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1 Honorable Dirk Kempthorne Page 1 1/9/2009 Stand Up For California! Citizens making a difference standupca.org P.O. Box 355 Penryn, CA July 9, 2007 Honorable Dirk Kempthorne Secretary of the Interior U.S. Department of the Interior 1849 C. Street N. W. Washington, D. C Fax: RE: Take a Hard Look Potential IGRA Violations in California Compacts Dear Secretary Kempthorne: Stand Up for California! has been involved with issues associated with Indian gaming for many years. We frequently serve as a resource to policy makers and elected officials at the local state and national levels. We have read with considered interest the United States Department of Interiors unprecedented step to reconsider its approval of the 1993 compact that allows the Oneida Tribe to operate the lucrative casino and resort complex 35 miles east of Syracuse. Thus, we write today, hoping you will give our request to thoroughly vet California s newly amended Tribal State Compacts serious consideration. Requested Action Stand Up For California! writes today to respectfully request that the newly amended Tribal State Compacts of Agua Caliente, Morongo, Pechanga and Sycuan be given a detailed legal and policy review by your office. Additionally we ask that you indicate your refusal to approve these compacts or indicate that they cannot be accepted until the effective date of In addition, we believe there are many flaws in the construction of these compacts that potentially violate provisions of the Indian Gaming Regulatory Act ( IGRA ) and other provision of federal law that do not relate to jurisdiction over gaming on Indian lands. Indeed, these compacts fail to adequately protect the public on several extremely important issues. These compacts have created such controversy that a referendum is being discussed to oppose these compacts. A thorough examination of these compacts demonstrates that they invite future problems which would set the stage for extensive litigation, which no one should desire. In our view shared by many these Compacts represent both a legal and a policy failure by the State of California.

2 Honorable Dirk Kempthorne Page 2 1/9/2009 Four areas of significant concern: 1. Amended Compacts are not a Final Document The compact ratification statutes for the Agua Caliente, Morongo, Pechanga, and Sycuan as a matter of State Law do not become effective until January 1, There is a very real possibility for a referendum. 2. Can the Secretary of the Interior approve a Compact that is modified and/or supplemented by a Memorandum of Agreement that is a prerequisite for tribal state compact ratification and addresses core issues of IGRA? And the related question: are the MOA s even enforceable 3. Does the BIA Recognize After-Acquired Lands for Gaming 4. Does this Violate the Separation of Powers Doctrine? Stand Up For California! supports the Yurok Tribal State Compact also ratified on June 28, 2007, as it contains many provisions that enhance government-to-government relations and fosters mutually beneficial public policies ensuring environmental concerns, patron and employee protections and judicially enforceable mitigation agreements with affected local governments. Other negotiated Tribal State Compacts yet to be ratified, such as Los Coyotes and Big Lagoon, are even more comprehensive and demonstrate a collaborative approach by the Tribes, the state, and affected local government to come together early in the decision process and work out solutions to identified environmental, taxation, jurisdictional, social and infrastructure problems. The contrast between the aforementioned Tribal State Compacts and the agreements ratified by the State Legislature on June 28, 2007, with Agua Caliente, Morongo, Pechanga and Sycuan fail to address necessary provisions if the public is to have confidence in the integrity of the tribal gaming industry. Moreover, these compacts represent an unprecedented expansion of gaming without consultation of affected local governments 1 or the voters of California. 2 These compacts set a precedent for bad public policy based on years of the Bureau of Indian Affairs ( BIA ) ignoring state and public concerns and the mysterious skirting or circumventing of the federal regulatory process for transferring land into trust for after-acquired lands eligible for gaming. These compacts unfairly project a cloud of suspicion on all gaming and nongaming Tribes by creating the appearance of impropriety by certain members of a group a group that has been granted a monopoly on gaming through the trust of the public. 1 Letter dated April 11, 2007, from Supervisor Dianne Jacob, San Diego County Board of Supervisors to State Senator Dean Florez- Chairman Governmental Organization Committee. First, I regret that local government is reacting to the proposed Sycuan Compact instead of taking part in its development at an earlier juncture. 2 In 2004, similar amendments to the 1999 Tribal State Compact were offered in a statewide ballot authored by Agua Caliente. The voting public opposed the amendments by 79% statewide.

