Tribal Attorney Under Fire

Sacramento attorney Howard Dickstein has made tribes rich, comes under fire
By Dale Kasler and Peter Hecht The Sacramento Bee

He started out in a tent at the reservation at Wounded Knee, S.D., an idealistic young lawyer defending Indians' rights. He evolved into a champion for Indian casinos – a towering political figure who cut deals with California governors and helped give birth to a $7 billion-a-year industry.

Sacramento attorney Howard Dickstein has made his tribal clients rich. He's largely responsible for creating three of the region's top casinos: Jackson Rancheria, Cache Creek and the stunningly successful Thunder Valley resort near Lincoln.

After nearly 40 years representing tribes, however, Dickstein is a polarizing figure. His negotiating tactics have angered some tribes, and he is often depicted as a controlling presence who meddles in tribal affairs.

For the second time in four years, he is facing bitter accusations of gaining vast personal wealth at the expense of unsophisticated clients.

Two banned members of the United Auburn Indian Community, which owns Thunder Valley, have accused Dickstein of duping the tribe into paying his firm $26 million in fees over six years.

Most of the money – about $23 million – came through a fee arrangement that, until 2009, gave Dickstein's firm 2 percent of the tribe's share of Thunder Valley's profits. Legal experts and rival tribal lawyers say they have never heard of such an arrangement.

Dickstein said there was nothing wrong with it – and that he's worth every penny.

"A tribe's financial relationship with me is a phenomenal net benefit to the tribe," he said.

In a recent interview at his loft-style midtown office, Dickstein portrayed himself as combination lawyer, businessman and politico who steers clients through choppy waters. For instance, he said, he helped persuade the Auburn tribe to scale back Thunder Valley's hotel, saving $500 million during the recession.

"I focus on the big picture," he said.

At 67, Dickstein is wiry and sports a scraggly beard and mane of silver hair. He drives Ferraris and collects fine European wine, but dressed for the Bee interview in faded jeans and a scruffy gray sweater.

His office is filled with modern art. He lives with his wife, Jeannine English, former head of the state's Little Hoover Commission, in a 1940s-era Sierra Oaks Vista home that was featured recently in Sacramento Magazine.

Dickstein makes no apologies for his wealth. He said tribal members "know what I stand for and know what my fees are."

"I have a nice car. I drive it up to (tribal) council meetings and park it in front. I am what I am. I am my own person," he said. "Some people like it and some people don't."
Accused of rip-off

The recent allegations against Dickstein echo a case from four years ago. The Rumsey Band of Wintun Indians, owner of Cache Creek, sued Dickstein, a former law partner and two business partners.

The tribe, now known as the Yocha Dehe Wintun Nation, said Dickstein and his allies effectively took control of the tribe and profited through questionable land deals while taking excessive fees and traveling on a tribe-paid jet.

The suit said Dickstein's firm made $18 million between 1993 and 2006, when he was fired.

According to a court document, the fees included one-half of 1 percent of Cache Creek's profits.

The case was settled, under a seal of confidentiality, but is hardly forgotten.

Dickstein "was deeply affected personally," said developer Mark Friedman, a friend and a co-defendant in the case. "He'd helped (the tribe) move from abject poverty to great wealth."

Dickstein won't discuss the case but said he serves his clients ethically. Sometimes, he said, he becomes the fall guy when there is a change in tribal leadership, as there was at Rumsey.

Others say Dickstein is all too willing to stick his nose into tribal affairs.

In the late 1990s, for example, he spent months defending Vern Castro, head of Table Mountain Rancheria near Fresno, against a recall effort. After Castro gave up and a new council was installed, Dickstein was fired.

"The tribe was severely divided," said his replacement, attorney Majel Russell. "One of the ways to resolve the conflict was to not renew Mr. Dickstein's contract."

Dickstein said he was simply doing his job representing an incumbent tribal government.
He was back in the headlines in November, when a rift erupted in the Auburn tribe.

Jessica Tavares, former chairwoman, and tribal elder Dolly Suehead led an effort to recall the tribe's council. Their top issue: Dickstein's fees.

"It's time for this outrageous rip-off of our tribe to end," Suehead said in a statement circulated by Sacramento political operative Steve Maviglio.

The recall failed, and the council banned Tavares, Suehead and five others from tribal property. Six of the group lost their $30,000-plus monthly casino dividends for up to four years.

The council said the group had violated tribal laws prohibiting slander.

But Tavares blames Dickstein for engineering their ouster – an example of him playing one faction against another to maintain control, she said. "He's the puppeteer," she said recently.

"He ran us lock, stock and barrel."

