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Tribal Warfare

Illustration by Tra Selhtrow

CAPAY VALLEY — Paula Lorenzo, the 54-year-old, tattooed, Harley-riding chairwoman of the tiny Rumsey Band of Wintun Indians, looms over the surrounding patchwork of orchards, vineyards, and fields full of hay, horses and sunflowers in this bucolic valley about an hour northwest of Sacramento as if she were, more or less, Ben Cartwright.

If you had to pick the single most powerful and influential person in Yolo County, it would have to be this short grandmother of six — or Paula, as she’s called by just about everyone who knows her or has heard of her.

It’s one hell of a long way to come for someone born into an obscure tribe that had its traditional lands snatched away, for a youngster who was on welfare, that is, when she wasn’t working in the fields picking walnuts, tomatoes and grapes. “I hated the grapes,” she says with a laugh, waving her hand. “Too many bees.”

Paula elicits a totally different kind of buzz nowadays. A high school grad, she’s now a foundation trustee at nearby UC Davis. The charitable contributions made by her Tribal Council help float a fleet of community organizations, including the local symphony orchestra, the police and the fire department. An organizer from the hotel workers union that represents her work force goes so far as to call the boss lady a “visionary.”

She and her tribe of barely 46 souls, only half of them adults, now are the biggest private employer in the county — providing jobs for 2,500 people out of a total population of 170,000. The Rumsey have also helped bring Hewlett-Packard into the county. With the advice of some top-notch financial advisers, Paula and her tribe are heavily invested in the stock market and real estate. The office buildings they own in Sacramento have the state of California and, until recently, the IRS as tenants.

The Rumsey Band and its investment partners are also the largest owner of government-leased real estate in Illinois, collecting hefty rent from the DMV and the Department of Corrections. The city of Springfield is practically being redeveloped with money that Paula’s tribe have invested. They also own a Ford dealership. And the Rumsey are turning 300 nearby acres into a golf course.

Oh, yes. Then there’s that Cache Creek Casino and resort hotel the tribe opened this spring with a B-52’s concert, just a mile or two south of the Rez. The impoverished Rumsey edged into the gambling business in 1985, when they opened a small bingo parlor. “Back then, I was happy just to be a floor clerk,” Paula says. “I was happy to have a job.” By a decade later, the Rumsey had added a handful of primitive “pull-tab” slot machines. And Paula and the Tribal Council were socking away the money for the members. By 2000, the first Nevada-style machines were introduced, and the overall fortunes of the tribe took their definitive turn — free health care, tuition, and increasingly juicy monthly checks for everyone (with the tribe even taking care of individual tax returns).

The just-opened, all-out, whiz-bang Vegas-class casino takes matters to a whole new level of prosperity. A veritable money machine, with just under 2,000 slots in a 66,000-square-foot casino, each one cranking out maybe $300 a day, on peak days it has as many as 10,000 customers. Toss in the blackjack and pai gow tables, the 200-room luxury-level hotel, the 600-seat showroom with 12 fog machines and a state-of-the-art sound system, the gourmet restaurants and the spa, and it totals up to maybe $200 million, or maybe half again that much per year. Enough, roughly, to pay back the total investment in one calendar year.

“Yes,” Paula says with a smile. “Where we’ve come from has been a humbling experience that allows the tribe today to really enjoy life.”

“The world has changed 180 degrees for us,” Paula adds as we sit and chat in the gleaming Tribal Council chambers. “From welfare checks and state subsidies, from standing in line for government cheese, from a reservation that was really 56 acres of plowed dirt, to now being able to buy whatever we need, to all of this.”

All of this includes a reservation of the sort never seen in any cowboy movie — an idyllic home for the 26 family units, branching off only three family trees that make up this tribe. That patch of plowed dirt that Paula played on as a child has been replaced by a couple of dozen breathtakingly crafted homes, many of them mansions of 4,000 to 5,000 square feet, with detailed metalwork and custom glass, and sweeping architectural flair, nestled into a country-club setting of curving creeks and arching bridges. Squadrons of shiny Hummers, Caddies, SUVs and chromed-up hogs squat in the driveways. The ultramodern tribal offices, a new fully computer-equipped school, a community center and a performance space occupy center ground.

