$15 billion stakes ride on epic gambling fight

$15 billion stakes ride on epic gambling fight
Article by: TONY KENNEDY , Star Tribune

Minnesota's Indian gambling tribes, which have spent more than $6 million on political donations since 2002, say an off-reservation expansion of casino gambling would be an epic defeat.

Backed by a battalion of 30 lobbyists and deploying a multimillion-dollar political war chest, Minnesota's Indian gambling tribes wield influence at the State Capitol in both obvious and subtle ways.

But this year, with a Vikings stadium on the line, the tribes' formidable political clout is likely to face one of its fiercest tests.

Gambling revenue could play a pivotal role in the stadium financing proposals under scrutiny at the Capitol, and no one is certain how far Gov. Mark Dayton and GOP legislative leaders will go -- if at all -- in breaking up the lucrative monopoly the tribes have had on slot machines for the past two decades.

At stake in the looming struggle are huge sums. Gambling at Minnesota's 18 Indian casinos totals an estimated $15 billion a year and returns $600 million to the casinos. The gambling compacts that the tribes signed with the state have no expiration date and require no sharing of revenue.

The tribes, which have spent more than $6 million on political donations since 2002, say an off-reservation expansion of casino gambling would be an epic defeat. They are going to great new lengths to make sure that does not happen in the legislative session that opens Jan. 24.

Long close to the DFL Party, the powerful lobby has been courting allies among Republicans and lacing those friendships with tribal PAC donations. When 2011 campaign finance disclosures are filed in the next several weeks, for example, they will reveal a fresh flow of cash to GOP organizations, said John McCarthy, president of the Minnesota Indian Gaming Association (MIGA).

"It's a little bit of a new day," McCarthy said. "It's not so much that we won't support the Democrats, but there is also now room to support the other side to some degree."

Capitol insiders see other telling changes. In November, the prominent GOP aide Cullen Sheehan was hired by Lockridge Grindal Nauen, the Minneapolis law and lobbying firm that has long represented the state's Indian gambling industry. Sheehan was chief of staff to the Minnesota Senate Republican caucus and, before that, a campaign manager for Republican U.S. Sen. Norm Coleman.

Sheehan's move is but one of the many behind-the-scenes connections for the tribes. In the governor's office, they have close ties to Dayton's deputy chief of staff, Michele Kelm-Helgen. She once worked as a lobbyist at North State Advisers, whose president is Andy Kozak, one of the premier strategists for Indian gambling.

Intrigue also has surrounded the Republican-led, Indian-supported Citizens Against Gambling Expansion (CAGE). It's a nonprofit with an operating budget of more than $115,000 a year. Tribal leaders support CAGE, but McCarthy said he doesn't know how much money they have given.

The group is led by influential Republican operative Jack Meeks and, until last year, counted Tony Sutton, the former Republican Party chairman, as a member of its board.

Tribal leaders say that while they work the Legislature aggressively, they abide by the same rules as every other constituency at the Capitol.

"When we go into the session, we go in to win," said McCarthy, whose association represents 10 tribes from across the state.

Racial politics

Opponents say the tribal lobby has grown bigger than the system, fueled by streams of money that cannot be fully tracked. They also accuse the group of smearing opponents with racial politics and funding opposition campaigns to defeat elected officials who cross them.

"I call it the casino cartel. They are the big gorilla in the state," said Dick Day, a former state Senate minority leader who also has lobbied for Racino Now , a group that wants slot machines at Canterbury Park and Running Aces horse tracks, sharing revenue with the state.

In dollar figures alone, the tribes' influence is sizable. In direct political contributions, the top five tribal PACs have outspent Education Minnesota, the huge teachers union, in at least eight of the past 10 years. In addition, the tribes give money to federal campaigns and spend millions a year on lobbyists and lobbying expenses. State records show that the four largest state tribal PACs, along with MIGA, spent $12.7 million to cover the Capitol from 2002 through 2010 on all issues.

Over the years, anyone trying to cut in on Minnesota's casino market has felt the weight of the tribes' political influence.