3 Honorable Dirk Kempthorne Page 3 1/9/2009 Discussion 1. The Amended Compacts Are Not A Final Document The compact ratification statutes for the Agua Caliente, Morongo, Pechanga, and Sycuan as a matter of State Law do not become effective until January 1, The only discretion IGRA gives the Secretary in compact approval is to:(1) Affirmatively approve it under Section 2710(d)(8)(A), or (2) Do nothing and allow it to be deemed approved by operation of Section 2710 (d)(8)(c). The Secretary has no discretion under section 2710(d)(8)(B), which states he/she cannot approve or allow to become final any compact which is unlawful. (B) The Secretary may disapprove a compact described only if such compact violates- (i) any provision of this chapter, (ii) any other provision of Federal law that does not relate to jurisdiction over gaming on Indian lands, or (iii) the trust obligations of the United States to Indians The Secretary cannot approve a compact that violates federal law through the automatic approval of: 2710 (d)(8)(a) before the date that is 45 days after the date on which the compact is submitted to the Secretary for approval, the compact shall be considered to have been deemed approved by the Secretary, but only to the extent the compact is consistent with the provision of this chapter. Since the Amended Compact is not a final document until January 1, 2008, the Secretary of the Interior has no choice but to return the Compacts to the State of California unapproved. Approving a document that is not final violates section 2710 (d) (3) (B) entered into requirement and is thus illegal. The California Legislative ratification of these compacts has caused affected parties to consider the potential for a referendum that would force a statewide vote on the compacts. 3 It is in our view and without reasonable dispute should these compacts be placed before the voting public they will receive an overwhelming defeat. Therefore, it is important that the Secretary of the Interior not approve these compacts until it is clear the ratification statutes have become settled law. Federal approval of these compacts prior to becoming a final document constitutes federal interference with the vote of the people and the Federal Constitutions guarantee of our States republican form of government. Moreover, it will be necessary for the Secretary of the Interior and the United States Department of Justice to uphold the rule of law and ensure that NO additional slot machines are installed at these tribal casinos violating 3 James P. Sweeney, Copley News Service, San Diego Union Tribune, Assembly ratifies tribal gaming deals

4 Honorable Dirk Kempthorne Page 4 1/9/2009 federal law, until the ratification of the compacts is settled and Secretarial Approval is valid. Approving these compacts represents a final agency action opening the door to affected third parties to seek substantive review through an Administrative Procedures challenge. The vote of the people is precious and must be protected. 2. Can the Secretary of the Interior approve a Compact that includes an MOA that is a prerequisite for tribal state compact ratification and addresses core issues of IGRA? In California it is clear that the Governor must negotiate and the State Legislative must ratify Tribal State compacts. These actions are required under Article IV, section 19 of the State Constitution. Despite the clarity of this language, other questions arise. How does the State Legislature deal with insufficiencies in the negotiated Tribal State compacts? In our view, if a State Legislature does not approve of certain provision in a Compact negotiated by the Governor, and refuses to ratify it, the Compact should be returned to the Tribe and the Governor, preferably with a detailed explanation of the reasons the legislature denied ratification. The Legislature should not negotiate, but simply communicate its conclusions. This is the legislative action that develops and sets state tribal gaming policy. The State Legislators unwilling and fearful to vote down the compacts for insufficiencies of these politically powerful and well healed tribes have instead negotiated side deals. These agreements were taken to the Governor for his signature. Governor Schwarzenegger has signed side deals with the Tribes. The Governor s Press Release of June 27, 2007 announcing the Memoranda of Agreement ( MOA ) with four Tribes clearly states: The MOAs are government-to-government agreements with enforcement provisions that are separate and apart from the 2006 compact amendments. No Tribal resolutions were provided authorizing waiver of sovereignty nor a signature line for the Secretary of the Interior to ensure the agreements are binding. Are these agreements binding? Or are these agreements a prerequisite for tribal state compact ratification violating IGRA? The proposed MOA s appear to be a prerequisite for tribal state compact ratification which imposes a tax, assessment, or fee on tribes. An MOA covering the Minimum Internal Control Standards ( MICS ) requires an exercise of tribal sovereignty affecting the governmental authority of the tribe. Likewise a waiver of sovereignty is required to allow the State the ability to garnish the wages of dead-beat parents or subpoena and search files and records on Indian lands. Therefore, Section 2710(d) (4) applies to these provisions and directs the Secretary of the Interior. nothing in this section shall be interpreted as conferring upon a State or any of its political subdivisions authority to impose any tax, fee charge, or other assessment upon

