Muscogee Creek Nation Demands Halt to Poarch Band Wetumpka Casino Project

The Muscogee Creek Nation (currently located in Oklahoma) is demanding that the Poarch Band of Creek Indians (currently located in Alabama) halt plans to build a mega-casino on sacred land in Wetumpka, Alabama.  The site for the new mega-casino is located on the Muscogee Creek Nation's ancestral land--specifically, a grave site and ceremonial grounds.  Hickory Ground, known as "Oce Vpofa" in the Muscogee language, was the last capital of the National Council of the Muscogee Creek Nation prior to forced removal by the federal government in the 1830s.  

Muscogee Creek Nation Principal Chief George Tiger stated that the Nation is committed to protecting its sacred grounds.  "We have attempted to convey to the Poarch Band why it is wrong to disturb the peace of our ancestors and burial grounds.  However, the Poarch Band does not seem to share our cultural values and respect our traditional ways."

The Poarch Band, which already operates three casinos in the state, announced in July that it would expand its casino in Wetumpka.  The Band plans to expand its casino in Wetumpka by spending $246 million to build a 20-story hotel tower with 285 rooms and a 90,000 square foot gaming floor with more than 2,500 electronic gaming machines.

While the Poarch Band states that it is working to protect and preserve the remains, the Muscogee Creek Nation claims that the Band excavated approximately 60 human remains to build the current casino, and that the expansion will cause further desecration of the sacred site.  The Nation passed a law affirming support for protection of Hickory Ground and authorizing funding to protect the site, and plans to file legal action if construction does not stop.  The Nation also initiated a fundraising effort to save Hickory Ground.

US Government Studies Tulalip Tribes' Labor Relations Model

This week Assistant Labor Secretary Jane Oates visited with board members and staff of the Tulalip Tribes to learn how the Tribes dealt with labor agreements during the construction of their casino and resort hotel complex in Washington state. Oates offered praise for the way Tulalip handled labor agreements on the reservation and ensured Tribal members have employment opportunities.

“We hear nightmares about how some Tribes are not able to negotiate with labor unions,” Oates said. “The Tulalip Tribes did an amazing job, and we are here to learn from them.”

Oates’ tour included a visit to the Tulalip Tribal Employment Rights Office, which has a mission to protect preferential employment for tribal members and contracting rights on the reservation. The office also works to improve wages, training and career and contracting opportunities.  Unemployment on reservations throughout the nation is a concern in President Barack Obama’s administration, Oates said. “It’s unacceptable that unemployment in Indian Country is five times what it is among non-Natives,” she said.

Tulalip board member Glen Gobin told Oates that myths, stereotypes and misconceptions about the tribal work force were dispelled during construction projects on the reservation. “We know that our Tribal members are our most valuable resource,” Tulalip Chairman Mel Sheldon said.
 

NAFOA Conference Call On Tribal Finance - 10 February

Native American Finance Officers Association Conference Call Series
“Indian Country Financing at a Crossroads”
A Primer to NAFOA’s Next Decade Finance Conference
Wednesday, February 10 – 10:00AM Pacific / 1:00PM Eastern
Dial-In Number: (800) 965–6503
Conference ID: 54703566

NAFOA’s experts will weigh in on the recent Lac du Flambeau management decision, and then take a broader look at the potential crisis that may emerge with future tribal defaults. This call will begin to address the situations that will be discussed in greater depth and breadth at NAFOA’s “Next Decade Finance Conference,” March 16-17 in New Orleans.

The call will be moderated by NAFOA President Bill Lomax, who has been actively working with Tribal governments most of his career and has several years experience working on Wall Street helping tribes with financing and investments. An enrolled member of the Gitxsan Nation, Bill teaches in the area of financial literacy and has acted as a trainer in numerous Tribal financial education sessions
 

Tribe Signs Landmark Union Labor Contract For Casino Dealers

The Mashantucket Pequot Tribal Nation has reached a tentative agreement with the United Auto Workers Union (UAW) for a labor contract and collective bargaining on behalf of 2500 of table-game dealers at Foxwoods Resort Casino in Connecticut. The agreement is unique both for its scale – Foxwoods is billed as the largest resort casino in the United States – and for the fact that it was negotiated in the context of Tribal law rather than federal labor law.

