Let the games begin

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Sovereignty battle looms large

Two adversaries, three deadlines and intervening feds

ALBANY, N.Y. - A classic clash over sovereignty - tribe versus state - is coming to a head in upstate New York. This confrontation has been gathering intensity for a decade as politicians, judges, tribal leaders and citizens groups have all weighed in. Three federally imposed deadlines may soon prompt a determination as to just whose sovereignty carries greater, or even any, weight.

In a March 15 letter, Lawrence Jensen, deputy solicitor for the Interior Department, informed the Oneida Indian Nation and the state of New York that their leaders have until April 30 to begin negotiations on a new Class III gaming compact for the Oneidas' Turning Stone Casino. This deadline stems from a state Supreme Court decision in June 2004 that ruled invalid a 1993 compact between the Oneidas and then-Gov. Mario Cuomo that allowed gaming at Turning Stone.

Twenty-three months later, the state Court of Appeals, New York's highest tribunal, upheld the 2004 decision, which was based upon the fact that the state Legislature never ratified the 1993 agreement. In December 2006, the U.S. Supreme Court refused to hear further argument in the matter. Thus, in effect, a state court was allowed to rule a compact supposedly binding under federal law invalid.

Jensen's letter also set a second deadline - if the parties are unable to forge a compact by June 14, Interior will then decide whether or not Turning Stone may remain open for gaming. The third deadline is Oct. 1 - this is when Jensen said a new compact must be submitted for Interior's approval.

Who's who

The players - Oneida Nation Representative Ray Halbritter and Eliot Spitzer, Democratic governor of New York - are new adversaries. But the positions they represent are old foes. [Indian Country Today is owned by Four Directions Media, a business enterprise of OIN.] Halbritter and Spitzer's predecessor, former Gov. George Pataki, were never able to agree on permanent solutions to the outstanding land and taxation issues between OIN and Albany. The two sides remained at loggerheads for years, ultimately prompting federal intervention.

Not surprisingly, Halbritter is an ardent supporter of tribal sovereignty. His leadership and business acumen have helped lead his people from poverty and joblessness to ownership of a major casino/resort destination - one of the major employers in an economically barren region.

OIN has succeeded in creating a valuable revenue stream for itself and jobs for its members and other Central New Yorkers. Through its Silver Covenant program, OIN has contributed hundreds of thousands of dollars in revenue to area school districts and municipal governments since 1996. The courts have forced the Oneidas to begin paying property taxes, but Halbritter has steadfastly and vehemently refused to bow to state and judicial pressure to ''share'' casino revenue and collect state excise and sales taxes.

Spitzer, who took office in January, is still somewhat of an unknown quantity, despite his fame from prosecuting corrupt Wall Street executives. Among his first pronouncements as governor was his stated intention to force New York's Indian nations to collect state taxes on reservation sales of fuel and tobacco to non-Indians. He has since ratcheted the rhetoric down a notch, saying he is willing to negotiate tax agreements by which the state will ''share'' some of the tax revenue collected with the tribal governments.

From the strict tribal sovereignty perspective, the state has no right to collect its taxes on reservation transactions. Thus the state is not ''sharing'' anything with the tribes; rather it is the tribes who are still acting as state tax collection agents. Even if the Indian nations were to keep, for example, half of the taxes collected, the state is still taking money it is not entitled to while forcing the nations to act on its behalf.

The state believes that it can collect taxes on reservation transactions and cites a 1994 U.S. Supreme Court ruling permitting states to tax reservation commerce. The state also relies heavily in the infamous 2005 City of Sherrill v. Oneida Indian Nation of New York decision, in which the federal Supreme Court ruled that OIN could not unilaterally reclaim sovereignty over former reservation land reacquired in fee simple purchases from willing sellers.

Complications

After Sherrill denied them just remedy in reclaiming title to illegally taken lands, OIN, acting on Justice Ruth Bader Ginsburg's majority decision, applied to place the 17,000-plus acres it owns into federal trust. Interior is supposed to render a decision in the matter sometime this summer. In circumstances echoing recent recognition decisions in Connecticut, there is little doubt that Interior officials are feeling tremendous pressure from certain state and federal politicians to rule against the Oneidas.

Interior can take all, some or none of the Oneida lands into trust. It's hard to imagine that they won't take at least the casino and its immediate environs into trust, in order to allow gaming to continue. But what happens if Interior rules against the Oneidas?

Halbritter has publicly raised the possibility of closing Turning Stone. While, it is difficult to determine the likelihood of such a measure actually coming to pass, it would have potentially devastating consequences for the Oneidas and their neighbors.

For one, it would cut drastically into OIN's revenue stream. And while the resort's other attractions - hotels, restaurants, golf courses and concert venues - could remain open, it is the gaming floor that draws the most patrons. Without gaming, the resort would most probably operate with but a fraction of its former patronage, if at all.

OIN employs roughly 5,000 people, a vast majority of them non-Indians. If gaming were halted, most of these folks could find themselves out of work. This is an outcome that nobody wants - even anti-Indian groups claim they don't seek Turning Stone's closure. But given the situation, it may be Halbritter's only real leverage. Whether or not it has any weight is anyone's guess but nonetheless must be taken seriously.

In the end, Albany appears to have the upper hand in the compact negotiations. This is not because its arguments are more correct or its degree of sovereignty more valid. It is simply a case of raw power. New York surrounds Oneida territory. It has in hand state and federal court rulings against OIN. The logic and morality of the decision notwithstanding, Sherrill has certainly tipped the balance of power towards the state. The fact that the feds have stepped into the fray to force a resolution seems to strengthen the state's hand at the expense of OIN.

Halbritter and other Indian leaders will no doubt fight as hard as they can to protect the rights, sovereignty and economies of their nations. But in the end, it may be all they can do to prevent the state's hand from digging too deeply into tribal pockets. For the foreseeable future, tribal sovereignty will remain on the defensive.