Tribes in Prop. 70 Fight Cite Sovereignty but Need to See Reality

I’m not much of an Indian, but my mother was proudly one-quarter Cherokee.

Mom’s grandmother was a toddler on the Trail of Tears, force-marched out of the Smoky Mountains. Her defiant parents quickly jumped off the trail and began assimilating.

So I have a genetic and learned appreciation of Indians and the sins of the white man.

But some Indian leaders lose me with their rigid stance on sovereignty, which is at the core of the current battle between a few gambling tribes and Gov. Arnold Schwarzenegger.

Indian sovereignty derives from Supreme Court rulings in the 1800s. The court ruled that the federal government can boss around Indians, but the states can only do it when the feds give permission. Tribes are sovereign governments -- like states.

Mostly. Arguably. Sometimes.

When Congress passed the Indian Gaming Regulatory Act in 1988, tribes were given the right to operate any games on their reservations that were allowed elsewhere in the state. Governors were directed to negotiate with tribes for gambling compacts -- modern-day treaties.

But California allowed only rinky-dink gambling, the Indians felt. They went to the ballot in 1998 and 2000 and talked voters into letting them run Nevada-style slots. Moreover, they were given a monopoly. Nobody else could have the machines.

The tribes still needed compacts, however.

So it raises the question: How sovereign is a tribe when it has to get a governor’s signature and a bill from the Legislature, or a vote of the people, before expanding a casino? Not very, I’d say, when it comes to gambling.

But that’s not the rhetoric we hear from some tribal leaders. And it’s not how they act.

Sovereignty is sacrosanct for all tribes -- but some tribes more than others. There’s a split. Some gaming tribes have a rigid attitude. Others are more flexible. Some are confrontational with the state; some cooperative.

It’s at the heart of the fight over Proposition 70, the initiative to expand Indian gambling. The outcome will shape the approach of both the state and the tribes toward sovereignty. It’s all about how much control the state -- the public -- will have over gambling on Indian lands.

The more rigid tribes -- mainly the Agua Caliente Band of Cahuilla Indians in Palm Springs and the San Manuel Band of Mission Indians in San Bernardino -- are bankrolling Prop. 70, which bypasses the governor and Legislature and would, in essence, void current state-tribal gaming compacts.

Prop. 70 would require the governor to sign 99-year deals. Under them, the tribes would be allowed unlimited casinos and slots on their lands and whatever games they desired. In return, they’d pay the state 8.84% of net winnings. That’s the corporate tax rate in California, and it’s the tribes’ response to Schwarzenegger’s demand for a “fair share.”

At first glance, this might seem fair. But reservation Indians are exempt from most other state and local taxes because of sovereignty. Property taxes don’t apply to reservations, even to huge casinos. Tribal members don’t pay state income taxes if they live on the reservation and earn their income there. They don’t pay the car tax if the vehicle is used mostly on the reservation, and nobody checks.

“Tribes are sovereign governments. It is unlawful for governments to tax other governments,” says San Manuel Chairman Deron Marquez. “Has the state ever paid tribes their ‘fair share?’ ”

Well, California has given the Indians a gambling monopoly worth billions a year.

But people seem reluctant to give more. They’re buying Schwarzenegger’s “fair share” pitch, polls indicate. And they’re apparently opposed to major gambling expansion. Prop. 70 is losing big in surveys.

“Imagine a 99-year monopoly. I mean, it would be disastrous for our state,” Schwarzenegger says. “The whole thing is just a huge rip-off. I have nothing against them having their casinos, but, hey, if you make billions, why not pay the state a fair amount?”

Says Marquez: “Arnold Schwarzenegger doesn’t understand what tribal nations are. I don’t think he respects us.”

Prop. 70 sponsors first tried to negotiate with Schwarzenegger for new compacts that would have allowed them unlimited slots, scrubbing the 2,000-cap of existing pacts. The tribes offered $1 billion. But the governor also wanted guaranteed protections for casino patrons, workers, the environment and local governments. The tribes felt that violated their sovereignty.

Other tribes have taken a more practical approach. Nine have signed 25-year pacts with Schwarzenegger, guaranteeing the protections and giving the state a lump-sum $1 billion, plus roughly $200 million a year, based on an average 15% cut of earnings on new slots. The tribes are allowed unlimited slots and given a territorial monopoly, far beyond their reservations.

These tribes felt that if the state had a satisfactory stake in their casinos, it would be more likely to protect the monopolies.

“We can’t take on the state,” says Paula Lorenzo, leader of the Rumsey Band of Winton Indians, which runs the Cache Creek casino in Yolo County. “We have to evolve with the times, work with the government.”

Lorenzo chairs a new organization of six like-minded, pragmatic tribes called the California Tribal Business Alliance.

Says Vice Chairman Bobby Barrett, No. 2 at the Viejas Band of Kumeyaay Indians in San Diego County: “It’s better to build relationships and work through situations. We want more slot machines. We’ll pay the price. We’re not here to make trouble.”

That’s wise. There are 36 million Californians, and just 26,000 are members of gaming tribes.

The tribes need a version of sovereignty that works best for them. And that’s one that works best for everybody.