Native American Press/Ojibwe News

Attorney General’s Office rules on temporary classification of Indian gambling audits as non-public data: “disapproved as to form and legality”

September 14, 2001

TO: David F. Fisher, Commissioner, Minnesota Department of Administration

Re: Temporary Classification

Dear Commissioner Fisher:

On August 29, 2001, this Office received a copy of your approval,' as Commissioner of Administration, of the application by the Minnesota Department of Public Safety (the "Department") for temporary classification of certain data contained in audits of tribal gaming enterprises submitted to the Department by eleven tribal governments in accordance with their respective tribal-state compacts.2 The approval was submitted to the Attorney General's Office pursuant to the provisions of Minn. Stat. § 13.06, subd. 5 (2000) which requires the Office to review the approval as to form and legality.

Based upon a review of the record and applicable law, the following sets forth the analysis and conclusion of this Office.

Background
For a temporary nonpublic classification of data not on individuals to be approved, the applicant must meet two statutory requirements. The applicant must clearly establish that no statute currently exists that either allows or forbids classification as nonpublic and that one of the three criteria set forth in Minn. Stat. § 13.06, subd. 3 (2000) is met. In this instance, the Department of Public Safety in its application sought to establish the criterion in Minn. Stat. § 13.06, subd. 3(b) (2000) that public access to the data would render unworkable a program authorized by law.

You determined that the Department established that no statute currently exists which either allows or forbids classification of the data as nonpublic or protected nonpublic.3 This Office agrees with that conclusion since the record reflects no state law that specifically addresses the issue and the Indian Gaming Regulatory Act only classifies data submitted to the National Indian Gaming Commission under federal law.4 25 U.S.C. §§ 2716.

You also found that the Department met the requirement of Minn. Stat. § 13.06, subd. 3(b) because public access would render unworkable the State's program to monitor the integrity of Class III gaming under all the tribal-state gaming compacts. In this regard, you concluded that the Indian bands and communities could refuse to give the Department copies of the pertinent audit data which would result in "significant fiscal and program implications" for the Department's 'Alcohol and Gambling Enforcement Division. You apparently believed that the Department had no legal recourse to obtain such information.

Analysis

The Indian Gaming Regulatory Act ("IGRA"), 25 U.S.C. §§ 2701-2721, and the compacts between the State and eleven Indian bands and communities govern Class III video gaming and blackjack. IGRA authorizes and legalizes Class III gaming activities on Indian lands 14 only if such activities are ... conducted in conformance with a Tribal-State compact entered into by the Indian tribe and the State under paragraph (3) that is in effect." 25 U.S.C. § 2710(d)(1)(C). In addition,

Class III gaming activity on the Indian lands of the Indian tribe shall be fully subject to the terms and conditions of the Tribal-State compact entered into under paragraph (3) by the Indian tribe that is in effect.

Id. (d)(2)(C)

Thus, Indian gaming in Minnesota is completely dependent upon having in place tribal-state compacts and in complying with their terms.

Eleven Indian bands and communities5 entered into two types of compacts with the State, one for Class III video games of chance and one for Class III blackjack. The video gaming compacts were entered into in 1989 and 1990, while the blackjack gaming compacts were executed in 1991. The blackjack compacts were incorporated into a Consent Judgment and Order issued by the Honorable Diana E. Murphy, Judge of the United States District Court, in the case: Lower Sioux Community of Minnesota v. State of Minnesota, No. 4-89-936 (D. Minn. filed Aug. 1, 1991). The Consent Judgment and Order made the terms of the compacts binding upon all parties and specifically provided that "[t]he terms of this Judgment may be enforced upon proper application to this [federal district] court."

All the tribal-state compacts contain audit clauses that require the compacting Indian .band or community to:

. . . engage an independent certified public accountant to audit the books and records of all [video or Blackjack] gaming conducted pursuant to this compact and shall make copies of the audit and all current internal accounting and audit procedures available to the State upon written request.6

The blackjack compacts contain two additional sentences expanding upon the meaning of the foregoing:

To the extent possible under state law, the state shall not disclose any information obtained pursuant to such a request [the written request]. Also upon written request, the [band or community] shall make the accountant's work papers available for review at the office of the accountant or the [band or community].

The above language expresses the understanding of the parties that "copies of the audit and current internal accounting and audit procedures" are required to be provided to the State upon its written request.7 The additional language in the Blackjack compacts requiring the State not to disclose this audit data, to the extent possible under state law,8 acknowledges that such data would physically be in the State's possession and be subject to the Government Data Practices Act ("Data Practices Act") Minn. Stat. ch. 13. Further, it is clear from the above language that the only data for which the Indian bands and communities may limit access to an on-site inspection are their accountants' work papers.

The issue of disclosure of data to a State regulatory body pursuant to compact terms has been addressed in two cases: Confederated Tribes of Siletz Indians of Oregon v. State of Oregon, 143 F.3d 481 (9th Cir. 1998); Confederated Tribes of the Chehalis Reservation v. Johnson, 958 P.2d 260 (Wash. 1998). In both cases, the courts analyzed the issue Under contract law, noting that the compacts are contracts. Siletz, 143 F.3d at 484-85; Chehalis, 958 P.2d at 750, Under the facts of each case, the courts held that the compacts did not prevent release of the data. Siletz, 143 F.3d at 485; Chehalis, 958 P.2d at 748.