 

Not too shabby for a few dozen folks whose ancestors, according to the official tribal history, “dwelled along the waters of Cache Creek in the serene Capay Valley and thrived off the bounty of the land.”

After two centuries of tough times, the official history continues, “the tide is beginning to turn for the members of the Rumsey Band of Wintun Indians.”

Tide? More like tidal wave. Today, in California, if you’re a member of one of the tribes that operate a casino, at least on the scale of Cache Creek, well, then, to paraphrase Mel Brooks, it’s good to be an Indian. Very, very good.

 

The rise of the Rumsey perfectly parallels the story of the other 25,000 California Indians who belong to the 54 tribes that currently operate a casino — about 10 percent of the state’s total Native American population.

While dozens of states now host Indian casinos, nowhere is the concentration greater than in California. Though some of the casino-owning tribes have as few as 13, or in one case seven, members (the average is 140), the industry now takes in about $6 billion a year and employs more than 43,000 workers. Because each tribe has sovereignty, the books are closed and the exact amount of revenue isn’t known.

But the Indian gambling boom is just beginning. One leading tribal chair predicts that within five years, California casino revenues will surpass those of Nevada’s — currently about $9 billion. Some industry analysts predict that in the immediate future, California gambling income will as much as quadruple. The current fleet of 60,000 slot machines might expand to 350,000 — one for every 100 Californians. Some Las Vegas gambling brand-name corporations — like Harrah’s and Caesars Entertainment — that once tried to sink Indian casinos in California are now partnering with them.

Ruling class: Chairwoman Paula Lorenzo, and her domain (Photos by Steve Yeater)

When Californians voted, twice in the last six years, to grant Indian tribes a monopoly on Vegas-style gambling, they did so convinced that, after being subjected to institutionalized injustice and marginalization, Native Americans deserved a chance to be “self-reliant.” At least, that was how the casino legalization was pitched to the public. Few voters, if any, realized, or could know or even imagine, that they were also giving birth to the fastest-growing industry — and fastest-growing political lobby — in California, one likely to shape the state’s destiny, economy and politics for decades to come.

Indian tribes that had already tasted, albeit in limited fashion, the economic benefits of operating small card rooms and bingo parlors, and were angry with Governor Pete Wilson, who opposed widespread gambling, spent $67 million in 1998 to persuade state voters to approve Nevada-style reservation-based casinos and to lower the gambling age to 18.

The California Supreme Court quickly overturned the measure, known as Proposition 5 — but the Indians were hardly defeated. The major gambling tribes then came together with newly seated Governor Gray Davis, upon whom the Indians lavished generous political contributions, and who, over the course of 16 harried and hurried days, drafted a round of 58 formal gambling agreements known as “compacts.” The framework established by Davis was supposedly to contain California gaming by giving the tribes a 20-year monopoly on casinos and limiting each tribe to a maximum of 2,000 slot machines.

Some states, like Connecticut, exact as much as 25 percent in return payments from Indian casinos. (As sovereign nations, Indian tribes cannot be formally taxed.) But anxious to maintain the Democrats’ cozy relationship with the tribes, Governor Davis negotiated compacts that demanded no return payments from the tribes to the general state fund.

The Davis compacts were so hastily drawn, so scant in their regulation and so economically undemanding that New York Governor George Pataki once quipped that California was the example of how not to manage Indian gaming.

Against little opposition, and fueled by $28 million in tribal funds, Proposition 1A sailed through in 2000, approving the Davis compacts, and dozens of tribal casinos snapped open like popping corn throughout the state, bestowing not only a tremendous fortune on their tribal operators, but also the kind of awesome political clout that only money can buy.

