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Tribal Warfare 

It’s Indian vs. Indian with Arnold in the middle, as the fight over the flood of money from reservation casinos heats up

Thursday, Sep 30 2004
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The Terminator struck back at the tribes financing Davis and Bustamante, and promised, loudly, that if elected he would get tough and force the wealthy Indian tribes to start kicking back a fair share of their earnings to the state — as much as 25 percent, as in Connecticut.

Soon after the new governor took office late last year, he made good on his promise and named David Kolkey as his tribal negotiator — a Bay Area lawyer who had been a gambling negotiator for Pete Wilson. Kolkey’s mission was to hone a strategy that would allow the state to shape and harness the inevitable expansion of gambling.

And that expansion, indeed, had become inevitable, no matter what Schwarzenegger did or didn’t do. Racetrack and non-Indian card-club interests were crafting their own ballot measure, Prop. 68, which would allow them to install slot machines in their facilities, thereby breaking the Indian monopoly — that is, by the terms of the measure, if the Indians didn’t contribute 25 percent of their take to the state. Passage of 68 would mean more casinos.

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Some powerful Indian tribes, meanwhile, were not about to sit back and surrender the future to others. The Agua Caliente Band, in Palm Springs, began fashioning its own ballot measure, Prop. 70, which would jump the gun on Schwarzenegger by allowing a virtually unchecked expansion of Indian gaming and return a smaller payment to the state than that demanded by the governor.

By the time of Schwarzenegger’s inauguration, the three-sided battle over the future of California gambling was joined.

 

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.

Palm Springs billboard slams local tribe.

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.”

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