The agreement has several facets that differ significantly from typical union labor contracts. The Nation’s laws prohibit strikes by workers and lockouts by owners, so the contract does not contain a strike provision. In the event of a labor dispute that cannot be resolved through negotiation, the matter will be submitted to private arbitration for resolution. The contract provides an average 12 percent increase in dealers' wages over two years, changes the distribution of tips for dealers, includes programs to reduce repetitive stress injuries, and creates a 24-table smoke-free gaming pit for workers and customers who prefer a smoke-free environment.

For the UAW, the agreement is being heralded as a major victory in their union organizing efforts. "Working together, we proved casino workers can successfully exercise their right to have a union under tribal law," said UAW Region 9A Director Bob Madore. "Our settlement demonstrates what we have known all along: that tribal sovereignty and employee rights need not be inconsistent. We value the investment and jobs the Mashantucket Pequot Tribe has brought to Connecticut, and we look forward to promoting this exciting resort as a destination of choice for working families and union members across New England."

For the Mashantucket Pequot Nation, the agreement may provide a measure of financial predictability for its casino operations. The casino, by far the Nation’s largest revenue source, is behind in its debt repayments and has been working with creditors to restructure its financing. The agreement with the UAW sets wage and benefit rates for two years, and eliminates the potential for labor unrest or further legal battles with the union or the federal government.
 

Mashantucket Pequot Reaches Deal To Extend Foxwoods Casino Debt Forbearance

The Mashantucket Pequot Tribal Nation, owner of Foxwoods Resort Casino, has reached a new agreement in principle with its senior lenders to extend a debt forbearance agreement. The agreement is designed to provide more time to improve the casino’s cash flow and repayment ability as it works to restructure $2.3 billion of debt. The existing forbearance agreement would have expired January 20th; the new agreement extends the timeline to April 30, 2010.

The agreement in principle has been made with a majority of the Tribal nation’s lenders and will be finalized and executed shortly, according to the Tribe’s spokesperson.  The statement emphasized that the Nation's debt restructuring efforts are separate and distinct from operations at Foxwoods and will not have any impact on guests, employees, suppliers or business partners at Foxwoods or MGM Grand at Foxwoods.

“Foxwoods remains committed to providing its guests with its signature guest service, unparalleled gaming options, the very best in entertainment, and world-class services, dining and amenities,” according to the statement.
 

NAFOA Issues Statement On Controversial Tribal Bond Repayment Case

Bill Lomax, President of the Native American Finance Officers Association, has issued the following statement regarding the recent federal court decision in the Lac du Flambeau bond repayment case.

Dear Tribal Leaders and Finance Officers,

I am writing to inform you about a case concerning a Tribal bond issuance that has recently been decided and, in theory, has potential implications for any Tribe that currently has financing or may be seeking financing for a Tribal project.

The Decision:
On January 6, 2010, the United States District Court for the Western District of Wisconsin (the “Court”) issued an order in the case of Wells Fargo Bank, National Association, as Trustee v. Lake of the Torches Economic Development Corporation. This order invalidates the trust indenture for $46,615,000 of bonds issued by a tribal corporation of the Lac du Flambeau Band of Lake Superior Chippewa Indians (“LDF”) for the refinancing of the Lake of Torches Casino and other LDF debt. In this order, the Court ruled that the indenture amounted to a management contract and is void due to failure to seek the required National Indian Gaming Commission approval.

Some have suggested that this case may have dire consequences for all Tribes seeking financing. We have consulted with some of the top attorneys in Indian country and believe that this case is “sui generis” or unique in its facts and are hopeful that it will not have widespread application to the Native American community.


The Risk of Existing Tribal Trust Indentures or Financing Agreements Being Invalidated as Management Contracts:

The Indian Gaming Regulatory Act prohibits Tribes from entering into management agreements for casinos without review and prior approval by the Chairman of the NIGC. A financing arrangement risks being invalidated in its entirety if it includes provisions that could be construed as providing the lender with rights of management. The Court concluded that the bond indenture in the LDF financing does not comply with NIGC guidelines related to impermissible elements of management control.