And with California today poised to become the gambling center of America, everyone wants a piece of the action. Governor Schwarzenegger and local communities want a “fair share” of gambling revenues. Big Labor wants to unionize the casino work force. And Indian tribes want more slot machines and more casinos. “Who would have thought we Indians would someday be at the center of California’s political universe?” wisecracked one Coachella Valley tribe member. “Yet here we are, and we ain’t leaving. That’s the surest bet.”

 

Not only did the governor spend a good piece of the summer trying to hammer out new agreements with gambling tribes, but this November’s state ballot will be dominated by two gambling-related measures, Propositions 68 and 70 — one backed by card clubs, racetracks and Larry Flynt, and the other pushed by the state’s most powerful band of Indians — the Agua Caliente Band — who want to remove all restrictions on expansion of tribal gambling.

As it is, the gaming tribes are a formidable political force in the state Capitol, having spent more than $135 million on California politics since 1998. “In the late ’90s, all of a sudden, like out of the blue, there they were,” said one Sacramento political consultant. “There were the teachers, the prison guards, the chamber of commerce, and, boom, along came the tribes, dishing out donations like the new rich kids on the block.” By way of example, in pushing through ballot Propositions 5 and 1A, which legalized Indian-casino gambling, the San Bernardino–based San Manuel tribe ponied up $34.8 million, a staggering half-million for each of its 67 members.

Dozens of California politicians, from both parties, have benefited from tribal largess for the better part of the last decade.

Millions were given to Gray Davis. Hundreds of thousands have been given to state Senate President Pro Tem John Burton. Almost a million went to Attorney General Bill Lockyer. Republican state Senator Jim Battin, who represents the casino-rich Coachella Valley, gets almost all of his funding from the tribes. When he served in the Assembly, former Speaker Antonio Villaraigosa was a favorite recipient of Indian funding. But when he ran for mayor of Los Angeles in 2001, he was torpedoed by a $200,000 smear campaign, financed by the Palm Springs–area Morongo tribe, which had been angered by his pro-union voting record. “Antonio learned the hard way what it meant to cross the tribes,” says the Capitol consultant. “They massacred him.”

But for all their political juice, the tribes ran pretty much under the public political radar — that is, until the treacherous turns of California gubernatorial politics thrust the tribal casinos front and center.

Not long after Proposition 1A ratified the tax-free Indian casinos, Gray Davis began to regret the sweetheart deals he had inked. In early 2003, Davis re-assessed the terrain: State deficits were mounting, his political career was swooning, the whisper about recall was becoming audible, and tribal receipts were skyrocketing. Davis announced he wanted to reopen the 20-year compacts he had signed only four years before. Some sort of expansion would be authorized, but in return Davis wanted $1.5 billion back in casino revenues to help fill up the state’s bare coffers.

“We were ready to work out something, why not?” says one tribal representative. “We were willing to pay back something reasonable if we could get more [slot] machines beyond the limit of 2,000.” Twenty-one tribes said they were ready to renegotiate.

The roar of recall soon washed away the renegotiation effort. Davis, struggling to hang on to his job, backed down, preferring to take another round of tribal contributions.

One out of five dollars spent on the 2003 recall election came from Indian tribes, with a total of $9 million given to Davis, to Lieutenant Governor Cruz Bustamante and to conservative State Senator Tom McClintock. Just two Southern California gambling tribes, the Pechangas and the Viejas, dropped a jackpot $4.5 million into Bustamante’s campaign coffers.

Such egregious tribal involvement was a crass political error that has boomeranged against the Indian gaming industry.

The tribes, perceived by the public until the recall campaign as long-standing victims finally making good, now, seemingly overnight, transformed themselves into seemingly one more high-visibility, insider special interest and one more political target.

