Proposal would level field of play

4/26/99

WASHINGTON, D.C. ? A long-awaited alternative proposal on gaming compacts was followed by praise and kudos from Indian country and a lawsuit from two states.

The Department of Interior, Secretary Bruce Babbitt and others will defend the right of the secretary to impose a rule that puts tribes on a level playing field with states who refuse to negotiate gaming compacts.

The final version of a secretarial regulation on Indian gaming compacts was published in the Federal Register April 12, while Congress was off on Easter vacation. It is widely speculated that Babbitt took advantage of this window of opportunity and ordered the final regulations of the alternative proposal to state/tribal gaming compact negotiations published in the Federal Register.

"We are very, very happy and elated by the decision of the secretary to go ahead and publish those alternative procedures. We've been waiting for that, in the case of some of the tribes, for more than 10 years," said Jacob Coin, executive director of the National Indian Gaming Association.

"It's certainly a welcome sign and we hope that all good faith will be dispatched to allow those tribes who have been waiting to engage in a serious tone of economic development, to give them an opportunity to do just that," he said, adding, "We are talking about a handful of states and I hope this will break that logjam."

On the same day the alternative rule was published, the states of Florida and Alabama filed a complaint in federal court and asked for a permanent injunction against implementation of the rule. The two states' intent is to prevent the compacting of Class III gaming by any means other than negotiations with the states.

The long-awaited and much anticipated alternative proposal rule is designed according to the Indian Gaming Regulatory Act and allow a Class III gaming compact to take effect when a state fails to negotiate a compact in good faith or if a court dismisses a suit filed a tribe against a state. The key trigger is a failure to waive sovereign immunity by the state.

"I'm deeply troubled by the federal government's assertion that it has a larger role than the states do in overseeing gaming compacts with the Indian tribes," said Florida Gov. Jeb Bush.

"Furthermore, the people of Florida have made their feelings about gambling known through ballot initiatives and legislative attempts to expand gambling rights, and their position is clear: Floridians oppose the expansion of gambling and do not want casino-style gaming in their neighborhoods or communities."

The alternative proposal to compact negotiations is in keeping with the 1988 Indian Gaming Regulatory Act. It mandated a process of judicially supervised mediation should a state not negotiate gaming compacts in good faith.

The states lack an incentive to negotiate compacts since the U.S. Supreme Court ruled in Florida vs. Seminole that states have the right to claim sovereign immunity under the 11th amendment, thus rendering the judicial process off limits to the tribes.

Coin said the alternative proposal should provide that incentive states need to negotiate compacts, considering, he said, the alternative which is imposing a non-negotiated compact on the state.

The official word from the Department of Interior and the BIA is that the suit is welcomed to provide clarification of the regulation by the federal courts.

"The vast majority of compacts negotiated between states and tribes during the past 10 years have been negotiated voluntarily and in a spirit of good faith," said Kevin Gover, assistant secretary for Indian Affairs.

"We do not believe that the Indian Gaming Regulatory Act envisioned giving states a veto power over Class III Indian gaming when other Class III gaming activities take place within their borders. The new regulation addresses only this narrow issue and seeks to level the playing field once again in these rare circumstances."

The court complaint was filed at a time when the Seminole Tribe of Florida and the Poarch Creek Indians of Alabama were negotiating compacts with new governors. The Seminole negotiations passed the required 180-day limit, and the Seminoles asked Secretary Babbitt to impose the alternative proposal to resolve the issue.

"(United South and Eastern Tribes) would be prepared to work as hard as we can to see the secretarial regulations go forward. It's long overdue," said Keller George, chairman of the tribal coalition.

"If the justice department is successful in defending the secretary and, if it is brought out he can implement the regulations, it would be a great thing.

"On the other hand, it's a bad thing due to the fact that litigation takes time. Then again, it might be years before this case is settled," George said.

"I believe the secretary has the opinion, the solicitor's office believes that too. The secretary has been fooling around with this for years. It's been the opinion of the tribes all along that he could do this," George said.

The alternative proposal, and an eventual court decision, will affect tribes from all parts of the country. Some are in the midst of renegotiating expiring compacts, others are in states like Nebraska, Florida, Massachusetts, California and others where negotiations have either not occurred or are at a standstill.

Some tribes operate casinos without benefit of compacts and in the case of the Santee Sioux Tribe of Nebraska it is subjected to daily fines, but refuses to yield and remains open. Nebraska has not, according to Santee officials, seriously negotiated a gaming compact. The Seminoles and Poarch Band of Creek Indians claim the same results in attempts to negotiate compacts.

"It was difficult to believe I was sitting there Tuesday morning with the procedures in my hand," said Arthur "Butch" Denny, chairman of the Santee Sioux Tribe in Nebraska.

Denny said he will be in Washington, D.C., and present his tribe's compact May 12, the day the alternative procedure officially takes effect. The process allows Nebraska to submit its compact and a negotiator will pick the best of the two.

"It should give the states added incentive to negotiate, only because if they don't then the tribes have at least a viable alternative to go to. It gives the tribes a better than average chance to consummate a compact," Coin said.

