Court of Appeals rules casino audits held by state are public information

April 4, 2003

by Clara NiiSka

On Tuesday, April 1, a three-judge panel of the Minnesota Court of Appeals ruled that most of the information in Indian casino audits, which Minnesota state-tribal gambling compacts require the tribes to provide to the state on request, is public information under the Minnesota Government Data Practices Act (MGDPA).

The ruling by the appellate court reverses the decision made by Ramsey County District Court Judge Louise Bjorkman, who on April 23, 2002 issued a summary judgment that the audits are “trade secret” information and therefore non-public.

Tuesday’s decision is the latest step in a process begun more than two years ago by the Native American Press/Ojibwe News, which requested Red Lake audits in February 2001. The Minnesota Department of Public Safety (DPS), which under the Compacts is charged with upholding the integrity of Indian gambling enterprises in Minnesota, refused to release the records, claiming they were confidential. Press/ON requested an advisory opinion from the Department of Administration, the state agency charged with overseeing the operations of Minnesota’s bureaucracy, and on June 6, 2001, the Commissioner issued an opinion that the audit data are public information under the MGDPA.

On June 15, 2001, Press/ON published information from the 1997 Red Lake audit, which DPS claimed was the only Red Lake audit in its possession, and requested all of the other Indian casino audits held by the state. The next week, Press/ON published excerpts of White Earth audits obtained from another source.

Rather than provide the additional casino audits requested by Press/ON, the DPS sought the assistance of tribal attorneys in barring its release. On July 27, 2001, the DPS asked the Commissioner of Administration to temporarily classify the casino audit data as non-public information. On August 28, 2001, the Commissioner approved DPS’s request.

Under Minnesota law (Minn. Stat. § 13.06, subd. 5), the State Attorney General must review such temporary classification requests for “form and legality,” and on September 14, 2001, the Attorney General’s office disapproved DPS’s temporary classification request. “The temporary classification of the [casino audit] data … as nonpublic data … is disapproved as to form and legality pursuant to Minn. Stat. § 13.06, subd. 5,” wrote Minnesota Solicitor General Alan Gilbert.

Prairie Island and Mille Lacs promptly sued in state court, and Shakopee, Grand Portage, and Lower Sioux sued in federal court, seeking to prevent the release of casino audit information. Press/ON publisher Bill Lawrence, acting as his own lawyer (“pro se”), intervened in the state court lawsuits, and the Minneapolis Star Tribune filed an amicus curiae (“friend of the court”) brief.

On April 23, 2002, the state district court ruled that the casino audit data were private as “trade secret” information, rejecting the numerous other arguments to maintain audit secrecy that were made by the tribes’ attorneys.

Press/ON appealed on the state district court’s ruling on June 20^th, the same day as Federal District court Judge Ann D. Montgomery denied most of the tribes’ arguments, and granted the state’s motion for summary judgment, ruling that interpretation of state law – the Data Practices Act – should be made by the state courts.

The state joined Press/ON in appealing the state court decision, filing its appeal on June 24^th.

Tribal attorneys for Mille Lacs and Prairie Island have thirty days during which to file notice that they intend to appeal the April 1, 2003 Court of Appeals decision to the Minnesota Supreme Court. If the Court of Appeals ruling is not appealed, or if it is upheld on appeal, then the case will go back to the district court – “remanded” – so that the district court judge can determine what, if any, information should be “redacted” (blanked out) before the audits are released.

Tribal officials were “stunned” by the Court of Appeals decision, according to Leslie Suzakamo’s April 2^nd article in the St. Paul Pioneer Press. “Of course we’re disappointed. At this point, we’re going to have to look at what our options are,” Mille Lacs solicitor General Mary Al Balber told the Pioneer Press. Prairie Island spokesman Jake Rent was quoted by the Pioneer Press as saying that gambling revenue, “is the lifeblood of the community.” Rent told the Associated Press that the casino audit data “goes to the sensitivity of our business and could be misused by competitors, among other things.” The Court of Appeals described Prairie Island’s claims that the casino audits included confidential business information as “thin,” and found that “the district court overstates the information in the financial statements at issue … and disregards the significance and availability of information from other sources.”

The Pioneer Press described Press/ON publisher Bill Lawrence as the “biggest winner” in the Court of Appeals decision, although Lawrence pointed out that Indian people, who have long contended with secrecy in tribal government, are the “real winners” in the Court of Appeals’ decision supporting openness in government. “’We’ve got this huge industry that is unaccountable to anybody,’ Lawrence said Tuesday while delivering copies of his newspaper at the Capitol,” wrote Suzakamo.

The Associated Press reported that Lawrence “said the public deserves to know how casino money is spent and whether there are any irregularities” in casino operations. “We’re talking about state-sanctioned monopolies that should be monitored and open and accountable,” Lawrence said. According to the Minnesota Indian Gaming website, at http://www.mnindiangaming.org/, there are 13,339 Indian casino employees in Minnesota, 22% of them “Native,” and 85% full-time with benefits. Total payroll for the casinos is $278,168,000 per year. Lawrence has previously estimated total Minnesota Indian casino income in excess of $750 million per year, and gross annual revenues at more than $3 billion.

Lawrence, who was extremely pleased with the Court of Appeals decision, told Press/ON that he found it “incongruous” that the trial court judge “could find that audited financial statements were ‘trade secrets’ and could derive independent economic value remaining non-public.

Minnesota Attorney General Mike Hatch also hailed the Court of Appeals decision as “a victory for Lawrence and for letting ‘sunshine’ into government,” according to the Pioneer Press. “We have a tendency in government for corporations to file documents with government and stamp ‘trade secret’ on it whether it is secret or not,” Hatch said.

The full text of the Court of Appeals decision is reproduced in this issue of Press/ON.