Indian Bingo Hall Showdown
Fragin, Sheryl
Indian Bingo Hall Showdown BY SHERYL FRAGIN Once upon a time the Florida Seminole Indians sold jewelry and wrestled alligators to make ends meet. Unlike more fortunate Western tribes, their...
...Indians didn't like the bill because it held management to a salary rather than a piece of the action and was likely to dry up financing...
...Two high-powered lobbyists in 'Tallahassee look after tribal interests, and the tribal chairman shuttles between appointments with politicians and businessmen in his private plane...
...Bingo supporters are trying to deflect concern by working out their own regulatory scheme...
...Former Seminole attorney Whilden, who is now something of a bingo mogul, says he can't dispute that large amounts of cash tend to attract people who want to steal it...
...Likewise, before the appellate court ruled on bingo, two state congressmen introduced a bill revising Florida bingo regulations, with an amendment exempting Indian bingo...
...If the Florida legislature is more sympathetic than Arizona's, one reason is that the Seminoles have shown more political savvy in spreading around their cash...
...The opening of a gambling warehouse on a major thoroughfare in Butterworth's Broward County was thus a little like opening a Planned Parenthood clinic across the street from the Rev...
...It would be hard to find a more stunning example of the kind of entrepreneurship and self-help that President Reagan so eloquently promotes...
...Arizona Rep...
...Regis near Massena, the Shinnecocks on Long Island, and the Alleganys outside Buffalo are selling goods ranging from designer jeans to stereos to gasoline, tax free...
...Backed against the wall, the Seminoles finally borrowed from anyone who would put up money and traded away 80 percent of their future profits in the deal...
...The victims, moreover, have been the Indians themselves...
...The federal government, moreover, has helped give it credence...
...They were opposed by Robert Butterworth, then sheriff 'of Broward County—a man whose real crusade was to keep legalized gambling and its mob escorts out of South Florida...
...At 3 p.m...
...For three years, Streeter badgered local authorities, the BIA, and anyone who would listen...
...Hell, I'm one-eighth Indian myself, from Kentucky...
...One month before his death, Alvarez gave a series of interviews to the local Indio Daily News, charging Nichols with skimming money from the bingo hall and casino...
...Two of the five general partners who started Seminole bingo, for example, were once co-stockholders in a Miami hotel with the late Meyer Lansky...
...In late June 1981, tribe member Alfred Alvarez and two friends were killed execution style, one bullet to each head, shortly after Alvarez started publicly accusing the Cabazons' bingo management company of wrongdoing...
...Gambling is not the sort of activity one would expect to find endorsed by a far right ideologue...
...But the stories have yet to have much impact in Tallahassee, where the Indians have attended to their friends...
...Bingo halls spread like health spas, as Indians scrambled to replace federal financial aid that the Reagan administration had taken away...
...But such a scenario has been tried before, with disastrous results...
...The deal fizzled, leaving in its wake at least as many versions of the story as there were characters involved...
...For most of them, the quality of their members' lives has improved vastly...
...The Seminoles have vast experience at losing that game...
...While neither local officials nor the FBI have proven links to organized crime in these cases, the aroma of corruption persists...
...But the Seminoles weren't about to entrust their precious loophole to the good graces of the courts any more than the real estate industry entrusts its loopholes to the whims of Congress...
...Of the 291 tribes recognized by the federal government, at least 80 now run bingo operations...
...He began to call me at night," says his sister, Linda Streeter, who had opposed Nichols, "and tell me that, unfortunately, I probably was right...
...All the Indians have to show for these operations is a $650 dividend payment in 1980, says Streeter...
...The developer, building on reservation land, wouldn't be bound by zoning laws or building codes...
...Casino gambling, on the other hand, is prohibited totally in the state and likewise on Indian land...
...In South Florida, two convicted felons registered a new bingo management company with the Securities and Exchange Commission, but couldn't get underwriting...
...Reportedly, it is Florida's number-one corporate political contributor...
...Whilden doesn't think that little dance was really necessary and says the tribe follows the letter of the campaign laws and ceilings as a "courtesy...
...Jerry Falwell's residence...
...If you're going to have a $1 billion cash, unregulated industry in this country, it's going to be ripe for organized crime?' That suspicion has plagued the infant industry since its inception...
...Butterworth didn't like the Seminoles' big-time version of the game and felt they were bound by state law, even though their bingo hall was on reservation land...
...Cars lined up 20 deep to buy cartons at a $1 discount...
...Alvarez told the paper "my life is on the line...
