People Against a Casino Town
Heard on National Public Radio

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SHOW:  Fresh Air

DATE:  December 16, 2002
     
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TERRY GROSS, host:

This is FRESH AIR.  I'm Terry Gross.

Casino gambling on Native American reservations was legalized by Congress in the late '80s.  The purpose was to create jobs and help get Native Americans out of poverty.  Indian casinos are succeeding in making money.  Last year, 290 of them in 28 states pulled in about $12.7 billion in revenue.  But according to an investigative report in Time magazine, the profits are making a small percentage of Native Americans rich while the majority get nothing. My guests, Pulitzer Prize-winning reporters Donald Barlett and James Steele, are the authors of this two-part report.  It began last week, and continues in this week's edition of Time.

To qualify for a casino, you have to be a member of a federally recognized tribe.  Barlett and Steele found several long-defunct tribes were resurrected for the purpose of getting permission to build a casino, and these particular casinos benefit few natives.  The most lucrative casinos are near urban areas, but most of the native population lives in rural areas in such states as Oklahoma, Montana, North and South Dakota.  The casinos there are not very lucrative.  I asked Barlett and Steele for examples of what they consider the best and worst ways casino profits have been used by tribes.  James Steele started with a positive example.

Mr. JAMES STEELE (Journalist): We saw a tribe out in Kansas, west of Kansas City, a fairly good-sized tribe which has a very successful casino that doesn't disrupt its neighborhood.  They plow most of the profits from that casino back into the reservation, into everything from housing to education to senior developments.  They're rebuilding the reservation's road network, which had gotten into a very rundown state for a very long period of time.  They're
donating money to some neighboring school districts where children on the reservation go to school.  And they're taking a small percentage of the profits from the casino and sending out checks to every member of the tribe.

And what is really most impressive about what they do is that it's this nice balance between investing in what you might call community values, the reservation, and also giving a little money to the individual members.  And
what you find with this particular tribe--it's about a 5,000-member tribe, the Potawatomi nation--most of them don't live on the reservation, which is very common across the country in terms of Indian country.  Most have had to find
jobs elsewhere because the reservation itself was in such economically difficult straits for many, many years.  But what the tribe does, it gives that annual distribution not just to those on the reservation, but to all 5,000 members wherever they may live, because it believes they're all part of the same family.

GROSS: And an example of profits that you don't think are well-spent in terms of the original goal of these casinos, which is helping Native Americans get out of poverty.

Mr. DONALD BARLETT (Journalist): And the other extreme, Terry, is the tribe we write about in part two, the Kickapoo tribe of Texas, which has a reservation down in Eagle Pass along the Mexican border.  And they started up the casino.

This is a tribe many of whose members speak only limited English. They still speak their ancient language.  Most of them speak Spanish; very poor, very limited education.  So the casino goes up, it seems to be doing very well, but
the money doesn't--nobody's sure where the money is going after a period of years.

And tribal members we interviewed found said the money was being diverted for a variety of purposes.  It was going to run election campaigns.  Mr.  Garza had run for the US Congress unsuccessfully; his son had run for the state
Legislature; money had been spent there.  Or the money had simply disappeared. It had gone into Mexico and nobody knows where.  The members themselves saw very little benefit from the casino.

GROSS: Did the members of the tribe try to object to the way the money was being used?

Mr. BARLETT: For several years, members of the tribe would raise the objections.  They wrote letters constantly to the Bureau of Indian Affairs. They wrote letters to the FBI.  They wrote letters to the Interior Department, to other law enforcement agencies.  And they simply never got a response.

GROSS: Well, what about regulation?  There's the Bureau of Indian Affairs, there's a Native American Gaming Commission.  Have those groups been useful at all in preventing this kind of mismanagement of profits from happening?

Mr. BARLETT: The short answer is absolutely not.  They've absolutely done nothing.  The Bureau of Indian Affairs' response is, `Well, this is an internal tribal matter, and you people have to deal with this yourself,' no matter
what's going on is improper conduct.

And there's another aspect to this, Terry, that we haven't talked about and may well be the most disturbing, and that is that these reservations in many cases are run like dictatorships.  They're run the old Communist bloc countries.
Dissent is not acceptable.  It's not tolerated.  People will be banished from the reservation.  People who question what's happening may lose their jobs, they may lose their housing.  It's very disturbing.