Some have suggested that this case could lead to other Tribal trust indentures and financing agreements being invalidated as management contracts. We at NAFOA do not think this is the case. The trust indenture in the LDF case includes several critical provisions not commonly found in Tribal gaming financings.

One highly experienced Indian country attorney we consulted has suggested that “the trust indenture is like none [he has] ever seen and clearly does not conform with the standards set by the NIGC.” For example, according to the pleadings in this case, the indenture included provisions: 1) requiring bondholder approval of changes to specified senior management of LDF’s casino operation; 2) permitting bondholders to direct LDF to hire new management in the event of default by LDF; 3) upon certain financial covenant violations, requiring LDF to retain an independent gaming management consultant and thereafter use “best efforts” to implement the recommendations of such consultant; and 4) permitting the appointment of a receiver over casino revenues and casino equipment in the event of a default by LDF. The Court concluded that these provisions, among others, overstep NIGC rules concerning a lender’s ability to assert management powers within a financing agreement.

We believe that few trust indentures or other financing agreements in Indian country are likely to have provisions similar to the ones mentioned above and we think this will limit the applicability of this case to other Tribes. Thus, it is our hope that Tribes and their lenders need not be concerned about the validity of their financing agreements.

We do however have some concerns about the broad language used by the Court in this case. In addition to the provisions noted above, the Court included references to some commonly used provisions often found in trust indentures and loan agreements. We are hopeful that the National Indian Gaming Commission will provide some guidance so as to avoid confusion about which of the provisions, taken together or separately, would constitute a management contract if included in a trust indenture or loan agreement.
 

For detailed information on Tribal bond issues and the impact of current legal decisions, contact Jeff Nave, Marc Greenough, or Bill Tonkin.

Tribal Economic Development Featured On National Public Radio


This week the National Public Radio program “All Things Considered” airs a two-episode series on Tribal economic development in the Southwest. The programs highlight the diverse issues, challenges, and opportunities for Tribes in different locations and which possess different levels of resources. The program focuses on two particular Native economic development models: The Navajo Nation and The Salt River Pima – Maricopa Indian Community.

Interviews include:

Joe Shirley, Navajo Nation President

Martin Harvier, Vice President of the Salt River Pima – Maricopa Indian Community

Quannah Dallas, Salt River Pima’s Economic Development Manager

Brett Isaac, Shonto Community Development Corporation

Joseph Kalt, Director of Harvard University’s American Indian Economic Development Project

Greg Guedel, Chair of Foster Pepper PLLC’s Native American Legal Services Group


Part I of the program, focusing on the Navajo Nation, can be downloaded HERE.

Part II of the program, focusing on the Salt River Pima – Maricopa Indian Community, can be downloaded HERE.

Cohesive Tribal Government Is Critical For Economic Development

(Ken Lambert/Seattle Times)

While the appropriateness of government intervention in private business is a hotly-debated topic around the world, a clear truth is emerging closer to home: cohesive and sound governance is a crucial element for economic development in Native American communities. The proof comes both from success stories such as Tulalip and Pechanga, as well as the cautionary tale currently playing out within the Snoqualmie Tribe.

The Snoqualmie Tribe regained federal recognition in 1999 and last November opened a showpiece casino a half-hour from downtown Seattle The casino, financed with $375 million in debt, was conceived as a means of bringing prosperity to the Tribe's approximately 600 members. Instead, political infighting has brought turmoil, reduced revenue, and uncertainty regarding the Tribe’s economic future.

The problems stem from socio-political divisions that divided the Tribe’s governing body and rendered it unable to function effectively. "They were a split council and would not come together for joint meetings off and on since May," said Judy Joseph, superintendent for the Bureau of Indian Affairs (BIA) Puget Sound Agency. "To maintain a government-to-government relationship, they have to be a viable Tribal government," Joseph said. "If there is any question about that, it causes red flags to go up, and they were split, they were not meeting."  In August, the Tribe's administrative offices were padlocked and some of its federal funds frozen. Elders stepped in to dissolve the council and take charge until new elections could be held — but they had no constitutional authority to do that. The Tribe was facing the prospect of the U.S. government assuming administrative control of the Tribal government. The BIA offered mediation this month, which resulted in reinstatement of the council that was in place before the disputed May election.

