The K Street Jackpot from Indian Casinos

Source: Center for Responsive Politics

Former Rep. Bill Paxon, R-N.Y., has lobbied successfully in Albany, N.Y., to win backing for the Seneca Nation of Indians to open three casinos in the state, and his firm, Akin, Gump, Strauss, Hauer & Feld, will be pressing the Interior Department to give federal approval to the deal.

Last year, Republican strategist and lobbyist Scott Reed helped to lead a drive that blocked a bill sponsored by Senate Majority Whip Harry Reid, D-Nev., that would have stopped a California Indian tribe from opening a gambling operation near Oakland, Calif. And this year, Washington lobbyist and GOP fundraiser Jack Abramoff provided a lesson in grassroots lobbying to the Coushatta Tribe of Louisiana, which runs a casino. A letter-writing campaign by the Coushattas to state and federal officials helped block another Louisiana tribe’s plan to start a casino. These separate lobbying drives highlight one of the fastest-growing jackpots on K Street: representing Native American tribes.

Indian casinos generated $10.6 billion in revenues nationwide last year, almost double the amount of five years earlier. And Indian gambling has spread to some 320 locations as tribes have maneuvered in several states and in Washington to capitalize on gambling opportunities.

The tribes have hired lobbyists to help them win political backing for their own casinos and to fend off casino rivals, both Indian and non-Indian. Indian tribes’ spending on Washington lobbying–most of which has been on gambling issues–shot up from $4.9 million in the first six months of 2000, to an estimated $8 million in the last half of 2001, according to the nonpartisan group PoliticalMoneyLine.com.

Moreover, as tribes have gained greater visibility in Washington, both of the major political parties have been vying aggressively for campaign contributions. Over the past few years, Republicans have been getting an increasingly larger share of the donations, ending the heavy tilt toward Democrats during most of the Clinton administration. “The Republican philosophy of less government interference and more local control matches the Native American message, goals, and priorities,” says Reed. Paxon, whose firm lobbies for at least six tribes with gambling interests, adds, “The Native American community has realized it’s important not to put all
their eggs in one basket.”

In 2001, Republican candidates and party committees received 37 percent of the $608,975 in total PAC, soft-money, and individual campaign contributions made to both parties by Indian tribes with gambling interests, according to the Center for Responsive Politics. In 1997, the GOP got about 20 percent of the total. The Indian lobbying work has several fronts. Some influence merchants are pressing the Interior Department to help their clients obtain federal recognition or have their lands put into trust, the steps a tribe must complete before it can open a casino.

Other lobbying is aimed at Capitol Hill, where tax bills have been blocked, and at state capitols, where more political muscle may help tribes get into casino businesses. Some congressional critics argue that all the lobbying on gambling ignores the serious and pressing social problems of Native Americans. “Indian gaming in some places, like Connecticut, has become a license to print money,” says Rep. Christopher Shays, R-Conn., who wants tougher government regulation. “It’s very difficult to keep gambling honest.”

Rep. Frank R. Wolf, R-Va., worries that the spread of Indian gambling becomes an “excuse” for government not to fund sorely needed programs. “We should be putting more money into education, housing, and health care” for Native Americans, says Wolf. The lawmaker charges that few Indians have benefited from gambling income and that gambling has produced “countless stories of shattered lives.” Shays and Wolf have introduced a measure that would create a commission to probe the impact of Indian-run gambling and to assess the adequacy of current regulations.

Wolf argues that lobbyists want the National Indian Gaming Commission, which Congress established to oversee Indian casinos, to “remain weak.” Heather Sibbison, an attorney at Patton Boggs who does legal work for several tribes, says that gambling has skewed the politics of Indian affairs and is taking away from other priorities. “Gaming is driving federal recognition and land acquisition,” she says.

Still, work for Indian clients has soared on K Street in the past few years. Akin, Gump’s lineup of Indian clients includes the Gila River Indian Community of Arizona, the Miami Tribe of Oklahoma, and the Seneca Nation of New York. Last year, work on behalf of the Gila alone brought in $1.4 million, or nearly 7 percent of the firm’s total lobbying revenues. Lately, Paxon has been active for the Seneca Nation, which is based near Buffalo and is in the district that Paxon represented as a congressman. Paxon says he “worked the issue aggressively” in Albany, and last summer the administration of Republican Gov. George E. Pataki backed a bill that would create six new Indian-run casinos, three of which would be controlled by the Senecas.

