January 6, 2006

The Real WMD Threatening Democracy

Gambling Money

When sleaze meets sleaze magic happens. One glance across a crowded room and they instantly recognize kinship. But when super-sleaze teams up with super-sleaze a fusion-like chain reaction flashes to life consuming everything in range.

And that's what happened when Jack Abramoff met Indian gambling. The master of political sleaze met the masters of societal sleaze.

Oh, I know the media is all atwitter over the political implications for ruling Republicans, but as usual they are missing the soul of this saga -- the political correctness and hypocracy that surrounds Indian gaming.

Let me explain.

I'm have no moral objections to most vices, including gambling and, when I can get away with it, indulge in several vices myself. So the morality of gaming is not my beef with Indian casinos. It's what I learned way back in the 1980s about what's really going on behind all that helping the poor Indians blather.

While working on our S&L book (Inside Job) in 1986, my co-author, Mary Fricker, and I followed one of our S&L crooks to a small Indian reservation outside Palm Springs. It was the home of the Cabazons, the very tribe that took their case for gambling rights to the U.S. Supreme Court and won sparking the Indian gaming revolution.

What we found there was, to say the least, unnerving. Sure there were Indians - about 25, but they weren't in charge. Instead as group of Los Angeles-based Mafioso were running the operations -- people with names like Rocco. The gaming operations were run by a non-Indian “management” company. They would front the money to build, maintain and operate the various gaming operations with the promise the tribe would get a share of the "profits," as calculated by Rocco and friends.

This is how Indian gaming began. After being chased out of Los Vegas and New Jersey by state and federal heat, the mob discovered indian reservations. It was like a gift from the Mob Gods. One mobster testifying before congress was asked how the mob viewed Indian reservations. He replied, "as our new Cuba.”

That's because Indian reservations are sovereign nations within a sovereign nation. The mob could set up casinos, pay off tribal leaders and skim casino proceeds with impunity. If the FBI showed up they had tribal security usher them out the gate because they had no jurisdiction on reservation property.

During our short investigation of the goings on at that Indio, California Blazoning reservation:

* Three members of the tribe were found shot in the head a week after threatening to go public with corruption at the gaming facilities,
* An illicit arms sales operation was set up peddling machine guns,
* The non-indian head of the tribe's gaming management company, John Philip Nichols, was sent to prison on a hire for murder charge,
* The S&L crook who led us to the reservation in the first place and who had financed the tribe's high-stakes bingo parlor, was charged with running fraudulent insurance companies and running off with customer premiums,
* The same fellow was later sued by the federal government for tens of millions in fraudulent loans he got from now-defunct S&Ls,

And there was more. And it's still going on . (See this story)

We heard reports back then of similar activity on Indian reservations in Florida and Minnesota as well. Mobbed up management companies were rounding up their own tribes coast to coast. One operator was pitching so many tribes he referred to his targets as, “Chief of the week," sessions.

Ah, but Indian gaming proponents are quick to counter, “that was then, things have changed.”

Yeah, they've changed alright. They got smart. The likes of one time Republican National Committee chairman, Frank Farenkopf, and later GOP lobbyist, Jack Abramoff, stepped in. While Democrats saw Indian gaming as supporting another down trodden minority and something “we have to put up with because of how we screwed the American Indians in the past,” the GOP saw it another way – the GOP saw indian gaming the same way the mob saw it, as a cash cow.

And so Indian gaming really is different now. It's bigger and more corrupt. The mobsters were shoved into the closet and replaced out front by buttoned down business men, men with the kind of connections that get things done – and without all that messy “batta bing, batta bang” stuff.

Not only could these guys bring big money and big influence to Indian gaming, but legitimacy, even a reassuring glaze of morality. After all, would Jesus-boy, Ralph Reed, associate himself with something sleazy?

Farenkopf made the way safe for fellow Republicans, serving as president of the American Gaming Association. The ASA is the lobbying arm of the gaming industry. It was formed in 1995 and hired Frank at a hefty $1 million plus a year. For his keep Frank took gambling's case directly to GOP bigwigs, even the White House.

"He was the best hired gun that money could buy," said the Rev. Tom Grey, founder and executive director of the National Coalition Against Legalized Gambling "There is no doubt that he plays a very skilled Washington game."

When Farenkoph argued his case to fellow Republicans he surely pointed out two critical facts:

1)Gaming produces tons of free cash, and
2) Democrats have been getting most of the Indian gaming action. (See here)

From 1998 on the GOP's share of indian gaming revenues has steadily grown. But Farenkoph played by the rules so Dems kept their lead, though it narrowed through 2004. It wasn't until Jack Abramoff blended political action with tried and true mob techniques that the GOP pulled past Dems.

I only mention all this because the only way to get to the bottom of a problem is to identify all the elements that created it in the first place. Sure we need campaign finance reform. And we need lobbying reform as well. But we also need to admit that little has changed since the days when powerful white men set up trading posts on indian reservations, traded their goods for cheap liquor they knew was poison to them then, once hooked on hooch, proceeded to exploit them in every way imaginable. (All of which, of course, was carried out in broad daylight under the banner of “helping the poor Indians.”)

