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How Arnold Schwarzenegger Violated Tribal Sovereignty

Bo Mazzetti
9/21/11

States and governors just can’t seem to control themselves; they cannot keep their hands out of tribal pockets. The concept that tribal governments have rights and financial needs has eluded them for so long they have become accustomed to ignoring them.

But occasionally a governor gets a hand slap for reaching too far into tribal pockets and breaching our sovereignty. An example is the Rincon Band of Luiseño Indians' legal victory over former California Governor Arnold Schwarzenegger for illegal taxation and bad faith in renegotiating Rincon’s gaming compact.

The case affirms that occasionally tribes have the power to tip the imbalance of power states enjoy.

Schwarzenegger was a political blackmailer from the outset of his career as a California politician. He used tribes and gaming income as a wedge issue in his run for governor. It may not have been “playing the race card,” but it was a none-too-subtle “us versus them” strategy.

In an expensive television campaign, he asserted that the former governor’s deal with the gaming tribes had been too favorable to California Indians. He vowed that he make tribes pay their “fair share.” The backdrop for the campaign was the state’s continuing budget deficits and the voters’ "no new taxes" mentality.

Schwarzenegger found a painless solution for California voters: Tax the rich gaming Indians. It didn’t matter that most California tribes are far from rich—they're actually closer to destitute—and only a few tribes earn big bucks through gaming.

Schwarzenegger carried out his promise to make tribes pay more. He accomplished that by renegotiating compacts or approving new compacts with tribes only when they agreed to be taxed at 15 percent and up to 25 percent of net win. Since there was no consideration of overhead and deductions for operations, a net win for the Rincon Band, asking to renegotiate to add 900 new slot machines, would have actually been a 30 to 40 percent tax.

Furthering his arrogance and his administration’s failure to abide by the law that protects tribal gaming from grasping governors, he placed the tribal fees into the state’s treasury, not IGRA-approved revenue sharing trust funds.

Gaming, according to federal law, was meant to help tribal governments and communities get on our feet. That's a fact—a fact that didn't fit into Schwarzenegger's political agenda or register on his administration’s radar. Tribal sovereignty certainly wasn’t high on his list of concerns either.

Aside from the illegal use of tribal fees and monetary excesses, some of the more egregious aspects of the Schwarzenegger compacts stripped tribes of sovereign immunity where disagreements existed, requiring arbitration or adjudication in state courts. Then there were MOUs that required tribes to hand over large amounts of tribal funds to local governments, supposedly to mitigate impacts—these had to be negotiated and signed before state approval, thus giving local governments leverage to demand excessive amounts of future tribal earnings to pay for obligations local governments, not tribes, owed their taxpayers.

For Rincon, the issue was sovereignty: Tribes cannot be forced to trade away our sovereignty to engage in an economic pursuit. The legal question, however, was also important: Could the Governor just thumb his nose at IGRA? The Rincon law suit dragged on for six years, with the Schwarzenegger administration issuing excuses for why they could not approve a compact with the Rincon Tribe every step of the way. Excuses like “There are no more slot machine licenses available for Rincon,” despite the fact that many tribes signing the Schwarzenegger compacts were given unlimited licenses—for a price, a very high price. Giving 98 percent of our earnings to the state was a price that Rincon refused to pay.

The final argument the state put forth to the U.S. Supreme Court was the most honest, although still illegal: “The state has fiscal problems and we need tribal money.” A bit of irony, as there has been some reversal in the monetary status of some tribes, but it was the same old argument: “The state comes first, and tribes sacrifice.”

What we learned is what Indians have always known—the state will almost always place its rights and needs above the tribes. Moreover, many non-Indians will almost always place their needs over tribal needs. We knew we had the law—IGRA—on our side, and if the case was decided on its merits, as it was in the San Diego Federal Court and 9th Circuit Court of Appeals, we would win. We realized the risk in trusting that judges will follow the law over politics, in any given court, at any given time.

But this time the Supreme Court did the right thing and let the lower court decisions stand.

Even with the risks implicit in our law suit, many tribes united around our lawsuit and court-ordered negotiations, viewing it as an opportunity to improve present and future compacts. With the leverage of the courts and IGRA, we are working with a new governor to stop the wholesale extortion of tribes being forced to agree to the Schwarzenegger demands. The first things we are inking out of the new compact are conditions that violate our sovereignty.

We believe this governor offers an opportunity for a more cooperative relationship and mutually beneficial agreement. Herein lays the hope that states and governors can finally begin to view tribes as partners, rather than impediments, or ATMs.

