LET THE GAMES BEGIN; The Great Catskill Casino Fiasco

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On April 15, New York Gov. George Pataki withdrew from agreements with five
Indian governments, deals he'd hoped would trade lucrative Catskill casinos
for land claim settlements and sales tax remittance. The fact that these
deals collapsed is not necessarily news; such an implosion has been hinted
at for months. But what matters now is finding a basis upon which those
negotiations might be restarted.

In the wake of the October 2001 state legislation authorizing three Indian
casinos in the Catskill Mountains, speculation ran rampant over how those
casinos would be allocated, although it was generally assumed that New York
tribes would face no competition from "out-of-state" Indian governments.

The Oneida and St. Regis Mohawk tribes, which were already in the gaming
business, were thought to have an inside track. Among other potential
players: the Seneca Nation had already been granted a trio of casinos in
western New York; and the Onondaga, Cayuga, Tuscarora and Tonawanda Seneca
nations were all strongly opposed to gambling.

In early 2003, the Cayugas reversed their stance and opened a pair of small
Class II facilities - and discord over that reversal may have opened a rift
in that tribe's government. A couple of other tribal governments with
ancestral ties to New York were not given much chance of scoring a Catskill
casino.

Initially, Pataki hoped to use the potentially lucrative casino compacts as
incentive to get the in-state tribes to resolve outstanding land claim and
taxation issues. But as the closed-door negotiations dragged on with no
apparent progress, 2002 turned into 2003.

In October 2003, Pataki abandoned his pledge not to negotiate with
out-of-state tribes. Pataki eventually signed deals with three non-New York
tribes - the Oneida Tribe of Wisconsin, the Stockbridge-Munsee Band of
Mohicans, and the Seneca-Cayuga Tribe of Oklahoma. The other two agreements
were with the Cayuga Nation (which later tried to withdraw from the deal in
objection to the out-of-staters) and the St. Regis Mohawks, who may well be
the only tribe to open a Catskill casino any time soon.

These voided deals were rotten from the start. Pataki undermined years of
the New York tribes' determined resistance to collecting state sales taxes
by courting and striking deals with their distant cousins.

In his questionable attempts to settle land claims, he pitted the two
groups of Oneidas against each other and did the same to the Cayugas
against their Seneca-Cayuga cousins, ultimately siding with the
out-of-staters as a way to settle the land claims. How this would have
worked is anybody's guess. But in the end, all the conniving was for
naught.

Had the U.S. Supreme Court's City of Sherrill v. Oneida Indian Nation of
New York decision not caused Pataki to back off, increasing federal
opposition to "reservation shopping" - the practice of locating Indian
casinos without regard to the particular tribal owner's ancestral lands -
would have certainly sunk these deals. So now the governor must dust
himself off, climb back into his seat at the bargaining table, and figure
out a way to get the New York tribes to trust him again.

Want a recipe for something that will take a long time to cook? Combine the
whole Catskill fiasco with the Sherrill decision, and add renewed efforts
by Albany to force tax collection upon the New York tribes (a major
reversal on Pataki's part). What you've got in your pot is the current
status of the Great Catskill Casino Fiasco. Until the proper recipe is
formulated, this thing will be simmering for a long time to come.

DOES SHERRILL APPLY?

The Sherrill decision prohibited the Oneida Nation of New York from
declaring sovereign the land it has reacquired within its designated
land-claim area. Since its announcement in late March, much ink has been
spilled over the ramifications of this damaging decision.

Some observers have been quick to link Sherrill to the nearby Cayuga
Nation. The Cayugas, like the Oneidas, have been buying property from
willing sellers within the tribe's land claim area, a 64,000-acre horseshoe
around the northern end of Cayuga Lake. And, like the Oneidas, they have
attempted to re-assert sovereignty over land once part of a
treaty-designated reservation - the Cayugas have refrained from paying
property taxes on their holdings and do not collect New York sales tax at
their two convenience stores.

Several upstate New York politicians on the local and state levels have
been quick to jump on the bandwagon, crowing about how they can now force
the Cayugas - landless until acquiring their first commercial property in
May 2003 - to collect and remit their "fair share" of state sales taxes.
Although I'm not an attorney, it seems to me that there is a fundamental
difference between the Oneida and Cayuga situations in light of Sherrill.

In regard to the Oneidas, Sherrill decrees that reacquired land does not
automatically become sovereign upon purchase: it must be taken into trust
by the federal government on the tribe's behalf. Both the Oneidas (at the
recommendation of the Supreme Court in Sherrill) and the Cayugas have begun
that process, a right of all federally recognized tribes, much to the
chagrin of those same power-hungry local politicians.

I wonder if those who automatically apply the Sherrill treatment to land
reacquired by the Cayugas might be missing the point. Despite unilateral
attempts at settlement by Oneida governments in Wisconsin (2004) and New
York (2002), the Oneida land claim case is nowhere close to settlement.
Given the current acrimony between the Wisconsin and New York tribes,
resolution may not happen any time soon.

Yet the Cayugas' land claim case has been decided upon in favor of the
tribes, although the monetary award under that decision, and the decision
itself, remain under appeal. If those appeals are resolved in the Cayugas'
favor, then it seems logical to assume that repurchased land, up to
whatever acreage limit is imposed by the court, would be sovereign Indian
land. Such territory would be off-limits to local and state governments for
taxation and regulatory purposes.

Thus, those who are quick to apply Sherrill to the Cayugas might be jumping
the gun. The situations, though similar, are not identical and could well
warrant different solutions. These are fascinating times in Indian country:
we can watch the scope of Indian law evolve right before our eyes.