Skip to comments.Tribes' casino lobbyists well-connected
Posted on 05/23/2005 9:15:35 AM PDT by NormsRevenge
A Minnesota company with millions of dollars invested in a controversial plan to build a casino and hotel 25 miles east of San Diego has placed its bet on one well-connected man.
It hired lobbyist Tom Foley, a former commissioner of the federal agency that oversees American Indian casinos, the same agency that must approve the company's partnership with the Jamul tribe.
Foley waited three years before lobbying his former employer. Such restraint isn't always the case when government officials go to work for tribes.
At least nine former officials of the National Indian Gaming Commission now lobby the federal government on behalf of tribes and casino companies, according to a San Diego Union-Tribune analysis. Five began lobbying less than a year after they left the commission.
Larry Rosenthal, for example, left his job as the commission's chief of staff in February 1999 and returned five months later to lobby on behalf of nine tribes and one casino company. Rosenthal, who declined to discuss his work, co-founded a firm that specializes in Indian gambling law and whose clients include the Mashantucket Pequot Tribal Nation of Connecticut, which owns one of the largest casinos in the world, Foxwoods.
Most government employees are required to wait a year or more to lobby former colleagues under the Ethics in Government Act of 1978, which is meant to prevent conflicts of interest. It also prohibits them from lobbying on matters they worked on while in government.
Lobbyists for tribes, however, are exempt from the federal ethics law, so there is no mandatory waiting period. They can lobby their former agencies as soon as they leave the government and they can lobby on any issue, even if they worked on it or it was pending when they left.
That raises questions, especially for the agency that oversees a multibillion-dollar industry. When regulators make decisions, are they thinking of the public's interest or the interests of their future employers?
"It's a temptation for someone to switch sides and immediately earn a heck of a lot more money," said Bill Allison, managing editor of the Center for Public Integrity, a Washington, D.C.-based nonprofit group. "You hope that public officials aren't looking forward to their next job when making decisions."
The center posted a report on its Web site last month that showed gambling interests nationwide have spent $59 million to lobby the federal government since 1998.
Philip Hogen, chairman of the gambling commission, said he doubts that commission officials are unduly influenced.
"Everybody that's a commissioner takes an oath to uphold the law and defend the Constitution, not to pave the way for future employment," he said. "But if you do a good job and you are seen as effective, tribes that observe that might beat a path to your door."
Foley, the former commissioner, said the ethics-law exemption is outdated.
"The thought was that nothing should hinder a tribe and its relationship with the federal government," he said. "A lot of things have changed, and it probably makes sense" to revisit the exemption.
Foley resigned from the commission in 1998 and began lobbying in 2001 on behalf of Lakes Entertainment, a multimillion-dollar casino company in Minnetonka, Minn., and Caesars Entertainment of Las Vegas.
When he lobbies the commission, Foley says, he addresses issues such as financial arrangements between his casino management clients and tribes, as well as potential environmental impacts of casinos.
"Hopefully, that leads to the approval of a management contract," he said. "You don't just go in and say, 'Sign this document.' "
The National Indian Gaming Commission approves partnerships between tribes and casino companies to ensure that tribes get a fair cut of gambling revenues. The commission also helps some tribes complete environmental assessments of casino projects.
Lakes Entertainment has partnered with two California tribes to build casinos. Both projects face strong opposition from local communities.
One is proposed by the Shingle Springs tribe, which plans to build a casino and hotel about 50 miles east of Sacramento in El Dorado County.
In 2002, the county sued the National Indian Gaming Commission and the Bureau of Indian Affairs, contending the agencies didn't adequately consider the casino's potential impact on the environment. A federal judge ruled in favor of the agencies in January.
While the lawsuit was pending, the commission approved Lakes' contract with the tribe. In the 18 months preceding that approval, Lakes paid Foley at least $170,000 in lobbying fees.
Lakes also has partnered with the Jamul tribe to put land into trust near the East County reservation to build a casino, a plan that county officials and Gov. Arnold Schwarzenegger oppose. The project is awaiting approval of the U.S. Department of the Interior and the gaming commission.
Bill Mesa, a tribal member leading Jamul's effort, said Foley has helped the band gain access to the commission and other agencies.
"He knows the people back there, and he knows how the system works," Mesa said. "If you have a lobbyist, it's much easier to get in to talk to people."
But Shawn Pensoneau, spokesman for the commission, said Hogen will meet with "any tribe that calls him."
Foley also lobbies for Caesars, a multibillion-dollar company that is expected to merge with Harrah's Entertainment to form the world's largest casino corporation. Caesars has paid him more than $260,000 in lobbying fees since 2003.
"He has been our eyes and ears at the NIGC," said Robert Stewart, senior vice president of corporate communications for Caesars.
Despite his apparent effectiveness, Foley doesn't get special treatment, he said. Foley acknowledges that he is friends with Hogen, the commission chairman, as the two served together as commissioners from 1996 to 1998.
Between two appointments to the commission, Hogen led an Indian law practice for the international law firm Holland and Knight. He said he might return to representing tribes, and might even register as a lobbyist, when he finishes his term as chairman.
Holland and Knight currently employs former NIGC commissioner Teresa Poust, who served from 1999 to 2002. As a commissioner, she voted to clarify the definition of Class III, or Las Vegas-style, gambling, a move that could have national implications and change the way tribes share revenues with states.
Poust registered as a lobbyist four months after leaving the commission and has worked for tribes in California, Arizona and Wyoming. Poust said she has not contacted the gambling commission for her clients, but Hogen said he sees her about once a month. They most often discuss the commission's upcoming decision that will clarify the definition of Class III gambling, he said.
