Interior Aims for Transparency in State-Tribal Casino Compact Process

Rob Capriccioso
8/30/13

 

When Kevin Washburn, Assistant Secretary for Indian Affairs at the Department of the Interior, last fall rejected a negotiated compact between the state of Massachusetts and the Mashpee Wampanoag Tribe as one of his first actions in his new job, he left a lot of folks – both on the tribal and state sides – scratching their heads.

The state wanted revenue; the tribe wanted to assert its sovereignty by opening a casino in a potentially lucrative market. The parties negotiated, came to a deal, and sent the plan along to Washburn, as required by law.

But the new Assistant Secretary was having none of it. He went out of his way to describe in his rejection letter to Democratic Gov. Deval Patrick that he felt the compact was unfair to the tribe. Washburn said the compact not only violated the Indian Gaming Regulatory Act of 1988 (IGRA) by including what he deemed to be an excessive 21.5 percent share of all gross gaming revenues, it also asserted “illusory concessions” by the state.

Many gaming experts nationwide – of both the tribal and state variety – were less concerned about Washburn’s specific rationale here, they wanted to understand the bigger picture: Was the Interior Department intent on laying out clear criteria for how it goes about approving or denying state-tribal gaming compacts?

If the current leadership has its way, the process will become clearer in coming months, although precise clarity is not likely.

Interior officials say Washburn is committed to making the process much more transparent, and he hopes to have Interior’s past disapproval and acceptance letters – not just his own – posted on the Department’s website, so the public can understand why disapprovals happen.

They say that many lawyers have queried the Department about past decisions, noting with frustration that the decisions cannot be accessed through the usual legal research methods, such as Lexis or Westlaw.

Compacts are usually reported on in the press, but finding all of them can be a chore—a problem Interior wants to alleviate. Under Washburn’s direction, Interior plans to post letters going back as far as they have been released by the Department, into the early 1990s.

One of the things Interior officials want to make clear is that it is not the Bureau of Indian Affairs (BIA) that makes these decisions, it is the Office of the Assistant Secretary for Indian Affairs, assisted by the Office of Indian Gaming, which both sit above the BIA in the organization chart. It’s a minor distinction, to be sure, but one that at least helps people involved in the process know exactly who they are dealing with on the federal side.

According to Interior officials, there is currently a regular supply of compacts coming through the Assistant Secretary’s office for approval, approximately two or three a month.  

For a process that is supposed to be clear-cut, as laid out by Congress in IGRA, even people who are supposed to be gaming experts often react with surprise when Interior disapproves agreements to which the state and the tribe have agreed, but that is exactly the role Congress gave Interior under the law.

The process may seem paternalistic – especially to tribes like Mashpee that get rejected – but the process is actually supposed to strengthen the federal trust responsibility to tribes by making sure that tribes are getting fair deals with the states they are negotiating with.

If Interior doesn’t make a decision within 45 days of being given a compact to review, the compact is automatically approved, under the law.

The 45-day rule is pretty clear, but the nitty gritty details of how the Assistant Secretary comes to a final decision will never be able to be understood completely by looking to past letters. The Assistant Secretary has latitude, and it is his or her interpretation of what is good for a tribe that ends up creating the final determination.

Assistant Secretaries change, and so do their rationale. Plus, determinations differ from one presidential administration to the next. If an administration looks negatively on Indian gaming, there is probably a greater chance that compacts will be rejected—for reasons that do not always seem to be in the best interests of a tribe, as sometimes was the case during the George W. Bush administration. On the other hand, compacts are probably equally likely to be rejected by an administration, like the current one, that wants to approve strong compacts for tribes at a time when many states are facing budget crises.

“The rules for denial are definitely not-clear cut, as far as I can tell,” says Matthew Fletcher, Director of the Indigenous Law & Policy Center at Michigan State University. But there are a few general rules that do not change, regardless of the administration. “IGRA is clear that states may not tax gaming, but because of the Seminole Tribe decision, states have an effective veto on Class III gaming. So Interior allows revenue sharing where tribes receive a ‘meaningful concession’ from the state,” Fletcher notes. “If they didn't, there wouldn't be gaming anywhere except Michigan and Connecticut and a few other states where tribes had compacts before Seminole Tribe, and maybe California and a few other states that waived their sovereign immunity.

“Revenue sharing [from a tribe] in exchange for nothing [from the state] is going to be a no, I think, in all cases,” Fletcher adds.

Finally, “Smart negotiating parties are more aggressive in getting Interior involved earlier in negotiations,” says Fletcher. “That's a big step.”

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