Casino audit update:
Five Minnesota Indian ‘tribes’ respond to Attorney General’s ruling with lawsuits

by Clara NiiSka

Attorney General Mike Hatch’s office released a ruling on Friday, September 14^th determining Indian casino audits held by the state under the terms of the state-tribal compacts are “public under the dictates of state law.”  The compacts assign responsibility for monitoring Indian gambling enterprises’ $3 billion annual monopoly in Minnesota to the state Department of Public Safety (DPS), and require that audits be provided to the state upon written request.  Recent reports by the Minneapolis Star Tribune and the St. Paul Pioneer indicate that since 1991 DPS has obtained sixty-five audits from the eleven tribes operating 18 casinos in the state; in a September 21 article, Star Tribune staff writer Robert Franklin quoted DPS spokesman Kevin Smith as saying that DPS has only four audits obtained since 1997.

In response to concerns expressed by readers of this newspaper, Press/ON requested copies of the casino audits from DPS under the Minnesota Data Practices Act, a “sunshine law” which provides that most government records in the state of Minnesota are public information.  Months of legal wrangling followed Press/ON’s request: DPS refused to provide the audits, the Department of Administration ruled that they were public information, and then DPS then filed a formal application to reclassify the casino audits as nonpublic until the matter could be considered by the legislature.  The Department of Administration approved DPS Commissioner Charlie Weaver’s request to reclassify the audits as nonpublic information, and, as required by state law, the matter went to the Attorney General for review.  On September 14, the Attorney General’s office ruled that the reclassification request was “disapproved as to form and legality,” and that the audits are public information.

Under the provisions of state law, the audits were to be released by DPS on Friday, September 21.  In addition to Press/ON’s request, the casino audits have also been requested by the Minneapolis Star Tribune.  DPS subsequently requested an extra week to go through the audits and remove any “security” data or other nonpublic information, postponing the release of any information until Friday, September 28.

On Thursday, September 20, attorneys for the Prairie Island Indian community filed a lawsuit in Ramsey County district court, seeking a temporary injunction barring DPS from releasing “any tribal audit information” submitted to DPS by Prairie Island, pending a ruling by the court on the issues posed by Prairie Island in its Complaint.  Prairie Island attorneys named “DPS acting through its duly appointed Commissioner” as the other party to the lawsuit.  Prairie Island’s motion for a temporary injunction barring the release of audits submitted to the state by Prairie Island was heard by Ramsey County District Judge Louise Dovre Bjorkman on the same day as the lawsuit and motion were filed.  The temporary injunction was granted on September 20, with the provision that a hearing be held within two weeks; the state, through the Attorney General’s office, did not oppose the request for a temporary injunction.

Also on September 20, attorneys for the Shakopee Mdewakanton Sioux Community, Grand Portage Band of Chippewa Indians, and Lower Sioux Indian Community jointly filed a lawsuit in Minnesota Federal District Court, suing Minnesota Attorney General Mike Hatch, Commissioner of Administration David Fisher, and DPS Commissioner Charlie Weaver for alleged violations of the U.S. Constitution, specifically the “due process” guarantees of the 14^th Amendment, as well as several federal laws: 42 USC § 1983 (civil rights), the Indian Gaming Regulatory Act (IGRA) and the Freedom of Information Act (FOIA).  The federal lawsuit included a motion for a temporary restraining order preventing the release of casino audit information provided to the state by plaintiffs Shakopee, Grand Portage and Lower Sioux, which came before federal Judge Ann D. Montgomery on September 21, who granted a temporary injunction barring immediate release of the audits.  A teleconference is reportedly scheduled to he held on September 28^th to establish a hearing schedule.

On Friday, September 21, attorneys for the Mille Lacs band filed a lawsuit in Ramsey County district court against the State of Minnesota and Charlie Weaver as the Commissioner of the Minnesota Department of Public Safety, suing the state for three counts of alleged violations of the Minnesota Data Practices Act, and for alleged breach of contract.  The Mille Lacs Band’s attorneys also sought an injunction barring release of Mille Lacs casino audits.

The Attorney General’s September 14^th ruling that Indian casino audits held by the state are public information was written by Chief Deputy and Solicitor General Alan Gilbert, and was published in Press/ON on September 21.

