Tribe Deals In Its Own at Casino

SANTA YNEZ, Calif. — Gilbert Cash would have no chance of working as a blackjack dealer at one of the major hotels on the Las Vegas Strip.

The reason: Cash has filed for personal bankruptcy four times and failed to pay about $60,000 in income taxes. He also is awaiting trial on charges of choking and beating his estranged wife — allegations he denies.

Yet as chairman of the gaming commission at the Chumash Casino Resort, Cash, 38, oversees more than $1 billion in wagering each year. Nor is he the only regulator at the Santa Barbara County casino with a troubled past.

A Times examination of the Chumash gambling enterprise, one of the most profitable in California, found that:

• At least seven of 16 tribal members who have served on the gaming commission during the past decade have backgrounds that almost certainly would preclude them from working at, much less regulating, casinos in Nevada and New Jersey.

One commissioner resigned in July after The Times asked about his past convictions for robbery, burglary and theft. Another former regulator once fired gunshots near the Chumash bingo hall. A third was elected to the commission after he was fired from a management job in the casino for allegedly molesting female employees.

• Tribal members have been caught taking advantage of their authority on the gaming floor. The tribal chairman once directed a blackjack dealer to provide free chips to his son and other customers. In another case, a tribal member was fired as head of video gaming after it was discovered that slot machine tournaments had been fixed.

• Key security jobs at the Chumash Casino are held by relatives of gaming commissioners — an arrangement prohibited by casinos in other states. The surveillance unit in recent years has included several officers who are related to members of the Chumash gaming commission and its executive director.

Such problems are “somewhat inevitable when tribes are given the power to regulate themselves,” said I. Nelson Rose, a professor at Whittier Law School who is a leading authority on gambling and an advisor to state regulators.

Tribal leaders contend that the success of the Chumash Casino shows that their patrons have full confidence in the integrity of the operation. They say their tribe — the Santa Ynez Band of Mission Indians — has taken corrective measures whenever infractions have been uncovered.

“This only underscores our assertion that we can, in fact, regulate ourselves,” said Tribal Chairman Vincent Armenta. “We run a tight operation.”

California voters approved high-stakes gambling on reservations four years ago. Since then, tribal gaming has expanded so rapidly that the state is expected to overtake Nevada as the nation’s casino capital within several years.

An initiative on the November ballot would extend the tribes’ monopoly on Las Vegas-style gambling into the next century. Proposition 70 would lift restrictions on the number of slot machines and allow tribes to offer unlimited craps, roulette and other high-stakes games.

In exchange, tribes would pay the state corporate income tax of 8.84% on casino profits. Currently, Indian casinos are exempt from state and local taxes.

The initiative is sponsored by the Agua Caliente Band of Cahuilla Indians in Palm Springs, with support from other tribes. It is opposed by law enforcement leaders, organized labor and Gov. Arnold Schwarzenegger, who prefers to negotiate gambling agreements directly with tribes.

Under Proposition 70, tribes would continue to have primary responsibility for policing their $6-billion-a-year industry.

Currently, each of the state’s 53 casino-owning tribes is required to set up a commission to monitor gambling. Some tribes hire professional regulators, often with law enforcement backgrounds. The Chumash and other bands do the job themselves, electing tribal members to their gaming agencies.

Advocates of Indian gambling say tribes have kept their casinos free of corruption.

“We can say with confidence there is no evidence that the Mafia is running Indian casinos,” said Michael Lombardi, chief regulator for the Augustine Band of Cahuilla Indians in the Coachella Valley. “Indian gaming in California is much more regulated than card rooms and at least stands up to the same level of quality as racetracks and the lottery.”

Last year, the Chumash moved their gambling operation into a new, $157-million Mediterranean-style resort with 2,000 slot machines — as many as Caesars Palace in Las Vegas.

More than 25,000 gamblers flock to the reservation on weekends. Gambling revenue this year is projected to exceed $200 million, a 40% increase from 2003. In July, the casino raked in $1 million in a single day for the first time.

Those winnings have brought the tribe startling wealth. Since 2000, each of the band’s 153 members has collected more than $1 million in casino proceeds, according to confidential records. In July, members voted to give themselves a 10% raise, bringing their monthly checks to nearly $30,000 each.

The casino “is our primary source of income,” Armenta said. “Do you think we’re going to allow something illegal to happen there?”

A Big Opportunity

The original Chumash Casino opened in May 1994, six years before voters formally approved Vegas-style gambling.