Meanwhile, the new casino has only been producing one-fourth of the revenue originally budgeted, and its operations are mired in administrative and regulatory problems. Unresolved federal audit findings could expose the Tribe to significant liability, and until recently federal funds allocations to Snoqualmie were frozen by the U.S. government. To address these significant issues, the Tribe's general membership will meet this month to consider election procedures and set a date for a new council election.

While dissension and differences of opinion are common for any political entity, the need for Tribes to maintain a solid, functioning government structure is of paramount importance for both political and economic purposes. Both the federal government and private investors are wary of contributing capital in places where leadership is in doubt, making it crucial for Tribes to demonstrate that their decision making bodies and procedures are stable.

New Federal Policy May Open Door For Off-Reservation Casinos

As reported in the Wall Street Journal, the Department of Interior is reconsidering a Bush administration policy that limited Tribes from developing off-reservation casinos unless the sites were within “commuting distance” of the reservation. The new policy would eliminate that proximity requirement and allow Tribes to build casinos on trust land farther from their reservations – and thereby likely closer to larger population centers that would offer more customers. Some areas Tribes are considering are actually on their ancestral lands, but were separated from the Tribe’s main land base through 19th Century treaties.

Over 20 Tribal casinos on non-reservation land exist, and about 20 tribes have off-reservation plans in the works. The Confederated Tribes of Warm Springs of Oregon want to develop a casino along the Columbia River Gorge, and the St. Regis Mohawks have plans for a site in the Catskill Mountains, about 350 miles away from the Tribe's reservation -- but less than a two-hour drive from New York City. Some state governors such as David Paterson of New York and Arnold Schwarzenegger of California have come out in favor of certain projects in recent months.

Despite concerns about the economy, some off-reservation casino projects near major population centers have been able to line up financing for construction and operations. A private investment company that has financed start-ups of major Indian casinos in Connecticut and New York, is acquiring a near 50% stake in Empire Resorts Inc., the company that has been working with the St. Regis Mohawks on plans for a casino in Monticello, N.Y.

Tribes across the country have opened hundreds of casinos since the 1987 U.S. Supreme Court ruling that loosened state restrictions on Tribal gaming. In 1988, Congress authorized development off-reservation casinos. Interestingly, some Tribes that developed the first casinos are now working to block off-reservation gaming by other Tribes, and Senators from Nevada, California and Arizona wrote Interior Secretary Ken Salazar to oppose off-reservation gaming, saying it "violates the spirit" of Tribal gaming law.

3rd Annual Native American Economic Development Conference, 16-18 September In Las Vegas

Foster Pepper PLLC and KeyBank are Co-Sponsors of the huge Native American Economic Development Conference to be held at the Westin in Las Vegas September 16-18, 2009. The far-ranging seminar will cover topics of immense importance to Tribal economies, including:

  • Tribal Leaders Roundtable: The Impact of President Obama’s Administration
  • Economic Development Bonds and the Federal Stimulus Package: Effects on Tribal Financing
  • Tribal Enterprises Facing Bankruptcy
  • CEO Roundtable: Private Enterprise Boards vs. Tribal Governments
  • CFO Roundtable- External Diversification vs. Internal Reinvestment: Weighing Risk Management Issues
  • Economic Development Roundtable: Stimulating Revenue Growth
  • Effective Master Planning
  • Design and Construction Roundtable: Climbing out of a Recession
  • Strategic Marketing in a New Economic Era
  • Using Sports and Entertainment to Maximize Casino Traffic
  • Planning for Retirement in Indian Country

The conference presenters possess unparalleled expertise in Tribal economic development issues, and include:

