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Friday, February 2, 2018

Zinke's agency held up Indians’ casino after MGM lobbying



Zinke's agency held up Indians’ casino after MGM lobbying

Two tribes in Connecticut say the Interior Department illegally failed to say yes or no to their plans for a third casino in the state.


Ryan Zinke is pictured. | Getty Images

The Interior Department’s refusal to sign off on the tribes’ plans for a third Connecticut casino came after Interior Secretary Ryan Zinke and other senior department officials held numerous meetings and phone calls with MGM lobbyists and the company’s Republican supporters in Congress. | Brendan Smialowski/AFP/Getty Images

Two casino-owning American Indian tribes are accusing Interior Secretary Ryan Zinke of illegally blocking their plans to expand operations in Connecticut — a delay that stands to benefit politically connected gambling giant MGM Resorts International.
The Interior Department’s refusal to sign off on the tribes’ plans for a third Connecticut casino came after Zinke and other senior department officials held numerous meetings and phone calls with MGM lobbyists and the company’s Republican supporters in Congress, according to a POLITICO review of Zinke’s schedule, lobbying registrations and other documents. The documents don’t indicate whether they discussed the tribes’ casino project.
Federal law gives Interior just 45 days to issue a yes-or-no verdict after a tribe submits proposed changes to its gaming compact with a state, as the Mohegan and Mashantucket Pequot tribes note in a suit they filed against Zinke and the department. But the department declined to make any decision in this case, an inaction that raises questions about whether an intensive lobbying campaign by one of the gambling industry’s biggest players muscled aside the interests of both the tribes and the state of Connecticut.
“I think the Department of Interior has been derelict in failing to give approval” to the tribes’ request, Sen. Richard Blumenthal (D-Conn.) told POLITICO. “We asked for a meeting, but they were unresponsive. They never even responded.”
Meanwhile, MGM and its allies had direct access to Interior. Zinke had multiple conversations last year with Sen. Dean Heller and Rep. Mark Amodei — two Nevada Republicans whose state is a major center of employment for MGM, and who have each tried to impede the tribes’ casino plans. The company also doubled its lobbying spending and assembled a team that includes Bush-era Interior Secretary Gale Norton and Florida-based Trump fundraiser Brian Ballard.
The proposed Connecticut casino would sit on non-tribal land just across the border from a billion-dollar casino that MGM is planning in Springfield, Massachusetts. The Pequot tribe’s Foxwoods Casino in Connecticut previously provoked the ire of former New Jersey casino owner Donald Trump, who complained during a 1993 congressional hearing that “they don’t look like Indians to me.”
An Interior spokeswoman did not respond to requests for comment, but the department is due to respond by next week to the suit the tribes filed in November. MGM has sought to join the suit on Interior’s side.
MGM and its supporters say the tribes are trying to circumvent restrictions on “off-reservation” gambling while still maintaining their exclusive access to Connecticut’s lucrative casino market, and that the new property would provide unfair competition to its Springfield project.
Interior officials sent the tribes encouraging signals as recently as May. But by mid-September the department reversed course, saying it would be premature to either approve or reject the plans.
“It’s 100 percent about delaying us for as long as they possibly can,” said Andrew Doba, a spokesman for the joint enterprise the tribes created for their new project.
The case is far from the first legal dispute to arise from Interior’s role as the overseer of Indian tribes’ gambling agreements with the states. Clinton-era Secretary Bruce Babbitt faced a special prosecutors’ investigation after Interior rejected three Wisconsin tribes’ plans for a casino that other, Democrat-supporting tribes opposed — though he ultimately was cleared. Indian gambling also played a key role in the George W. Bush-era Jack Abramoff scandal.
In the Connecticut case, the tribes have been operating two casinos — the Pequot tribe’s Foxwoods and the Mohegan Sun — since the early 1990s. Their success in the market between Boston and New York provided competition to casinos in Atlantic City, including the formerly Trump-owned Taj Mahal.
As gambling spread across the U.S. in recent decades, MGM and other casino developers — including Trump — pursued projects in Connecticut but were ultimately unsuccessful. State law there limits casino ownership to the two in-state tribes and their new joint venture.
The tribes say they are fully complying with state law and the federal Indian Gaming Regulatory Act, which allows federally recognized tribes to operate casinos on their reservations or lands held in trust by the federal government. The casino they want to open is technically a commercial project that would be operated by MMCT Venture, a company jointly owned by the tribes that owns the casino site in East Windsor and entered into a development agreement with the town.
Connecticut Gov. Dannel Malloy and the state legislature signed off on that arrangement last year, so long as the tribes agreed to amend their gaming compacts that guaranteed a certain share of slot revenues would go to the state. The Indian Gaming Regulatory Act requires Interior to approve such compact amendments after a brief review window, unless the amendments violate the terms of the federal law.
The lawsuit seeks to force approval of the contract, arguing that the law does not allow Interior to refuse to render a verdict.
“IGRA and its implementing regulations leave the Secretary with no discretion to proceed in any other manner,” Connecticut and the tribes argue in their lawsuit, filed in U.S. District Court for the District of Columbia on Nov. 29.
At one point, Interior seemed inclined to agree with the tribes’ interpretation of the law. In a May 12 technical guidance letter to the tribes, Associate Deputy Interior Secretary James Cason acknowledged that the Indian Gaming Regulatory Act provides for a 45-day review period for compact amendments and that the department may disapprove them only for violating the act, other federal laws or trust obligations to the tribes.
While Cason stressed that his advice was nonbinding and did not constitute a preliminary decision, he endorsed earlier guidance from the Obama administration that the Connecticut amendment reflected the “unique circumstances” at play and that opening a new casino would not affect the tribes’ exclusivity agreement with the state.
