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Gaming trust fund caught in California budget stalemate

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SACRAMENTO, Calif. ? Now it's a state trust fund for Indians that is embroiled in a legal stalemate.

Under state compacts, California gaming tribes contribute part of their profits to a trust fund for non-gaming tribes. On Aug. 9 the California Gambling Control Commission decided to release over $14 million dollars to the eligible tribes. But just a few days later the Commission sidestepped and said the money would only be issued when the state resolved its fiscal budget.

California is currently in the second month of a budget stalemate between Republicans and Democrats in the legislative branch. The two sides have refused to compromise. Hillary McLean, press aide to Governor Gray Davis, said the state could not release any funds whatsoever during the stalemate.

Chairwoman Mary Belardo of the Torres-Martinez band, a non-gaming tribe, asked why the state budget fight would have anything to with trust money that belongs to the tribes and not the state.

"It's hard to complain because this money is a gift," she said, "but this fund was created by the tribes for the tribes and is definitely not part of the state's revenue."

The revenue-sharing trust fund was established with the passage of Proposition 1A in March 2000. Under the new law, tribes were supposed to make payments into the fund that would be distributed to non-gaming tribes, including those gaming tribes with 349 or fewer slot machines.

Belardo said the state was holding the trust money as an act of convenience. She said the state was merely supposed to hold the money and disburse the funds to the intended recipients on a regularly scheduled basis. Payments are supposed to be received quarterly and were supposed to begin last year. However, a wide range of disagreements between the state government and the tribes, including disputes over the formula, method and administration of the funds, has held up distribution.

The issue has become a partisan scuffle in the state legislature. Republicans have accused the Davis administration of purposely holding the trust fund as a political football.

McLean, the Governor's spokesman, referred questions regarding the type of account and legal reasons for holding up the disbursements to the Gambling Control Commission. But the Commission does not have a press person and calls to Commission Chairman John Hensley were not returned by press time.

Though the California Nations Indian Gaming Association did not return phone calls by press time, executive director Jacob Coin was quoted in the Palm Springs-based Desert Sun as saying he was not aware that there was a contingency linking the state budget to the revenue sharing trust fund.

Leaders of the Pechanga and San Manuel Bands of Mission Indians have also questioned the authority of Gambling Control Commission to control distribution of machine licenses. (See related story on page C-1). The tribes have been attempting to invoke a meet and confer clause in the tribal/state gaming compacts with Gov. Davis over this and other related issues. Davis, a Democrate, has not indicated whether or not he will meet with the tribes.

In its Aug. 9 action, the Commission also provided at least 4,800 new gaming machine licenses for gaming tribes to purchase.

These decisions by the governor-appointed Commission come on the heels of a decision by Gov. Davis to open further compact negotiations with non-compacted tribes who are seeking gaming operations.

After a yearlong freeze on new gaming compacts, Gov. Davis has finally agreed to begin compact negotiations with the Torres-Martinez.

When several card clubs and charitable organizations filed a lawsuit last summer that challenged Proposition 1A under the federal Equal Protection Act, Davis announced that he would suspend further compact negotiations until the lawsuit was resolved. A federal judge struck down the lawsuit on July 29.

Belardo says she is elated by the decision.

"We've been patient because we had to be, but I'm very happy that the governor will at least talk to us now," Belardo said.

The Torres-Martinez recently received a multi-million dollar settlement from the federal government over land the tribe had lost in 1909 when an aqueduct carrying irrigation water from the Colorado River broke and flooded its land. The body of water is still present as the Salton Sea.

Also included in the settlement was the right to buy a 640-acre parcel of land that will be eligible for a rare second tribal gaming operation if the tribe chooses to purchase the parcel.

McLean, spokeswoman for the governor, confirmed that he would negotiate with Torres-Martinez. She said he would open up the compact process. At least a dozen more California tribes are also seeking gaming compacts with the state.

When asked if this would open the door to further negotiations with non-compacted tribes McLean hinted that this would most likely be the case.

"I wouldn't quibble if I saw that statement in print," she said.