Election-Donor Suit Pits Tribes Against State

By Erica Werner, Associated Press
Jan. 6, 2003

Source: California Fair Political Practices Commission

In an important test of the reach of tribal sovereignty, California’s political watchdog agency is suing one of the state’s wealthiest and most influential American Indian tribes, alleging violations of campaign finance reporting laws.

The Agua Caliente Band of Cahuilla Indians, which operates two casinos in and near Palm Springs, argues that those laws do not apply to it because it is a sovereign entity. The Fair Political Practices Commission says California has a sovereign right of its own to ensure the integrity of its election system.

The case will apparently be the nation’s first test of whether Indian tribes’ unique sovereign status exempts them from the rules that apply to other political donors. With gambling-rich tribes increasingly among the top political donors, the ability of state governments to effectively monitor money in politics could hang in the balance.

“I think this is the kind of case that is potentially precedent-setting,” said Joseph Wiseman, who teaches American Indian law at Empire State Law School in Sonoma. “Tribes feel, in my opinion, that their sovereignty is under assault, so tribes will draw a line in the sand.”

The FPPC alleges that Agua Caliente, the only tribe in the state with two casinos, was late in disclosing more than $8 million in donations to candidates and causes between 1998 and 2002.

The tribe argues that it disclosed all the information required by the FPPC, “although not always on the FPPC’s forms or on its timetable.” The tribe contends that it did so voluntarily and has no legal obligation to make the disclosures.

“Therefore, this case is not about disclosure … this case is about power,” the tribe said in court papers. “Under the distribution of sovereignty among the states and tribes recognized in the U.S. Constitution, no state agency may use a state court to compel a federally recognized Indian tribe to submit to a state statute.”

The FPPC replied: “The defendant tribe and its members, as full participants in the government they share with all other citizens of California, are subject to the rules protecting all citizens from undue influence of money and from improper and corrupt practices.”

The first hearing in the case is set for Wednesday in Sacramento County Superior Court.

Agua Caliente Chairman Richard Milanovich did not respond to interview requests, but FPPC Chairwoman Karen Getman said she was prepared to pursue the case to the U.S. Supreme Court.

“We have an absolute commitment to take this as far as we need to go,” she said.

Political watchdog groups, meanwhile, are concerned that a victory by the tribe would threaten the state’s campaign disclosure system.

“This is absolutely a first, and I think one with enormous potential ramifications for this state and nation,” said Jim Knox, executive director of California Common Cause. “It will completely undermine the system of campaign reporting if the state’s largest donors aren’t obliged to report.”

Before 1998, when Indian gambling was first on the ballot in California, Indian tribes donated little money to political campaigns in the state.

That year, they catapulted to the top of donor lists. They spent millions, mostly to promote Proposition 5 to legalize gambling. The Agua Calientes alone donated more than $5 million to the campaign and were the third-largest donors to legislative races in the state, behind the prison officers union and another tribe, the Morongo Band of Mission Indians.

Prop. 5 passed overwhelmingly but was thrown out by the courts as unconstitutional. Two years later, voters passed Proposition 1A, which amended the California constitution to allow Indian tribes to conduct Nevada-style gambling. It, too, was promoted by millions in tribal donations.

Since then, Indian gambling has grown into a multibillion-dollar industry in the state. While tribes do not have to report their profits, revenue from tribal casinos in California was an estimated $5 billion last year.

State law requires candidates and groups promoting initiatives to report the contributions they receive. So even without tribes detailing their donations, much of the information would become public.

FPPC officials argue, however, that it would be virtually impossible to gauge the extent of a tribe’s political donations if it did not comply with the state’s reporting guidelines.

Wiseman and other experts said the state might have trouble proving it has the authority to enforce campaign finance laws on tribal governments, which according to an 1832 Supreme Court ruling have sovereign immunity from state laws on their reservations.

California is one of six states where the state has some jurisdiction over Indian lands, under a 1953 federal law called Public Law 280. In other states, the federal and tribal governments share oversight of tribal areas with almost no state role.

But even in Public Law 280 states, their authority to pursue civil litigation such as the FPPC suit against tribes is limited and murky, experts said.

“It’s an area that’s not as clear as either party wants it to be,” said Daan Braveman, an Indian law professor at Syracuse University.

A possible indication of trouble ahead for the FPPC was the unusual refusal by state Attorney General Bill Lockyer to take the case, forcing the agency to hire a private attorney.

Lockyer’s spokesman declined to specify why the attorney general would not take the case but said it was unrelated to the hundreds of thousands of dollars in tribal donations he has received, including at least $25,000 from the Agua Calientes.

“This is an incredibly important case which could decide whether tribes and perhaps others are exempted from complying with state campaign contribution reporting laws,” Lockyer spokesman Nathan Barankin said. “Taking this case into federal court without the best facts possible is a very risky proposition. The federal courts are very deferential to the sovereign rights of tribal nations.”