The Santa Ynez band and other Southern California tribes offered electronic gaming machines, despite the contention of federal and state prosecutors that the devices were illegal. At the time, many tribal members on the reservation were unemployed; families stood in line for government surplus food.

Interviews with former employees, including two who served as general manager of the casino, and a review of internal records offer a detailed portrait of the tribe’s gambling operations over the last decade, both at the original casino — a cramped, smoke-filled hall — and at its opulent replacement.

Conrad Sabiron, a former Santa Barbara police sergeant who supervised security for nearly eight years, maintains that a culture of “lawlessness” pervaded the casino.

Sabiron sued the Chumash for wrongful termination after his job was eliminated Feb. 7, 2002. A Superior Court judge dismissed the lawsuit, citing the tribe’s sovereign status. Sabiron is appealing.

In court records and in a series of interviews, Sabiron, 70, said tribal members routinely violated gambling regulations, including fixing slot machine games.

Chumash officials reject Sabiron’s claims.

“There is absolutely no substance to Mr. Sabiron’s allegations,” said Glenn Feldman, the Chumash gaming attorney.

Sabiron said his staff began investigating the rigging of games in 1999. He learned that bingo Director Inez Palato had organized a promotional drawing in late 1997 in which an acquaintance, Nicole Davis, won a Jeep Wrangler valued at $20,084, according to casino investigative reports.

Palato then arranged for Davis to sell the vehicle at about half-price to a Santa Barbara car salesman. Davis told investigators that she blew the entire $10,000 at the casino and that she lost a total of $100,000 gambling on the reservation.

Casino management determined that Palato had violated regulations by loaning Davis at least $1,650. Palato was also found to have given money to other people to gamble on her behalf, reports show. She was fired in 1999.

In an interview, Palato, 58, acknowledged that events surrounding the 1997 drawing looked “very fishy.” But she said she did not rig the game or profit from the sale of the Jeep. Palato said casino officials offered no explanation for her dismissal.

“There would have been good reason to fire me if they could prove I fixed the game,” Palato said. “They did an investigation for three months and came away empty-handed.”

Palato had served on the tribe’s gaming commission from 1994 to 1997 — while also serving as bingo director. Two years after firing her, the Chumash elected her vice chairwoman of the tribal business council, which manages the band’s finances.

While Palato was director of bingo, a daughter who worked at the casino stole money from a bingo players’ pool, police records show. Stephanie Palato was convicted of theft in 1995.

Meanwhile, Sabiron’s investigators also uncovered a scheme to fix slot machine games.

One weekend afternoon in 1996, an undercover security officer received a tip that the spouse of a casino employee would collect a cash prize for winning a slot tournament that day.

The prediction proved correct. Casino investigators determined that the spouse “won” the tournament with a phony score.

Judy Hewitt, the undercover officer, said she found a list of previous winners at the casino that included girlfriends, relatives and neighbors of tribal members and employees who ran the tournaments.

Former casino workers said in interviews that it was common knowledge that the tournaments were rigged.

Rachel June said she reported to Sabiron that the winners included a casino receptionist, the receptionist’s husband and her mother. “I thought it was strange that three family members each won tournaments,” June said.

The casino’s general manager at the time was Lombardi, now the top gaming regulator for the Augustine Indians. He said he fired the director of slot machines, Jonathan Cash, and two employees who had organized the 1996 weekend tournament.

Cash is the brother of the current gaming commission chairman, Gilbert Cash.

In an interview, Jonathan Cash said that the 1996 tournament was rigged, but not by him.

Cash said that casino management and a gaming commissioner conspired to fix the tournament to provide a pretext for firing him and the two employees. “It was a witch hunt,” he said.

“There is no way I’m going to allow anybody to cheat in any of those tournaments,” Cash said. “I ran that department as efficiently as I could.”

The episode sparked passionate debate on the reservation. Lombardi said he woke up one morning to find a dead cat nailed to the front door of his home.

“That was an attempt to intimidate me,” he said. Sabiron, who now works in private security, said Lombardi told him to keep quiet about the fixed games.

Lombardi said he did not order Sabiron to cover up the incidents. Rather, he said, he advised him that “we have to be aware that if this gets out in the public, nobody will come play here.”

By 1999, Chumash gaming commissioners wanted Sabiron fired, recalled Joseph Marinan, the casino general manager at the time. Marinan said he refused.

Marinan said he himself ran afoul of tribal leaders by objecting to their use of casino-issued credit cards to make large personal expenditures and to the practice of forcing dealers to pay thousands of dollars a week in cash tips to card room supervisors. Marinan was fired after about eight months.