5 Honorable Dirk Kempthorne Page 5 1/9/2009 an Indian tribe or upon any other person or entity authorized by an Indian tribe to engage in a class III activity. Clearly, one Tribal government seeking compact ratification is opposed to the side deals. We think it sets a bad precedent because the Legislature is this case has initiated negotiations with these tribes on these gaming related issues that the state Constitution says is the role of the governor to conduct, Coin said. 4 (Representing the San Manuel Band of Mission Indians) MOA s to these newly amended compacts arguably violate the authority of the Secretary of the Interior and the trust obligations of the United States to Indians. 3. BIA s Failure to Recognize After-Acquired-Lands for Gaming Since California has unique Indian law with regards to land, we request a thorough review of the land acquisitions for certification of such land for gaming in the Agua Caliente, Pechanga, Morongo and Sycuan compacts. We believe the BIA s January 2007 letter to the Potowatamis (and to other Tribes thereafter) regarding the BIA s refusal to take non-adjoining/non-contiguous lands into trust may be implicated. We respectfully request, that the policies applied in the Warm Springs letter dated May 20, 2005 be applied to these compacts particularly the Sycuan Compact, and Tribal governments who may have acquired land for reasons other than gaming (bait and switch, or land banking) and are now using the land for gaming enhancement or the development of a destination gaming resort be required to adhere to a NEPA and Office of Indian Gaming Management review. The approved 1999 Tribal State Compact requires that all Gaming Facilities be operated only on those Indian lands on which gaming may lawfully be conducted under the (IGRA). (Compact Section 4.2) The compact defines Gaming Facility as any building in which class III gaming activities or gaming operations occur and all rooms, buildings, and areas including parking lots and walkways, a principal purpose of which is to serve the activities of the Gaming Operation. (Compact Section 2.8) Indian lands on which gaming may be lawfully conducted under the Indian Gaming Regulatory Act ( IGRA ) is limited to: (1) all lands within the limits of any Indian reservation and (2) any lands title to which is either held in trust by the United States for the benefit of any Indian tribe or individual or held by any Indian tribe or individual subject to restriction by the United States against alienation and over which an Indian tribe s exercises governmental power as of October 17, 1988, the date on which IGRA became law. (25 USC section 2703(4)) 4 Joe Nelson, San Bernardino Sun, June 29,2007, Tribe rejects gaming side deal

