Commissioner Charlie Weaver applies for temporary classification of gambling audits as "private"

June 29, 2001

Department of Public Safety caves in to tribal gambling interests

Commissioner Charlie Weaver applies for temporary classification of gambling audits as “private” on June 27, 2001

by Clara NiiSka

Charlie Weaver, Commissioner of Public Safety (DPS), filed a “temporary classification request” with Minnesota Department of Administration on Wednesday, June 27, requesting that audits of tribal gambling enterprises be classified as “private data.” Weaver had previously argued that the Red Lake gambling audits should be classified as “nonpublic.” The sole Red Lake gambling audit held by the DPS—for 1997—was obtained by Press/ON under the Data Practices Act after a ruling by the Commissioner of Administration. Press/ON published excerpts from that audit on June 15.

The June 27 ruling was hand-delivered to Press/ON by Frank Ball, Director of the Alcohol and Gambling Enforcement Division of the (AGED) of the DPS. Ball read from a prepared statement: “Today, June 27, 2001, the Department of Public Safety has submitted an application to the Commissioner of Administration to temporarily classify tribal gaming audit data under MN Stat. 1306. The effect of submitting this classification protects the audits as they would be classified if the application is successful, as protected non-public data. …”

Weaver’s temporary classification request is based on Minnesota Indian tribal governments having “unanimously” opposed the release of the gambling audits. In his request, Weaver argues that “release of the [gambling audit] data to the public would have a detrimental effect on each tribe’s willingness to provide audit information under the tribal-state compacts to Public Safety.”

The compacts, signed by the tribal government as well as the state, require the Indian tribal governments to provide the annual audits whenever the State requests them in writing. For example, the Red Lake Tribal-State Compact controlling video slot machines reads, § 6.11, “The Band shall … make copies of the audit and all current internal accounting and audit procedures available to the State upon written request. The Band shall permit the State to consult with the auditors …” Tribes with gambling operations are required to provide annual audits to federal regulators under the National Indian Gaming Act (NIGA); it is up to the State of Minnesota to request them under the Tribal-State compacts. The State has not requested the audits on a regular basis (it is unclear whether or not the State has ever requested them), so Press/ON questions the basis upon which Weaver is evaluating the “willingness” of the tribes to comply with the State’ audit requests. Despite the fact that Red Lake and other Minnesota tribes have continuously operated casinos subject to the Tribal-State gambling compacts for nearly ten years—since the compacts were signed in 1991—the only Red Lake gambling audit held by the State was from 1997.

Bill Lawrence responded to a similar argument from AGED in his April 19, 2001 response to Frank Ball’s April 10 denial of Press/ON’s request for the Red Lake gambling audits. Lawrence observed that, “since the State of Minnesota expends significant sums both on Indian reservations and on State infrastructure supporting Indian gambling, prudent management of State finances would require that the State regularly obtain and study Indian gambling audits.”

MDS Commissioner Weaver also argued that “disclosure of the financial information in the audits could lead to increased criminal activity in the Tribal gaming operations since the privacy of this data currently shields the gaming operations ‘from organized crime and other corrupting influences’.” Weaver’s notion that secrecy begets honesty is at variance with the philosophy underlying the “sunshine laws” and openness in government in the State of Minnesota, as well as with a plethora of federal laws mandating public disclosure of corporate information, for example federal securities laws and antitrust legislation.

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Weaver, in his June 27 temporary classification request, also objected to the release of tribal gambling audits on the grounds that they “contain security and surveillance-related information, the disclosure of which could assist criminal influences.” Press/ON publisher Bill Lawrence had addressed the issue of “surveillance information” in his April 19 letter: “I further disagree with Mr. Ball’s assessment that the audits include ‘surveillance information,’ but if for some reason the files contain such information, I would be willing to have such surveillance information deleted. Inasmuch as I have recently reviewed other Minnesota tribal casino gambling audited financial statements, I am surprised and even startled that the Red Lake audits are alleged to contain security and surveillance information. I therefore challenge the purported inclusion of such information in financial statements as an excuse to deny public access to such statements.”

Weaver argued that “Under 5 U.S.C. § 552(b)(4), Congress … classified tribal audits as ‘trade secrets …” 5 U.S.C. §552(b)(4) simply enumerates “trade secrets” as among the exemptions to the general “sunshine” provisions of federal Administrative Procedures—and makes no mention of either Indian tribal governments or tribal gambling audits. <>Lawrence had argued in his April 19 letter, “To interpret financial information as a ‘trade secret’ not only misconstrues the trade secret exemption, but also does a disservice to the citizens of the State of Minnesota and our reasonable access to legitimate flow of public information about a multi-billion dollar monopoly in Minnesota.”

Indian tribal constitutions make all expenditures of tribal funds public information—the problem is that tribal members are unable to enforce the constitution in tribal courts, the only forum which supposedly has jurisdiction.

Weaver also made a number of other arguments on behalf of the state of Minnesota’s upholding Indian gambling operations’ secrecy, including that “disclosure of gaming audits would place Minnesota tribes at a competitive disadvantage,” and that “Indian tribes cannot afford to lose portions of their gaming revenues.” It appears from the context of Weaver’s temporary classification request that he was subjected to pressure from Indian tribal governments. Press/ON has requested copies of the tribal governments’ correspondence with the Minnesota Department of Public Safety regarding their objections to the release of the tribal gambling audits.

§ 13.06, Temporary classification

Subdivision 1 of § 13.06 of the Minnesota Data Practices Act describes the procedures to be followed for “temporary classification” such as that requested by Minnesota Department of Public Safety Commissioner Charlie Weaver:

“Upon the filing of an application for temporary classification, the data which is the subject of the application shall be deemed to be classified as set forth in the application for a period of 45 days, or until the application is disproved, rejected, or granted by the commissioner [of the Department of Administration], whichever is earlier.

“If the commissioner determines that an application has been submitted for purposes not consistent with this section, the commissioner may immediately reject the application, give notice of that rejection to the applicant, and return the application. When the applicant receives notice of rejection from the commissioner, the data which was the subject of the application shall have the classification it had before the application was submitted to the commissioner.”

Press/ON is seeking an early review of DPS’s request for reclassification of the tribal gambling audits.