Rumsey Chairwoman Paula Lorenzo agrees that the recall was a historic political turning point. While her tribe prudently stayed far from the fray, limiting itself to one modest $25,000 donation to Governor Davis, she knew that trouble was brewing from the millions forked out by some other tribes. “It was a gross amount of money they flashed,” she says. “And now we all have to pay for it. It just wasn’t thought out. This is the big leagues, you know. And just having a lot of money to throw around doesn’t mean you have to stop paying attention.”

Schwarzenegger certainly was paying attention. “To be honest, Arnold didn’t go into the recall planning to make the Indians and getting some money back from them all that big of an issue,” says one of the governor’s close advisers. “But Arnold knows an opening when he sees one. And this opening was about as big as they get.”

 

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.

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.”

 

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.”

And the Rumsey are even pro-union (“a necessary evil,” in Paula’s words), their workers holding one of the only two collective-bargaining contracts among the state casinos. The workers that HERE had brought in to lobby the state Legislature to ratify the compacts all came from the Cache Creek Casino. And all eagerly praised Paula’s tribe for providing good wages and family health care. “What’s unique in this industry is the palpable level of fear,” says HERE organizer Krajcinovic. “The workers see how much unfettered power the tribes have, with no way to sue for workers’ comp, no OSHA, no building codes, and how in some places the tribe has bought off the local government. We’re trying to build a statewide movement while this industry is exploding. The new compacts are hugely important, as they set the standard. And Cache Creek is the best example.”

Paula Lorenzo knew she was sticking her neck out to sign a pact with the governor, and with labor, for that matter, contradicting the strategy of other, more recalcitrant tribes. “Yeah, to be honest, some tribes are probably going to get mad at us for signing this compact,” she tells me. “But they’re busy fighting so many brushfires with their own community, and we’re not.”

“For me, it’s all about business,” Paula says. “If you’re going to do business with people, you have to treat them well, treat them with the utmost respect. You know, Big Money threatens people. So we have to put people at ease and show them we know how to do the right thing.”

 

A full day’s drive to the south of the Rumsey, two hours southeast of L.A. along I-10, just before the turnoff for Palm Springs, a 23-story skyscraper towers over the desert floor. Without question, it’s the tallest building within 50 or maybe even a hundred miles.

The only building more than a half-dozen or so floors high in the entire Coachella Valley, the hotel tower is the crown jewel in the new 600,000-square-foot casino-and-resort complex now being completed by the Morongo Band of Indians. Like the Rumsey, the Morongos parlayed what was once a humble roadside bingo room into a fabulously wealthy gambling empire with a flashing, rocking casino at its center.

 

But the defiant lone tower set against the sweeping, natural desert and mountain vistas around it is, alas, an unfortunate but fitting symbol of the attitude that many local tribes maintain toward their neighbors. As one enraged Palm Springs community activist pointedly put it: “So much for the notion that some people are genetically predisposed to be better stewards.”

Unlike the Rumsey, the Morongos want no truck with the governor’s new type of tribal compacts. Nor do the Morongos care much for community cooperation. They are among eight tribes that operate nine casinos in the Valley, making the Palm Springs area a viable future competitor against Las Vegas as a “destination resort” — a place you might bunk into for a long weekend, primarily, but not only, to gamble. All together, the eight tribes give back only about $10 million a year to Riverside County. Compare that with, say, the $13 million that one single Northern California tribe, the United Auburn, pays annually to the much smaller, rural Placer County (the Auburn have also signed on to the governor’s new compacts).

But the biggest player in the concentration of Palm Springs gaming is the 350-member Agua Caliente Band of Cahuilla Indians, the veritable 900-pound gorilla of Indian gaming tribes. Easily the wealthiest and most powerful of California tribes, it not only operates two casinos in the Palm Springs area, it is also the desert resort town’s largest landholder. According to estimates from its longtime Chairman Richard Milanovich, one of the few registered Republicans among California tribal leaders, the tribe controls 65 percent of the developable land in Palm Springs and neighboring Cathedral City. The tribe owns a local bank as well as lucrative stakes in malls, even in the local airport.

