Official correspondence reveals unusually cozy relationship between Department of Public Safety and Indian gambling interests

July 13, 2001

Native American Press / Ojibwe News

by Clara NiiSka and Bill Lawrence

Correspondence between the Minnesota Department of Public Safety (DPS) and Indian gambling interests which Press/ON has obtained under the Data Practices Act reveals an apparently cozy relationship between the DPS and the Indian casinos in Minnesota. “I can’t thank you enough for your assistance!” Data Practices Compliance Official Laurie Beyer-Kropuenske wrote in a fax to attorney Greg Paulson of BlueDog, Olson and Small, the law firm representing the Shakopee Community and Grand Portage Band. “Of all the firms involved, your firm provided Public Safety with exactly the information and arguments we need! In my note to the chairpersons, I plan to highlight how helpful your firm has been!” Beyer-Kropuenske continued.

“I want to thank you for your efforts. Thanks for making yourself available to my phone calls and questions. If need be, we’ll do our best to see that the position your Department has taken is upheld,” responded attorney Paulson.

Public official Beyer-Kropuenske and Indian attorney Paulson were discussing the pending release of “all tribal gambling enterprise audited financial statements submitted to the State of Minnesota pursuant to §6.11 of the Tribal-State compacts.” The gambling audits were requested by Press/ON under the Data Practices Act, verbally and then in a June 19, 2001 letter to Norm Pint, Special Agent in Charge, Alcohol and Gambling Enforcement Division (AGED) of the Minnesota Department of Public Safety.

Audits for the Red Lake Band of Chippewa’s gambling operations were determined to be public information under the Data Practices Act, §13.03, subdivision 1, in Minnesota Department of Administration Advisory Opinion 01-051, filed by Minnesota Commissioner of Administration David Fisher on June 6. Press/ON publisher Bill Lawrence had requested the advisory opinion on April 19, after Press/ON’s February 26 request for the Red Lake gambling audits had been denied by AGED director Frank Ball. Under State law, the Department of Administration is charged with maintaining the integrity of state records and monitoring compliance with the Data Practices Act.

The Minnesota Department of Public Safety responded to Press/ON’s request for the casino gambling audits on the same day as Press/ON formally requested them in writing—not by adhering to State law and providing copies of the audits, but by Data Practices Compliance Official Beyer-Kropuenske’s sending a letter to all of the Minnesota tribal chairmen, carbon-copying tribal attorneys and Special Agent Norm Pint, among others.

In her June 19 letter, Beyer-Kropuenske informed the tribal chairman that AGED “has received a request from William Lawrence of the Native American Press/Ojibwe News for copies of all tribal gaming enterprise audits in its possession which may include audits of your gaming operations.” She explained that the Department of Public Safety “may consider seeking a temporary classification” of the audits as “private data,” and advised the tribal chairmen that: “If you would support the Department in seeking a temporary private classification of the audits and would like to offer assistance, please have your legal counsel contact me at (651) 284-3321. Without assistance from the tribes or a court order, the Department will be forced to release all of the audits on Thursday, June 28, 2001 …” [emphasis in original]

Most of the tribal chairmen responded through their tribal gambling enterprise attorneys, including: the law firms of Winthrop & Weinstine (Prairie Island); BlueDog, Olson & Small (Shakopee [Mystic Lake Casino] and Grand Portage); Steffens & Rasmussen (Upper Sioux); Zenas Baer and Associates (White Earth); and Jacobson, Buffalo, Schoessler & Magnuson (Lower Sioux). The Leech Lake Band responded through their in-house legal department, and the Mille Lacs Band responded through their solicitor general Tadd Johnson. The Fond du Lac Band and Red Lake Band responded with letters signed by tribal chairmen Robert “Sonny” Peacock and Bobby Whitefeather. If there was any communication from the Bois Forte Band to the DPS, it was not provided by DPS in response to Press/ON’s Data Practices Act request for “all correspondence … specifically including email and other electronic communication.”

Mary Magnuson, partner in the law firm representing the Lower Sioux, is particularly familiar with the State of Minnesota’s position on Indian tribal gambling operations. As the Minneapolis Star Tribune reported on October 19, 1992, she was the “assistant attorney general who represented the state on legal questions concerning gambling.” She left the Minnesota attorney general’s office to join the law firm of Jacobson, Buffalo and Schoessler, which specializes in “representing Indian tribes, Indian casinos and gambling in general.” Jacobson, Buffalo, Schoessler and Magnuson responded to state administrator Beyer-Kropuense’s request for “support” with a letter from senior partner John Jacobson, who wrote that he found the Minnesota Department of Administration’s Advisory Opinion “shocking.” In the letter, faxed June 21, Jacobson continued, “I had the privilege to participate in the negotiations that led to both the 1989 Compacts on Class III Video Games … and the 1991 Compacts on Class III Blackjack.” Among his objections to the release of Indian gambling audits was the claim that that information “could seriously damage the Tribe’s competitive position with respect to other gaming enterprises,” and that “its release could seriously compromise the security of the Tribes’ casinos.”