On June 19, DPS Data Practices Compliance Official Laurie Beyer-Krupuenske’s faxed a letter to tribal chairmen, requesting the “support” of their attorneys in preventing the release of the casino audits.  As Press/ON reported on July 13, Indian gambling enterprise attorneys, tribal attorneys and tribal chairmen responded with wide-ranging arguments as to why the audits should kept secret.  A number of these arguments were used by DPS Commissioner Charlie Weaver in his June 27 request for temporary reclassification of the casino audits as nonpublic information; most of the remaining arguments suggested by the tribal attorneys—for example that the audits contained “trade secrets”—had been previously rejected by Department of Administration Commissioner David Fisher in his June 6, 2001 Advisory Opinion 01-051, in which Fisher ruled that Red Lake casino audit information was public.

In the September 14^th ruling, Attorney General’s Office (AG) focused on tribal governments’ threatened refusal to provide casino audit information to the state, and DPS Commissioner Weaver’s claims that therefore, “public access to the data would render unworkable a program authorized by law.”  The AG found that the problems cited by Weaver, and reiterated by Fisher, were a consequence not of the release of audit data, but rather by tribal governments’ potential refusal to provide the audits to the state—and that Indian gambling enterprises in Minnesota depended on tribal compliance with the compacts, which the state had the means to enforce.

The AG also rejected the arguments raised by DPS, that tribal governments were “outside” Minnesota.  “The Indian bands and communities are all located within Minnesota,” the AG wrote.  “In fact, they would not be able to enter into a compact at all with the State of Minnesota if they were not located within Minnesota.”  Except for Red Lake, exempted from extension of state criminal and civil jurisdiction under Public Law 280, and Nett Lake, with respect to which state jurisdiction has been partially retroceded, all of the state’s Indian reservations are clearly subject to state jurisdiction pursuant to federal law.

The September 20-21 lawsuits were filed by three law firms representing Indian tribal gambling enterprises.  None were filed by in-house tribal attorneys.

The lawsuits filed in the Ramsey County District Court name DPS, or DPS Commissioner Charlie Weaver, as the defendant.  Weaver has consistently attempted prevent public scrutiny of the casino audits held by DPS, and as the defendant on behalf of the state, it is unlikely that he would change his stance and argue vigorously in support of public release of the audits in court.

Release of the casino audits would invite public examination of Indian gambling operations in Minnesota—and it would also subject the operations of the DPS to public scrutiny.  Monitoring the billions of dollars which flow through Minnesota’s Indian gambling monopoly each year is a huge task, and DPS has a limited budget with which to supervise a cash-rich industry with historical problems of corruption and ties to organized crime.  Has Charlie Weaver’s agency been successful in ensuring “clean” gambling in Minnesota’s Indian casinos?  If the audits are hidden as nonpublic information, the public will never know.

The tribal attorneys are arguing that public release of audited casino revenues will provide an unfair advantage for competing casinos in other states.  It would also provide firm grounds for public demands for accountability from Indian tribal gambling enterprises: from tribal members who want to know how much money “their” tribal governments are earning (and where it is being spent), as well as from state and federal agencies which continue to pour millions of dollars each year into reservation Indian programs despite casino revenues.  These argument were addressed by the U.S. Court of Appeals for the 9^th District, in Confederated Tribes of Siletz Indians v. State of Oregon.  In that case, the federal Court of Appeals found that the “possibility” of damage to a tribal gambling operation posed by release of records under state public records laws does “not seek to usurp tribal control over gaming nor do they threaten to undercut federal authority.”  Rather, the federal appellate court found that the release of the records contested in the Siletz case “is fully consistent with the IGRA (Indian Gaming Regulatory Act)’s goal of fair and honest gaming.”

The lawsuits filed September 20-21 involve less than two thousand tribal members living on five of Minnesota’s smallest reservations, which is approximately 1/30^th of the total Indian population in the State of Minnesota, and about .04% of the total population in the state.

Prairie Island Indian Community v. Minnesota Department of Public Safety, Ramsey County District Court, Court File No. C5-01-8766.

