Court debunks myth that audits are "trade secrets"

Minnesota Indian gambling—unregulated, unaccountable, monopoly with nearly unlimited cash hiding behind sovereign immunity

by Bill Lawrence

Minnesota Commissioner of Public Safety Charlie Weaver expressed a remarkable philosophy in DPS’s June 27 temporary classification request, in which he asked the State Department of Administration to reclassify tribal gambling enterprise audits held by the state as “private” information. He writes that secrecy “shields the gaming operations ‘from organized crime and other corrupting influences.” The truth of the matter is that stealing funds from casinos has been a longstanding problem, as Press/ON has reported throughout the ten years during which Indian gambling has been in existence. Some of the thefts and embezzlements were prosecuted and some weren’t. Political considerations played a major role in the declination to prosecute certain influential individuals. Press/ON has been received dozens of phone calls about money being stolen out of casino vaults. The secrecy advocated by Weaver has not prevented the problems of theft and “corrupting influences” at Indian casinos.

In my estimation, secrecy breeds crime, corruption, mismanagement, and political intrigues. Indian tribal governments operate within a cloak of secrecy that is literally and figuratively killing Indian people. There are no open meeting laws and no data practices acts on the reservations. It seems that Weaver would like to have that same kind of unaccountable secrecy within State government, if legally-mandated disclosure of information might affect “his” organization, the Minnesota Department of Public Safety. If there is nothing to hide, why are the tribes, and for that matter DPS, afraid to reveal the financial status of tribal casinos? <> Some tribal governments have claimed that they make their financial information available, but no tribal member in the state has had an opportunity to thoroughly review the financial statements that should be open as a matter of right under the tribal constitutions. If tribal governments deign to make gambling audits “available,” it is done under circumstances in which it is impossible to make a full and proper review. In the instances that I have been told about: they bring you a big pile of documents, and give you an hour to look at them. Red Lake tribal chairman Bobby Whitefeather recently proposed to the State that he make Red Lake casino audits “available” to the State DPS in this manner.

I have brought two lawsuits in the Red Lake court of Indian offenses to obtain audited casino financial records from the Red Lake tribal government. With the tribal council in control of the court of Indian offenses, my efforts went nowhere. In each instance the tribal council abused “sovereign immunity” as a defense for their secrecy.

<>In his quest to cloak the operations of his Minnesota State agency with Indian secrecy, Commissioner Weaver also writes 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 to Public Safety.”

It is questionable how much monitoring DPS has actually done since the compacts were negotiated in 1990-1991, and DPS was assigned the task of overseeing Indian gambling operations since the State of Minnesota had already established an Alcohol and Gambling Enforcement Division (AGED) within DPS. During the past ten years, how many investigations of tribal gambling operations under the compacts have been conducted by DPS? How many people have been charged with violations of the compacts, by State, tribal, or the federal government?

The Commissioner of Public Safety’s notion that the State of Minnesota should wriggle out of complying with State law—the Data Practices Act—because the organizations that he is charged with monitoring might not be “willing” to comply with other State laws—providing gambling audits to DPS—is really astonishing if you think about it. How many highly placed law enforcement officials would even think of arguing that organizations which have demonstrated corruption and links with organized crime in the past should be placated by State policies of secrecy, and that State laws should not be enforced because those organizations might not be “willing” to comply with that State law?

<>Based on the Ninth U.S. District Court of Appeals’ Siletz decision in 1998, the arguments raised in Weaver’s request for reclassification are pure folly (see “Official correspondence” article on page 1).

It is evident that some of Charlie Weaver’s staff are confused about who they are working for and who is paying their checks: the taxpayers of the State of Minnesota, or the Indian tribal gambling interests. Whether they like it or not, in order to monitor tribal gambling enterprises properly, there is bound to be an adversarial relationship between the Department of Public Safety and Indian casinos. The DPS’s role should be to monitor casinos and ensure compliance with the State-Tribal compacts. How else can they do that, without obtaining audits and doing investigations? Financial audits and investigation reports can be potent tools in monitoring an industry laden with cash. Indian gambling is a powerful monopoly with a lot of unaccountable cash. At the very minimum the DPS should obtain casino audits regularly, and provide full information to the legislature and administration. They should take some leadership role, rather than pandering to tribal governments and casino interests, if any honest and meaningful gambling policy is ever to be developed in this state. <>It appears that the DPS is adhering to a patty-cake policy in dealing with Indian tribes, and Weaver seems to be taking an attitude of, “Hear No Evil, See No Evil, and There Will Be No Evil”—but we in the community know different.

With ten years of gambling in the State of Minnesota, and tens of billions of dollars which have passed through Indian casinos in the State, there is no significant improvement in social conditions on the reservations. Instead we have seen increased crime and particularly disturbing increases in violent crime, low educational standards, inadequate housing, high abuse and neglect, alcoholism and drugs, gangs, misuse of resources, welfare and unemployment, and other social problems persist on the reservations. Indian tribal governments show an increasing dependency on federal government funding, rather than relying on casino and other business income to pay for social programs. At one moment, Indian tribal governments are “sovereign,” but at the next they are still “wards,” with their hands out begging from Uncle Sam and the State of Minnesota, refusing to exercise their own initiative and energies, or to fulfill their fundamental responsibilities to the people who they claim to “democratically represent.”

Five years ago I made a request for information under the Data Practices Act, to find out just how much regulating the State of Minnesota was doing “in this sea of cash that has been changing hands.” My request was sent to Tom Brownell, Director of the Gaming Enforcement Division of DPS. In my August 23, 1996 editorial, I detailed my subsequent conversations with the office of Gaming Enforcement in the Minnesota Department of Public Safety. According to information furnished by Brownell’s office in 1996, he had a staff of three investigators and one clerk to do the background investigations on over 10,000 persons employed by tribal casinos in Minnesota. They were also responsible for testing more than 11,000 video machines at the 17 Indian casinos in the state. In August 1996, only one casino had been inspected by DPS, with minor violations reported. It did not appear that either the National Indian Gaming Commission or the State of Minnesota had either sought or received copies of audits from any of the tribes. As I wrote in 1996, since tribal councils are secretive with tribal membership and the State is neglecting its legally-mandated obligations to monitor the casinos, “just who is looking over the shoulder of some our less than trustworthy tribal officials?”

Given what has happened in the past, it is my opinion that DPS would like to cover up just how poor a job they are really doing in monitoring tribal gambling in Minnesota. With a decade of Indian gambling under our belt, we should have learned something. Unfortunately, the state agency charged with monitoring Indian casinos has developed an all-too-cozy relationship with the very organizations it is supposed to monitor.

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