Status of Tribes’ Campaign Spending Called Uncertain

The top lawyer for the agency that enforces state campaign finance law says he is uncertain whether Indian tribes are subject to regulation of political contributions, even though tribes in recent years have become by far the largest donors to state campaigns.

Since becoming heavily involved in state politics in the mid-1990s, tribes have contended that, as sovereign entities, they are not subject to the California Fair Political Practices Act. Like other donors, they file public reports with the secretary of state disclosing their contributions--although some add statements to the reporting forms indicating they are doing so as a courtesy and not a requirement.

At a Fair Political Practices Commission hearing on Friday, Steve B. Russo, chief of the agency’s enforcement unit, said the commission’s investigation into a complaint citing dozens of errors on campaign finance reports is complicated by uncertainty over whether the tribes must comply with the act.

“There is an issue of Indian sovereignty which exists with regard to some or all of these cases,” Russo told the commissioners. “How these cases are handled, and how other cases like this are handled, can affect what we can do in the state of California for years to come.”

Russo’s comments, thought to be the most extensive to date by a commission official on the issue, came in response to questions about the status of a massive complaint filed in June 2000 by California Common Cause. It alleges that Nevada casinos, card rooms, horse racing interests and Indian tribes with gambling operations, as well as politicians who accepted their money, violated campaign finance filing requirements 332 times from 1996 to 1998.

Jim Knox, head of California Common Cause, told the commission that the state’s enforcement unit has found violations against only card rooms and horse tracks but not against Indians, even though two-thirds of Common Cause’s allegations involved errors in filings by tribes.

“If the commission is uncertain of its authority, let’s get it resolved,” Knox said. “Let’s take an enforcement action. Let’s fight it out in the courts. It is in the public interest to resolve this issue.”

Commission Chairwoman Karen Getman shot back that Knox’s testimony offered an “incredibly inaccurate portrayal” of the agency’s effort and called on Russo for a defense.

Russo said his unit has concurred with Common Cause on some of its allegations, finding violations that resulted in fines of $9,500. Russo said investigators concluded that more than 100 allegations were unfounded.

Of the original 332 errors cited by Common Cause, the commission continues to investigate 38 potential violations by six entities. Russo suggested that the fate of at least some of the remaining allegations turns on whether the Political Reform Act, approved by voters in a 1974 initiative, applies to tribes.

“Of course, it is a concern,” Russo said. “It is our job to regulate political activity. If there is a group of individuals who are major players in political campaigning and the financing of political campaigns, and we can’t regulate them, that certainly undermines our ability to do our job.”

Howard Dickstein, a Sacramento attorney who represents several tribes, said in an interview Friday that “it is doubtful” the act applies to tribes, even though most comply with the act.

“As a practical matter,” Dickstein said, “most if not all tribes file reports. While we reserve our rights, we file. . . . The reason it hasn’t been litigated is that tribes are complying in practice, as a matter of policy as opposed to legal obligation.”

In a report last year, Common Cause found the gambling industry donated $15.8 million to state candidates from 1995 to 1998, with tribes accounting for $8.5 million of those contributions--far more than other interests. The California Teachers Assn. spent the second-largest sum during that period on candidates--$4.7 million.

California tribes also were involved in the most expensive initiative fight in U.S. history, spending more than $60 million to win passage in 1998 of Proposition 5, which sought to legalize casinos on their reservations. Nevada casino corporations and other foes spent $25 million to defeat it. Voters approved the measure, but the California Supreme Court struck it down.

Tribes spent another $24 million to win passage of Proposition 1-A in March 2000. That measure ratified a deal between Gov. Gray Davis and tribes granting Indians monopoly rights to operate Nevada-style casinos in California.

From January 1999 to June 2001, seven tribes with major casino operations and the most involved in state politics spent $32.1 million on California campaigns, a review of campaign finance reports shows.