For example, in Siletz, the compact between the tribe and the state had a provision addressing access to records. It stated that certain records provided to the state, including financial information, proprietary ideas, plans, methods, and other data (not mentioning investigative reports) "shall be deemed confidential." Siletz, 143 F.3d at 483. The provision then stated: "The State agrees that the disclosure of such documents shall be protected under ORS 192.410 to 192.595 [the Oregon Public Records Laws]." A provision regarding investigative reports did not reference the Oregon Public Records Laws. Siletz, 143 F.3d at 484. The court noted that where the compact permits or prohibits release of the report, the terms of the compact controlled. Id., at 485. Where it was silent, however, "neither the IGRA, the Indian Commerce Clause, nor any other federal law prevents Oregon from releasing the Report." Id. The court held that the investigative report provision was silent with respect to the application of the Public Records Laws. Therefore, the state could release the report consistent with the Public Records Laws and the compact. Id.

In this case, the video gaming compacts are silent as to the application of state law with respect to the issue of data disclosure, whereas the blackjack compacts specifically recognize and apply state law to disclosure. Both types of compacts require the Indian bands and communities to provide audit data. Under the compacts and IGRA, and consistent with the case law cited above, the Indian bands and communities must provide the audit data upon written request of the State as part of their ability to engage in legal gaming in the State of Minnesota and the data provided is public according to the dictates of state law.

The monitoring program is not rendered unworkable by release of the data, but rather by the potential refusal of the Indian bands and communities to provide the requested audits or to require review of them on-site. This Office concludes that such refusal or imposition of an on-site requirement would violate the terms and conditions of the compacts and be contrary to IGRA. The Department has legal recourse to enforce the terms of the compact if the bands or communities fail to comply with the audit requirements.9

Conclusion

Based on the review by this Office, the temporary classification of the data described in Exhibit A as nonpublic data not on individuals is disapproved as to form and legality pursuant to Minn. Stat. § 13.06, subd. 5.

Very truly yours,

Alan I. Gilbert

Chief Deputy and Solicitor General

End Notes:

1 This Office also received a copy of the disapproval of that part of the Department of Public Safety's application that covered data already classified as security information, namely internal control measures, cash flows, security and surveillance-related information. Minn. Stat. § 13.06, subd. 5 authorizes the Attorney General to review only grants of temporary classifications, not denials. Therefore, the denial is not addressed in this decision.

2 The specific data approved by the Commissioner as nonpublic data not on individuals is described in Exhibit A attached hereto, which was attached to the Commissioner of Administration's approval as Attachment II.

3 The Department of Public Safety and commentators have argued that Minn. Star. § 299L.03, subd. 11 (2000) protects the audit data because in the hands of the Indian bands and communities, the data is confidential or nonpublic. Section 299L.03, subd. 11, however, refers to data provided to the Department of Public Safety "by a governmental entity located outside Minnesota." The Indian bands and communities are all located within Minnesota. 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.

4 Arguments have been made that IGRA, which protects audit data in the possession of the National Indian Gaming Commission, preempts State law with respect to how the audit data is classified. Courts have rejected this argument. See Confederated Tribes of Siletz Indians of Oregon v. State of Oregon, 143 F.3d 481, 485-87 (9th Cir. 1998) (held IGRA did not preempt Oregon public records law based on finding that state public records law did not interfere with and was not incompatible with the IGRA and tribal control over gaming); The* Confederated Tribes of the Chehalis Reservation v. Johnson, 958 P.2d 260, 270 (Wash. 1998) (held application of Washington's public records act is not contrary to goals of tribal self-government or tribal self-sufficiency and therefore is not preempted by the IGRA).

5 The eleven Indian bands and communities are the Bois Forte Band of Chippewa, Fond du Lac Band of Lake Superior Chippewa, Grand Portage Band of Chippewa, Leech Lake Band of Chippewa Indians, Lower Sioux Community, Mille Lacs Band of Chippewa, the Prairie Island Sioux Community, Red Lake Band of Chippewa, the Shakopee Mdewakanton Sioux Community, the Upper Sioux Community, and the White Earth Band of Chippewa.

6 The audit provision is contained in Section 6.11 of the video gaming compacts; it is contained in Section 6 of the blackjack compacts.

7 The Leech Lake Band of Chippewa entered into its tribal-state compact for Control of Class III Video Games of Chance on the Leech Lake Reservation in Minnesota in June of 1990, after most of the other video gaming compacts had been executed. The compact with the Leech Lake Band contains an additional sentence in Section 6.11, the audit provision, which reads:

All materials and information relating to the audit conducted hereunder which are provided to the State upon its request shall be treated as privileged information and shall not be released to third parties unless approved by the Tribe in advance in writing, ordered to be released by a court of competent jurisdiction, or required to be released pursuant to state or federal law.

Thus, the Leech Lake Band expressly recognized in the gaming video compact as well as the blackjack compact that the State would receive data that was subject to State law regarding, disclosure.

8 As noted above, the video gaming compacts do not contain the additional language elaborating upon the statements requiring disclosure of data to the State and permitting on-site inspections of accountant's work papers. However, the additional language is instructive in interpreting the phrase "mak[ing] copies of the audit ... available to the State" which is contained in both the video gaming compacts and the blackjack compacts.

9 Florida v. Seminole Tribe of Florida, 181 F.3d 1237, 1242 (11th Cir. 1999) (Congress abrogated tribal immunity with respect to violations of existing tribal-state compacts); see also Maxam v. Lower Sioux Indian Community of Minnesota, 829 F. Supp. 277, 281 (D. Minn. 1993) (tribal immunity waived for purpose of determining compliance with gaming conducted under IGRA).