Greg Paulson of BlueDog, Olson & Small faxed, emailed and mailed a five-page position paper to the Data Practices Compliance Official on June 26. In that “letter,” he provided the Minnesota Department of Public Safety “with information … which could be used in support in an application for a temporary classification” of the Indian gambling enterprise as ‘private’ information. He advised the State regulatory agency that there were “several ways in which public access” to the gambling audits “will render unworkable a program authorized by state and federal law.” According to Paulson, “first and foremost, Indian tribes may refuse to provide copies of Tribal gaming operation audits to the AGED.” Paulson—attorney for a State-sanctioned Indian monopoly—advised the Minnesota Department of Public Safety that, “even if withholding audits would violate the compacts, the State would be without any recourse to obtain the audits due to Tribal sovereign immunity” [emphasis added]. He continued, “under this scenario, the State’s shared interest in ensuring the integrity of Class III gaming would be frustrated.”

Tribal gambling attorney Paulson also advised the State that “disclosure of the financial information in the audits could increase criminal activity in the Tribal gaming operations.” He informed the Department of Public Safety that, “informing the public about how much cash is on hand at each Tribal gaming operation could increase criminal activity,” and reiterated the old argument that the audits “contain security and surveillance related information that could assist criminal influences from attempting to steal from tribal gaming operations.”

He also wrote that “a compelling need exists for immediate temporary classification, which if not granted could adversely affect the health, safety or welfare of the public.” Specifically, he continued, “tribes use gaming revenues for schools, roads, law enforcement, tribal courts,” etc., “and to nurture their culture.” Paulson did not mention the millions of dollars flowing from U.S. Congress’ appropriations onto Minnesota reservations, earmarked for subsidy of reservation schools, roads, law enforcement, tribal courts, etc.

Red Lake tribal chairman Bobby Whitefeather, whose sole gambling audit held by the State—for 1996 - 1997—had already been released to Press/ON pursuant to the Department of Administration’s determination that the audits are “public,” requested that “any financial information or audits that we have supplied to you in the past as being made ‘available’ to you under the terms of the compact should be returned to us at once, provided that you have had an adequate opportunity to use them for the purposes that were intended.” He also thanked Beyer-Kropuenske for the “informative dialogue and exchange of information that we have enjoyed while working with your office.”

Norm Pint, Special Agent in Charge, Alcohol and Gambling Enforcement Division of the Department of Public Safety, informed Press/ON in a June 19, 2001 letter that, “The AGED has been contacted by a number of attorneys representing tribal gaming operations … currently, the tribes are investigating administrative and legal options that would protect the release of these audits. Be aware that Commissioner Weaver may consider applying for a temporary classification of this data” as “private” information. In his June 19 letter, Pint “estimated” that the documents requested by Press/ON would be prepared for release by AGED on June 21. He followed his first letter with a second, advising that “the letter previously sent had an incorrect date,” and that “the date the information will be available is June 28, 2001.”

On June 27, Charlie Weaver, Commissioner of the Minnesota Department of Public Safety, filed a “Temporary Classification Request” with David Fisher, Commissioner of the Minnesota Department of Administration, requesting “that audits of tribal gaming enterprises be classified as private data.” In his temporary classification request, Weaver drew heavily on the legal analysis provided to the Department of Public Safety by tribal gambling enterprise attorney Greg Paulson.

On behalf of the citizens of Minnesota, whose interests the Department of Public Safety is mandated to protect, Commissioner Weaver argued that “release of the data to the public would have a detrimental effect on each tribe’s willingness to provide audit information under the tribal-state compacts … As a result, Public Safety’s ability to ensure the integrity of Class III gaming in Minnesota would be threatened. Additionally, 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’” [emphasis added]. He reiterated tribal gambling attorney Paulson’s arguments that “informing the public about how much cash is on hand at each Tribal gaming operation could increase the threat of criminal activity,” and that disclosure of alleged security-related information “could assist criminal influences in attempting to steal from tribal gaming operations on a small and large scale.” The Commissioner also repeated Paulson’s concerns about the “competitive disadvantage” which release of casino audits would create for Indian gambling enterprises, as well as the tribes’ attorney’s argument that releasing casino audits would affect “health, safety and welfare” on Indian reservations.