By 1998, the Agua Caliente Band was the third largest contributor to state political campaigns. By 2000, it was hosting events at both the Democratic and Republican national conventions. Over the last six years, the tribe has doled out more than $20 million in political contributions. And when the state’s Fair Political Practices Commission complained that more than $7 million of those contributions were defectively reported, the tribe argued in court, unsuccessfully, that its sovereign status exempted it from complying with state campaign rules.

Tribal officials didn’t return calls seeking comment for this story. But just as Paula Lorenzo’s tribe evokes rather universal praise, the critics of Chairman Milanovich’s Agua Caliente Band are legion and vocal, singling out the tribe for everything that’s wrong about Indian gaming. Part of the problem, some say, is that the tribe was already wealthy before the legalization of casinos and is therefore insensitive to the sort of two-way relationship that must be forged with local communities, and the casino bonanza has only made things worse. “That tribe has a whole history of self-importance and arrogance,” says Sacramento lawyer Howard Dickstein, who represented the Rumsey and other tribes in the new compact negotiations with the governor. “They’ve had money a long time, and it makes it difficult for them to show respect for other governments. They’re know-it-alls. But, in fact, they are not very sophisticated at all. They lack political subtlety. They’re crass.”

Call it crassness, or call it pride, whatever it is, the attitude and practice of the Agua Caliente have set off a series of bloody dogfights that currently embroil the tribe.

Refusing to join the new compacts with the state, the Agua Caliente have picked a fight with Schwarzenegger by authoring Prop. 70 for this November’s state ballot. Sinking $12 million of their own money into the campaign, they also picked up a $10 million donation from the neighboring San Manuel tribe, the single largest political donation to a ballot initiative in state history. And Milanovich vows he will raise another $30 million if necessary to see the initiative through. Schwarzenegger, in his own style, has promised to crush the proposition.

Not only would Prop. 70 abrogate the newly signed compacts, but it would permit virtually unfettered expansion of Indian gambling for 99 years, and, in return, the tribes would pay back just under 9 percent of overall profits to the state. Those profits are calculated in a way, however, to minimize payments. Most significantly, if Prop. 70 were approved, it would cede almost no regulatory rights to the state and would guarantee nothing for labor.

The tribe is also at war with HERE, the hotel workers union. As soon as a unionization drive got under way last year, the tribe responded with reprisals and the deployment of two union-busting firms. When the local clergy signed on to the union campaign and two dozen protesters were arrested last April in an act of civil disobedience in front of the tribe’s Spa Casino, Milanovich brushed off the demonstrations as “meaningless” and “senseless.”

 

The union has put health care at the center of its campaign, slamming the tribe for not paying the coverage costs for employees’ family members. One study estimates that more than half of Agua Caliente employees resort to state welfare programs to cover their children’s health needs. The union alleges that the tribe organizes seminars for its workers so that state agency reps can explain the welfare program to them.

The tribe has bought a series of full-page newspaper ads attacking the union and has even purchased 30-minute blocks on local TV to run its own anti-union infomercial. In the last few weeks, the union and its allies in the clergy responded with a series of 13 full-size roadway billboards, scattered from Banning to Indio, that show a smiling Latino family of four and that, sarcastically, read: “Thanks taxpayers. You pay for family health care for casino workers because Agua Caliente won’t.”

But Milanovich not only has not blinked, he’s raised the stakes. Just as his tribe is lavishing millions on its own ballot proposition, he announced that starting this week, the tribe will no longer pay health-care costs for individual casino and hotel employees. To retain their insurance, the workers, many of whom only clear $17,000 a year, will now have to pay an annual $720 a year for coverage. And an additional $1,092 to cover a child. “As we’re well aware, the costs of health care are going up dramatically across the nation,” Chairman Milanovich dryly told the local newspaper.