The tribe sought to clamp down on unauthorized credit charges in 2001, and casino management ended the involuntary tip-sharing arrangement last year, according to tribal records and casino officials.

Chumash leaders say any past improprieties reflect the birthing pains of Indian gambling. They said that they now have a comprehensive regulatory system in place to prevent such occurrences.

“When we started, we didn’t know what to do, and I don’t think the state knew what to look for,” said Gilbert Cash. “We are learning from our mistakes.”

Regulating Their Own

The Chumash gaming commission consists of five elected tribal members who work part-time, receive no compensation and need not have any experience in the casino industry. They oversee 34 full-time surveillance and compliance employees.

Commissioners said they routinely receive compliments from federal and state regulators.

In a letter following up on a March 31 site visit, one federal investigator commented on “how fortunate the Band and the casino are to have such industrious and well-versed regulators. The combination of experience and sound leadership reflects glowingly on the [tribe’s] decision-making capability.”

But some current and former commissioners have backgrounds that would disqualify them from regulating casinos in other states.

Gilbert Cash, for instance, has filed for bankruptcy protection four times — most recently in June — despite having received more than $200,000 annually in casino dividends in recent years. He also is paid $62,400 a year as a Santa Barbara firefighter.

Bankruptcy Court records filed in June show that Cash and his wife have $128,502 in unpaid obligations, including $60,000 in federal and state income taxes.

Cash’s share of casino proceeds pushed him into “Bill Gates’ tax bracket. I couldn’t get a handle on it,” he said. “I’m a victim of not withholding enough taxes.”

Cash said he was making good on his debts. But now he faces a possible prison term for allegedly assaulting his estranged wife in April. According to a police report, Cash “choked the victim using a nylon luggage strap” and struck her in the face three times.

Cash called the police account one-sided and said: “Do I deny what happened? Of course I do.”

His personal problems have no bearing on his role as a tribal regulator, Cash said. “Does that have anything to do with my character or my ability to do my job as a gaming commissioner? I don’t think so.”

Nevertheless, Cash said, he would resign if he is convicted. Someone with Cash’s legal and financial history would not pass the background investigation needed to work in a casino in other states, let alone serve as a regulator.

Authorities and casino executives in Nevada and New Jersey said that a pending felony charge would bar a job applicant from a gambling-related position. A current casino employee charged with a felony would be suspended until the matter was resolved.

Rudolph Romero, another veteran Chumash regulator, served prison terms for robbery, petty theft, burglary and possession of heroin between 1948 and 1965. He won a seat on the gaming commission a decade ago.

“It wasn’t a great half of my life,” Romero, 74, said in an interview in July. “But the second half has been a great life. I am full of integrity now…. I can say for a fact that I made a contribution to the success of our casino.”

Romero said it was inappropriate for outsiders to pass judgment on the fitness of tribal regulators. “We are a sovereign nation, and we decide who we want regulating our business,” he said.

Eight days later, Romero resigned from the commission, citing health reasons.

Romero is viewed as a Native American role model for overcoming a troubled past, said Lombardi, the former general manager.

“Rudy Romero was a young street thug,” Lombardi said. “He was not well-educated and didn’t know a thing about Indian gaming. But through a lot of hard work, he learned the business and has become one of the most knowledgeable gaming commissioners in California.”

Another convicted felon, Julio Carrillo, 60, served on the Chumash gaming commission for nearly five years through June 2003. Court records show that between 1977 and 1993, Carrillo was found guilty of assault with a deadly weapon, disturbing the peace and drunken driving.

On June 22, 1986, Carrillo had been drinking in a local tavern and was overheard threatening to kill the general manager of the Chumash bingo operation for cutting his pay, according to police reports.

Witnesses reported that Carrillo fired six shots from a handgun near the front of the bingo hall and into an area where children were playing.

Carrillo was convicted of illegal possession of a firearm by a felon and sentenced to 90 days in county jail.

Asked for comment, Carrillo said: “I have nothing to say right now.”

Former Chumash Tribal Chairman David Dominguez said the membership elected Carrillo to the gaming commission because “Julio is a great guy. Everybody likes him.

“Our people overlook a lot of things on the reservation because we are a very small tribe, and it’s very hard to get dedicated people in those positions,” he said.

Armenta, the tribal chairman, said the tribal government is similar to a family business. “Like a family, if a member of our tribe makes a mistake in his or her life, we don’t reject the member,” he said. “Rather, we hope that the member learns from the mistake and moves forward.”

