Tribes see independence in a casino

By BART JANSEN, Portland Press Herald Writer

Copyright © 2003 Blethen Maine Newspapers Inc.

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The Passamaquoddies HOW WE DID IT Staff writer Grace Murphy and researcher Julia McCue began working last May on this series. Murphy interviewed dozens of members of the Passamaquoddy tribe and the Penobscot Nation, as well as state officials, experts on casino issues, supporters and critics of the project. Staff writer Bart Jansen examined federal audits of the tribes, and attended a congressional hearing about Native American gambling. They read research articles on casinos, requested financial records from the tribes and plowed through hundreds of pages of federal and state documents. Murphy went to the Pleasant Point reservation and stayed there for two weeks last June. She has visited the reservation three times this year, including her two-week stay. Photographer Gregory Rec also has visited the reservation four times this year, and spent a week at Pleasant Point last June. In Depth: Casinos in Maine WHAT'S YOUR OPINION? This poll is not a scientific survey of reader opinion. The results are a snapshot of what readers are thinking. Are casinos in Maine worth the gamble? Visit our In Depth: Casinos section for background news stories, a timeline and related links, and voice your opinions and thoughts in the poll and online discussion. To top of story

WASHINGTON — Maine's American Indian tribes, whose members historically have suffered lower income and higher unemployment than the state generally, receive much more per person in federal grants than the state averages, according to a review of federal audits. But gambling revenues projected for a casino the Passamaquoddy Tribe and Penobscot Nation are proposing would dwarf government funding that the tribes now rely on.

The Penobscot Nation received nearly $10.5 million in federal grants last year - not counting its housing authority and school system, according to an audit filed with the U.S. Office of Management and Budget. The Passamaquoddy at Indian Township received $8.7 million in 2001 and in Pleasant Point received more than $6 million in 2000, the most recent audit available.

Among the dozens of grant categories, several are distributed statewide and also separately to the tribes. Public assistance to buy heating oil, for example, shows that the Penobscot and Passamaquoddy averaged more than $275 per person in 2001. The statewide average that year was $14 per person, according to the Northeast-Midwest Institute, a group that monitors federal policy for states.

Similar disparities exist in funding for child care, community development and housing authorities.

The high concentration of poverty on the reservations, where income is less than two-thirds of the statewide average, explains part of the difference because each of those mentioned above are geared for people with lower incomes. The relatively small number of people on the Passamaquoddy and Penobscot reservations also drives up the average grant spending because of minimum amounts distributed.

If voters approve casino gambling on Nov. 4, the revenue generated from that facility would be enormous. Slot machines alone are projected to generate $400 million a year, of which $100 million would be paid to the state, according to a study conducted for the tribes. The casino also would offer blackjack, craps and roulette. Money from those tables and wheels won't be shared with the state.

Penobscot Chief Barry Dana, chairman of the casino company Two Tribes Enterprises LLC, said some members were reluctant to accept federal grants when the tribe was formally recognized, but others saw the need for housing assistance and health care.

Dana said a casino stands to vastly improve the tribes' quality of life. Profits could reduce reliance on federal aid, while potentially extending health care to all members, paying for out-of-state college tuition and creating a museum for artifacts now housed in a converted machine shop.

"We appreciate the federal and state money, but we hope someday to fund some of those activities ourselves," said Dan Nelson, the tribe's chief financial officer. "We're a sovereign government, separate and distinct, and yes, we'd like to be financially independent if we could, to strengthen our sovereignty."

About 250 tribes nationwide have casinos in 24 states, according to the Bureau of Indian Affairs. The 330 Indian gambling operations nationwide generated $14.5 billion in revenue last year, according to the National Indian Gaming Commission. Maine projections place the casino among the most lucrative in the country. Only 41 Indian casinos generate more than $100 million annually.

A December 2002 study of American Indian gaming by Time magazine found that casinos in three states - California, Connecticut and Florida - dominate the Indian-run gaming industry, collecting 44 percent of all revenues. Yet, those states account for just 3 percent of the American Indian population in the United States.

Members of the tribes that run casinos in those states receive an average $100,000 apiece from gaming profits.

Other states with major American Indian populations - Montana, Nevada, North Dakota, Oklahoma and South Dakota - account for far less of the industry revenues. Correspondingly, members of the tribes that run casinos in those states receive an average check of $400 per year from gaming profits.

Some American Indians said the study was biased.

And some academics who have studied tribal gambling found that casinos helped American Indians organize themselves even if revenues failed to meet expectations.

