Dances with Sharks

...The shame is that a few tribal success stories suggest that, if properly run and carefully regulated, Indian gambling can pay off as promised-in housing and modern plumbing, scholarships and jobs...

...The first test came in Florida back in 1979, after the Miami Seminoles defied a state law prohibiting bingo prizes of more than $100 and began offering $10,000 jackpots in a 1,200-seat hall...

...Although tribes have always kept criminal and financial data to themselves, and while the government seems equally disinclined to discuss the subject of troubles in Indian gaming, there’s a growing body of evidence that what happened to the Senecas is not unusual...

...It came from Harvey’s Wagon Wheel Inc., a Lake Tahoe resort hotel and casino that caters to 2.5 million visitors annually...

...Housing and Urban Development, which had authorized 6,000 new units of Indian housing during Carter’s last year as president, was building only 1,500 new units by 1988...

...No one-neither the tribes nor the government-has taken the trouble to find out...

...They’ve subsidized their own Head Start program and built their own K-8 grade school...

...By December, only a handful lived in poverty, virtually none were unemployed (most had gotten jobs in the casino), and the tribe had become the county’s biggest employer...

...A set of revised regulations on what types of electronic machines will be allowed in bingo halls was heatedly debated for months in hearings in five cities across the country...

...Las Vegas was steadier, ranking either first, second, third, or fourth in per capita felonies in the country’s metropolitan areas between 1960 and 1984...

...Nevertheless, Congress agreed that the Indians had both the legal right to establish gaming parlors and little prospect of raising badly needed money from other sources...

...a decade later it was sending seven...

...The Mirage deal is clearly good for the Kickapoo leaders’ egos...

...The man Bush appointed to run the commission, Tony Hope (adopted son of entertainer Bob Hope), plans to have the commission up and running by this spring...

...Yet in their current hands-off mode, the NIGC and the legislators who created it are repeating the mistakes of previous would-be benefactors who threw plots of land, and then money, at tribes...

...Since June 1, 1990, all their federal grants for housing, education, and other social services have ceased...

...I can’t imagine why so many tribes are willing to give away 40 percent,” says Bobby Webster, part of the tribal management team...

...Now we have a lot of folks acting like they’ve always been our buddies...

...The first proposal was perhaps the most audacious...

...Less clear is whether it is good for the Kickapoo rank and file, who suffer from a 60 percent unemployment rate...

...But these Vegas-scale operations will not ease unemployment...

...A modern sewer system, school improvements, and a health clinic are on the way...

...While funds for education decreased only slightly in the Reagan-Bush era, other aid programs plunged...

...The case has yet to be solved...

...The NIGC is headed for a similarly minimalist approach in its role as watchdog...

...And as the need for alternative funding became evident, the legal grounds for gaming were being won...

...On the Mohawk reservation where the intratribal gambling war broke out, non-Indian investor Emmet Munley was found by his Indian business partner to have deducted $186,000 in traveling expenses and $120,000 in accounting fees...

...abies...

...Today the New Jersey Casino Control Commission employs 400 people and spends $23 million per year to keep an eye on Atlantic City’s 12 casinos...

...Mostly finding office space...

...While most reservations have been losing members, the Oneidas have seen their numbers swell by a third in the past 15 years...

...Harvey’s and the Santee Sioux, a small and impoverished tribe in northeast Nebraska, hatched a plan to petition the federal government to take into trust three acres of land in Council Bluffs, Iowa, a small town just across the river from the 600,000 residents of Omaha...

...Slow motion is a standard feature of federal bureaucracies, but the commission has also been hindered by the combined resistance of Indian leadersmany of whom see the commission as patronizing and unnecessary-and the states, which have their own interest in making sure the halls are functioning responsibly...

...What Congress envisioned as a fast track out of poverty and unemployment for American Indians has evolved into a billion-dollar-a-year industry that has added precious little to social services on reservations throughout the country...

...Before the Mille Lacs Chippewas of Minnesota opened their Grand Casino in April 1990, 60 percent of their families lived below the poverty line...

...The last thing the Kickapoos need, after all, is another broken promise...

...In one extreme instance, the Mohawks of upstate New York split into proand anti-gambling factions and commenced a brief civil war because profits from their seven on-reservation halls were going exclusively to hall owners and their non-Indian management team...