Poust said her government experience benefits her clients and does not create a conflict of interest. The ethics exemption has allowed tribes to recruit the many Indian law specialists who work for the federal government, she said.
Foley's wife, Jana McKeag, is also a former commissioner. Now she lobbies the commission and other agencies for Venture Catalyst, a company that consults for the Barona tribe, which owns a casino in East County.
McKeag said she started with Venture Catalyst about a month after she left the commission in December 1995, and the company hired her as an in-house employee three months later. Since then, Venture has paid McKeag at least $900,000 to lobby on issues such as proposed casino regulations. She also lobbies for Sodak Gaming, a subsidiary of International Game Technology, the world's dominant slot manufacturer with revenue of nearly $2.5 billion in 2004.
The job awaiting her on the other side of the Indian gambling industry played no role in decisions she made as a regulator, McKeag said. "I felt that I had to contribute so that I could make it a good agency. When I started, there was no industry. We thought Indian gaming was going to be bingo."
McKeag also spent 20 years in the Bureau of Indian Affairs, an agency she said she spends more time lobbying than the gaming commission.
"I hardly ever talk to the NIGC at all, other than on a social basis," she said.
In California, 15 tribes spent $4 million to lobby the federal government in 2003, the latest complete figures available. Since 1998, 25 tribes in the state paid more than $12 million, including $1.7 million from Pechanga, which owns a casino near Temecula, and $1.1 million from Viejas, which owns a casino in Alpine.
But there is no way to tell how much they spent lobbying the National Indian Gaming Commission because lobbyists can be vague on disclosure reports, making it difficult to scrutinize what agency they contacted.
Disclosure reports show tribes have paid to lobby on issues such as tribal sovereignty, gambling oversight and transportation.
"They keep us abreast of what's happening in Washington," said Frank Riolo, chief executive officer of Viejas Enterprises, the business arm of the Viejas tribe. "There is as much of that as lobbying on specific issues, if not more."
Lobbyists for tribes contact many agencies from the Department of Transportation to the U.S. Fish and Wildlife Service but tribes and companies seeking approval of casino plans often focus on the National Indian Gaming Commission.
The commission oversees more than 400 tribal casinos nationwide and had a budget of $12 million last year. By comparison, the Nevada Gaming Control Board oversees 418 casinos and had a budget of $36 million in 2004.
The Indian Gaming Regulatory Act of 1988 created the commission to shield casinos from corruption and ensure that tribal governments are the primary beneficiaries of gambling revenue. It also designated tribes as the primary regulators of their casinos.
The commission has dual roles, working with tribes on regulations while at the same time enforcing them. It can impose civil fines and even close a casino if it finds a violation.
At a Senate Indian Affairs Committee hearing April 27 on the regulation of tribal casinos, Earl Devaney, inspector general for the Interior Department, said the commission's role as an adviser hinders its ability to regulate.
Devaney said his greatest fear was "not that the integrity or accountability of Indian gaming will be compromised from inside the casinos, but rather by the horde of paid management advisers, consultants, lobbyists and financiers flocking to get a piece of the enormous amount of revenues being generated by Indian gaming."
One lobbyist, Jack Abramoff, who worked for numerous tribes including Agua Caliente in Palm Springs, is being investigated by a grand jury and the Senate in connection with tens of millions of dollars he received from tribes.
Pensoneau, spokesman for the gambling commission, said he has never seen Abramoff in the NIGC office. But other lobbyists frequently come around to talk with commissioners and staff members.
Hogen said the lobbyists are trying to get the commission to consider the views of their clients, whether they are casino companies or tribes.
"I don't think it's undue influence," he said. "I think it's just selling their point of view."
Lobbyists are defined as people who work within six months for a single client and receive at least $6,000, make one or more contacts with senior government officials and spend at least 20 percent of their time on lobbying activities.
Contacts with government officials can be written, spoken or electronic. Lobbying activities can include research and discussions with less-senior government employees.
Lobbyists must file two forms a year with the Senate for each client, showing how much they were paid, what issues they dealt with and what agencies they lobbied.
Most government employees must wait a year or more to lobby former colleagues. However, lobbyists for tribes do not have a mandatory waiting period.
The National Indian Gaming Commission oversees American Indian casinos to shield them from organized crime and corruption and to ensure that tribes are the primary beneficiaries of gambling revenue. The president appoints the chairman of the commission, who requires Senate confirmation. The secretary of the interior appoints the other two commissioners. All three serve full time for three years.
At least two of the three commissioners must be members of a federally recognized tribe and no more than two members may be of the same political party.
Is this the same Tom Foley that used to be House Majority Leader up until 1994 when his home state of WA voted him out? He finally had to go into the real world to find a job since his previous experience was in politics except for a very short stint as an attorney.
Is this the same Tom Foley who was speaker of the house?
Question: if it's good for society to legalize one vice and give one ethnic group a government-sanctioned monopoly on it, then wouldn't it be even better to legalize all vices and grant monopolies to all the other ethnic groups?
Like a bad penny...
You've really got to love these lawsuits over blood-purity that have been going on. If your blood is pure enough, you get a piece of the casino gambling winnings.
It's also cool how the California Valley Miwok tribe has only FIVE members, yet got Congress to recognize it. It is now considering an offer from outside investors to build a sizable casino on the outskirts of Gilroy's famed garlic fields.
What a joke. I've had enough of this garbage.
After the house banking scandal he was neck deep into, we voted in term limits here in Washington. Foley led the court fight against the citizen initiative and the liberal court threw it out.
What a corrupt bastard he is.
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