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Schwarzenegger appoints new gaming negotiator

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SACRAMENTO, Calif. - Gov. Arnold Schwarzenegger began the new year by appointing one of the former negotiators of the controversial Pala Compact to be the new lead negotiator in an attempt to land more revenue from gaming tribes.

David Kolkey, 51, a former appellate court judge and member of the Pete Wilson administration was named by the governor on Jan. 7 to re-negotiate the tribal/state gaming compacts. Schwarzenegger made it a promise during last year's recall campaign to get as much as 25 percent of tribal gaming revenues for the state's coffers.

In his State of the State speech on Jan. 6, Schwarzenegger said that while he "respects tribal sovereignty" he expected that tribes would recognize the state's dire financial situation. During the same address Gov. Schwarzenegger announced that the state is $15 billion in the red, though figures that came out later in the week put the actual number closer to a little over $12 and a half billion.

Almost immediately after being appointed, Kolkey announced that he would seek to renegotiate several components of the original compacts singed by former Gov. Gray Davis in 1998.

Though Kolkey refused to give a specific amount that he would seek from tribes, the San Francisco Chronicle quoted an unnamed capitol source as saying that the governor would be seeking slightly less than a billion dollars total, less than the amount that was sought by Davis last year.

Apparently off the negotiation table is the 25 percent Schwarzenegger promised to wrest from tribes during his campaign.

It is unclear how much leverage that Kolkey would have with tribes. Most of the current compacts, including the dozen or so with tribes with large gaming operations, are good for another 17 years. In theory, tribes could simply refuse to come to the table during Schwarzenegger's tenure.

That leaves the most likely scenario in which Schwarzenegger and Kolkey could agree to lift the current cap of 2,000 machines in order to provide the incentive for tribes to negotiate. A few gaming tribes have already signaled that they might be amenable to such a scenario.

He refused a direct interview with Indian Country Today from his San Francisco office at the law firm of Gibson, Dunn & Crutcher pending clearance from Schwarzenegger's staff, which was apparently not given before press time.

However, in a story that ran in the Contra Costa Times, Kolkey said his first job is to listen.

"We're not going to be pushing anything until we hear the tribes out," said Kolkey in the article.

He also seemed to signal that he had a plan in order to get the tribes to negotiate.

"I will say this: We've got a strategy and a backup strategy and a backup to the backup strategy," added Kolkey cryptically.

Another source of potential negotiation leverage is a proposed ballot initiative for next November that would expand slot machine gaming to card clubs and race tracks if tribes refuse to give up revenues to the state.

Schwarzenegger, possibly as an olive branch to the tribes, has said that he would oppose the proposed measure that has not as yet even gathered enough signatures to qualify for the ballot.

The tribes have reacted swiftly to the proposed initiative by hiring two prominent members of the previous two gubernatorial administrations, Garry South, who worked in the Davis administration and Dan Schnur who was an aide to former Gov. Pete Wilson.

Additionally a source who works with gaming tribes said that several large gaming tribes, including the Southern California Morongo, Viejas and the Northern California United Auburn tribe, which just opened a new casino in the Sacramento area last year, have contributed $1.5 million each to combat the proposed initiative.

In addition to his work with the Wilson administration, Kolkey is also a former appellate court judge who left his post last year to take a job with the private law firm.

Officially tribal gaming sources offered muted words of welcome. Though calls to the California Nations Indian Gaming Association (CNIGA) were not returned, the organization issued a very brief press release welcoming Kolkey.

"The California Nations Indian Gaming Association congratulates Governor Schwarzenegger for moving swiftly in appointing a lead negotiator for tribal gaming compacts. Tribes look forward to sitting down with Mr. Kolkey to begin the process of discussions," read the entire press release from CNIGA

However, one source close to tribal gaming who asked not to be identified said that tribes are more than a little apprehensive given Kolkey's resume.

"This is the same guy who worked with (former governor) Pete Wilson on the Pala Compact, we're not sure how much we can trust him," said the source.

Some tribes were angered over the Pala Compact, which was negotiated in 1996 under Wilson because they felt it placed too many restrictions on Indian gaming and thus infringed on tribal sovereignty. These restrictions were largely lifted after the passage of Propositions 5 and 1A in 1998 and 2000 when then Gov. Davis negotiated a new series of compacts that lifted some of the Pala restrictions.