But the tribes’ request drew opposition from out-of-state lawmakers like Heller and Amodei.
“Under that framework, the tribes seek to expand off-reservation gaming without going through the procedures mandated by” the Indian Gaming Regulatory Act, Amodei wrote in a July 28 letter to Cason, following up on a discussion earlier that day. Amodei asked whether Interior planned to allow the 45-day review period to lapse, which would allow the amendments to be “deemed approved.”
Ultimately, Interior decided against approval. Acting Assistant Secretary for Indian Affairs Michael Black told the tribes in a Sept. 15 letter that approving or disapproving the amendment to their gaming compact was “premature and likely unnecessary,” and said Interior had “insufficient information” to make a decision. However, he did not cite any legal justification for that move, nor did he outline what additional information the department would need.
Interior has on at least one occasion returned a gaming compact amendment rather than make a yes-or-no decision, although the circumstances were slightly different at the time. In 2013, the department told the Cheyenne-Arapaho tribes in Oklahoma that it could not process their amendments because of incomplete information. But in that case, the department replied in less than 30 days rather than wait for the entire review period to elapse, and it cited specific regulations and outlined what additional information it needed from the tribes.
Black copied Amodei and Heller on his letter but did not include any Connecticut lawmakers. (He did say a separate letter was going to Malloy, the Connecticut governor.) Zinke and Heller also spoke on the phone on Sept. 15, according to an entry on Zinke’s calendar. And the day before Black sent the letter, Zinke and Cason were scheduled to meet at the White House with deputy chief of staff Rick Dearborn, although Zinke’s calendar does not list the subject of the meeting.
Ahead of the decision, MGM “participated in Interior’s review” through meetings and correspondence in which the company urged Interior to either return the amendments without making a decision or to disapprove them for violating the Indian Gaming Regulatory Act, according to a statement filed in court by Uri Clinton, MGM’s senior vice president and legal counsel.
MGM brought on heavyweights including Norton — who disclosed her work for the company just last month — as well as Ballard, a lobbyist who has helped raise millions for Trump’s campaign. MGM’s spending on lobbyists for all issues more than doubled last year, to $1.5 million spread across five outside firms and its own newly formed in-house team.
An affiliated company, MGM Public Policy LLC, also paid $270,000 last year to hire a team of lobbyists from Brownstein Hyatt Farber Schreck LLP to work on issues including gaming. That’s the firm at which Deputy Interior Secretary David Bernhardt worked until he joined the administration last year, though he has agreed to recuse himself from matters involving former clients of his firm without prior authorization.
“MGM Resorts last year established a public policy office in Washington to engage more directly on Federal legislative and policy issues,” an MGM spokesman said in a statement. “Our advocacy activity reflected that increased engagement. As the largest employer in Nevada, part of that advocacy is routinely engaging our elected representatives.”
Heller and Amodei each had multiple meetings and phone calls with Zinke last year, according to the secretary’s calendar, although it’s unclear whether they discussed the Connecticut casinos. On one occasion, Zinke joined Heller for dinner at a Las Vegas steakhouse on July 30, when he was in the state touring national monuments, one of several pieces of Interior’s portfolio of interest to Nevada.
A Heller spokeswoman did not respond to a request for comment. But the senator has tried to advance MGM’s interests in the past: In 2016, he offered an amendment to a defense bill that would have prevented Indian tribes from operating commercial casinos in the same state where they operate casinos on the reservation — precisely what the Connecticut tribes are trying to do. The amendment never came to a vote, and Heller does not appear to have ever discussed it publicly.
MGM employees and the company’s political action committee have given $96,000 this cycle to Heller’s reelection campaign and leadership PAC, making the company his largest single source of contributions, according to the Center for Responsive Politics. Amodei has received no donations from company employees or its PAC.
Interior’s Sept. 15 decision came two weeks after Zinke invited several lobbyists for MGM to join him and other guests for a social visit on his office balcony, which overlooks the National Mall. They included, according to Zinke’s calendar, Ballard and other lobbyists from his firm Florida-based firm Ballard Partners, which opened its first Washington, D.C., office in 2017. Also present were Zinke’s former family attorney and a major GOP fundraiser, according to copies of the secretary’s calendar.
MGM hired Ballard in March and paid the firm $270,000 last year, according to disclosure filings. Ballard was Florida finance chairman for Trump’s 2016 campaign and helped organize a fundraiser at the Trump International Hotel in Washington last summer at which donors gave $35,000 to attend or $100,000 to join the host committee.
Ballard declined to discuss his work for MGM or any other client and said he could not recall the details of that particular meeting, which took place Aug. 29, according to Zinke’s calendar. But Ballard said he had met Zinke and thinks “the world of him.”
In October, MGM brought on Norton, who served as Interior secretary from 2001 to 2006, to lobby on issues related to the Connecticut tribes. Norton began lobbying for MGM on Oct. 25, according to disclosures filed Jan. 19.
The next day, Oct. 26, Interior officials spoke to the tribes and asked them to explain why the department was obligated to weigh in on their casino since it was being built by a commercial entity and not on tribal land.
In a brief interview last week, Norton said she did not know why her disclosure form was filed so late — lobbyists are required to file disclosures within 45 days — and she did not respond to follow-up inquiries.
Meanwhile, a new state legislative session begins in February in Connecticut. MGM plans to ask legislators there to allow an open bidding process for new casinos in the state, arguing that Interior’s refusal to act shows that the state's attempt to limit casino ownership to the tribes would not work.

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