 

While the Agua Caliente tribe’s anti-union stance has rankled the local clergy, its plans to redevelop and expand operations in a square-mile section of downtown Palm Springs known as Section 14 has touched off somewhat of a popular revolt — if something like that can be imagined in a town better known for golf courses than for street demonstrations. If not peasants with pitchforks, well, then, something like “pensioners with petitions.”

The tribe’s original plans for Section 14 called for a third Agua Caliente casino, four 75-foot observation towers and a mega–entertainment complex. Under public protest, the project has been radically scaled down. But the community knows that the square mile in question is “sovereign land” and, in the end, the tribe can do with it what it likes.

The fear is that the quiet and cozy, villagelike atmosphere of downtown Palm Springs, a magnet for strolling tourists and residents alike, will be spoiled by a garish gambling-centered monstrosity built by the tribe.

On a hot summer night, about 15 steamed-up residents meet in the Santa Fe–style community room of the genteel Orchid Inn. Some are typical desert retirees. The head of the local ACLU chapters is also there. So are some neighborhood-association activists, as are a couple of staffers from HERE. The guest of honor at this meeting of Citizens for Local Government Accountability, as the group is called, is Cheryl Schmit, the founder of Stand Up for California, who has flown in from her home base in Placer County and who now declares the Palm Springs fight to be the new Maginot Line against unregulated gambling expansion.

The atmosphere is rather giddy, the participants not quite ready for an unexpected success. After the Palm Springs City Council rubber-stamped tribal plans for redeveloping Section 14, this small band of activists fanned out through the sun-baked town, hoping to collect enough signatures to qualify a referendum on the city’s November ballot overturning the council’s decision. To their amazement, they did. After only a few weeks of campaigning, some 3,700 signatures were gathered, a thousand more than needed to put Measure U on the November ballot. The vote would not be binding, but a vote against the tribe might force it to reconsider.

“We went door-to-door and found that people really felt they hadn’t had a chance to discuss this matter before the city approved it,” says George Franzen, the local ACLU leader. “People came here to live in a quiet resort. They don’t want towers, casinos and bright marquees.”

Now Franzen and the other local activists have poked a pole into the cage of the tribal tiger, which will certainly fight back this fall with, again, millions if necessary. The citizen activists, by contrast, have set themselves the modest goal of raising $70,000 to wage their coming ballot fight.

After the activist meeting, I go to have a coffee with 50-year-old Cleve Jones, who in 1985 conceived the AIDS-quilt project in San Francisco, and moved to Palm Springs in 1997 for health reasons (since our interview, Jones has taken up a job running L.A. Shanti in Hollywood). Jones, who can only be described as spitting mad at the Agua Caliente, believes the activists will win the referendum vote; he is convinced that they have tapped into a wellspring of resentment against the tribe.

 

Jones begins a spirited and deeply passionate monologue that I scramble to jot down. He tells of his own sense of betrayal by the Agua Caliente. In 1998, when Proposition 5, the measure that initially legalized Indian casinos, was on the ballot, Jones was part of the campaign staff.

“I was out there organizing the gay vote for the Indians,” he says. “It was all based on my boyhood memories from Michigan, where I saw the terrible poverty, the tarpaper shacks on the reservation. But this whole thing has made me terribly cynical. This Agua Caliente is what I call the Wal-Mart tribe . . . A lot of Californians voted for Prop. 5 for good reasons, not just for more gambling. They wanted to do the right thing for the tribes, it was heartfelt. Now, I think we were just plain naive. I see the Agua Caliente as a big corporation that has only 350 stockholders . . . The turning point for me was last year. I got into some discussions with union members and what pissed me off was the health-care issue. Look, I’ve had AIDS for 19 years, and when I see the millions of dollars the tribe is raking in while it’s bullying its workers to go on welfare to get their kids covered, it’s a little too much to take . . . Nationwide now, I think we are starting to see a backlash against aggressiveness by the tribes. This fight here looks like it’s going to be another Inglewood. Here’s another fat corporation that’s trying to ignore all the needs and rules of the local community. What we saw in Inglewood was that all of Wal-Mart’s millions, with all their arrogance, couldn’t satisfy the outrage of the community. So if the Agua Caliente want an Inglewood here, we’ll give ’em an Inglewood.”