One lobbying blitz in the mid-1990s went all the way to the White House. Three economically distressed Wisconsin tribes proposed a casino in Hudson, Wis., just 50 miles from Mystic Lake Casino in Shakopee, the crown jewel of tribal gambling in Minnesota. Enrolled members of the Shakopee Mdewakanton Sioux have received annual per capita payments sometimes exceeding $500,000, and any new casino in the metro area would diminish Mystic Lake's market share.

The Hudson proposal won some federal support, but a ruling by the Clinton administration's Interior Department killed it. Minnesota tribes subsequently gave close to $300,000 to the Democratic National Committee, and an independent counsel investigated allegations that the contribution was part of a quid pro quo. The case closed in 1999 with no evidence of illegality.

"We don't like to go against other tribes ... but look, our position is no off-reservation gambling," said McCarthy, who testified in Washington at least four times during the inquiry.

In April 2003, a racino bill passed the Minnesota House under then-Speaker Steve Sviggum, R-Kenyon, who bristled over unprecedented tribal spending on the DFL. The five largest Indian gaming PACs had given $253,200 to the state DFL House caucus and DFL Central Committee in 2002, six times more than they gave to comparable GOP units.

Then-Rep. Barb Goodwin of Columbia Heights was one of four DFLers who sided with the Republicans on the bill. Her own constituents heavily favored racino, but House Democrat after House Democrat pressured her to vote against it. That was the first year Goodwin directly felt the connection between money and votes, she said.

"I was disappointed in my party during that vote because I was lobbied so heavily," said Goodwin, now a state senator. "They don't give a reason. They just say we're taking a caucus position."

The tribes' lobbyists admit that in those years, campaign contributions were slanted overwhelmingly toward the DFL, but were never earmarked, as critics contend, to take out Republicans who supported racino.

"You don't want to get the reputation that you are out to whack incumbents," Kozak said. "You support people who supported you."

Not in plain sight

The tribe's web of influence among DFLers is legendary, but it is deeper than meets the eye with Republicans.

At a 2010 House committee hearing on various gambling proposals, one speaker was Annette Meeks, who sits on the board of CAGE with her husband, Jack. Her group, the Freedom Foundation of Minnesota, had written a report attacking the racino group for allegedly making overblown revenue projections. Meeks is a former Newt Gingrich staffer who was Tom Emmer's running mate in the 2010 Minnesota governor's race.

Two other closely connected Republican insiders are former state party chairman Chris Georgacas, who chaired Gov. Tim Pawlenty's first gubernatorial campaign, and Chris DeLaForest, a former Pawlenty staffer. Both are registered as lobbyists for the Mille Lacs Band of Ojibwe Indians, owners of Grand Casino.

Some opponents of tribal gaming say its biggest weapon is the race card. In a May 2011 op-ed published in the Star Tribune, McCarthy wrote that at least some of the support for gambling expansion "comes from 'old Indian fighters' whose trademark is hate speech against Native Americans."

He was responding to an earlier opinion piece in the newspaper by Gary Larson, whose column railed against the Indian casino lobby but contained no racial references.

McCarthy's piece reminded readers that a Minnesota governor, Alexander Ramsey, once called for the extermination of all Sioux people. "It's sad that some Minnesotans still think like Alexander Ramsey," it concluded.

McCarthy said that his column was directed at Larson only and that "we very seldom relate anything directly to racial overtones."

'It's about jobs'

Longtime Indian gambling lobbyist Randy Asunma is among those who believe the Vikings stadium issue could present a daunting challenge, coupled with racino and a Legislature filled with so many new players.

"I think it's going to be a pretty intense session," he said. "They want the tribes to potentially pay for a stadium. Why should the tribes do that? Is anybody knocking on Cargill's door, on 3M's door or anyone else's door?"

Bois Forte Tribal Chairman Kevin Leecy, who oversees Fortune Bay Resort Casino near Lake Vermillion, said the political success of Indian gambling in Minnesota boils down to merits.

"It's not about the tribes and Indian people, it's about jobs in outstate areas,'' Leecy said.

Kozak, the lobbyist, said the coalition succeeds because it delivers persuasive arguments with clarity. His rap against racino in 2012? "A bunch of racetrack owners are going to be enriched at the expense of a lot of people's jobs.''

He said the legislative landscape is trickier and more complicated than usual, meaning no one from any side of the debate is assured a slam dunk.

"We have to win every time, every year. They only have to win once.