That's all Jack Abramoff and Ralph Reed were doing, simply following in the footsteps of those hardy pioneers. Behind all the altruistic hoopla you hear today, Indian casinos are just the latest incarnation of the old exploitive reservation trading posts.

But don't expect anyone in Washington to admit that. Not the Democrats, who you can bet are rushing to assure gaming tribes -- and those that want to join the party -- that Dems hold no grudges about their little fling with GOP whores. The DNC brothel is right where always was and welcomes their indigenous constituents back with open arms -- but do bring wallets.

And don't expect Republicans to say anything but the nicest thiings about indian gaming for the next few year -- and for free!. Republicans must now do penance for golfing in Scotland on indian money even as Abramoff and his pals gang raped their tribal clients.

I don't argue that some revenues from reservation casinos have helped some Indians. But I am quite certain tribes never see the lion's share of the cash that flows through those operations. But non-indian management and politicians do.

Wanna bet?

PS: Oh, and about how Indian casinos are "different now?" Well sorta -- sorta not.

Tribe Deals In Its Own at Casino
The Santa Ynez band's lucrative gambling operations are overseen by its own regulators, some of whom have criminal histories.

By Glenn F. Bunting, Times Staff Writer
October 19, 2004

SANTA YNEZ, Calif. — Gilbert Cash would have no chance of working as a blackjack dealer at one of the major hotels on the Las Vegas Strip. The reason: Cash has filed for personal bankruptcy four times and failed to pay about $60,000 in income taxes. He also is awaiting trial on charges of choking and beating his estranged wife ...

Yet as chairman of the gaming commission at the Chumash Indian Casino Resort, Cash, 38, oversees more than $1 billion in wagering each year. Nor is he the only regulator at the Santa Barbara County casino with a troubled past.

• At least seven of 16 tribal members who have served on the gaming commission during the past decade have backgrounds that almost certainly would preclude them from working at, much less regulating, casinos in Nevada and New Jersey.

One commissioner resigned in July after The Times asked about his past convictions for robbery, burglary and theft. Another former regulator once fired gunshots near the Chumash bingo hall. A third was elected to the commission after he was fired from a management job in the casino for allegedly molesting female employees.

• Tribal members have been caught taking advantage of their authority on the gaming floor. The tribal chairman once directed a blackjack dealer to provide free chips to his son and other customers. In another case, a tribal member was fired as head of video gaming after it was discovered that slot machine tournaments had been fixed.

• Key security jobs at the Chumash Casino are held by relatives of gaming commissioners — an arrangement prohibited by casinos in other states. The surveillance unit in recent years has included several officers who are related to members of the Chumash gaming commission and its executive director.

Such problems are "somewhat inevitable when tribes are given the power to regulate themselves," said I. Nelson Rose, a professor at Whittier Law School who is a leading authority on gambling and an advisor to state regulators.

Tribal leaders contend that the success of the Chumash Casino shows that their patrons have full confidence in the integrity of the operation. They say their tribe — the Santa Ynez Band of Mission Indians — has taken corrective measures whenever infractions have been uncovered.

"This only underscores our assertion that we can, in fact, regulate ourselves," said Tribal Chairman Vincent Armenta. "We run a tight operation."

California voters approved high-stakes gambling on reservations four years ago. Since then, tribal gaming has expanded so rapidly that the state is expected to overtake Nevada as the nation's casino capital within several years.

An initiative on the November ballot would extend the tribes' monopoly on Las Vegas-style gambling into the next century. Proposition 70 would lift restrictions on the number of slot machines and allow tribes to offer unlimited craps, roulette and other high-stakes games.

In exchange, tribes would pay the state corporate income tax of 8.84% on casino profits. Currently, Indian casinos are exempt from state and local taxes.

The initiative is sponsored by the Agua Caliente Band of Cahuilla Indians in Palm Springs, with support from other tribes. It is opposed by law enforcement leaders, organized labor and Gov. Arnold Schwarzenegger, who prefers to negotiate gambling agreements directly with tribes.

Under Proposition 70, tribes would continue to have primary responsibility for policing their $6-billion-a-year industry.

Currently, each of the state's 53 casino-owning tribes is required to set up a commission to monitor gambling. Some tribes hire professional regulators, often with law enforcement backgrounds. The Chumash and other bands do the job themselves, electing tribal members to their gaming agencies.

Advocates of Indian gambling say tribes have kept their casinos free of corruption.

"We can say with confidence there is no evidence that the Mafia is running Indian casinos," said Michael Lombardi, chief regulator for the Augustine Band of Cahuilla Indians in the Coachella Valley. "Indian gaming in California is much more regulated than card rooms and at least stands up to the same level of quality as racetracks and the lottery."

Last year, the Chumash moved their gambling operation into a new, $157-million Mediterranean-style resort with 2,000 slot machines — as many as Caesars Palace in Las Vegas.

A final thought. Lose cash, in the quantities produced by gambling operations, always attracts two kinds of people; sleaze and politicians. (Oh look! A redundancy.)