Tribal Warfare

 

A half-year later, on the cusp of the July Fourth weekend, with the Legislature about to adjourn, it was an odd sight on the Capitol grounds. In the Sacramento summer heat, the militant hotel workers union (UNITE HERE) had brought in teams of worker-members to frenetically lobby for the same Governor Schwarzenegger whom, only months before, organized labor had spent millions in trying to defeat.

The Legislature was about to vote on new compacts that the governor had just hammered out with five leading casino tribes — including Paula Lorenzo’s Rumsey Band — and the union was determined to see them through legislative ratification.

“Arnold walked the walk,” said UNITE HERE organizer Ivana Krajcinovic, who was accompanying the workers through the halls of the Capitol. “Other governors,” she said, referring to Gray Davis, “merely talked the talk.”

The union euphoria in backing the Republican governor was easy enough to understand. The agreement that he struck with the five tribes was an artful compromise that had something for everyone — including labor. The new compacts approved that night by the Legislature would indeed preserve the tribes’ monopoly on casino gambling but would also require them to make a $1 billion up-front payment to the state as well as annual payments of about $175 million. It fell short of the 25 percent levy Schwarzenegger had promised during his campaign by about one-half, but it was, nevertheless, a sea change.

Signatory tribes could now expand beyond the previous state-imposed limit of 2,000 slot machines each, but would have to pay increasingly more to do so. The tribes also agreed to submit to numerous state environmental, safety and building constraints, thereby waiving some long-held rights of sovereignty (each of the state’s 107 tribes is, at least theoretically, a foreign power exempt from most state and federal regulation). And to the surprise and delight of many, Schwarzenegger held firm in demanding that the tribes agreeing to the new compacts permitting expansion would have to remain neutral in any labor-organizing attempt, effectively kicking the doors open to unionization.

Not that the governor was a closet Wobbly. But he knew that to follow through on his vows to extract a fair-share return from the tribes, he was going to need the support of the liberal Democrats who controlled the Legislature, so why not bring labor into his coalition? At least on the casinos.

The environmentalists were also onboard. And so was Stand Up for California, the largest statewide grassroots group that has been fighting an eight-year guerrilla war trying to force gaming tribes into giving back more to local communities. “A year ago, I never thought this would have been possible,” says Stand Up’s founder, Cheryl Schmit. “The pendulum is swinging back. These new compacts are a national milestone, the most advanced in the country. California now moves from being the worst to being the best in defining relations with the tribes.”

Schwarzenegger had some good cards to play. Going into the talks with tribes, he was purposefully ambiguous about whether or not he would eventually support Prop. 68. After all, two of his advisers — George Gorton and Don Sipple — were both working on the pro-68 campaign. And the tribes knew that if the talks fell through, in November they might very well see Schwarzenegger putting his political capital into Prop. 68 and breaking up the Indian casino monopoly. It was either bargain with the governor, or dare facing him down in the balloting box.

The guarantee of Indian exclusivity was the strongest motivator for tribes like the Rumsey to sign on to the new revenue-sharing compacts. “That’s the most important thing we win out of this,” says Howard Dickstein, the Sacramento attorney who represented the Rumsey and other tribes in compact talks with the governor.

As soon as the new compacts were signed, Schwarzenegger announced he would “smash” the racetrack-backed Prop. 68. (And Gorton and Sipple soon both withdrew from the campaign.)

Perhaps most deftly, Schwarzenegger had now neatly cleaved the Indian gaming lobby in two. (In late August, compacts with five more tribes were worked out by Schwarzenegger, and four of those were approved by the Legislature.) On the one side were the tribes like the Rumsey, eager to cooperate with the state and make the necessary trade-offs to expand. And on the other were the tribes, most notably the Palm Springs–based Agua Caliente Band, that wouldn’t agree to the new terms and were still intent on doing an end run with their ballot Proposition 70.

“This really breaks up the cartel, the artificial equality that the tribes had been given when each was allowed 2,000 slots,” says Schmit. “This is the best way to handle the expansion that was coming anyway.”

While forging the new compacts, proponents held up Chairwoman Paula’s Rumsey Band as their model. A few years back, the tribe had already worked out a generous and unique giveback agreement with the local community, pledging $3 million to $5 million a year in payments over 18 years to abate the social costs of gambling. “What we have with the tribe is the most expansive and most enforceable agreement anywhere,” says Yolo County Supervisor Mike McGowan, who also heads up the state association of counties. “There was a lot of resistance on both sides at first,” he says. “But it worked because the tribe had a real relationship with the land and really accepted the role as stewards.”