...And what the NIGC lacks in financial way, it won’t be malung up with regulatory will...

...While some Indians might paint any oversight effort as an infringement on their rights of sovereignty, this is the wrong moment for the government to be daunted by that charge...

...When the petition is approved by the BIA, the land will become sovereign territory, allowing the Indians to permit Harvey’s to build a casino on it...

...mission will hire 25 people and spend $3 million per year to oversee more than 150 halls...

...People would not even use our name...

...Then Harvey’s will buy 47 surrounding acres to build a $67 million hotel and convention center, cutting the Indians in on the action once the dollars roll in...

...Even if the kids don’t go to college, they’ll have a trade...

...The question of who will pay the hall’s debt is now headed for arbitration...

...In 1980, the National Health Service Corps sent 155 physicians to reservations...

...Since most have high rates of unemployment and poverty and rely heavily on the government for social services, Indians had to find alternative sources of funding...

...Disorganized crime may be just as threatening...

...The NIGC is supposed to be doing more sophisticated background checks, sniffing out the mafia and malung sure tribes are getting a fair count from their management comEven after it publishes all its regulations, the commission will probably remain ineffective...

...One reason is that Indians are a little more modem than we think...

...At the Seneca-Cayuga hall, Wayne Newton Enterprises was clearing $20,000 to $30,000 a month, according to Don Deal, who used to work for the company and saw the accounting sheets, while the tribe earned next to nothing...

...Still, even when it works this well, gambling is no panacea for deep social ills that could be billions of dollars and decades away from a cure...

...Indians are especially vulnerable to mafia infiltration because few banks make loans to tribes...

...Allegations that the Genna Corporation has bought off half of the Winnebagos’ tribal council in lieu of sharing the profits has so riven the tribe that members have been unable to meet and approve applications for government programs...

...Grift horses When Stewart Siegel, a dealer and manager at casinos from Las Vegas to the Caribbean, was hired to run the Barona reservation’s bingo hall in San Diego, he brought a pro’s touch to the reservation’s games: Grand prizes like cars and $60,000 in cash were regularly won by planted shills, who then gave the money back to Siegel...

...If we get the money from bingo, we’re going to set up a vocational training program,” says Kickapoo administrator Frausto...

...The state sued, but in 1982 a federal appeals court ruled that since the Seminoles were a sovereign nation, state civil regulations did not apply to them...

...The Oneidas, also from Minnesota, watched their unemployment rate fall from 40 percent in 1976 to 17 percent in 1991, thanks to their gaming facilitywhich is run with no outside management help...

...Santee clause The most recent opportunists have been Nevada entrepreneurs...

...What has the NIGC been doing since it was written into existence in 1988...

...There will be no micromanagement from D.C.,” he insists...

...The Economic Development Administration, which had funded bricks-and-mortar projects, was slashed to near extinction, while the Community Services Administration, which granted money for development projects, was wiped out a together...

...While it’s easy-and partially correct-to blame American Indians for the unfolding gambling fiasco, the real culprit may be bureaucrats in Washington, D.C...

...To anyone familiar with the effects gambling has had on other communities that have legalized it, the Indians’ venture into gaming may sound less like a shortcut to prosperity than a quick way to finish off tribal life once and for all...

...After all, Indian gaming is an experiment that might convince even Milton Friedman that government regulation is in order: inexperienced, financially desperate Indians entering a slick and crime-infested business...

...With proceeds from their bingo hall, they have built a $10.5 million hotel and convention center and an environmental testing lab that has won state and federal contracts...

...For one, it is woefully underfunded...

...When we started having problems with our management company,” says the Winnebagos’ Jo Ann Jones, “we didn’t even think of calling [the NIGC...

...nationwide took note, and within five years, 113 bingo operations around the country were grossing $225 million annually...

...But if a few tribes can make a little progress through gaming, perhaps more can...

...The style is the legacy of a Republican policy, initiated by Nixon in 1970 and expanded upon by Reagan and Bush, to encourage Indian self-determination by allowing tribes to make their own decisions wherever possible...

...A high school is now in the works...

...So when tribes look elsewhere for start-up money, well- and not-so-well concealed mafiosi are often their most willing backers...