Dickstein vehemently denied that: "I'm not the dictator of a banana republic – that's so insulting to the tribe."

Compensation reworked

Auburn's current leadership stands behind Dickstein. When he heard The Bee was working on a story, Chairman David Keyser wrote a letter to Dickstein praising him as the "key to our prosperity."

The letter, forwarded to The Bee by the tribe's public relations consultant, said Auburn is "completely satisfied" with Dickstein's fees. It dismissed suggestions to the contrary as "the same old lies from Jessica Tavares, Dolly Suehead and Fred Hiestand."

Hiestand, a former friend of Dickstein's, is a lawyer and lobbyist representing the women. Dickstein said Hiestand is angry because the tribe fired him as its lobbyist.

In an interview, Hiestand said he lost trust in Dickstein after asking him whether he was taking a percentage of Thunder Valley's income. Dickstein told him no, "that would be unethical," Hiestand recalls.

Dickstein denied the conversation ever occurred and said his fees were fully disclosed to tribal leaders, including Tavares.

He added that he shared his fees with two other lawyers in his firm.

Tavares acknowledges approving the fee arrangement. She said she never dreamed the casino would become so profitable – or that Dickstein's firm would take home as much as $420,000 a month.

"The checks were enormous for Howard, and it really bothered me," Tavares said. "He said, 'Jessica, I had no idea what the casino was going to make.' "

Suehead said Dickstein "deserves a lot of credit" for Thunder Valley, but added, "The casino made more money than he ever dreamed of, and his eyes just got bigger and bigger."

The council voted in March 2009 to end Dickstein's profit-sharing. A tribal resolution cited "difficult economic times." Documents obtained by The Bee show the compensation has been cut to a flat fee of $80,000 a month. He said he's fine with that.

Still, Tavares and Hiestand made a complaint in 2010 to the National Indian Gaming Commission, which governs tribal casinos. They said the profit-sharing was illegal because it hadn't been approved by the agency, and Dickstein should have to return that portion of his fees: $23 million.

Hiestand said the agency briefly investigated but took no action. Dickstein said he was never contacted.

Several legal experts called the profit-sharing highly unusual. Jerry Levine, who runs the Indian law practice at Holland & Knight in Los Angeles, said the State Bar of California generally discourages lawyers from taking a financial interest in clients' businesses.

"I'm not aware of any situations where law firms were getting a percentage of profits or revenues from tribes," he said.

Dickstein said he spent years working for relatively small fees and collected big money only after Thunder Valley opened.

"I didn't come in when the going got good," he said.

Path to riches

The son of a doctor, born and educated in Philadelphia, Dickstein taught law in Malaysia in the early 1970s. He was deported after canceling classes to support student protests against government oppression.

Back in the United States, he spent a week at Wounded Knee, part of a team defending Indians against charges stemming from a violent 71-day occupation in 1973.
Coupled with Malaysia, the experience cemented his devotion to "the rights of indigenous people," he said.

He later moved to Sacramento and began his career in tribal law in earnest, representing the California Rural Indian Health Board for $2,000 a month.

In the mid-1980s, he was hired by Jackson Rancheria. The tribe had opened a bingo hall, and Dickstein said he saw the importance of gambling to Indians' future. Political and civil rights, he said, "were not enough without some form of economic self-sufficiency."

When the impoverished Auburn tribe hired him in 1995, leaders like Tavares were impressed by his comments about broken treaties and his understanding of persecution from being Jewish.

"We thought, 'This guy really cares about all the injustices that have been done,' " Tavares said.

In the 1990s, tribes were fighting to establish the legality of their casinos, and Dickstein took the lead. He negotiated a series of groundbreaking gambling compacts with Govs. Pete Wilson, Gray Davis and Arnold Schwarzenegger to legitimize and expand gambling operations.

The deals were notable for their give and take. His tribes agreed to pay the state millions in fees – and surrender some sovereignty rights – in exchange for permission to add more slot machines. Auburn even agreed to make payments to Placer County, a bold move at the time.

The strategy often infuriated other tribes. They said Dickstein had undermined them by giving up too much.

Most experts say Dickstein was vindicated.

"He knew it all came down to how many slot machines you could get," said Nelson Rose, an Indian gambling law expert at Whittier College.

Few casinos operate more slots – 2,800 – than Thunder Valley. It's considered one of the most successful casinos anywhere, and documents obtained by The Bee suggest the tribe has been pulling out $200 million a year in profits.

It's Dickstein's crowning achievement, perhaps, and he won't run from the money it has earned him.

"I'm general counsel to one of the largest privately held businesses in the state, and one of the three or four largest casinos in the world," he said. "And that requires a lot of work."

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