Last year, the Senecas paid fees of $370,179 to Akin, Gump–the biggest amount any law and lobbying firm in the state earned from a single client, according to the New York Temporary State Commission on Lobbying. Lately, Akin, Gump’s work for the Gila, a tribe that has three casinos, has focused on disputes with the state of Arizona and the federal government over water rights. Akin, Gump says it is close to reaching a legal settlement. The tribe is working hard to build political support in Congress, which would have to approve any deal. “They’ve been very active politically,” says Paxon, who has advised the tribe on its political donations.

For instance, the Gila have sponsored fundraising events for House Speaker J. Dennis Hastert, R-Ill. The tribe also hosts the Speaker’s Cup, a charity golf tournament held in Arizona that benefits sufferers of diabetes, a cause that Hastert embraces since he has diabetes himself. Health officials have cited the Gila as a tribe with one of the highest levels of adult diabetes.

Another firm that’s witnessed a windfall is Greenberg Traurig, where Abramoff has signed up five Indian tribes. Two tribes, the Coushattas and the Mississippi Band of Choctaw Indians, together paid the firm $4.1 million last year, which equaled about 25 percent of Greenberg Traurig’s total lobbying revenues. Abramoff has been especially busy for the Coushattas in Louisiana.

Last year, the Coushattas, who had been running a casino for seven years, seemed to be having trouble getting the governor’s office to renew their expired gambling compact. “We went in and helped [the tribe] organize the entire community,” Abramoff recalled. The message delivered to every tribal vendor and every employee was “that their business was at risk” unless the compact was renewed. The result was that some 30,000 letters were sent to the governor, who eventually renewed the compact. But to the Coushattas’ chagrin, early this year the governor awarded a separate compact for a casino to the neighboring Jena Band of Choctaw Indians. The Jena Band retained Patton Boggs for legal help in Washington; and Machal Inc., a developer that backed the Jena Band, hired Barbour Griffith & Rogers for lobbying help at the Interior Department on land issues. But the Jena Band was outmaneuvered by the Coushattas and Abramoff. The Coushattas again mounted a letter-writing effort to state officials and members of Congress. Abramoff helped contact members of the Louisiana congressional delegation, and most of the delegation then pressed Interior to turn down the Jena Band’s application.

And Senate Minority Leader Trent Lott, R-Miss., wrote to Interior Secretary Gale A. Norton opposing the Jena Band’s compact. Last month, Interior nixed the compact. Last summer, in an effort to raise the visibility of his Indian clients, Abramoff helped arrange a White House get-together on tax issues with President Bush for top Indian leaders, including Lovelin Poncho, the chairman of the Coushattas.

The lobbyist also reportedly invited the Coushattas and two other tribal clients to a dinner party last fall that included Norton. For their part, the Coushattas are high on Abramoff’s work. Vice Chairman William Worfel says his tribe hired Abramoff because “we weren’t getting help down here. They showed us how to do media campaigns to inform the public. The Jena tribe would have cut us off at the pass … and choked off development.”

A smaller lobbying firm that has also benefited from working for Indian tribes, including the gambling interests, is Chesapeake Enterprises, whose president is GOP strategist Reed. Last year, a California development company that has helped bankroll the Lytton Band of Pomos hired Reed and former Rep. Bob Livingston, R-La. The tribe had been granted the right to open a cardroom near Oakland, Calif.

The California developers were concerned about the Senate bill Reid was pushing on behalf of Nevada’s casino industry. Reid’s bill would have repealed the measure, sponsored by Rep. George Miller, D-Calif., that had given the Lytton tribe the right to open its gambling business. Reid’s legislation passed the Senate last year, but the lobbyists mounted a successful drive against the bill in the House, effectively killing it.

For several years, Reed’s firm has also represented the Mashantucket Pequot Tribal Nation of Connecticut, which operates perhaps the most successful Indian gambling operation in the country and is the largest political giver among Indian tribes. Working with Democrat Larry Rosenthal of Ietan Consulting, who also represents the Mashantucket tribe, Reed helped lead a lobbying drive in 2000 that resulted in Congress’s passing a bill allowing more favorable treatment of Indian unemployment taxes, a provision worth about $10 million over 10 years to the tribes. Under Reed’s tutelage, the members of the tribe are giving increasing amounts of political and financial support to the GOP. “Senior Native American tribes are hiring GOP operatives to build a working coalition on the Hill,” Reed says.

PLACING THEIR BETS

Indian tribes that operate gambling facilities are giving an increasing share of their campaign contributions to Republican candidates and party committees.

Legend for Chart below:

A – YEAR
B – TOTAL(*)
C – DEMOCRATS
D – REPUBLICANS

A             B                 C            D
2001         $608,975     62.9%    37.1%
1999(**)    $802,563     69.4       30.6
1997          $443,901     79.2       20.8

(*) Includes PAC, soft, and individual donors.
(**) Presidential election cycle.