Tribes Take a Wait-and-See Recall Stance

The gubernatorial recall election comes at a particularly opportune time for one of California’s ascendant special interests -- Native American tribes that have exclusive rights to operate Las Vegas-style casinos in the state.

For months, Indian leaders have been frustrated by the slow pace of talks with Gov. Gray Davis over new gambling compacts that would help small tribes in generally remote locations.

At the same time, other tribes with large casinos are pressing for an increase in the number of slot machines allowed, and are growing concerned over what they see as attempts by the state and local governments to erode their authority as sovereign entities.

Now, with total gambling revenues of about $5 billion per year, California tribes are poised to exert significant influence in the Oct. 7 election. Since 1998, tribes have spent more money on state political campaigns -- in excess of $120 million -- than any other interest group.

Because donors are subject to limits on direct contributions, unlimited independent expenditures may become even more important in this truncated campaign. The tribes have access to large amounts of money and have demonstrated a willingness to spend on campaigns.

“The tribes were invisible until they started writing checks,” said Jim Knox of California Common Cause. “There is no better illustration of the power of money in politics.”

Interviews with tribal chairmen, consultants and political experts indicate that Democratic Lt. Gov. Cruz Bustamante is the favored candidate among some California Indian leaders.

“We’re hoping for strong support,” said Richie Ross, Bustamante’s lead campaign strategist. “But there really has been no quantification of that. The tribes will be involved. I don’t know to what extent.”

Ross also serves as a lobbyist and political consultant for two major casino-operating tribes: the Barona and Viejas bands of Indians in San Diego County. The two tribes have donated a combined $487,500 to Bustamante since 1998, when he was elected lieutenant governor.

Tribal leaders are intrigued by the candidacy of Arnold Schwarzenegger and eager to learn his position on Indian gambling. Republican state Sen. Tom McClintock of Thousand Oaks has spoken out on behalf of tribal sovereignty and is viewed favorably by some tribes.

And the possibility still exists that tribes will oppose the recall. After all, it was Davis who granted them the exclusive gambling rights they had sought for so many years and had failed to secure under Republican Gov. Pete Wilson. So far, no tribes have publicly stated plans to support the recall.

“Has Gray Davis really done that bad of a job?” asked Vincent Armenta, chairman of the Santa Ynez Band of Mission Indians. “I think it is pretty difficult to blame one individual for all of the state’s problems.”

Tribes are taking a wait-and-see approach.

“Nobody is showing their hands in any significant way,” said Howard Dickstein, a Sacramento attorney who represents several tribes.

Armenta said he hopes to meet next week with Bustamante, Davis and McClintock. “I believe all of them have potential to be a decent governor,” Armenta said.

Deron Marquez, chairman of the San Manuel Band of Mission Indians, said his tribe has decided to sit out the recall campaign, at least for the time being.

“In my mind, the recall is more than a done deal. I think the governor is on his way out,” he said. “We’re just basically waiting to see who is for real and who is not.”

Many of the tribes want to see where the candidates stand on expanded tribal casinos and whether California should authorize slot machines at card rooms and horse tracks, a proposition the tribes oppose.

“Like a lot of special interests, tribal casino leaders will invest in a lot of candidates when they’re not certain of the outcome,” said former Assembly Speaker Leo McCarthy, a San Francisco Democrat and a critic of expanded gambling. “They’ll bet on more than one horse.”

The ability of the tribes to influence an election was illustrated in the Los Angeles mayor’s race in 2001. Antonio Villaraigosa had angered the tribes by the way he handled their issues when he was Assembly speaker, so they launched a mail campaign attacking him as being soft on crime. He lost to James K. Hahn.

“The tribes played hardball against Villaraigosa, letting him know and everybody else that if they oppose the tribes, they will come in and pour massive amounts of money against them -- and massive amounts of money they have,” said Robert Stern, head of the Center for Governmental Studies in Los Angeles.

Under Davis, Las Vegas-style gambling has exploded on reservations throughout California, particularly in San Diego County and the Palm Springs area. In 2000, voters overwhelmingly approved a ballot measure granting tribes exclusive rights to operate slot machines.

Davis has signed individual compacts with 62 tribes, some of which have no casinos. The agreements permit them to operate a maximum of 2,000 slot machines at any one casino. The machines are the most lucrative form of gambling for casino operators.

Gaming industry experts estimate that Indian casinos in the state will generate revenue of about $5 billion this year, up from about $1.4 billion in 2000.

This ranks California as the second-largest gambling state in the nation, behind Nevada’s $9.3 billion in casino revenue. Experts said California will probably become No. 1 within a few years. Nevada gambling revenue is expected to remain steady or even decline, while California Indian casinos continue a rapid expansion.

Early today the Santa Ynez Band unveiled its $150-million Chumash Casino expansion north of Santa Barbara. In Riverside County, the Agua Caliente Band of Cahuilla Indians is building a $90-million casino on reservation land in downtown Palm Springs that is scheduled to open this fall.

About 15 miles away, the Morongo Band of Mission Indians is constructing a 309-foot-tall resort hotel between scenic peaks in the San Gorgonio Pass.

In June, the once-impoverished United Auburn Indian Community opened a $200-million casino in suburban Sacramento. On opening day, traffic backed up eight miles.