...Most tribes have since scraped by without any economic base other than government handouts—until the Seminoles figured out that the treaties that kept them isolated and impoverished could also give them a major economic advantage...
...Suddenly the Seminoles had allies in Tallahassee...
...He makes you feel that as a small tribe we could defeat the world and the government, that we could send our money to foreign countries and they'd never know where it is...
...Inside are long formica tables- and orange plastic swivel seats...
...The Indians would participate in the larger community as equals, protected—and governed— by American laws...
...The state attorney general, Robert Corbin is worried not only about organized crime but also about the plight of church-basement charity bingo, which can't hope to compete with high-stakes Indian games...
...The irony," says former tribal attorney Stephen Whilden, "was that in 1982 the Supreme Court ruled on Seminoles v. Butterworth and for all practical purposes ended the risk...
...After the cigarette case was settled in court, the Florida legislature volunteered a state law reinforcing the Seminoles' tax exemption...
...Today, just a few years later, the tribe has achieved relative financial security, netting $13 million a year, nearly 80 percent of which is self-generated...
...Unlike more fortunate Western tribes, their land didn't yield oil or coal...
...They are also concerned about the states...
...Reagan cut federal aid to Indian tribes by $113 million in his first budget, according to figures from the Office of Management and Budget...
...State investigator didn't bother to question a former casino employee, Rocco Zangari, who has been described by law enforcement officials as a "mob enforcer...
...As tribes consider projects like shopping centers, dog tracks, and, in Nevada, brothels, they have a reasonable concern that the courts will start to take a dimmer view of their good fortunes...
...Brock is more attentive these days...
...Ideally, those on one side of Florida's Route 441 would live under the same rules as those on the other...
...This man is very intelligent and has a Jim Jones charisma," says Streeter...
...It's just common sense," says Butterworth...
...Indian bingo and related enterprises have stirred a nationwide controversy that is opening old national wounds created by the white man's treatment of the Indians...
...The tribe's flagship bingo hall is an immense concrete box, visually consistent with its setting on U.S...
...Alvarez had been vice chairman and security chief for the tribe and loyal to the Cabazons' white business adviser, John Philip Nichols...
...But the white man was pushing west so fast that soon the Indians were in the way again...
...When he lost that bid, he pressed onward to the Supreme Court, where the case was denied review in 1982...
...The courts ruled that tribes were exempt from paying the state tax...
...Sheryl Fragin is a New York writer...
...New York tribes such as the St...
...The more successful a tribe becomes, the more legislatures are pressured to do something...
...As the law stands, gambling operations on reservations are subject to state laws that are criminal or prohibitory in nature but not those that are civil or merely regulatory...
...In any event, Florida lost more than $12 million in tax revenue because of reservation cigarette sales during the 1982-1983 fiscal year...
...They aren't flashing wads of cash or driving fancy cars or buying designer clothes...
...In other words, because Florida allows some bingo operations, the law is "regulatory" and therefore does not apply on reservations...
...But something else is at work here, too—namely, business competition...
...One country, one law Recently, members of the Arizona state Republican party passed a resolution calling for annulment of all treaties with Indian tribes...
...If the Indians shouldn't have special legal exemptions, then they deserve further compensation for the deplorable treatment they have endured...
...And so the tribe survived on government subsidies...
...Indian leaders point out that the reductions were aggravated by the abolition of CETA, the Community Services Administration, and the Economic Development Administration, all of which provided considerable assistance to Indians...
...Frank Brock, a special agent assigned to the case, said in October that Zangari is irrelevant to the investigation...
...It took us a heavy lobbying effort to get that vote off the calendar the last day," says an exasperated Butterworth...
...The Grand Rondes in Oregon sold off property for $5 an acre, which would cost about $5,000 an acre to buy back today...
...The Indio Police Department conducted those investigations and has undoubtedly put pressure on the state team...
...That the bingo business exists at all reflects some Indians' determination to start winning at the white man's game...
...When the Supreme Court declined to hear the Seminole case, it gave a green light to tribes all over the country...
...The only unfortunate part is we don't know where it is either...
...It is a seven-night, five-matinee-a-week business, and, together with the tribe's two other bingo halls, it grossed $28 million in 1983...
...Theirs is the house that bingo built...
...Justice didn't like it because it didn't go far enough...
...In 1977, they opened their first drive-through, 60-hour-a-week, tax-free cigarette shop...
...Since deportation hadn't worked, the government came up with the reservation system, making Indians wards of the state and stripping them of their dignity, traditions, and self-sufficiency...