The next afternoon, I accompany the ACLU’s Franzen and a couple of other activists to the regularly scheduled Palm Springs City Council meeting. Cheryl Schmit has plans to speak during the public-comments portion, and when her two minutes are granted, she asks the recently elected council to reconsider its approval of the tribe’s plans for Section 14 and warns that if they don’t, Palm Springs could become the center of a statewide battle.

Mayor Ron Oden, derided by the activists as “Rubber-Stamp Ron,” blankly says, “Thank you,” and moves on to the next speaker. In his State of the City address last January, the mayor, a gay African-American, called the tribe’s opponents “masters of deception.”

It’s anybody’s guess how the vote will go in Palm Springs. There’s certainly no institutionalized resistance to the tribe’s expansion plans. Four of five of the council members are firm allies. The local newspaper also eschews bucking the tribe. And there isn’t exactly a battery of nonprofits and unions in town. For his part, the Agua Caliente tribe’s top planning officer predictably brushed aside any significance to Measure U’s qualifying for a vote. He told reporters that the referendum would have no effect on the development of Section 14. As far as the tribe is concerned, he said, “The only comment we have is, it’s business as usual.”

 

The state gambling battle exploded this week on TV stations up and down the coast, as the airwaves were saturated with an estimated $10 million in commercial spots for and against Propositions 68 and 70. As much as $75 million has been marshaled by the various dueling tribes and racetrack operators, enough to guarantee a noisy and potentially bloody fight all the way up to Election Day on November 2.

The pro-68 spots feature enraged suburbanites claiming they were snookered into supporting Indian gaming without knowing they were unleashing a greedy new industry. The anti-68 ads, financed by the Rumsey and other tribes, praise the new compacts reached with the governor. Then there are the pro–Prop. 70 ads, underwritten by the Agua Caliente and San Manuel tribes, that claim to offer Californians a better deal than the Schwarzenegger compacts (in spite of independent analyses that indicate otherwise).

But in this high-stakes race to control the mushrooming expansion of Indian gaming, Governor Schwarzenegger still seems to have the upper hand. A mid-August Field Poll showed public support for the Agua Caliente’s Prop. 70 to be precipitously collapsing, barely reaching 30 percent approval. That marked a dramatic drop-off of 20 points in two months.

An even greater collapse was noted for Prop. 68, the measure that would break the Indian casino monopoly and allow slot machines to operate in the card clubs and racetracks that have so far raised more than $22 million to back their effort. Tribes opposing the measure have come up with an even greater amount of funding, and are ready and willing to spend whatever it will take to force the folding of Prop. 68 because of its threat to the Indian monopoly on state slot machines.

 

With their proposition sinking in the polls, racetrack operators have gone into the courts to sue Schwarzenegger, claiming that the Indian gaming compacts he signed this summer are illegal.

A month out from the election, however, the smart money continues to bet against both Prop. 68 and Prop. 70.

What remains to be seen is how history will judge this political moment. Whether, 10 or 20 years from now, our current governor will be seen as the politician who intervened just in time to bring California casino gambling into a controlled and measured growth that benefited the state. Or will he be remembered as the enabler of a wild, free-for-all expansion that burgeoned out of control?

Cheryl Schmit, who has led the grassroots “fair share” fight, has become markedly optimistic, predicting that now that Schwarzenegger has set up a framework that permits tribes to compete against each other, “we’re about to see a shake-out,” in which only a dozen or so tribes will be able to significantly expand, while others will have to contract.

Industry analysts like Bill Eadington, of the University of Nevada, argue, however, that California’s gambling demand will not be sated until we have five or even six times the slot machines currently in place.