6 Honorable Dirk Kempthorne Page 6 1/9/2009 While newly acquired lands may meet exceptions under 25 U.S.C. Section 2719 as contiguous lands or 25 U.S.C. Section 2703 lands within the boundaries of a reservation, there are other relevant findings that require the scrutiny of the Department of the Interior to certify that the after-acquired lands qualify for gaming. There can be no dispute that the newly acquired lands being developed off reservation do not satisfy the 1999 California Tribal State Compact requirement that Gaming Facilities be located exclusively on lands that qualify for gaming under IGRA. It appears that the failure of the Regional Office of the BIA in California goes to a fundamental policy decision to ignore the terms and conditions of the tribal state gaming compact. Indeed, this very issue was challenged in State of California v Acting Pacific Regional Director Bureau of Indian Affairs, docket No. IBIA A August 10, The Interior Board of Indian Affairs ( IBIA ) concluded that the BIA did not commit legal error or abuse its discretion in failing to consider the terms of the compact concerning gaming facilities, because the State failed to bring those terms --- and the alleged contract violations associated with the tribe s use of the property to the attention of the BIA. This response from the IBIA appears to be an easy-out giving cover to the BIA Regional Director. The BIA failed to analyze adequately the land acquisitions tribal and project site histories and all appropriate documents including the tribal state compact affecting those land acquisitions. In order for BIA decision-makers to do their job, they must be able to do so without wondering whether the next person in the job will spend time reversing things they have done. The very integrity of the decision-making and policy-making process must be respected. It is the responsibility of the Regional Director to consider the tribal state compact provisions particularly in light of the fact that IGRA requires the Secretary of the Interior to approve, disapprove or deem approved Tribal State compacts and notice them in the federal register. This exploitation of discretion has allowed for the skirting and circumventing of federal regulations that protect the environment and ensure that affected local governments and state concerns are appropriately addressed. This discretionary neglect constitutes federal interference with the powers reserved to the State in a manner patiently at odds with the intent of the 10 th amendment. This mistreatment of discretion has caused substantial monetary impacts on local governments and ultimately state tax payers who are now subsidizing numerous multi-million dollar casino expansions. Clearly the decision makers are aware of this issue as the Checklist for Gaming 5 Acquisitions in 2001 requires central office approval by the Assistant Secretary Indian Affairs for all acquisitions for gaming related purposes, including parking facilities, even though no gaming will be conducted on the property. The following are a few highlights of bait and switch after-acquired-lands: 5 The Checklist for Gaming Acquisitions is basically an underground regulation. BIA cannot rely upon the checklist only as it does not supercede the terms of a Compact that IGRA s requires.

7 Honorable Dirk Kempthorne Page 7 1/9/2009 San Manuel s Compact Section 4.2, provides that the second casino, one additional location on the Tribe s Indian lands. Land Grab: San Manuel Band of Mission Indians Non-Gaming Acquisition: A land acquisition by the San Manuel in 1997 stated the intended use of the land as a community recreational area. Instead, as suspected by then California State Attorney General Dan Lungren and reflected in his comments on the acquisition, the San Manuel Band of Serrano Mission Indians announced after the passage of Prop 1A in 2000, that it will use this land for expansion of its existing Bingo and Casino facility by 364,000 square feet, including 135,000 square feet for a meeting and banquet hall, 70,000 square feet of additional gambling area, 55,000 square feet of additional food service area, and 50,000 square feet of additional administration area. In addition, the Tribe constructed a six-level, 3,400 space parking structure, an additional single level 200+ space parking lot, and a 1,400-1,800 seat event center, adjacent to three homeowner associations of single family residential areas, populated by 17,800 residents and in proximity to seven schools within the City of San Bernardino. Pechanga Compact Section 4.2 provides that the second casino, one additional location on the Tribe s Indian lands. Land Grab: ac. Great Oak Ranch transferred into trust by Congressional Act. The land links and makes contiguous the Tribal owned casino property to the main reservation The Band submitted an application for a fee-to-trust acquisition for ac. The intended use was to maintain the existing cultural resources that exist throughout the site. Today it is the site of a developing golf course, two multi-level parking garages, parking lot and other proposed developments enhancing the casino as a destination resort HR. 28 Congressional Act by Congressman Issa is proposing to transfer 1100 ac. of land contiguous to the reservation into trust. This is land that has significant resources vital to the regional area affecting the lives of many tribal and non-tribal members. The BLM agreement is nothing more than unenforceable promises and can be terminated within 45 days for any reason. Morongo Compact Section 4.2 provides that the Tribe may establish and operate not more than two gaming facilities and 1 auxiliary gaming facility within the boundaries of its Reservation and only on the Tribe s Indian lands existing as of the execution date of this Amended Compact. Land Grab: Since 2000 the Morongo have submitted 11 applications for fee-to-trust acquisitions for more than a 1000 ac. of land, most outside of the exterior boundary of the reservation. Much of the land has been acquired with no immediate plans to change the current land use. However, the stated need is that land is necessary for future generations commonly known as land banking. Land banking is contrary to the goals of the Indian Reorganization Act (IRA) which requires tribes to demonstrate an immediate need for the acquisition for the land. Moreover, land banking constitutes federal interference with the powers reserved to the State in a manner patiently at odds with the intent of the 10 th amendment. Agua Caliente Compact Section 4.2 The Tribe may establish and operate not more than three (3) Gaming Facilities within the boundaries of its Reservation and only on the Tribe s Indian lands existing as of the execution date of this Amended Compact. Land Grab: Agua Caliente Band of Mission Indians: In 2002 the Agua Caliente Tribal government had two casino expansion projects. The Spa Casino in downtown Palm Springs and

