Casino-owning tribes may play big roll in California recall
Monday, August 25, 2003
LOS ANGELES -- California's politically powerful Indian tribes are poised to play a key role in the campaign to recall Democratic Gov. Gray Davis, and they have much to gain from the outcome.
Whoever occupies the governor's office after the Oct. 7 vote will largely determine how much gambling will expand in California, as well as whether tribal casinos will be asked to fork over more money to the state.
The tribes have become some of the state's top political donors since dozens of them signed deals three years ago to operate casinos, and they are expected to give heavily during the remaining six weeks of the campaign.
"We're going to get involved because our future and our kids' future is riding on the outcome of this election, and I think we're going to play a significant role," said Michael Lombardi, an Indian gambling consultant.
Some tribes see an opportunity with the candidacy of Lt. Gov. Cruz Bustamante, a Democrat who has been one of their top allies in Sacramento for a decade.
Bustamante has indicated the tribes already pay a fair share of revenue to the state and shouldn't be tapped for more, as Davis has tried to do. He has also suggested the market should determine how many slot machines tribes should be allowed to operate. They currently are limited to a maximum of 2,000 per tribe.
"Cruz Bustamante is the best friend gaming tribes have in Sacramento," said I. Nelson Rose, who teaches gambling law at Whittier Law School in Costa Mesa.
Indian gambling is a $5 billion-a-year industry in California, with 54 tribal casinos. Experts predict that within a few years California could surpass Nevada as the nation's No. 1 gambling state.
With all that money flowing in, California tribes have reportedly spent more money on state political campaigns than any other interest group since 1998 -- in excess of $120 million.
Bustamante and Davis have been frequent beneficiaries of their largesse. Both politicians have reportedly received in excess of $1 million in tribal donations since 1999.
"I'm going to ask the different tribal governments to assist me and provide as much support as they possibly can," Bustamante said recently.
Tribal officials also say they have contacted Republican front-runner Arnold Schwarzenegger, even though some of them are wary about his connection to former Gov. Pete Wilson, a staunch gambling foe when he was in office. Wilson is co-chairing Schwarzenegger's campaign and many former Wilson aides work for the body-builder-turned-actor.
But the possibility Schwarzenegger could become governor if Davis is recalled has kept tribes receptive. Schwarzenegger and Bustamante had been neck-and-neck in polls, though a Los Angeles Times poll released late Saturday showed Bustamante ahead, 35 percent to 22 percent with a margin of error of 3 percentage points.
"I think some tribes don't want to put themselves in the position of if Schwarzenegger wins they put all their eggs in the wrong basket," said Howard Dickstein, a Sacramento attorney who represents several tribes.
Most tribal officials say they are not looking much beyond the two front-runners.
Many also say they oppose the recall, although they wouldn't be unhappy to see Davis replaced by someone friendlier to their interests.
Indian support helped get Davis elected in 1998, and he signed compacts three years ago allowing gambling operations for 61 of the state's 107 federally recognized tribes. But the governor also angered many tribes by requesting $1.5 billion in gambling revenue for the state budget, a figure he later lowered to $680 million.
As sovereign governments, tribes are not subject to state taxation, although they can agree to share revenue, and in some states they turn over as much as 25 percent. In California they don't contribute anything to the state's general fund, but pay about $140 million a year to two special state accounts, one to help poor tribes and the other to mitigate the impact of casinos.