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11.19.04
Politics and Economy:
Indian Gaming Scandal
More on This Story:
Investigating the Indian Gaming Scandal

Etched in the history of our great nation is a long and lamentable chapter about the exploitation of Native Americans.... Every kind of charlatan and every type of crook has deceived and exploited America's native sons and daughters. While these accounts of unscrupulous men are sadly familiar, the tale we hear today is not. What sets this tale apart, what makes it truly extraordinary, is the extent and degree of the apparent exploitation and deceit.

— Statement of Senator John McCain, Senate Committee on Indian Affairs, Oversight Hearing on Lobbying Practices Involving Indian Tribes, 9/29/04

The Senate Committee on Indian Affairs has, for nine months, been investigating charges that former lobbyist Jack Abramoff and public relations executive Michael Scanlon manipulated Indian tribes and walked away with millions of dollars from "less than honorable" dealings. Senator McCain is only one of many shaken by the scandal. As Senator Byron L. Dorgan responded to the evidence building in this case, he called the activities "a cesspool of greed, a disgusting pattern, certainly, of moral corruption, possibly of criminal corruption...a pathetic, disgusting example of greed run amok." Senator Ben Nighthorse Campbell, who presided over the oversight hearings and is currently the only Native American U.S. Senator, detailed the evidence before the committee:

It appears, from their own words, Mr. Abramoff and Mr. Scanlon held their tribal clients in absolute contempt — clients, mind you, that paid them millions of dollars. E-mails obtained by the committee show that they regularly referred to their clients using contemptuous, even racist language.

What's the story behind these accusations of exploitation, greed, and contempt? As profiled in NOW's segment "Double Dealing," Washington insider Jack Abramoff promised free assistance to the Tigua tribe, claiming he could help to reopen their tribal casino that had been shut down by the state of Texas. What the tribe didn't know was that Abramoff had worked as part of the anti-gambling lobby that helped close that very casino, and that he had a secret deal with Scanlon to share the profits. The Tiguas weren't the only tribe to be seduced by false promises; Abramoff and Scanlon worked with six tribes in various parts of the country, offering to build grassroots networks and garner support for gaming on Capitol Hill. Now the FBI, a Grand Jury, and several federal agencies — in addition to the Senate Committee — are looking into the evidence behind these allegations.

A Brief History of Indian Gaming

According to the National Indian Gaming Association (NIGA), Indian gaming was originally part of tribal ceremonies or celebrations. Today, gaming is seen by some as one of the most "viable source[s] of employment and governmental revenues available to tribes." The NIGA views gaming as "a major catalyst for community growth and economic development, generating revenues for tribes like no federal stimulus effort ever has before." After decades of poverty and high unemployment associated with Indian reservations, gaming seemed to offer a promising enterprise for tribes to achieve self-sufficiency.

In 1988, Congress formally recognized but limited the right of Indians to conduct gaming operations, passing the Indian Gaming Regulatory Act and the establishment of the National Indian Gaming Commission (NIGC). An independent federal regulatory agency of the United States, the Commission's stated mission is to:

regulate gaming activities on Indian lands for the purpose of shielding Indian tribes from organized crime and other corrupting influences; to ensure that Indian tribes are the primary beneficiaries of gaming revenue; and to assure that gaming is conducted fairly and honestly by both operators and players.

Federally-recognized tribes are permitted to operate gaming facilities under certain conditions. First, the state must permit some form of gaming. Secondly, if the tribe wants to engage in casino-type gambling activities — formally known as Class III gaming, these include baccarat, craps, blackjack, and slot machines, among others — a tribal-state compact must be negotiated. Additionally, Indian gaming is only permitted to take place on lands within the tribe's jurisdiction and a tribal gaming ordinance must be submitted to the NIGC.

Furthermore, there are limitations on how the net revenue from tribal gaming may be used. Funds can be spent to fund tribal government operations or programs; provide for the general welfare of the Indian tribe and its members; promote tribal economic development; donate to charitable organizations; or help to fund operations of local government agencies.

The Closing of Speaking Rock Casino

In 1992, with Indian gaming laws in place, the Tigua tribe of El Paso, Texas petitioned then-Governor Ann Richards to allow casino gambling under a tribal-state compact. Richards rejected the tribe's request. In 1993, despite their failure to get government approval, the Tiguas opened Speaking Rock Casino. Over the following decade, the Tiguas and the Texas state government battled over the legality of the casino. While Governor George W. Bush, governor of Texas at the time, contended that Speaking Rock violated the state's anti-gambling laws, the Tiguas argued that their slot machines were similar to the state-run lottery games, which used computers to randomly generate numbers for players.

While the casino business continued on Tigua land, the Texas state attorney general sued the tribe to shut down Speaking Rock. In January 2002, the Tiguas argued their case before the U.S. 5th Circuit Court of Appeals to no avail. When the casino closed in February of that year, close to 800 employees were left without jobs. It was at this time that Jack Abramoff approached the Tigua tribe offering his lobbying expertise and Washington insider status to get the casino reopened. Later, it would become public that the Tiguas weren't the only tribe taken advantage of; there were five others. It is believed that Abramoff and Scanlon managed to bilk more than $66 million in fees from the six tribes.

While the investigation by the Senate committee continues, the e-mail trail left by Abramoff and Scanlon have been released to the public as part of the oversight hearing. Read through the correspondence (PDF).

For More Information:

Bureau of Indian Affairs
The Bureau of Indian Affairs handles the administration and management of 55.7 million acres of land held in trust by the United States for American Indians, Indian tribes, and Alaska Natives. There are 562 federal recognized tribal governments in the United States. Developing forestlands, leasing assets on these lands, directing agricultural programs, protecting water and land rights, developing and maintaining infrastructure and economic development are all part of the agency's responsibility. In addition, the Bureau of Indian Affairs provides education services to approximately 48,000 Indian students.

Committee of Indian Affairs
In 1977, the Senate temporarily re-established the Committee of Indian Affairs after a hiatus coinciding with the "Termination Era," a period in which U.S. policy was to terminate the federal relationship with Indian tribes. After several term extensions, the Committee was voted in as a permanent fixture in 1984, with jurisdiction to study the unique problems of American Indian, Native Hawaiian and Alaska Native peoples. Some such issues include Indian education, economic development, land management, trust responsibilities, health care, and claims against the United States.

National Indian Gaming Association
The National Indian Gaming Association (NIGA), established in 1985, is a non-profit organization of Indian Nations with other non-voting associate members representing organizations, tribes and businesses engaged in tribal gaming enterprises from around the country. The mission of NIGA is to protect and preserve the general welfare of tribes striving for self-sufficiency through gaming enterprises in Indian Country. To fulfill its mission, NIGA works with the Federal government and Congress to develop sound policies and practices and to provide technical assistance and advocacy on gaming-related issues. In addition, NIGA seeks to maintain and protect Indian sovereign governmental authority in Indian Country.

National Indian Gaming Commission
As an independent federal regulatory agency of the United States, the National Indian Gaming Commission was established pursuant to the Indian Gaming Regulatory Act of 1988. The Commission is authorized to conduct investigations; undertake enforcement actions, including the issuance of notices of violation assessment of civil fines, and/or issuance of closure orders; conduct background investigations; conduct audits; and review and approve Tribal gaming ordinances.

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