GROSS: I want you to talk about Mary Ann Martin.  You describe her as presiding over America's smallest tribe, and she's built a very profitable casino.

Mr. BARLETT: Mary Ann Martin actually didn't even know she was an Indian about 20 years ago.  When her grandmother died, she became aware of her Indian heritage.  She had been raised as an African-American in Los Angeles, pursued that, and in the early '90s, was designated by the Bureau of Indian Affairs as a member of the Augustine band.  And that point, there were no living members of the band.  She and her two brothers were designated as members of this tribe of Indians.

And this was about 1991, and in the years that followed, her two brothers, who were LA gang members, were killed in the drug wars of that era, and so she became the only surviving adult member of the Augustine band.  And she began
negotiating to put a casino on her reservation in Riverside County in the desert not far from Palm Springs.  And last July, the Augustine Casino opened there, and so now she is the one-woman tribe member proud owner of her very own casino.

In addition, when a tribe is recognized, they also qualify for all kinds of government assistance.  So Mary Ann Martin has also qualified and received several hundred thousand dollars in federal aid for housing to run her tribal government for the one adult.  You know, we should hasten to note there are seven children there.  She had three, and four she took from her two brothers' families to raise them, also.  So in time, you know, you will have eight adults, but that's the extreme situation of Indian gaming.

GROSS: So who profits from the casino in this very small tribe?

Mr. BARLETT: Well, you know, she will profit and also the investors.  And this is a Las Vegas company, Paragon Gaming, headed by Diana Bennett, who's the daughter of William Bennett, who developed the Circus Circus casino on the Las Vegas Strip.  And she in turn had investors in other sections of the country who put up money, as well, to help bankroll this project.

GROSS: So the picture that you're painting is that some of the casinos are run by tribes that are almost tribes in name only because they represent so few people, and that the profits go to very few people.  Instead of benefiting a
large number of Native Americans, they go to this very small tribe and they go to the backers and the investors of this casino.  Let's talk a little bit about these peripheral people who profit from the Native American casinos. How do the
investors typically figure into this?

Mr. STEELE: Most of the names are not known names.  They're people folks have never heard of.  You've certainly got some Las Vegas and Atlantic City folks involved now, from Donald Trump to certainly Harrah's and so forth.  But most of the people in the early years who backed a lot of these from the early '90s on were names that nobody's ever heard of.  And one of the most intriguing ones to us is a Malaysian billionaire who's now 85 years old, a fellow by the name of Lim Goh Tong, who financed Foxwoods, which is the biggest casino, not only in the United States, but the biggest casino in the world happens to be the casino of the Mashantucket Pequot tribe in Connecticut.  He put together a deal, loaned them the money and also took a cut of the profits that will last until well in--roughly around 2018, it's our understanding.

We calculated that he and his family and various companies that he's associated with will probably profit to the extent of about a billion dollars over the life of those agreements.  But again, nobody knows, for the most part, about these people.  They go on a case-by-case basis, project-by-project basis.  They take 30 percent very often, the managers do, of these casinos once they're up and running in return for running them and for backing them.

The other thing they do, which was absolutely fascinating to us, they don't just supply the money to build the building.  They take on the whole process. They finance the lawyers.  They finance the lobbyists.  They hire the genealogists in many cases if the tribe has to re-establish itself and show what its lineage is over time.  They take on the entire process.  They pay the rent on the tribal offices.  They pay the salary of the consulting fees for the tribe's public relations officer, if they have one.  They take over the entire, really, market basket of things the tribe needs to go online and have a casino.

GROSS: My guests are Pulitzer Prize-winning reporters Donald Barlett and James Steele.  The second half of their investigative series on Indian casinos is in this week's edition of Time magazine.

More after a break.  This is FRESH AIR.

GROSS: If you're just joining us, my guests are investigative reporters Donald Barlett and James Steele.  They're editors at large at Time magazine, and they've written a two-part investigative series on Native American casinos.

Are there feuds going on now between the casino rich tribes and the casino poor tribes?