  • Mellor Willie, Executive Director, National American Indian Housing Council
  • Elaine Fink, Chairperson, Northfork Rancheria of Mono Indians
  • Henry Cagey, Chairman, Lummi Nation
  • Bob Garcia, Chairman, The Confederated Tribes of the Coos, Lower Umpqua, and Siuslaw Indians
  • Robert Martin, Chairman, Morongo Band of Mission Indians
  • Georgia Noble, Chairperson, Sac & Fox National Business Enterprise Board
  • Mel Sheldon, Chairman, Tulalip Tribes of Washington
  • Glenn Hall, CEO, Bishop Paiute Tribe
  • Robert Mele, CFO, Seneca Construction Management Corporation
  • Robert Winter, CEO, Navajo National Gaming Enterprises
  • Chris Kelley, CFO, Viejas Band of Kumeyaay Indians
  • Eletta Tiam, CFO, Nisqually Tribe
  • Michael Marchand, President, Affiliated Tribes of Northwest Indians Economic Development Corporation
  • Virgil Moorhead, Chairman, Big Lagoon Rancheria
  • Morris Reid, Chairman, Picayune Rancheria of Chuckchansi Indians
  • Ivan Posey, Chairman, Shoshone Tribe of the Winder River Reservation
  • Theresa Two Bulls, President, Ogalala Sioux Tribe of The Pine Ridge Reservation
  • Cedric Black Eagle, Chairman, Crow Nation
  • Louis J. Manuel Jr., Chairman, Ak-Chin Indian Community
  • Michael Broderick, Director of Marketing, Lake of the Torches Resort Casino
  • Mary Galbraith, Director of Strategic Marketing, Cherokee National Entertainment
  • Michael L. Bearhart, Director of Gaming, St. Croix Casino & Hotel
  • Scott Eldredge, General Manager, Santa Ana Start Casino

Additional conference information and registration information can be accessed through Pier Conference Group.

 

 

 

 

Tribal Casino Defaults Raise Big Questions On Bankruptcy Laws

The economic downturn is opening some previously-uncharted legal territory - the question of applicability of federal bankruptcy laws and procedures for troubled Tribal enterprises. 

The Mashantucket Western Pequot Tribal Nation, owner of the massive Foxwoods Resort Casino, is seeking to restructure at least $1.45 billion in debt.  With gaming revenues in steep decline due to a lack of players, Foxwoods is at risk of becoming the biggest Tribal casino company to default on its debt. 

The looming cash crunch highlights the different economic and legal landscape in which Tribal enterprises operate. “They can’t do the types of things other debtors can in a restructure,” says Megan Neuburger, an analyst at Fitch Ratings in New York. “Tribal casinos can’t do a debt-for-equity swap. They can’t raise cash by selling off assets on Tribal land to repay creditors."  Standard & Poor’s has cut its Mashantucket rating four steps to CCC and placed the debt on credit watch.  Creditors probably can’t take over assets or operations of casinos on Tribal land, which are sovereign nations, as they may with commercial bankruptcies, Neuburger said. That leaves them little choice other than to restructure debts and work with the Tribe.

No Tribal casino has yet tested federal bankruptcy laws.  “Bankruptcy law does not apply to Tribal situations in the same way it does to a commercial situation,” Neuburger said.  Michael Thomas, chairman of the Mashantucket Pequot Tribal Council, told members that the Tribal government would be paid first, before bankers or bondholders.  “It might be posturing, but the Tribe is indicating that it might put itself, the equity holder, ahead of the debt, ignoring corporate law,” said Lawrence Klatzkin of municipal bond broker Chapdelaine Credit Partners. “It probably won’t happen, but if it does, who’s to say other Tribes don’t say, ‘If Foxwoods doesn’t need to meet its U.S. legal obligations, maybe I don’t either.’”

 

Federal Gaming Regulators Under Fire From Tribes

The National Indian Gaming Association has asked the Obama administration to replace the chairman of the National Indian Gaming Commission immediately, and stop the current commission from publishing proposed revisions to gaming regulations until the new official is in place. In a letter to the President, NIGA asserts the Commission violates government-to-government consultation rules and is revising gaming machine regulations that would impose huge and unnecessary compliance costs on Tribal gaming operations, and “overreaching” because they exceed the NIGC’s statutory authority.

NIGA is a nonprofit organization representing Tribal nations and businesses engaged in gaming enterprises, and acts as an educational, legislative and public policy resource for tribes, policymakers, and the public on gaming issues and Tribal community development. NIGA has asked Obama and Interior Secretary Ken Salazar to immediately replace NIGC Chairman Philip Hogen, who “is holding out for almost five years past his original term,” and appoint a new commissioner to fill a seat that has been vacant for years. The Chairman’s position is a Presidential appointment approved by the Senate.