8 Honorable Dirk Kempthorne Page 8 1/9/2009 the Rancho Mirage casino located on I-10. Both facilities required the acquisition of land after 1988 for gaming. These projects mysteriously skirted or circumvented various aspects of the fee-to-trust federal regulations. For example: Non-gaming Trust Acquisition of 2000: Agua Caliente purchased, as non-gaming property, 40 acres of restricted allotment land from a tribal member in The purchase price for this interstate highway frontage property was $4.1 million. The transfer of title and governance over the land to the Tribe was pursuant to 25 CFR section 152 which grant authority to the Secretary of the Interior to sell or transfer restricted lands. However, the notification process followed by the Palm Springs office of the BIA, if any, remains at this time unknown. Gaming Trust Acquisition of 2002: The Spa Casino required the purchase of former allotment land held in fee, which was sold to the City of Palm Springs Redevelopment Agency. Curiously, California has a state statute that prevents City Redevelopment Agencies from selling or negotiating agency land for any gaming activity whatsoever. (California Health and Safety Code ) Agua Caliente and Mr. Abramoff: Ultimately, special interest legislation was needed for Agua Caliente s casinos. The lobbying efforts of now disgraced lobbyist Jack Abramoff allegedly assisted in that endeavor. The Native American Technical Corrections Act of 2004 provided Agua Caliente with the language they needed to take land into trust circumventing authority of the State of California and local jurisdictions. This type of special interest legislation abuses the delicate balance of authority between States, Tribes and the Federal Government, framed by the Indian Gaming Regulatory Act. But Agua Caliente is not alone: Four of Abramoff clients had amendments in this Act as well as another California Tribe, the Barona Band. The legislation states: 108TH CONGRESS 1st Session MAKING TECHNICAL CORRECTIONS TO LAWS RELATING TO NATIVE AMERICANS, AND FOR OTHER PURPOSES Section 130. Agua Caliente Band of Cahuilla Indians Section 130 authorizes the Department of the Interior to take land into trust for the Agua Caliente Band of Cahuilla Indians and extinguishes the restrictive covenant attached to that parcel. While the local BIA submitted their final corrected decisions in June of 2002, the grand opening of the Spa Casino expansion proceeded in November 2003, despite the fact that the land was not recorded as being in trust in the federal register until July 14, In other words, there was a period of time when the tribe operated a casino on land under the regulatory authority of State of California. This raises questions of the potential of requiring the payment of back taxes on the real property during this period of time. Sycuan Compact Section 4.2 The Tribe may establish and operate not more than two gaming facilities on its Indian lands within the boundaries of its Reservation as it exists as of the