...The reservation said, 'we don't like that solution' The Indians' attitude is, 'we've never been rich, but we think rich would be better.' " G-man inertia While guilt in South Florida exists mainly by association, at another gaming tribe, the Cabazon Band of Mission Indians in California, the issue is more clear-cut...
...And invoking tribal sovereignty to defend bingo halls does seem a perversion of that principle...
...It grew Datsun dealerships and chicken farms and every fast-food chain known to man, putting little change in the Indians' pockets...
...When the tribe opened the first bingo hall in defiance of strict state bingo regulations, it gambled on being exempt...
...Righting past wrongs is going to require more than Americans have been willing to give thus far...
...On top of Nichols's criminal activities, he still hasn't delivered on his promises to the tribe...
...In Buffalo, the Campbell Oil Co...
...Investors have formed ad hoc bingo management firms (which dissolve and reappear with astonishing speed) and are scouring Indian country for receptive tribes...
...To some extent, this flurry of activity is inspired by genuine fears of mob infiltration...
...The bill died in committee, but Udall is thinking about introducing a revised version in this session of Congress...
...Tribal sovereignty gives Indian businesses a competitive edge over their neighbors...
...The California Department of Justice investigative team, however, was ready to close the case after a cursory review...
...Under Nichols's tutelage, the Cabazons watched first their cigarette shop end up in bankruptcy and later their casino...
...and two gas station owners have jointly filed suit in U.S...
...The Tallahassee connection The Cabazons' entanglements are not typical, but in 1983 they prompted the Justice Department in Washington to propose legislation that would have subjected Indian gambling to state regulation, effectively wiping out the industry...
...Through a particularly thorny Catch-22, the government has pushed some tribes into the arms of the very investors that Butterworth wants to keep off his turf...
...For years, though, sovereignty had been used to cloak the oppression and effective internment of the tribes...
...I get accused of being anti-Indian," Corbin says...
...Butterworth's answer was to throw the baby out with the bathwater `let's have no money on the reservation and then organized crime won't want to go on the reservation...
...I just felt they're citizens of our state, and we should all be doing things equally here...
...The Seminoles have also made large contributions to national political campaigns, funneling the money through members' checkbooks to circumvent federal election laws...
...and built libraries, two gyms, and senior citizen and daycare centers...
...He had started digging into the paperwork in the office at night, and he was finding very unusual things to do with coal deals from Kentucky and gold deals from foreign countries...
...Since opening their hall in December 1979, the Seminoles have paid off the mortgage on the $1 million building...
...the bureau turned them down because it deemed the investment too risky until the games had survived a court test...
...Watt intervened, and Justice backed down...
...That explains why people rob banks instead of Christian Science Reading Rooms," he smirks...
...Some of the people showing up on management contracts have given local law authorities pause because of their former connections with reputed mob figures...
...Private sector' problems So why isn't everybody happy...
...When several northwestern and California tribes were terminated between 1954 and 1962, they were promptly bilked out of major chunks of land by non-Indian speculators, who jumped at the chance to pick up rich timberland for a song...
...In 1830, they were one of the five unlucky "civilized" tribes to be driven off their homelands and resettled in the wilderness (now called Oklahoma), where they'd be out of the way...
...A cold war is growing between reservation and nearby merchants...
...Streeter has claimed all along that a former tribal employee told her he had made the payoff for her brother's assassination...
...District Court in Fort Lauderdale disagreed with him, he went to the Fifth Circuit Court of Appeals...
...District Court to wipe out the tax advantages of an Allegany retailer...
...Still, it's hard to be ecstatic about the unscrupulous business partners the Indians have enlisted to achieve solvency...
...They hired Stephen Whilden, a veteran of the State Department and the Office of Management and Budget, in 1977 to teach them how to play politics...
...The loophole opens The Seminoles had to fight all the way to the Supreme Court to get their bingo...
...In 1980, when the U.S...
...one afternoon, the hourly jackpot was $11,700, about $100,000 shy of the record...
...The Indians then struck out with private bankers, because with all reservation land in trust with the U.S...
...Through bingo they are compensating for federal budget cuts, much the way states are with lotteries...
...Interior didn't like that idea, according to Deputy Assistant Secretary John Fritz, who heads the BIA, because it doesn't want to be a regulatory agency...
...Non-charitable groups have to recycle all the take into prizes...
...By Florida law, an organization can run bingo games only twice a week, with a $100-per-pot maximum...
...But bingo represents the first stirrings of Indian economic independence, and Reaganites tend to backslide on the question of sin when it is of the acquisitive variety...
