Native American Press/Ojibwe News

Court debunks myth that audits are “trade secrets”

April 4, 2003
It was gratifying to learn on Tuesday this week that the Minnesota Court of Appeals threw out a Ramsey County District Court decision which had found that Minnesota tribal casino audited financial statements were trade secrets and therefore non-public under the Minnesota Data Practices Act.

It was bad enough that the Minnesota Department of Public Safety, Gambling Enforcement Division came up with this myth about 8 or 9 years ago to preclude me from obtaining the audits at that time. For someone who has worked with and written about financial statements for a long time, I found their definition of audits as “trade secrets” to be absolutely ludicrous. I found it to be especially absurd when a Ramsey County Court judge, in what I call the “audit lawsuit,” not only bought this bull but also found that the tribal casino’s audited financial statement derive independent economic value by remaining secret.

The St. Paul Pioneer Press, in their April 2nd article, called me “the big winner,” but actually the public, both Native and non-Native, are the big winners. Let’s face it, this $3 billion-plus industry is only working for a very few people. So-called “Indian gaming” does not benefit the state as a whole, and it also does not benefit most Indian people.

After twelve years of Indian gaming, it’s time to re-assess its value to the tribes, to Indian people, and to the state of Minnesota, and to come up with a more equitable – and more accountable – system.

Even non-profit corporations are legally required to file audited financial statements and other business information with the Attorney General’s Office, as are other state-sanctioned monopolies like utility companies. All of this information is public information.

Audited financial statements are an important tool in maintaining the integrity of our economic system. Some major corporations, such as Enron, WorldCom, and others have colluded with auditors like Arthur Anderson to “cook the books,” and have thereby defrauded the public. This has caused great financial catastrophes resulting in the bankruptcy of a number of companies because their finances turned out to be illegal, illusory, and fraudulent, and well as destroying the life savings and dreams of a lot of hard-working people, and has had long-term detrimental effects on the stock market and the rest of the economy.

Accurate financial information about the casinos is particularly important on Indian reservations, because on many reservations the casinos are nearly the entire economy. Therefore it’s imperative that this information be readily available to tribal members, and, because Indian gambling has a significant impact on the State, to citizens of the state of Minnesota.

Recent publication of audits by Red Lake, White Earth, and to some extent Leech Lake has not caused the sky to fall (like those at Prairie Island, Mille Lacs and other tribal governments opposing release of financial information have predicted). In fact, openness with the audits has helped these reservations to begin resolving long-festering financial problems. It’s hard to justify tribal attorneys’ hard-line position that their audits be secret.

It’s always reassuring when the judicial system actually works the way it’s supposed to.

The recent Court of Appeals decision exposes yet another myth, with Indian tribal governments trying to hide from even their own tribal members behind the shroud of “tribal sovereignty.”