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Schwarzenegger to face challenges in Indian country

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SACRAMENTO, Calif. - Arnold Schwarzenegger's victory in the California recall race left many prominent gaming tribes and their representatives in the state capitol looking for a silver lining. Governor-elect Schwarzenegger had run a series of campaign ads that targeted tribal gaming interests by promising to force the tribes to pay a significant share of their revenue to the state's general fund.

However, now that the campaign is over and Schwarzenegger is the victor, many questions remain as to how the governor-elect can specifically get tribes to cough up more money when federal laws limit his ability to do so.

Also, nearly as significant is how Schwarzenegger's win will effect the working relationship of tribes with some prominent Republican leaders in the state legislature, including recall rival Sen. Tom McClintock, R-Thousand Oaks, who have spent the past few years trying to bridge the gap between tribes and Republicans.

Despite these concerns, many tribal and gaming leaders are also secretly, and some not so secretly, glad to see Gov. Gray Davis ousted. Davis has had a contentious relationship with tribes after being viewed initially as an ally. Davis drew sharp criticism from tribal circles after he had frozen negotiations on gaming compacts in 2001 and did not negotiate another compact until earlier this year after he was in political hot water.

"You won't see many tears shed (by tribes) for Gray Davis," said Michael Lombardi, a prominent tribal gaming consultant."

Davis further antagonized tribes when he tried to assert power over tribal revenue funds set up by the compacts and give control of disbursement to the California Gambling Control Commission, which was comprised of Davis appointees.

The final straw for many tribes was when Davis tried to raise an initial $1.5 billion from tribes to help bridge the state budget which brought about the recall in the first place. Davis eventually backtracked and ended up asking for only half that amount.

Now tribes are faced with the prospect of a governor that has stated that he wants as much as a quarter of all each tribal casino's revenue, roughly equal to Davis' first proposal.

"Meet the new boss, same as the old boss," said Victor Rocha, the proprietor of an American Indian news site, paraphrasing an old song by the rock group the Who.

Rocha said that despite Schwarzenegger's campaign posturing, he probably will not be very much different than Gov. Davis when it actually comes to effecting tribal gaming issues.

There is much speculation as to how effective Schwarzenegger can actually be when it comes to wresting tribal revenues. Currently the state has 61 compacts in effect with tribes and almost all of these are 20-year compacts that are not scheduled to expire until 2018.

Though some tribes had expressed interest in negotiating for things like more gaming devices and other such minor matters, there is speculation that they will simply stick with the current versions of the compacts and wait until a more tribal-friendly administration takes power.

Schwarzenegger can affect tribes that are trying to negotiate new compacts. It is unclear how many tribes are currently in negotiations and various officials of both the state and tribal organizations list anywhere between four and 20 tribes that still have outstanding negotiations with the state.

The big question then is how many of these can be resolved before Gov. Davis leaves office. That exact date is not yet known. Under the provisions of the recall, it is supposed to happen the day after the Secretary of State certifies the election, which according to some pundits could be as late as Nov. 15, though some say the transfer of power will happen before that time.

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Another interesting development will be how Schwarzenegger interacts with the Democrat-dominated state legislature. His views on tribal issues stand in direct opposition to several prominent members of the legislative GOP minority, including McClintock and Senate minority leader Jim Brulte, R-Rancho Cucamonga. Will this lead to a clash within the Republican ranks?

Lombardi does not think so. He maintains that now, perhaps more than ever, these key lawmakers will have key roles in developing a working relationship with the incoming Schwarzenegger administration.

Rocha, however, points out that Schwarzenegger has surrounded himself with many retreads from former Gov. Pete Wilson, who was largely reviled in tribal circles.

Sen. Jim Battin, R-Palm Desert, a prominent tribal ally, said that he watched some of Schwarzenegger's most pointed commercials regarding Indian gaming with "frustration," and said that he disagrees with Schwarzenegger's basic stance. He points out that several gaming tribes, including Agua Caliente, which sits in his district, give direct donations to local governments rather than having the money funneled through the state's general fund.

"That, to me, is real money," said Battin.

Battin also makes the point that Schwarzenegger has never said that he opposed expansion of Indian gaming and speculates that the action movie star might agree to some concessions to bring tribes to the bargaining table.

Some of Schwarzenegger's campaign posturing regarding tribes was in response to large donations given to recall rivals Lt. Gov. Cruz Bustamante, a Democrat, and fellow Republican McClintock. The Morongo tribe funded a series of pro-McClintock television commercials and Bustamante's campaign used a loophole in the law to collect over $2 million from the Viejas tribe, more than is currently allowable under the provisions of an initiative passed by the voters of California last year.

It was clear that Bustamante was the first choice of many tribes and is now facing criticism from tribal corners on his perceived bungling of the campaign. Bustamante had been an early front runner and soon lost traction by adopting a low key campaign style that seemed at odds with his normally feisty and spirited style.

One source, who wishes to remain anonymous, who works with several gaming tribes, places the blame for Bustamante's missteps on prominent political advisor Richie Ross who some claim had pushed Bustamante into taking the ill-advised donation from Viejas. The lieutenant governor had skirted the new campaign finance law by using his re-election committee from 2002 that was not affected by the law because it predated it.

The source said that the manner in which the donation was made was bound to get bad press and Bustamante eventually lost a lawsuit over the money with a judge ruling that the donation violated the spirit of last year's law.

It should be noted however, that Schwarzenegger, who claimed that his campaign was not run by special interests received the bulk of his donations from some of the largest developers in the state, a point claims the source, Bustamante failed to fully capitalize on.

This stance also drew fire from the left as Independent Arianna Huffington, and Green Party nominee Peter Camejo also attacked Bustamante for the donation.

Currently the tribes are adopting a wait and see approach. Schwarzenegger ran a brief campaign that was largely short on specifics. In fact his campaign largely featured a series of similarly scripted stump speeches, television commercials and a scripted debate. Some have likened Schwarzenegger to a blind date.

Lombardi claims that Schwarzenegger agreed to meet with tribes and tribal organizations such as the California Nations Indian Gaming Association (CNIGA) after the campaign. In fact, CNIGA sent out a press release congratulating Schwarzenegger on his victory albeit one with a fairly clear warning shot. The release urges the new governor to visit tribal reservations to see the benefits of gaming and hopes he will take the opportunity to learn about federal law in regard to the state's tribes.