Barbara Kyser-Collier, Quapaw Tribal Gaming Agency director, has written to Obama seeking “urgent action” in appointing a new NIGC chairman. “It is beyond understanding that a federal agency established to protect tribal gaming as a source of revenue for tribal governmental services and functions, in fact, would persist in efforts to disseminate regulations that will inflict financial damage to Native American tribes,” Kyser-Collier said.

The proposed new gaming rules would also extend NIGC’s authority beyond its statutory limits, Kyser-Collier wrote. For example, NIGC has inserted into the proposed regulations a new technical standard that would require a jackpot payout be validated by the backroom accounting system. This would require a type of technology that is usually patented in a manufacturer’s gaming system, requiring the gaming operation either to have that particular manufacturer’s system or to pay the manufacturer a royalty fee to use its proprietary technology. “The NIGC characterizes these potential regulations as ‘internal control standards,’ when in fact they constitute product standards. A most important danger is that such rules could favor certain manufacturers and drive tribal costs higher,” Kyser-Collier said.
 

IRS Provides Guidance And Applications For Tribal Economic Development Bonds

The IRS has just released Notice 2009-51 soliciting applications for and providing interim guidance on the $2 billion of Tribal Economic Development Bonds authorized in the American Recovery and Reinvestment Tax Act, and providing an application form for Tribes to use.

Tribal Economic Development Bonds can be used to finance on a tax-exempt basis anything that a State or local government could finance on a tax-exempt basis, whether with tax-exempt governmental bonds or tax-exempt private activity bonds, except for any portion of a building in which gaming is conducted or any property actually used for gaming and facilities not located on the reservation.

The IRS notice appears to establish that no portion of a building may be financed with these bonds if gaming is conducted in any other portion of the same building, even if those portions are physically discrete from each other. The notice provides a safe harbor under which a structure will be treated as a separate building if it has an independent foundation, independent outer walls and an independent roof. Connections such as doorways, covered walkways or other enclosed common area connections between two adjacent independent walls of separate buildings may be disregarded as long as such connections do not affect the structural independence of either wall.

Other notable points from the IRS guidance include:

The volume cap for these bonds will be allocated in two $1 billion tranches.

Applications for an allocation from the first tranche must be filed with the IRS by August 15, 2009, and the bonds must be issued by December 31, 2009.

Applications for an allocation from the second tranche must be filed with the IRS after August 15, 2009 and before January 1, 2010, and the bonds must be issued on or before December 31, 2010.

No single Tribal government may be awarded more than $30 million from the first tranche, but there is authorization for projects to be financed jointly. If the total of applications for the first tranche exceed $1 billion each award will be reduced pro rata so the total does not exceed $1 billion.

A similar limit is expected to apply to applications for the second tranche, but the IRS reserves the right to change or eliminate the limit.

Unused volume cap for these bonds would carry over to future years under a process to be determined at some future date.

 

For further information on accessing funding and developing projects through Tribal Economic Development Bonds, contact William Tonkin.

Indian Gaming Increases Despite Economic Recession

When the National Indian Gaming Commission released the 2008 gaming revenues at the North American Gaming Regulators Association conference on June 3rd, the results were surprising, given the state of the economy. According to the figures, Indian gaming took in $26.7 billion in 2008, which amounts to a 2.3% increase over the prior year and represents growth of more than $500 million over 2007. These figures imply that Indian gaming remains a strong means of economic development for Indian nations.

According to surveys, over the past decade, Indian gaming has more than doubled from $9.8 billion to last year’s $26.7 billion. The rate of growth of Indian gaming has, however, steadily decreased over the past few years.

Reports show that although the Washington region has the fewest number of gaming operations it is the second top regional earner because it is home to two of the largest casinos in the country. The next biggest earner was the St. Paul region, which includes Iowa, Michigan, Minnesota, Montana, North Dakota, Nebraska, South Dakota, Wisconsin and Wyoming. But the biggest percentage increases are in the Tulsa and Oklahoma City regions, which include Kansas, eastern and western Oklahoma and Texas. The gross gaming revenues represent the amounts bet or wagered by gaming patrons, less the amounts paid out as wins or prizes.

It is likely that we will continue to see an increase in Indian gaming given the attractive and high quality entertainment tribes provide to the public. Gaming and casinos just may prove to be one of those few precious areas that are somewhat recession proof.
 

