10 N.M. Tribes Reject U.S. Order to Close Casinos : Gaming: Ultimatum follows ruling banning gambling and voiding state-tribal compacts. Indians cite financial stakes, issue of sovereignty.

Setting the stage for a historic clash in court--or possibly on American Indian lands--the 10 tribes operating casinos in New Mexico on Friday rejected a federal order that they close the lucrative operations by Jan. 15 or face forfeiture of their gambling devices.

Facing the loss of their economic base, a few of the tribes have threatened to block federal authorities who try to pull the plug on the games that employ more than 3,000 people and generate $200 million annually--plus millions more in commerce with surrounding non-Indian communities.

One of the tribes, the Pojoaque Pueblo, says it will close the portion of state Highway 285 that runs through the reservation and toward the Los Alamos National Laboratories to all but emergency vehicles for at least one day starting Jan. 6.

“We are like a cornered, wounded animal,” said Pojoaque Pueblo Gov. Jacob Viarrial, whose tribe borrowed more than $30 million to develop its “Cities of Gold” casino enterprises. “We are willing to die or go to prison to protect Indian gaming.”

The ultimatum from U.S. Atty. John Kelly follows recent state Supreme Court rulings banning Las Vegas-style gambling in New Mexico and invalidating state-tribal gambling compacts signed by Gov. Gary Johnson in March, approved by the Interior Department and published in the Federal Register as law.

At stake, Native American leaders say, are 150 similar compacts approved in 24 states involving 123 tribes who use gaming proceeds to pay for infrastructure projects, economic development, scholarships, health programs, police and fire protection and the restoration of historic traditions, customs and religions.

The dispute, they add, raises thorny legal questions over the implications of a state court changing a law in which huge financial investments are at stake, and about sovereignty--both state and tribal.

But Kelly said that he was forced to act because a provision of the Indian Gaming Regulatory Act allows American Indian tribes to operate only those casino games that are permitted by the state. When the state Supreme Court in November banned off-reservation charity casino games, it erased the legal basis for Indian gaming as well.

In a letter to tribal leaders, Kelly said that while the state Legislature, which convenes for a 30-day session on Jan. 16, may authorize the compacts, “until then it is important that there be no more illegal gambling.”

State lawmakers, however, remain deeply divided over the complex issue. And it is doubtful that they can resolve their differences, let alone ratify a new law, in time to forestall a collision in federal court.

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The Department of Justice does not intend to close the casinos by calling federal law enforcement officers onto the reservations. But, Kelly warned, “if you fail to comply with this request, we do intend to immediately initiate legal proceedings which will result in the . . . forfeiture to the federal government of all gaming devices located on the premises of the casino.”

For the sake of casino employees, Kelly agreed not to close the gambling parlors before the Christmas holiday. But he rejected a plea from Johnson that the gambling be allowed to continue while the Legislature is in session.

Sen. Pete V. Domenici (R-N.M.) said that U.S. Atty. Gen. Janet Reno told him in a telephone conversation Wednesday that “she did not think the [deadline] should be changed, but that she was quite sure the Legislature would have time, if they desired, to address the issue.”

From the American Indians’ perspective, Reno’s response represents another in a series of broken promises in an effort to take away any wealth the tribes might accumulate through one of the few industries that has proven successful for them.

“To me, those were just a lot of words that haven’t amounted to much,” said Roy Bernal, chair of New Mexico’s All Indian Pueblo Council. “If there was real concern about our sovereignty and self-sufficiency, then Janet Reno and people like that would be saying to Kelly: ‘Give the tribes the time they need to work things out.’ ”

Closure poses grave consequences for New Mexico’s San Felipe Pueblo, an impoverished reservation between Santa Fe and Albuquerque. The tribe borrowed more than $15 million to build a newly opened, 26,000-square-foot casino featuring 500 slot machines, 18 blackjack tables, two craps tables and roulette.

Save for a trickle of federal funds, the tribe has no source of revenue other than the San Felipe Casino Hollywood. What’s more, it waited until the compacts were signed by Johnson before going into debt on the venture, according to the tribe’s attorney, Daniel Rosenfelt.

“The way we see it,” Rosenfelt said, “the state Supreme Court has emasculated the governorship in its passion to get at Indian gaming.”

Richard Hughes, an attorney representing the Santa Ana Pueblo, was more blunt: “This amounts to a confirmation that the white man is always free to change the rules and screw the Indians.

“If this battle is lost,” Hughes added, “it will create a profound gulf between the tribes and the larger society--an unavoidable and permanent atmosphere of cynicism and distrust, possibly even outright hostility between the two.”

Antigaming advocates, however, are jubilant over the state court ruling, which they say strikes a blow against a gambling industry that is using American Indian casinos as a wedge to eventually allow gambling everywhere.

They also say the New Mexico tribes, some of whom have been operating casinos for seven years, should not have invested in gambling operations before the issue was resolved in state court, or ratified by the Legislature.

“You don’t get a license to break the law based on the assumption that the Legislature might do something,” said Victor Marshall, an Albuquerque attorney who represents a group opposed to gambling. “The federal government might legalize marijuana. Does that make it legal? Of course not.”

Under the New Mexico Supreme Court ruling, only parimutuel horse racing, paper bingo and the state lottery scheduled to begin in April 1997 are permitted.

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“The laws already in place make sense and allow the least harmful forms of gambling to raise a little money for the state,” Marshall said. “Politically, non-Indians are not going to allow Indians to make hundreds of millions of dollars in profits without getting a piece of the action--either everybody does it or nobody does it.”

“That’s an outrageous statement,” Rosenfelt argued, “because in our case, the governor signed the compacts and they were approved by the U.S. Interior Department before the investment at San Felipe was made.

“The tribe had every right to rely on the validity of the compacts in making their investments,” he added. “The thought that we should wait for some lawsuit that might never be filed is ridiculous.”