The governor himself has also given mixed signals. Among the tribes he compacted with late this summer was the Bay Area Lytton Band. When Schwarzenegger gave them the green light for a 5,000-slot mega-casino right on the edge of metro San Francisco, the deal was shot down by the Legislature.

More important than the governor’s legacy, the meteoric rise of Indian gaming — in California and across the country in just a handful of years — has not yet permitted any meaningful assessment of its long-term effects on the tribes and their future generations. Tens of thousands of California Native Americans have not been touched by the casino craze. Two of the largest California tribes, the Hoopla Valley and the Yurok, in Northern California, still live in poverty. In the case of the Hoopla, a few hundred slot machines have done little to alleviate their plight.

In Arizona, the Hopi tribe, fearing a subversion of their traditional culture, have made the conscious choice not to enter the gambling business.

The sudden wealth rained down on tribes has also set off a nasty series of purges that barely mask a sordid struggle over the cash flow. After the Pechanga tribe opened its classy casino near Temecula, applications for tribal membership shot up from about 30 a year to nearly 500. But tribal elders recently pruned the membership by more than 100, setting off a vicious legal dispute.

Early this year, the Redding Rancheria tribe voted out a fourth of its 300 members, the Sacramento Bee reported. Tribal leaders conducted macabre DNA tests on exhumed bodies of one extended family. Even after the tests proved the relatives were direct descendants of tribal leaders, all 76 members of the family were tossed out and banned from the tribal casino. After the expulsion was completed, the family’s $3 million cut of casino profits was divvied up among the remaining members. Meanwhile, a family that had been key to reconstructing the scattered tribe two decades ago was airbrushed from existence.

Near Fresno, the Chukchansi tribe disqualified 200 members. The blackballed members say they were thrown out because they criticized the new casino the tribe is building.

Laura Wass, of the American Indian Movement — a veteran activist group — who works with 2,000 outcasts nationwide, hundreds from California, told the Bee that the disenrollments were a form of “cultural genocide.” That might be an overstatement, but the ruthless shakeouts at least qualify as outtakes from The Sopranos.

Even for those directly benefiting from the gambling, and striving the hardest to make some reasonable connection with the society around them — like Paula Lorenzo’s Rumsey Band — questions about the immediate future weigh heavily.

As the Rumsey accumulate untold wealth, Chairwoman Paula spoke gingerly of a cultural heritage of “destitution” that, in turn, generates “drugs, alcohol, depression.” She hastened to add, “This is a clean reservation, 92 percent drug- and alcohol-free.”

No reason to doubt those figures. But the bigger question is, after settling into their mansions and buying a couple of SUVs, and taking that first trip abroad, what do members of a tribe that was living in poverty 10 years ago do today with millionaire-level wealth?

 

After being dependent on the federal government until recently, the tribe is now subject to a top-down paternalism that reflects not so much tradition, but a concern that individual members might not be able to handle their newfound prosperity. The Tribal Council owns the homes. The Tribal Council manages the collective investments. The Tribal Council pays out the monthly stipends. And the Tribal Council, says Paula, now “has to make sure that everyone is accountable, that everyone is put on a tribe committee — we need something tangible from them.”

In other words, the council has to find something to do for everyone. Most worrisome, though, are the children. “It’s in high school where we really start to lose them,” Paula says.

It’s been some time, in fact, since any Rumsey member graduated from high school. And no one has ever graduated from college. Now, one of Paula’s six grandchildren, a 15-year-old boy, carries much of the tribe’s hope for the future. Currently enrolled in an expensive East Coast prep school, he might be the first to make it through a university.

With a shrewd and wise granny like Paula, he seems unlikely to fail. But what about everyone else? It’s hard to spend any time with one of the newly rich gambling tribes without wondering if they haven’t been forced to trade one form of public assistance for another, if certainly at a much higher level. And, further, what other options were available? The Indians, at worst, are only playing out the hand dealt them after a 300-year run of some very bad luck.


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