Indian gambling attorney Paulson also provided the Department of Public Safety with arguments based on the Indian Gaming Regulatory Act (IGRA). He claimed that tribal gambling audits were trade secrets, and argued that both the tribal governments who create the information and the Department of Public Safety had previously protected the audits as “nonpublic information.” Commissioner Weaver incorporated these arguments in his temporary reclassification request, which retains the organizational structure provided by Paulson.

In a conversation with Press/ON publisher Bill Lawrence, AGED director Frank Ball stated that Department of Public Safety Commissioner Charlie Weaver made his decision to file a temporary reclassification request for Indian gambling audits, “based on recommendations from his staff.”

Tribal casino audits have been made public in the past. Press/ON has published excerpts from a number of audits, and, as the Minneapolis Star Tribune reported on April 27, 1994, the Shakopee Community’s “top executive of the casino’s parent company, Leonard Prescott, publicly opened the casino’s books,” revealing details of the Prior Lake Casino’s $177.7 million in revenues and $96.8 million in earnings for fiscal year 1993. Release of all of this financial information has not created the problems that the tribal attorneys and Charlie Weaver allege will be created unless the State re-classifies Indian gambling enterprise audits as “private.”

Earlier in 1994, the Star Tribune had documented “coziness” between Indian-owned casinos and “the federal official who was in a position to prevent abuses,” Earl Barlow. Until he was suspended in October 1993, Barlow was area director of the Bureau of Indian Affairs. As the Star Tribune reported in a January 9, 1994 article entitled, “Casinos good to official who regulated them,” Barlow and his administrative assistant, Dee Rasmussen, received casino voucher and other gifts from the tribal gambling operations he was supposed to be supervising, as well as winning jackpots totaling more than $20 thousand dollars.

The Minnesota Data Practices Act and other “sunshine laws” were enacted under the philosophy that public disclosure encourages honesty, rather than crime.

Legal issues involving state release of tribal gambling enterprise information were litigated in 1996 - 1998 in the case of Confederated Tribes of Siletz v. State of Oregon, 143 F.3d 484. In Siletz, the U.S. 9^th Circuit Court of Appeals ruled that where the State-Tribal compacts were “silent … neither the IGRA, the Indian Commerce Clause, nor any other federal law prevents Oregon from releasing” reports.

The court also ruled that “The Records Laws [comparable to Minnesota’s Data Practices laws] do not seek to usurp tribal control over gaming nor do they threaten to undercut federal authority over Indian gaming. To be sure, the Records Laws could have a detrimental effect on the Siletz Tribe if the Report contained damaging information on the Chinook Winds casino and the release of that Report would cause a decline in business. That possibility, however, is fully consistent with IGRA’s goal of fair and honest gaming” [emphasis added].

In addition, the recent U.S. Supreme Court decision in Nevada v. Hicks, which dramatically limited tribal jurisdiction, also held that “state sovereignty does not end at a reservation’s border.” In Nevada, the Supreme Court also held that,” Ordinarily, it is now clear, an Indian reservation is considered part of the territory of the State.” According to the U.S. Supreme Court, if sufficient state interests are implicated, states may regulate the activities even of tribal members on tribal lands.

The tribal “sovereignty” which gambling enterprise attorney Paulson argued would “frustrate” the State of Minnesota’s enforcement of honest gambling operations on reservations, leaving the State “without any recourse”—and which State commissioner Charlie Weaver in turn claimed “would have a detrimental effect on each tribe’s willingness to provide audit information” is, according to recent U.S. Supreme Court decisions, a mythological doctrine without solid legal grounds. In addition to the affirmation of State sovereignty in Nevada, tribal sovereignty has been limited by other Supreme Court decisions in the last few months, including C&L Enterprises v. Citizen Potawatomi Nation (April 2001) and Atkinson Trading Co. v. Joe Shirley, Jr., et al. (May 2001)

If tribal officials demonstrated reluctance to provide the State Department of Public Safety with the gambling audits mandated by the State-Tribal compacts, the “recourse” available to the State would doubtless include going on to the reservation and arresting them for violations of state law.

According to state law, Department of Administration Commissioner Fisher has forty-five days in which to issue a response to Public Safety Commissioner Weaver’s request for reclassification. Charlie Weaver’s request was filed on June 27, so the Department of Administration has until August 11^th to make a decision. The Department is currently soliciting public comment.