...Two principals of New England Entertainment Co., which originally managed the Shakopee Mdewakanton Sioux hall, between them had felony convictions ranging from conspiracy to defraud the government to to forging Treasury checks...
...Other states are getting nervous...
...By 1982, the year Whilden was fired in a power struggle, the Seminoles were giving $48,300 to state political candidates, according to The Miami Herald...
...The tribes are worried that Justice will try again, or that Congress, which has complete authority over Indian matters, will wipe out bingo on its own initiative...
...The Seminoles are stung by these swipes in the press...
...He burst upon the reservation in 1978, at the invitation of the Cabazons' chairman, sounding like a messiah to the impoverished, 22-member tribe...
...Morris Udall introduced a bill in November 1983 that would have made the interior secretary responsible for approving bingo contracts and running background checks on investors and management...
...government, the Indians have no collateral...
...The bingo brokers put up the money in exchange for about a 40 percent interest for anywhere from 7 to 20 years...
...created their own police force...
...The Indians simply learned how to play the game...
...Complicating the issue is the way "charitable" bingo can attract unsavory elements, too...
...Route 441, a main drag in Hollywood, just north of Miami...
...For a while, Congress shifted course and tried to force the Indians into the warp of American life...
...On a typical day, the parking lot is lined with Buick Electras and late-model Caddies...
...One especially creative scheme had the Seminoles buying a local golf course, persuading the BIA to put it into trust, and then leasing it to a developer of retirement condominiums...
...Finally, in June, she persuaded California Governor George Deukmejian to appoint a special team to look into possible organized crime involvement in the murder...
...This is no church fundraiser...
...started farming projects...
...Early this year, Nichols pled no contest to two counts of solicitation of murder in cases unrelated to the Cabazons...
...The state recently had to shut down three illicit bingo operations run by charitable groups...
...Help came from an unexpected quarter, however, in the person of James Watt, then secretary of the interior...
...Besides, the bingo profits mask the effects of Reagan's severe budget cuts...
...The source of the Seminoles' good fortune is as bizarre as the rest of this story...
...After just one year of operation, the Shakopee Mdewakantan Sioux tribe of Minnesota paid out more than $1 million in dividends to its members, put another $1 million into tribal programs, and still was able to pay off its mortgage...
...Smoke shops were the cornerstone of the movement to turn tribal sovereignty into an economic advantage, and again the Seminoles were among the pioneers...
...entrepreneurial tribes, the Seminoles have been blasted by local news media, which depict individual tribe members as rolling in bingo or cigarette money...
...Across the board," says Frank Ducheneaux, Indian affairs counsel to the House Committee on Interior and Insular Affairs, "the programs which Indian tribes had begun to rely on, perhaps more than on the Bureau of Indian Affairs, have been cut for Indians by one-third or more...
...Condos and dogtracks Whilden and the Seminoles' leader, Chairman James Billie, were an inventive pair, plotting business deals to exploit the Indians' status...
...Arizona, for example, has found a way to crimp the Indians' cigarette tax exemption by creating legal complexities for their wholesale distributors...
...A drawling, sardonic southern lawyer in the Sam Ervin mold, Whilden showed the tribe how to make friends in high places...
...A middle-aged waitress in black shorts, orange T-shirt, with a frosted bouffant, bobs through the rows of expectant faces...
...White man wiped my tribe out a long time ago...
...Unemployment went from 67 percent to zero...
...The Republican executive committee eventually overturned the resolution, but that it was proposed at all demonstrates how volatile bingo and the larger sovereignty issue have become...
...The General Allotment Act of 1887 divided up tribal lands among individual Indian families, who were supposed to become farmers...
...The policy died a slow death, costing the Indians nearly 100 million acres in the process...
...Like other newly...
...When the Seminoles were looking for start-up money, they went first to the Bureau of Indian Affairs...
...With Florida literally awash with drug smugglers and their millions of dollars to be laundered, Butterworth's fears grabbed local officials in a way that is difficult to appreciate from afar...
...That figure was later renegotiated down to 45 percent...
...The tribe was soon drawn into a protracted court battle by a private taxpayer, who also happened to be the sheriffButterworth's predecessor, Ed Stack...
...The Indians didn't take to farming, however, and started selling off their plots...
...So now the government would be willing to loan the money or guarantee the loans, but the money's not there because the new administration cut those programs ." The "private sector" has been delighted to fill the void...
...Arizona has also been unsuccessful in its attempt to legislate Indian bingo out of existence...
Vol. 17 • May 1985 • No. 4
