Interior rejects Indian casino compact Payment to state cited in denial letter
03/08/02 By Laura Maggi Capital bureau/The Times-Picayune
BATON ROUGE -- The Department of Interior on Thursday rejected a much-criticized agreement that would have let the Jena Band of Choctaws open a casino in a prime location near the Texas border, saying Louisiana's demand for a hefty percentage of the take was an improper tax.
In a letter signed by Neal McCaleb, the assistant secretary of Indian affairs, the agency explicitly rejected Gov. Foster's argument that the proposed location for the casino -- off Interstate 10 in Vinton, between the state line and the Lake Charles riverboat casinos and another Indian casino in Kinder -- was justification for requiring the Jena Band to pay the state 15.5 percent of net gambling revenue.
The Interior Department, which is charged with protecting tribes' interests, typically requires states that want a cut of Indian tribes' gambling winnings to give the tribes a monopoly, or near monopoly, on casino gambling in that state. Federal law prohibits states from taxing Indian tribes, which are considered to be sovereign entities.
Foster and the tribe's attorney expressed disappointment that the compact was rejected.
Julie Wilkerson, Jena's attorney, said the tribe will continue to push for a casino, and needs to further review the department's decision.
"The question is not whether Jena will have a casino, but where it will be located," she said.
This decision, Foster said, will mean the tribe ends up with a casino in a much less desirable market location.
"I have said I can't see us signing a compact where it takes a whole lot of state revenue away, as it would have in Lake Charles and Shreveport (without the state getting something in exchange)," Foster said.
Although he believes federal law requires him to continue negotiating with the tribe, Foster said he remains firm in his stance that he will not negotiate a compact that allows the tribe to open a casino in a parish that has voted out gambling. The Jena Band does not currently have a reservation, and the three parishes to which the tribe has historical connections, in Grant, Rapides and LaSalle, have all rejected gambling in local option votes.
Asked if the restriction meant the Jena Band would necessarily have to go to a rural parish that is amenable to gambling, Foster replied, "That is what they are going to be stuck with."
Officials weighed in
The proposed casino has become a heated political issue in recent weeks, with countless state and local officials questioning whether Foster's decision expands gambling in the state and whether a new casino would hurt the existing riverboat casinos and racetrack slots in Lake Charles. Local and state officials also complained that they were not aware of the negotiations until Foster announced the signing of the compact last month.
U.S. Rep David Vitter, R-Metairie, said he still believes Foster could refuse to negotiate with the Choctaws, saying court decisions have left tribes with no legal mechanism to force a governor to sign a compact.
"Other governors in other states have proven that you don't have to sign a compact," Vitter said. "I would urge him to consider that."
But Michael Rossetti, an attorney who advises Interior Secretary Gale Norton, said the department believes that under the Indian Gaming Regulatory Act the state has a requirement to negotiate "in good faith" with the Jena Band.
During discussions with the Department of Interior, the state and the tribe argued the superlative proposed location in Vinton, convenient to eager Texas gamblers, was justification for requiring the tribe to make a payment to the state. To bolster the argument, they also said Interior could consider the payments a "charitable contribution," which are allowed under the Indian gaming act.
Arguments rejected
In his letter, McCaleb rejected both arguments, pointing out the so-called charitable donations were actually going to an education trust fund for teacher pay raises that also receives tax money from riverboat casinos. "We cannot accept the argument that money paid into the SELF fund by the riverboats are state-imposed franchise fees, whereas money paid into the same SELF fund by the (Choctaws) are 'donations to a charitable organization,' " he wrote.
McCaleb also rejected the theory that the enormous profits the Jena Band would likely make at the Vinton location were enough to justify the payment to the state. He pointed out the decision to take land into trust, a necessary step before an Indian casino can be opened, is solely the province of the secretary of Interior.
Therefore, Foster's support for the Vinton location is not something that has "economic value" and can be traded away for a chunk of the Jena Band's expected profits. "In our view, the state is merely offering its support to the Band in the process," McCaleb wrote.
. . . . . . Reporter Steve Ritea contributed to this report.
Laura Maggi can be reached at lmaggi@timespicayune.com or (225) 342-7315. |