...Wherever it’s been tried, gambling has been accompanied by a dramatic increase in violent and property crimes, alcoholism, and drug abuse...

...The Indian Gaming Companies...

...Even among the Oneidas unemployment is still high, and drug and alcohol problems persist...

...And in the absence of other sources of funding, it means a few more Indian kids educated and employed and fewer houses with trashbag roofs...

...Examples of management companies cooking the books are legion...

...Keeping decent information about what works and what doesn’t, and then providing technical assistance for start-ups, should be the minimal role of the slumbering NIGC...

...So to shield Indians “from organized crime and other corrupting influences” and ensure that “the Indian tribe is the primary beneficiary of the gaming operation,” it devised a complicated system of regulation...

...Perhaps...

...After a green light from the federal courts, program-slashing by successive administrations, and a reluctant thumbs-up from Congress, the government now has an obligation to tribes to make sure that gaming is run legally and in the interests of the people it was intended to help-in short, that gambling is the “means of promoting tribal economic development, self-sufficiency, and strong tribal governments” Congress declared it would be in the eighties...

...In the meantime, most Indian casinos proliferate and run in a regulatory vacuum...

...That the growth of Indian gaming coincides with this new governmental disinterest is a historical accident and not a very fortunate one...

...tated tribes,” says Frank Ducheneaux, who served as counsel on Indian Affairs for the House Committee on Interior and Insular Affairs “The Reagan cuts deva during this period...

...Washington’s libertarian impulses may arguably be long overdue in other realms of Indian life, but they are misplaced in gambling, an industry that constantly tempts those involved with large sums of immediately available cash and easily fudged ledgers...

...When tribal vice-chairman Alvin Alvarez accused the management of skimming profits, he was forced out of office...

...Legal challenges from states abounded, but in 1987 the Supreme Court decided that Indians could operate any form of gambling already permitted by the state-and could do so with their own regulations...

...Because many Indians currently rely on far-flung, low-paying migrant work to survive, the promise of jobs is often a major incentive to tribes considering gaming...

...Yet Congress wasn’t altogether sanguine about gaming-nor should it have been, considering the then-vivid example of Atlantic City, where the felony crime rate skyrocketed in the fist few years of legalized gambling...

...Months later, he and two other critics were found shot to death...

...Emmet Munley was unable to get a gambling license through the Nevada Gaming Control Board on two occasions because he associated “with persons of questionable and unsavory character...

...their land, which is sovereign, cannot be foreclosed...

...But they may also get more than they bargained for...

...Regulation roulette The jobs issue is even more important than it first appears because it is most often those halls and casinos employing and involving tribe members that succeed...

...45 percent were unemployed...

...By their passivity, they’re effectively ensuring that good programs are flukes, not formulas-and that beggared but eager tribes like Eagle Bend’s Kickapoos will be playing against the odds...

...Tribes it, either directly through management and investors or indirectly through suppliers...

...it wasn’t until February 1991 that it settled on permanent quarters, and even then it needed an additional eight months to publish its first set of regulations...

...What is true for the owners and managers of casinos in Atlantic City and Las Vegas is true for the Indians: Without strong, vigilant, and impartial oversight, they are easy marks for the mob and all types of hustlers...

...Could names like “Stands With 17” be far behind...

...While in Nevada and New Jersey the mere scent of ill repute will get one barred from even the lower echelons of casino management, aspiring Indian casino managers are currently disqualified only if the FBI-which runs fingerprint checks on requestdiscovers a felony conviction...

...In the 14 states that allowed groups to run highly restricted “Las Vegas nights” for charity, the door was opened for Indians to start up full-blown casinos...

...When James Watt headed the Department of the Interior, he instructed BIA to review contracts between Indians and bingo hall managers only when tribes requested it, even though long-standing law requires that all such contracts get BIA approval...

...The FBI routed them out...

...While the Winnebagos went broke and the Mohawks turned to gunplay in squabbles over outside control, several tribes have been quietly fulfilling the gaming act’s promise of more jobs and social services by operating their own shops...

...It has yet to hire field operatives and has no legal apparatus to make and enforce its decisions...

...But the Indians don’t want help, and the commission the government created to regulate Indian gambling, the National Indian Gaming Commission (NIGC), is equally disinclined to provide it, preaching laissez-faire as tribe after tribe gets taken...