The Harvard Project on American Indian Economic Development studied Oklahoma tribes and reported in July 2002 that gambling made them more self-sufficient and raised much-needed money for social programs and economic development.

Kathryn Rand, assistant professor at the University of North Dakota Law School, reported in a Chapman Law Review article last year that casinos strengthened tribal organization to remedy chronic social ills including poverty, unemployment, inadequate housing and diseases such as diabetes and alcoholism.

"Yet, I argue that sovereignty, rather than net profits, provides the necessary foundation for assessing whether tribal gaming is successful," she wrote.

Zachariah Pahmahmie, chairman of the Prairie Band Potawatomi Nation, described for a Senate hearing last month how the tribe's casino 15 miles north of Topeka, Kansas, employs 900 workers, more than 90 percent of whom are non-tribal members.

With the gambling proceeds, the nation has tripled the amount of land it owns, paved roads and replaced bridges. The tribe built 41 housing units and will double that figure within a few months.

"The impact of the casino on our nation cannot be overstated - it has given us the very means with which to exercise our sovereign rights of self-government," he said.

Studies of campaign finance reports show that casino gambling has also helped tribes gain political influence, by giving them the means to hire lobbyists and make financial contributions to local, state and federal candidates.

In 2000-01, tribes spent $20 million lobbying on issues including expanding gaming operations and protecting American Indian sovereign immunity, according to the Time magazine study.

Not all tribes embrace casinos. Tribes including the Navajo Nation have rejected Indian gambling in referendums.

Another Maine tribe, the Aroostook Band of Micmacs, decided against participating in the proposed Maine casino. The tribe, with about 900 members in the Presque Isle area, struggles with poverty and a lack of affordable housing.

"The amount of money we get each year is like putting a Band-Aid on a bullet wound," Chief Billy Phillips said. "It might stop the bleeding a little bit, but it doesn't fix what the problem is."

But Phillips expressed concern that the casino arrangements are too generous to the state. His tribe doesn't oppose the casino referendum. Instead, it is pursuing projects to sell tax-free cigarettes and gasoline, and perhaps bingo, which wouldn't require government approval.

"It's very humble compared to a $650 million casino," Phillips said.

Nationwide, as recounted in the National Gambling Impact Study Commission in 1999, about one-third of American Indians live below the poverty line. And one-third of the housing on reservations is overcrowded.

Indians suffer diabetes at twice the national rate. Youths between 5 and 14 years old commit suicide at twice the national rate, and between 15 to 24 years old at triple the national rate. The commission found gambling revenues proved an important source of funding for tribal governments, health care and education.

American Indian income in Maine averages $12,700 per year, compared to a statewide average of $19,533, according to the 2000 Census.

In reviewing federal grants to the tribes, some categories defy comparison between grants for the tribes and for Mainers who are not American Indian.

For example, the Low Income Heating Energy Assistance Program, which helps the poor buy winter heating oil, provided the Penobscot Nation with $160,711 last year, the Passamaquoddy at Pleasant Point $332,168 in 2000 and Indian Township $204,945 in 2001.

The tribes averaged more than $275 per person. The statewide figure of nearly $28.5 million this year, which was higher than usual, meant the average Mainer received about $22.

Funding for housing authorities provides one of the starkest contrasts with the state - and provides evidence of inadequate funding for tribes in a state where affordable housing is a widespread problem.

The Passamaquoddy and Penobscot each averaged more than $1,000 per person in housing authority grants, compared to less than $6 per person statewide.

But desperate needs remain. The Penobscot have a waiting list of 50 people for subsidized housing. Yet, the reservation is built up so there is no room to build more apartments or homes, Dana said. The tribe would like enough money to create decent, safe housing for members off-reservation and in the area, he said.

The housing problem cuts across tribal boundaries.

The Micmacs, which averaged $427 per person for their housing authority, want to build revenue to cope with the housing shortage. A tribal survey a year and a half ago found about 275 households, with 60 in low-income housing with the tribe and another 19 in a home ownership program.

But that left nearly 200 households living in what Phillips calls substandard housing in trailer parks and aging homes facing demolition. "Some people would call it slums," he said.

"It's not real pretty the way a lot of people live up here," Phillips said. "With the federal grants that we have, it takes the edge off. We have a need overall."

Staff Writer Grace Murphy and researcher Julia McCue contributed to this story.

Staff Writer Bart Jansen can be contacted at 202-488-1119 or at: bjansen@pressherald.com

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