Mr. STEELE: There certainly are, and one of the most--it's not a full-fledged feud, but one of the most interesting ones of these is up in Minnesota.   Minnesota is one of those states in the Midwest with many Indian tribes, and it
also has many casinos.  One of the most successful Indian casinos in the country is right outside of Minneapolis.  It's called Mystic Lake.  The Shakopee Mdewakanton Sioux, which is a tribe of roughly about 300 members, has
this casino.  This casino generates hundreds of millions of dollars in revenue every year and every member of that tribe has done very, very well.

To the far north in Minnesota, you have a tribe such as the Red Lake band of Chippewa, which has roughly 10,000 members and three small casinos that, if they make any money, it's a very modest amount of money.  The tribe in the
north tried to partner with the state of Minnesota to open a casino somewhere in the Twin Cities area to basically make some money because their casinos in the north will never make the kind of money that ones near a big city will. And
they were opposed in that by the Shakopee Mdewakanton and another large tribe right outside Minneapolis and St.  Paul who did not want to see in any way certainly the proceeds they were deriving from gambling interfered with.

So that's one fight that you see going on.  It's a low-keyed one.  It hasn't had much publicity.  But you see things like this all over the country where the have tribes are resisting efforts to share with the have-not tribes.

Mr. BARLETT: And, Terry, to put that tribe in perspective, each member of that Shakopee tribe gets an annual dividend check exceeding $1 million.  The last one was very close, I guess, to about 1.5 million.

Mr. STEELE: I think one of the sad things that we have seen on a number of these reservations that's the kind of problem that would have been inconceivable a number of years ago, and that is in some tribes, especially in some of the smaller tribes, they have decided to--some are disenrolling members, some are not letting in people who are truly part of the family because the tribal councils have the power and the control to be able to do that.  So you have the situation where we focused on one in part one--a tribe outside of Fresno, which has an extremely profitable casino.  And there are roughly about a hundred members of that tribe who now share somewhere between 300 and $400,000 a year in various dividends from their casino.  There's an equal number--actually a slightly fewer number of folks who are related to them--their cousins, their daughters, sons, their aunts, uncles--all of whom are out in that same area over the years do not share in those profits because that particular tribal council has made decisions that have restricted the
membership.  And we've found this all over the country.  And actually since that first article appeared that talked about that particular tribe and what they're going through, we've had calls from all over the country--other Indian tribes--that folks have gone through the same thing.

GROSS: One of your concerns--the Indian casinos--is you think it's basically getting the government off the hook because the government can feel confident, the American people can feel confident they have a system in place that's
supposed to be helping Native Americans--these casinos, where you help yourself through capitalism.  But the reality is that these casinos aren't helping the majority of Native Americans, so that the confidence that American people and
American government can feel about the help it's giving Native Americans is unfounded.

Mr. STEELE: It's absolutely unfounded.  And I think it's one of the things that sort of interested us so much when we got into this subject because there is this perception that tribes are being helped, and the ones that are being helped, of course, are really being helped, but the vast bulk certainly aren't.  And it's one of the reasons we think the Indian Gaming and Regulatory Act needs to be revisited.  There are a number of ideas that are bandied about, about what the solutions might be.  But the main thing is that it needs to have more focus on actually who's benefiting from this, who has the likelihood of benefiting from this.  There are all of these glitches in the picture that we were totally unaware of when we got into this.  And I think most Americans have no idea exactly what's happening in this field.

GROSS: Do you see this story as fundamentally breaking down to being a story about good guys and bad guys, or do you see it as a story about a system that doesn't work?

Mr. STEELE: It's more really the latter, though, there are a lot of good guys and bad guys in here as well.  But it's mainly a system that's broken down.  I mean, it's easy in retrospect to see how the 1988 act, the Indian Gaming and
Regulatory Act, could not have worked the way some people wanted it to work.  And, of course, now many of the tribes have taken the position that it really was not about regulating gaming, it was about sovereignty, about building up
tribal governments.  But the fact of the matter is, that's a certain kind of retrospect.  It was mainly--it was largely to regulate gaming. It was in part to develop economic institutions on reservations.  And on the latter, for the
very small tribes with rich casinos, it's worked wonderfully. But it's affecting only a tiny percentage of the Native American population.