9 Honorable Dirk Kempthorne Page 9 1/9/2009 execution date of this amended Compact or as the boundaries thereafter may be adjusted to include approximately 1600 acres that are contiguous to the existing Reservation boundaries. This includes Singing Hills Country Club. 6 Land Grab: Application for the 1600 ac. has yet to be submitted at this writing Non gaming acquisition. The current land use of the ac. confirms the legitimate concerns expressed by Robert R. Copper, Deputy Chief Administrative Office, County of San Diego in a letter dated March 30, 2001 that the land would include gaming purposes. The Tribe specifically identified the land use on its fee to trust application as future tribal housing and a variety of cultural purposes. Instead the Tribe has constructed a five-level, 2,000 space parking structure. 4. Violation of Separation of Powers The Governor s negotiators overstepped the administrative authority of the Office of the Governor in creating and negotiating for systems that do not exist now and has never previously been authorized by the State Legislature or Congress. Such as providing for: Provisions requiring the State to negotiate in good faith the arrangements by which a tribal court system will adjudicate claims of bodily injury, property damage or personal injury. This appears to conflict with United States Supreme Court rulings: Nevada vs. Hicks (2002) 121 S. Ct. 2304: a case decided by the United States Supreme Court on June 25, The Nevada vs. Hicks decision relied on two previous rulings, Montana vs. U. S. 7 and Oliphant vs. Suquamish Indian Tribe 8. The Supreme Court held that the tribal court did not have jurisdiction to adjudicate state officials conduct in executing a search warrant to a tribal member for an off reservation crime. More importantly the Supreme Court in regards to the jurisdictional reach of tribal courts over nonmembers, stated: tribal courts, it should be clear, cannot be courts of general jurisdiction in this sense, for a tribe s inherent adjudicative jurisdiction over non members is at most only as abroad as is legislative jurisdiction. Id. At This compact is approving a casino on land (1600 ac.) that is not yet in trust. Will the Secretary of the Interior uphold the policy stated in the Warm Springs letter of May 20, Montana vs. United States, 450 U. S. 544 (1981): A case decided by the United States Supreme Court in The case ruled over both the criminal and civil position of tribal government authority. Tribal governments do not have civil regulatory jurisdiction over non-indian activities on fee lands or owned lands inside of tribal reservations. Tribes simply do not have full regulatory authority over non-indians. Moreover the Supreme Court is reading this case broadly stating that tribes do not have inherent jurisdiction over non-indians civil matters at all although tribal governments may regulate hunting and fishing on tribal lands. There are two exceptions in this ruling: 1. Citizens who enter into contracts with tribes are bound and under tribal jurisdiction. 2. Or the civil activity of non-indian citizens threatens the political integrity of the tribal government or the health or security of the Indian government. 8 Oliphant vs. Suquamish Indian Tribe, 435 U.S. 191 (1978): A cased decided by the United States Supreme Court in 1978 simply ruled that tribes have no inherent criminal jurisdiction over non-indians.

10 Honorable Dirk Kempthorne Page 10 1/9/2009 In other words, absent a federal law providing tribal court jurisdiction over a particular cause of action, tribal courts lack jurisdiction to adjudicate actions over non-tribal members. The Hicks case provides a clear limitation of Tribal Court jurisdiction over nonmembers. Additionally, the compact agrees to the development of a tribal workers compensation system. A tribal workers compensation system does not currently exist. This component appears to violate state law. Neither of the aforementioned components is appropriate for Tribal-State Compact negotiations. Both of these issues create systems that do not exist now and has never previously been authorized by the State Legislature. This is an overreaching of executive authority and makes this compact ripe for a challenge based on Separation of Power. Power exclusively conferred upon one branch of government is by necessary implication, power denied to the other, absent a specific exemption. Conclusion: California continues to raise unique issues brought about by the evolution of tribal gaming that covers a waterfront of never-before raised legal and policy questions. While the Tribal State Compact is an agreement to permit gaming it is also an important and vital document that maintains the delicate balance of powers between Tribes, states and the federal government. It is a document that should be carefully constructed while recognizing the powers and authorities vested in the executive, legislative and administrative branches of state and federal government. The cumulative impact of all the aforementioned reasons has powerful and far-reaching unintended consequences on the cultural, economic and political systems of this State. Thus, Stand Up For California respectfully request great scrutiny to the newly amended Tribal State compacts of Agua Caliente, Morongo, Pechanga and Sycuan. We believe there are many flaws in the construction of these compacts that potentially violate provisions of IGRA and other provisions of federal law that do not relate to jurisdiction over gaming on Indian lands. Sincerely, Cheryl Schmit Director Schmit@hughes.net CC: David Bernhardt Solicitor of the Interior Fax: James E. Cason Associate Deputy Secretary of the Interior Fax:

11 Honorable Dirk Kempthorne Page 11 1/9/2009 Carl Artman Assistant Secretary of Indian Affairs Fax: George T. Skibine Acting Deputy Principal Assistant Secretary for Indian Affairs Fax: Phil Hogen Chairman, National Indian Gaming Commission Fax: Maggie Grant Director, Office of Intergovernmental Affairs The White House Fax Eric Holland -Director, Office of Intergovernmental Affairs United States Department of Justice Fax United States Senator Byron L. Dorgan Chairman, Committee on Indian Affairs Fax: United States Representative Nick J, Rahall II Chairman, Natural Resources Fax:

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