Edward P. Kahn, 61, was convicted of disturbing the peace in an assault case in 1996. He was fired as director of maintenance at the casino in late 1998 after female workers complained that he had molested them. He was elected 15 months later to a seat on the gaming commission and served until June 2001.

Efforts to reach Kahn for comment were unsuccessful.

In a letter to casino management, Kahn wrote: “I am innocent of any charges against me for sexual harassment.”

Mildred Meaux, a gaming commissioner since 1996, was recalled as vice chairwoman of the Chumash business council in 1999 for allegedly misusing tribal funds. The tribe’s lawyers investigated and concluded that Meaux improperly subsidized construction work on her reservation home, according to a confidential legal memo.

In an interview, Meaux, 55, denied the allegations and said she paid for every dollar of the renovation work. Tribal members reelected her to the gaming commission, she said, because “people felt that I’ve been falsely accused.”

Dominguez, 69, became entangled in a casino controversy of his own in the mid-1990s, when he was both chairman of the tribe and a gaming commissioner. Dominguez had a third position — as a paid consultant for a supplier of slot machines to the Chumash and other Indian casinos.

When tribal members learned about the consulting deal, they demanded that Dominguez step down from the gaming commission, and he did.

In an interview, Dominguez defended the consulting arrangement. He said he was careful to avoid participating in any sales of slot machines to the Chumash Casino.

But he added: “Yes, maybe that was a conflict of interest. I resigned my position to save face for the tribe.”

Many Family Ties

Among the gaming commission’s primary duties is overseeing the casino’s surveillance operation, which is responsible for keeping an eye on patrons and workers to detect cheating. Yet several surveillance employees have family ties to commission executives.

The son of commissioner Mildred Meaux is a surveillance officer. So is the wife of Rudolph Romero.

The director of surveillance, Jimmy Johnson, is the son-in-law of Lynn Gill, the gaming commission’s executive director.

Johnson’s brother works in the surveillance unit. One of Gill’s daughters has been a surveillance officer.

Other states forbid such arrangements to prevent regulators and surveillance officers from conspiring to embezzle, authorities say.

Chumash regulators say they put family connections aside when enforcing gambling rules. As members of a small tribe, they also are loath to deny relatives job opportunities.

“Almost everyone here is related,” Rudolph Romero said. “How do we fix that?”

*

(BEGIN TEXT OF INFOBOX)

Trouble in the past

At least seven of the 16 tribal gaming commissioners responsible for regulating the Chumash Casino since 1994 have backgrounds that would probably prevent them from working in or regulating casinos in Nevada or New Jersey.

Gilbert Cash, chairman

Years on commission: 1999 to present Age: 38

Background: Filed for bankruptcy four times since 1994. Awaiting trial on felony spousal abuse and false imprisonment charges.

Mildred Meaux

Years on commission: 1996 to present Age: 55

Background: Recalled as vice chairwoman of the tribal business council in 1999 for alleged misuse of tribal funds.

Rudolph Romero

Years on commission: 1995-2004 Age: 74

Background: Convicted of robbery, petty theft, burglary and possession of heroin between 1948 and 1965.

Julio Carrillo Jr.

Years on commission: 1998-2003 Age: 60

Background: Convicted of assault with a deadly weapon, illegal possession of a firearm by a felon, disturbing the peace and drunk driving between 1977 and 1993.

Edward P. Kahn

Years on commission: 2000-2001 Age: 61

Background: Convicted of disturbing the peace in a 1996 assault case. Fired in 1998 as director of casino maintenance for allegedly mistreating female employees.

Inez Palato

Years on commission: 1994-1997 Age: 58

Background: Fired as bingo director in 1999 after organizing a promotion in which a new Jeep Wrangler was awarded to a gambler who owed her money.

David Dominguez

Years on commission: 1994-1996 Age: 69

Background: Resigned after it was learned that he was a paid consultant for a company that sold slot machines to the Chumash and other Indian casinos in California.

*

Sources: Criminal, civil and bankruptcy court records, Registrar of Voters and Chumash Gaming Commission

*

About this report

This is the first in an occasional series on the impact of casino gambling at the Chumash reservation in Santa Barbara County. Future stories will explore how gambling rescued the Chumash from poverty and anonymity, and how sudden wealth transformed the tribe’s relationship with its neighbors. For a video report on Indian casinos, go to latimes.com/ chumash.

---

Times researchers Maloy Moore and Penny Love contributed to this report. Glenn Bunting can be reached at glenn.bunting@latimes.com.