Attorneys John A. Knapp, Eric F. Swanson, and Julie Ann Fishel, of the St. Paul law firm Winthrop and Weinstine, are suing the Department of Public Safety on behalf of the Prairie Island Indian Community.  They successfully obtained a temporary injunction barring the release of Prairie Island casino audits, and seek to permanently prevent the release of those audits, contending that “no harm will be imposed on the State in terms of attorney’s fees or penalties by the individual requesting the information should the Court issue an injunction” sealing Prairie Island casino audits from public examination.  This writer asked Press/ON publisher Bill Lawrence about the Prairie Island attorneys’ unusual legal argument that Lawrence would not seek sanctions against the State for refusing to release the records—and that since he was ‘harmless,’ the records should not be released.  Lawrence chuckled and said, “they don’t know me very well.”

Plaintiff Prairie Island’s attorneys make several other arguments urging that the casino audits be reclassified as nonpublic and confidential, including claims that the applicable jurisdiction is federal—under which, the attorneys allege, the audits would be nonpublic, as well the argument that tribal governments are “sovereign” and legally “outside Minnesota.”  The attorneys also claim that the Department of Administration’s Advisory Opinion 01-151 pertains only to Red Lake casino audits and “cannot be extended to include Prairie Island Data, that casino audits are “trade secrets,” and “that the public interest would be advanced by maintaining secrecy with respect to casino operations.  The “trade secret” argument has already been rejected by both the Department of Administration and the Attorney General’s Office.

Shakopee Mdewakanton Sioux (Dakota) Community, Grand Portage Band of Chippewa Indians, and Lower Sioux Indian Community v. Mike Hatch, Minnesota Attorney General, David F. Fisher, Commissioner of the Minnesota Department of Administration, and Charles R. Weaver, Jr., Commissioner of the Minnesota Department of Public Safety, United States District Court, District of Minnesota, Court File No. 01-1737 Civil.

The law firm BlueDog, Olson & Small, attorneys for Shakopee, Grand Portage, and Lower Sioux, sued Minnesota Attorney General Mike Hatch, and Commissioners Fisher and Weaver, in federal court.  They sought federal jurisdiction with the claim that the lawsuit involves a “federal question.”  Interestingly, although the federal case includes claims like that of Prairie Island—that the tribal governments are “outside” Minnesota”—the federal Civil Cover Sheet filed with the legal papers acknowledges that both the “principal place of business” of the Indian casinos is in Minnesota, and that the Indian plaintiffs are citizens of the state.

Attorneys Steven F. Olson and Greg S. Paulson of BlueDog, et al. argue on behalf of the plaintiffs that the “Federal Government has a trust duty’ to Indian tribes to protect the tribes’ rights and immunities,” and presumably sought federal jurisdiction rather than state jurisdiction in the belief that the federal courts would be more sympathetic to the Indians’ arguments that state interpretation of state law, specifically the Attorney General’s analysis of the Data Practices Act as it pertains to casino audits held by the state, was a “unilateral interpretation of the Compacts” which unjustly deprived the Indian gambling interest of “property”—audits which had been filed with the state—and that releasing casino audit information under the Minnesota Data Practices Act would violate the Indian gambling interests’ fourteenth amendment rights.

Olson and Paulson also make a number of other claims, including that the audits are “trade secrets,” and that the audits are “protected” from public scrutiny by “the Compacts and Tribal law.”

Mille Lacs Band of Ojibwe Indians, Plaintiff, v. State of Minnesota and Charlie Weaver as the Commissioner of the Minnesota Department of Public Safety, State of Minnesota District Court, Ramsey County, Court File No. C3-01-8782.

Attorneys Thomas L. Fabel and Wallace G. Hilke, of the law firm Lindquist & Vennum, Minneapolis, sued Charlie Weaver, DPS, seeking to prevent DPS from “publicly disclosing confidential financial and business information concerning the Mille Lacs Band’s gaming operations.”

Like the lawsuits filed by attorneys for Indian gambling interests in the other two cases, the Mille Lacs attorneys make a sweeping series of arguments and allegations: that the top state administrators have violated State and federal law, that the casino audits are “trade secrets” and that the release of outdated financial information will unleash a flood of competition from out-of-state casinos as well as other Minnesota Indian casinos and will thereby irreparably harm local Indian casinos—and that Mille Lacs is allegedly “outside Minnesota.”

Press/ON and the Minneapolis Star Tribune

Both the Native American Press/Ojibwe News and the Minneapolis Star Tribune requested the casino audits from the State.  According to Press/ON publisher Bill Lawrence, “intervention by the Star Tribune or the Native American Press is likely.”