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Opinion: A Plan to Separate Tribes from their Casinos
Written by Susan Bradford Sunday, 04 April 2010 16:49 The Conservative Camp
Indian tribes, whose businesses can be worth upwards of billions of dollars, are becoming too powerful, making too much money, and only benefiting a few – principally tribal leaders, who may or may not even be legitimate Indians or have any historic connection to the Indian tribes they govern, and the lobbyists, attorneys, financial advisers, and casino developers advising them, in the view of some. How can these tribal juggernauts be stopped?
Advocates behind the recriminalization of casinos in states across the country have come up an idea – all in the name of helping dispossessed gamblers and vulnerable Indians. Why not transform their casinos into universities? After all, casinos, with their high ceilings and open spaces, provide the perfect acoustics for lecture halls, and their dining facilities could easily accommodate throngs of ravenous students. Tribal resorts conveniently come equipped with bedrooms, which could be styled into dormitories, and conference rooms, fashioned with faxes and phone lines, are essentially makeshift research labs, minus the petri dishes and microscopes. Stripped of their profitable casinos, tribes would not be able to resist external pressure to tap into their tribal gaming revenue and divvy it up equally among all Native-Americans, whether or not the recipients have an ounce of Indian blood.
Forcing sovereign tribal nations to relinquish their wealth to groups of individuals who only appreciated the value of becoming Indian once casinos, government benefits, and easy cash were on offer, is not morally justifiable. Struggling, legitimate tribes should receive honest advice on how they too can become self sufficient instead of being forced to fleece their fellow Indians in order to survive. Yet, as the National Gambling Impact Study Commission's Final Report complained in 1999: “Again, the unwillingness of individual tribes as well as that of the National Indian Gaming Association (the tribes' lobbyists) and the National Indian Gaming Commission (the federal agency that regulates tribal gaming) to provide information to this Commission, after repeated requests and assurances of confidentiality, limited our assessment.”
Founded by the federal government in 1997 to study the social and economic impact of gambling in the United States, the Commission produced a Final Report, which incorporated a statement from Terrance Lanni, the Chairman of the Board and CEO of MGM Grand. Another valued resource for the Commission was the Mashantucket Pequot Tribal Gaming Commission, whose affiliated tribe, the Mashantucket Pequot, owns the lucrative MGM Grand at Foxwoods. As one of the Gaming Impact Study Commission's contributing academics, University of Illinois Prof. John Kindt remarked in U.S. International Gambling Report, which he edited, “Second only to the international issues posed by Big Oil and oil-dependence, government-sponsored gambling is the most threatening and least-recognized economic vehicles for catalyzing worldwide financial and economic destabilization.”
Kindt's assessment is true, given that tribal casino businesses pump billions of dollars into area economies, banks, and businesses --- and retain a phalanx of lobbyists, armed with fists of campaign contributions, to petition governments from behind a virtually impenetrable wall of tribal sovereignty where financial transactions are often eclipsed from the light of federal regulation. His assessment is also ironic, considering that Big Oil often works in tandem with the tribes and drills on reservation lands.
Interactions between the federal government and tribes at a sovereign-to-sovereign level is entirely appropriate and desirable as long as legitimate Tribal Councils remain lawful, self-regulating, and honest. Problems emerge when they are taken over by rogue, illegitimate regimes, which usually consist of non-Indians backed by powerful financial interests, who create economic chaos in order to advance their profit margins. Unfortunately, as a result of manufactured corruption scandals, tribes are often being lumped together as criminal enterprises.
“Unlike Russia and other primary countries antagonistic to U.S. national security interests, the U.S. Congress may not have the ability to circumvent the financial power of gambling lobbyists and recriminalize gambling – absent a national economy crisis,” Kindt prognosticated. Right on cue, the economy came tumbling down in 2008 and 2009, resulting in massive job layoffs and less disposable income for gamblers to feed into slot machines. Burdened with billion dollar casinos and ever expanding business interests, some tribes have fallen into debt and reputedly do not have the option of filing for bankruptcy protection. Once a tribe defaults on a loan, it inevitably encounters diminished opportunities to tap into capital markets and expand its reach into other areas open to tribal investment, including pharmaceuticals, oil exploration, and foreign trade, for example. Through overextension and poorly constructed business plans, Native businesses are not likely to generate sufficient revenue for tribal needs, thereby weakening the power of Tribal Councils and making it easier for anti-tribal gaming activists to come in and reorganize Indian Country.
In truth, many casino-rich tribes are not weathering the economic storms well. For example, the Manshantucket Pequot was downgraded in Moody's and Standard & Poor's ratings by three ratings as it attempted to restructure its debt which, according to some news reports, is as high as $2.3 billion. In 2003, the Mashantucket Pequot reportedly set aside 10,000 square feet to build a Hard Rock cafe in the Foxwoods Resort Casino. Three years later, another tribe, represented by Ietan Consulting, the Seminole Tribe of Florida, purchased the Hard Rock International chain of restaurants, hotels, and casinos from the Rank Group of Britain for nearly $965 million. The franchise is now being pitched to other Ietan clients, like the Saginaw Chippewa Indian Tribe of Michigan.
Some tribal members believe buying into Hard Rock at a time when they are already struggling to meet financial obligations, could leave them burdened with insurmountable debt. It is possible that the federal government could craft another bail out (Tribes have reported receiving bail out money, as it is), similar to that which graced the banking industry by extending a lifeline to some tribes while letting the rest fall to extinction. Stripped of their financial strength, tribes would be powerless to ward off interference into their affairs and could collapse under crushing debt, with limited means to pay it. As Kindt writes in the International Gambling Report, “The goal of enhancing the lives of all American Indians requires the transformation of gambling facilities into educational, agricultural, business, and health facilities.” Indian tribes can put that in their pipes and smoke it.
Overextending business empires and pursuing speculative ventures are not prudent even in the best of times. Tribes should carefully weigh assets and liabilities and consider how much exposure they wish to assume as they embark upon risky schemes, which could quickly become an albatross which leads to their demise. Without proper care and discretion, casinos, which have been the biggest economic boon to Indian Country, could disappear overnight, and that, for a very powerful group of planners, would be the biggest blessing in disguise. Already tribes have morphed into nightmarish Socialist dystopias. Stripping Indians of their ability to protect and provide for themselves is unthinkable. Integrity is needed in Tribal Councils, not disempowerment.