Many of those facilities are approaching a Vegas-style experience by offering upscale dining, shopping and entertainment. Jay Leno is scheduled to appear at a private VIP party celebrating the opening of the Chumash Casino this week.

Amid all the expansion, tribes are renegotiating their existing 20-year compacts with Davis, who is asking for a share of casino profits to help ease the state’s budget crisis. The original agreements negotiated by Davis did not include payments to the California treasury similar to the shares of casino proceeds that go to Nevada, New Jersey, Connecticut and other states.

Tribal leaders were angered earlier this year when Davis began renegotiations by saying he wanted $1.5 billion in gaming revenues in exchange for lifting the cap on slot machines. The governor has since lowered that demand to $680 million for this year.

Bustamante, for one, said this month that he would support a proposal by Anthony Pico, chairman of the Viejas Band of Kumeyaay Mission Indians, that tribes pay taxes at the same level as other corporations. That amount would be far less than the $680 million that Davis has been seeking.

Bustamante is also on record as saying he believes the marketplace should determine the number of slot machines in an Indian casino. After a groundbreaking ceremony in May for the $250-million resort hotel on the Morongo reservation, Bustamante told the Desert Sun newspaper: “The tribes are not getting what they want [from the state]. The tribes want more machines. In-N-Out Burger doesn’t have to ask how many burgers it can make.”

When he announced his candidacy earlier this month, Bustamante called Indian gambling “one of the strongest parts of the California economy. It is creating tens of thousands of jobs. It is providing tremendous charity.”

Ross, Bustamante’s main campaign strategist, explained such support by recalling that the lieutenant governor forged his alliance with tribes when they were under political attack from Nevada gaming interests and “were economically weak and in legal jeopardy.”

“Many of the longer-term leaders know that he has been one of the few people who understood sovereignty, and stood up for them,” Ross said.

Stern of the Center for Governmental Studies said the tribes run a risk if they decide to bankroll Bustamante’s campaign in a recall election.

“The big problem that Bustamante will have is that he doesn’t want to be pictured as a tool of the tribes,” he said.

At this point, tribal leaders said, they don’t know what to make of Schwarzenegger.

Michael Lombardi, a tribal gaming consultant and former general manager of the Chumash Casino in Santa Ynez and Casino Morongo near Banning, said he wonders whether the actor knows anything more about Indians than what he saw in John Wayne movies.

“We did notice that one of the heroes in ‘Predator’ was Indian,” Lombardi said. “That guy was handsome and brave and died a good death. We noticed that [Schwarzenegger] is not a part of the Hollywood hypocrisy that always portrays Indians as savages.

“We are intrigued by Arnold,” he said. “Would he allow slot machines to expand by market demand? I think there are tribes out there waiting to hear some answers.”

Schwarzenegger spokesman Rob Stutzman declined Friday to describe the candidate’s views. One of the candidate’s top advisors is former Gov. Wilson, who battled tribes over gambling expansion. A co-chairman of Schwarzenegger’s campaign is Assemblyman Abel Maldonado (R-Santa Maria), who backs Indians in their efforts to maintain sovereignty and expand their casinos.

“If I’m advising him,” Maldonado said, “I say give them special attention because they’ve done a great job for the community.”

Another issue of concern is whether cities and counties should be compensated so they can better cope with the environmental impacts of casino developments.

“I think in Indian country there is a feeling that the state of California should live up to that 20-year deal approved by the voters, the Legislature, the governor and both political parties,” said Lombardi.

“Right now we’re confronted with the dilemma that county governments need money and they want to get it from the tribes because the tribes are so successful,” he added.

Under the current agreements, tribes are required to contribute roughly $140 million to two special state accounts. One is an Indian Gaming Special Distribution Fund for expenditures such as repairing roads, treating compulsive gamblers and subsidizing emergency rescue services. The other is used to redistribute revenues to impoverished reservations.

The Davis administration also has been engaged in talks over the last three years with tribes that haven’t signed gambling compacts.

On Wednesday, he signed the first compact with a California tribe that will pay casino proceeds directly to the state treasury. The agreement with the Torres-Martinez Desert Cahuilla Indians in the Imperial Valley requires the tribe initially to pay the state 3% of the revenue from its first 350 slot machines; the share increases to 5% in the third year of operation.

Wednesday’s announcement prompted speculation that, after years of stalled negotiations, Davis suddenly will shift gears and accelerate talks with tribes.

“It doesn’t take a genius to figure this out,” said I. Nelson Rose, a gambling expert and professor at the Whittier Law School in Costa Mesa. “I think we will see a couple of dozen new compacts before the recall campaign is over.”

Robert Rosette, a Sacramento attorney who represents several tribes that are eager to open casinos, said his clients are watching the recall campaign closely.

“They were very surprised at Gov. Davis’ sudden decision to grant Torres-Martinez that contract,” he said. “They also became hopeful that they will get theirs. We will see very soon how that pans out.”

Aides to Davis said that the recall campaign had no bearing on the timing of the Torres-Martinez announcement and that it is unlikely the governor will strike numerous other deals in the coming weeks.

“Nobody should view this signing ... as having anything to do with politics,” said Steve Maviglio, Davis’ press secretary. “These things take time. They are very complex. They last for years. They don’t operate on a political calendar.”

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Times staff writer Gregg Jones in Sacramento contributed to this report.