Tribes' "Special Privileges" Under Attack In Oklahoma

"It is simply unfair..."  Rep. David Dank

Assailing what he calls “special privileges that give (Native Americans) unique advantages” and declaring “It’s time for our Legislature to restore sanity to Oklahoma’s dealings with the Tribes”, Oklahoma state Representative David Dank has introduced three bills before the state Congress: 1) a constitutional amendment to give private businesses the same right to make corporate campaign contributions as Tribes; 2) a second amendment requiring compacts between Tribes and state government be ratified by the state Legislature; and 3) a bill giving private businesses located close to competing Tribal stores the same sales tax exemptions as the Native-owned businesses. Dank outlines his plan and purpose in an article in this week’s Oklahoman newspaper.

Dank’s reasoning is based on his view that:

Tribes collect no sales taxes on items sold from their grocery and convenience stores, or other Tribal businesses. They collect about half of normal tobacco taxes from Indian smoke shop sales. Tribal businesses pay no property taxes, the state receives little or nothing from Tribal auto tags, and Tribes, unlike private businesses, are free to make millions in corporate campaign contributions.

Meanwhile, the Tribes reap millions from a state-issued monopoly on casino gambling in Oklahoma because of a 15-year compact that cannot be altered.

These are tax exemptions and breaks that siphon tens of millions of dollars each year from local school districts, city and county governments and our state treasury. Non-Tribal citizens and businesses are being taxed to make up those losses. In some cases, non-Tribal businesses are being driven into bankruptcy by the unfair competition made possible by these special privileges.

Dank’s article neglects to mention some other ways in which Native American Tribes are “special”. Unlike every other municipality in the country, and despite being recognized by the US government as sovereign, Tribal governments are not allowed to levy property taxes on the Tribe’s own land. This state of affairs deprives Tribes of untold millions in revenues each year that other municipalities use for roads, police, and other civic services. For Tribes fortunate enough to be located near population centers or interstate highways, gaming revenue is but a partial substitute for the lack of taxing authority, as illustrated by the endemic poverty and substandard infrastructure on reservations.

The private sector of Oklahoma’s economy also reflects a “special” place for Native Americans. As he laments the Tribes’ “special financial privileges” that “cost state and local governments millions and damages competing private businesses”, Dank omits the fact that Native American and Alaska Native householders in Oklahoma had a median income 18.1 percent less than the median level for all households, and an overall decline in median income of 24.2 percent since the year 2000 – the biggest drop of any demographic group in the state. Meanwhile, the Caucasian demographic in Oklahoma has realized a 42.8 percent increase in household income level since the year 2005.

Special indeed.

Mashantucket and UAW Agree to Negotiate Labor Agreement Under Tribal Law

Only days after filing an appeal of the National Labor Relations Board’s ruling ordering it to bargain with the over 2,500 dealers represented by the United Auto Workers, the Mashantucket Pequot Gaming Enterprise (Foxwoods Resort Casino) and the UAW have agreed to enter into discussions regarding a labor agreement under Tribal law.

The jurisdictional dispute over whether Tribal laws or the federal National Labor Relations Act of 1935 apply to employees on Tribal land has been waged since last November, when poker dealers at the Mashantucket Pequot Tribal Nation’s Foxwoods Resort Casino voted 1,289 – 852 to join the United Auto Workers union. The federal law is administered by the National Labor Relations Board. Mashantucket has supported employees’ right to unionize, but says they must do so under Tribal labor laws.

The dispute at Foxwoods has been watched closely by Tribes and unions across the country, as it will set a precedent for labor relations involving Tribal enterprises. Federal labor laws did not apply on sovereign Tribal land for almost 75 years after passage of the National Labor Relations Act, but in January 2007 a federal court decision upheld the NLRB’s own earlier ruling that the San Manuel Band of Mission Indians in California was subject to federal labor laws.

The San Manuel case involved a narrowly-applied definition of a casino as a commercial operation, but did not deal with the wider issue of Tribal sovereignty or Indian casinos as governmental operations that provide revenue for Tribal services – issues that may still be resolved in court if the Mashantuckets and UAW fail to reach agreement in the current talks.