...Two years later, the Cabazons, a tiny tribe in Riverside County, California, retained Rocco Zangari, a member of a Southern California organized crime family, to run their card room...

...According to the FBI, the trendsetting Seminoles unwittingly hired the mob when they opened their hall in 1979...

...The NIGC’s colleague, the Bureau of Indian Affairs [BIA], which must approve any contract between a management company and a tribe, has also been less than vigilant in sifting out undesirWhen a Cabazon leader accused the managers of his tribe’s card room of skimming profits, he was forced out of office...

...Adjudicating between two sovereign entities makes painstaking debate on the commission’s every move inevitable...

...Wayne Newton Enterprises’ only other experience in Indian gaming, with the Santa Ynez of California, ended in bankruptcy...

...According to the FBI, troubles began almost as soon as the gaming did-and those troubles have included organized crime...

...Another is that, after a decade of penetrating budget cuts, they have few other options...

...most reservations, however, are in the hinterlands...

...Indeed, it was a BIA agent, Thomas Burden, who originally recommended Emmet Munley when the Mohawks were searching for investors...

...But it’s not enough...

...Since high-stakes, Indian-owned bingo parlors made their first appearance in the late seventies, tribes with gaming operations have been beset by difficulties ranging from graft to fratricide...

...We used to be ‘those Indians,’ ” says Verna Finch, the tribal vice-chair...

...Yet there is surprisingly little breast-beating on the reservations about how gambling could destroy what is left of Indian culture...

...Hope intends to preside over a relatively hands-off commission...

...Testifying before the Senate Select Committee on Indian Affairs with a hood over his head, he claimed that he knew of at least 12 halls that were controlled by the Cosa Nostra but guessed that nearly half of all Indian casinos were tainted by The allegation is hardly far-fetched, given the economics of starting up a gaming hall...

...But the commission is clearly not doing enough homework...

...Under the most common contracts that tribes negotiate with management companies, the Indians are promised 60 percent of “profits after expenses,” a clause that often means the tribe gets nothing...

...The legitimate gambling industry, after years of casting an alarmed and disapproving eye on its down-market competitors and pressing Congress to legislate the Indians out of its domain, appears ready to adopt an if-you-can’t-beat-’em-join’em strategy...

...Sound dubious...

...He and two other critics were later found shot to death...

...The Winnebagos of Wisconsin got a Halloween party and a back-taxes bill from the JRS for $800,000 but have yet to get any profits from their management company, the Genna Corporation...

...They need to be located near or within easy access of major population centers...

...Yet to date, no government or private agency has examined the successes or failures of Indian gamingzongress didn’t apparently have much of a plan for overseeing how its well-intentioned rules would work...

...After pleading guilty in 1986 to four counts of grand theft, including bilking the tribe of $600,000 a year, he joined the witness protection program and started talking...

...A year later, Congress bestowed its approval with the Indian Gaming Act, which advocated gambling as “a means of promoting tribal economic development, self-sufficiency, and strong tribal governments...

...Instead, as the Kickapoos break in the tables without expertise or government assistance, the deck has quietly been stacked against them...

...Since the Las Vegas-based company approached tribal leaders back in August 1991, the project has gotten a lot of popular support (the governor included) and made the tribe of barely 1,500 members some new friends...

...The tribe retaliated by surrounding the bingo hall with pick-up trucks while Newton’s security forces barricaded themselves inside...

...Although the nearby town of Hiawatha has offered to donate 70 acres of land within the tribe’s ancestral boundaries to build the casino 10cally, the Mirage has made it clear that it’s no dice unless the land is near Kansas City, an hour and a half away...

...After a tense five-day standoff, a federal judge ruled that the hall was to be returned to the tribe...

...Not to the tiny Kickapoo nation of Horton, Kansas, which is currently negotiating a similar deal with the massive Mirage Hotel and Casino...

...Indian gaming took hold in the eighties, as most everything else on the reservation was withering away...

...Even worse, gambling has cut off the little federal support the Winnebagos had before gaming, says tribal chairwoman Jo Ann Jones...

...So are the Genna Corporation and those other management companies corrupt...

...Two tribe members were left dead...