Bo Mazzetti is Chairman of the Rincon Band of Luiseño Indians.

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nanaiya's picture
An excellent article! It is time for California to buck up and take responsibility for their debts and pass fiscal irresponsibility. ALL of California once belonged to Indigenous people and it is immoral to continually take advantage of Indigenous people! I hope and pray this situation is made right, and by that I mean RESTITUTION!
nanaiya
beaver's picture
Schwarzenegger is Austrian. Someone just shows up from Austria and tells Indians who have been here for over 135,000 years what to do. I am not in favor of casinos but Schwarzenegger makes me really angry.
beaver
ahliss's picture
Arnold is a piece of s##t once a crook always a crook. If his father was an SS officer in Germany and it was swept under the rug so he could run for governor what would you expect. It was wrong for him to treat the Native American's as he did. I am so angry about this I can't even begin to tell you how I feel. Their are always going to be crooks in politics and he was no exception. Hopefully the new governor will be better I pray. Congratulations on winning your case (never give up)!!! Alice
ahliss
abareno's picture
Bo Mazzetti,your analysis is a good one and it cries out for government to be more mindful of sovergnity and other issues.There is another aspect of the tribal/local government relationship that should be addressed and codified and that is how local government can capriciously,stop land use projects initated by tribal interest,for no other reason sometimes,than the fact that some of its leader and their friends are jealous of what is being proposed.Keep up the good fight.Augie Bareno
abareno
stevegolsh's picture
BO MAZZETTI- YOU GET NO SYMPATHY FROM SOME NATIVES THAT YOU DENY ENROLLMENT FROM OUR HERITAGE FOR THE MONEY YOUR TRYING TO KEEP FOR "YOURSELF" IN SOME OF OUR EYES. YOU HAVE DIS-ENROLLED FAMILIES WRONGLY AND HAVE DRAGGED YOUR HEELS ON ACCEPTING ENROLLMENT APPS FROM "KNOWN" RINCON FAMILIES. MY GREAT GRAND FATHER MARCUS GOLSH, THE SAME MARCUS'S LAND THAT YOU BUILT THE HOSPITAL ON, ON "GOLSH" ROAD. BUT MY FAMILY AND I ARE NO WHERE NEAR GETTING ENROLLED BECAUSE YOU HAVE POLITICAL HOOPS FOR US AND OTHER TO JUMP THRU. SO FROM A GOLSH TO A "POLITICIAN" LIKE YOU AND ARNOLD, DO WHATS RIGHT AND GIVE RICON NATIVES ACCESS TO THERE HERITAGE. OR ARE YOU AFRAID OF LOSING SOME OF "YOUR" MONEY? AHO, ALL MY RELATIONS.
stevegolsh
stevegolsh's picture
YOU PLAY POLITICS WITH DESERVING NATIVES, THE GOVERNMENT PLAYS POLITICS WITH YOU... SOME WOULD SAY THATS KARMA. NOTHING BUT LOVE FOR MY TRIBE. LOOK IT UP, GOOGLE MARCUS GOLSH, YOU WILL SEE A STORY ON HOW HE "MARCUS" WAS SO INFLUENTIAL IN THE TRIBE BEING WHERE IT IS TODAY BUT YOU DONT WANT TO LET HIS AMILY BE ENROLLED? IN SOME EYES YOUR DOING MORE DAMAGE TO THE TRIBE WITH YOUR "POLITICS" THAT ARNOLD, JERRY BROWN OR MEG WHITEMAN COULD EVER HAVE DREAMT OF WITH NOT LETTING NATIVES INTO THERE OWN FAMILY/TRIBE... LIVE BY THE POLITICS DIE BY THE POLITICS...
stevegolsh
editors's picture
Thank you for your comment! Bo Mazetti responds: "I do not know Marcus Golsh or his family, and I have been involved with the tribe my entire life, as was my father before me. However, the heirs are free to submit their application to the enrollment committee, over which the tribal council has no authority, membership must be accompanied by specific proofs and is ultimately voted on by tribal members. Right now new applications are on hold as the enrollment committee is reviewing a number of issues and researching lineage of current members in a debate that has plagued the tribe for years -- before the casino opened. That can be confirmed by goggling past newspaper articles. No one has been disenrolled since the casino opened 10 years ago, so the idea that I, or any council members are denying membership, because we want more money for myself, doesn't hold up. We now have a tribal court, so if Mr. Golsh feels he has a case and is being wronged, he could take his case to the court."
editors