Babbitt's move to publish the alternative proposal came days after a moratorium preventing publication or implementation expired. It was published a day prior to Congress' return from Easter vacation and before another attempt to prohibit implementation was approved by Congress.

Senators Mike Enzi, R-Wyo., and Harry Reid, D-Nev., among other signers, attached a rider to the emergency appropriations bill that would again have prohibited the secretary from implementing or even publishing the final regulation. That bill is pending.

The Reid-Enzi amendment would have attempted to clarify the secretary's authority to promulgate the alternative rule which allows the states a consultation process.

"A lot of our people feel it is a welcome relief to get the issue into court. We've been fighting the Enzi business for the last three or four years more directly and they've been effectively able to use the legislative process to block the secretary from doing these regulations," Coin said.

"The secretary has gotten the clearance through the administration and the Office of Management and Budget and everybody else that needed to clear and had the courage to publish. It's certainly gratifying to the tribes."

The Enzi-Reid amendment is still alive, according to Enzi's office. It will be taken up on a joint conference committee, where tribal proponents will have an opportunity to leverage influence against the rider. According to Enzi's staff the rider's intent is to clarify the secretary's authority to promulgate the alternate rule of compacting.

"The truth is the procedures provide no less than nine points throughout the process where the states are directly consulted. So they are not by-passed by any stretch, by any description. And it's misleading and it's completely untruthful for the states to be advancing that argument," Coin said.

The state of Florida complains that the new rule "circumvents" the states in the gaming compact negotiating process. The state further argues the regulations are unconstitutional and "grossly overstep the federal government's authority in regulating a state's ability to negotiate with the tribes."

"Our challenge to the Interior Department rule granting this undue power revolves around two basic facts," said Attorney General Bob Butterworth. "First, the department lacks the fundamental legal authority to establish such a rule.

"Second, the rule puts the Interior secretary in the position of adjudicating disputes between states and Indian tribes at the same time that he is acting as a trustee of the tribes."

The two states, in the written complaint, additionally assert that the Indian Gaming Regulation Act granted them the right to negotiate Class III gaming compacts and therefore safeguard the state's public policy on gaming. The final regulation, the states claim, sets up procedures to impose Class III gaming for the tribes, an action not specified in the act.

"It's misleading and it's completely untruthful for the states to be advancing that argument," Coin said. "We're pretty stunned by the fact that the National Gaming Association and others would try to con the Congress into pleading that these procedures would somehow by-pass states and deal with state's rights. In fact, we believe that from the tribe's side that nine times of consulting the states is way too many."

The Indian gaming act established a procedure that allowed the tribes redress in federal court should a state not negotiate or not negotiate in good faith. However, in 1996, the U.S. Supreme Court ruled that states, under the Indian Commerce Act, could impose sovereign immunity under the 11th Amendment and refuse to be sued in court.

The Florida-Alabama complaint argues that the tribes are only entitled to an expectation that a state will negotiate in good faith. In the event of an impasse, the state of Florida claims, the tribes' only alternative is to go back to the negotiating table and work out a deal.

"The Department of Interior has handed its secretary the unprecedented power to unilaterally decide what kind of gambling will be permitted on reservations in Florida," Butterworth said.

"In effect, one federal bureaucrat can defy the wishes of elected state officials and ? more importantly ? the millions of people they represent."

As the tribes see the issue, the final secretarial regulation changes those rules. Anthony Pico, chairman of the Viejas Band of Kumeyaay Indians, said the rule would assure a sense of fairness and justice in the compacting process.

"Needless to say, I am very pleased the Secretary of the Interior finally promulgated procedures to supplement the Indian Gaming Regulatory Act. Now, hopefully, the void created by the Supreme Court in the Seminole case will give the law requiring tribal-state compacts the teeth it needs to move recalcitrant states and protect the tribes and integrity of congressional intent," Pico said.

Florida and Alabama were defendants in earlier suits filed by tribal governments. The Seminole and the Poarch Band of Creek Indians claimed the states failed at good faith negotiations. Both tribes have recently been involved with compact negotiations.

Prior to Babbitt's move to publish the procedures he was subjected to criticism from tribal officials from across the country. Now he is touted as a friend of Indian country once again.

"I felt he was not standing up for the rights of the people. He had trust responsibilities to tribes not the states. I'm glad he finally stood up and showed that he can do things for the tribes and not be scared of what the states are going to do," Denny said.

The procedure and the points:

* On Jan. 22, 1998, the BIA issued a proposed rule in the Federal Register, which started the process and declaring the Secretary of Interior had legal authority to initiate Class III gaming procedures within certain prescribed limitations.

* The final rule mirrors the Indian Gaming Regulatory Act's negotiation and mediation process with adjustments necessary if tribes are not allowed to pursue litigation against states.

* The rule only applies where the tribe and state fail to negotiate voluntary compact negotiations and when the tribe is prohibited from pursuing the process in federal court when a state claims immunity.

* The rule establishes a process that allows state participation in the development of procedures.

* If the state does not assert its sovereign immunity, the rule does not apply.

* The final ruling removes the requirement that allows the secretary to qualify good faith negotiations by the state. (States objected that bias may be a factor in the determination).

* The scope of gaming according to IGRA remains the same as provided in existing state and federal laws.

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