Mr. BARLETT: And I think when you talk about the good guys-bad guys, certainly at the beginning, you probably can't make that case, but you certainly can now.  Because Congress has just refused to look at this issue. You have a very few lone voices on Capitol Hill.  Frank Wolf of Virginia, the Republican congressman--I mean, he's like a voice crying in the wind.  Nobody pays any attention to him, but he's tried to bring this issue up time after time after
time.  And the other members of Congress simply aren't interested.

Mr. STEELE: And the campaign finance reforms so widely touted here over the last year basically does not apply to Indian tribes, which is one of those exceptions that has not gotten a lot of great publicity either.

GROSS: Why doesn't it apply to Indian tribes?

Mr. STEELE: Because while soft money applies to all groups, there's an exception which was basically decreed by the Federal Election Commission that lets basically individual members of the tribe contribute as much as they want
to individual candidates.

GROSS: So are candidates making a lot of money right now from Native American casino profits?

Mr. STEELE: They have been, particularly in California's ...(unintelligible). The money that's flowing out there is astonishing.  Indian tribes are now the largest special interest in that states.  If you go back a decade, they were
barely a blip on sort of the special interest radar screen.  Now they spend--they contribute more, they give more than such legendary special interest groups as the trial lawyers and the doctors.  They're number one out there simply because there is so much cash flowing through those operations.

GROSS: Was this a hard piece to write in the sense that, you know, you're writing about Native Americans and you're writing about corruption within the casino system on Native American reservations?  And I'm sure you have a lot of
sympathy for Native Americans who have had, you know, their land taken from them and their rights taken from them--they're now struggling to make a living and here you are bringing bad news about what goes on in the Native American casino industry?  I'm sure--you know, I'm projecting here, but I imagine it's bad news you didn't really want to bring.  So I'm just wondering if there were a lot of land mines in writing about the story that made it very difficult?

Mr. BARLETT: I think you put your finger on something that's very important. I think in no small part this attitude is why the situation is spinning out of control as it is, because there is a reluctance to--there's a great deal of sympathy out there.  I mean, the way this country has dealt with the Indians over 200 years is--what can you say about it?  On the other hand, when you see close up the way individual tribe members are being treated by their own people, it was in that sense a very easy story to write because that this is permitted to go on this country is an absolute disgrace, and it's allowed to go on.  And this is a case where because those tribal governments in a position to do so simply assert sovereign immunity and everybody else backs off.

And you cannot imagine the pressure that is put on ordinary Indians living on reservations.  We've been inundated with phone calls since this piece ran. Very, very, very few publications write about this.  Few alternative newspapers, interestingly, have.  And one of the things that struck Jim and I was an alternative paper in Arizona that told the plight of one Indian woman, and you read the story and you said, `OK, that's really interesting,' and then the next week's issue is filled with letters saying, `Thank God someone came to tell our story.' And so in that sense, this was really a very easy part of the story to write.

Mr. STEELE: It also was easy to write when we realized how few were benefiting.  And when we realized how few would ever benefit under the current regulatory set-up, then it became an easier thing to deal with the imperfections of the system.

GROSS: Well, I want to thank you both very much for talking with us.

Mr. STEELE: Nice to be with you, Terry.

Mr. BARLETT: Thank you so much, Terry.

GROSS: Donald Barlett and James Steele have written a two-part series on Native American casinos for Time magazine.  Part two is in this week's edition.

The National Indian Gaming Association has written a letter to Time in response to the report, suggesting that the magazine has tried to manufacture scandal to sell magazines.  The association claims that casinos have created over 300,000 jobs, more than 200 of the roughly 340 Indian tribes in the lower 48 states use Indian gaming to generate tribal government revenue; revenue which has built schools and funded college scholarships.  The letter also argues that the fact that the Indian Gaming Commission has yet to discover any major cases of corruption is a testament to the upstanding job done by its regulatory personnel.

I'm Terry Gross and this is FRESH AIR.

"Fresh Air with Terry Gross, is produced in Philadelphia by WHYY"
Also see:
Time Magazine,Special Investigation by Donald L. Barlett and James B. Steele, December 16, 2002
12/00/02 - Tribes of Gamblers, by William Saffire

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