benefited from American Indian gaming only slightly more than Republicans in “above the radar” contributions to both individuals and PAC’s, according to the Center for Responsible Politics.

Cycle Democrats Republicans
2004 Election Cycle 53% 47%
2003 Election Cycle 79% 21%
Since 1990 71% 21%
(8% other)

Editor’s note: This article has been printed with the permission of the Resource Sentinel and appeared in the May, 2004 issue.