Panel rules in favor of New York; Seneca must pay $200 million compact decision

Leslie Logan

Panel rules casino compact dispute in state’s favor. Ruling is binding and final without any prospect for appeal

On January 8, the Seneca Nation was dealt a decisive blow when it received a much-anticipated arbitration ruling regarding the casino compact dispute with New York state. A three-member arbitration panel ruled in favor of the state, requiring the Seneca Nation to resume revenue sharing payments and make back payments totaling some $200 million.

In a 2-1 ruling, the panelists deemed that the nation must resume payments and make outstanding payments dating back to 2016 when payments stopped.

Whether the Senecas were obligated to make casino revenue sharing payments upon automatic renewal of the compact in 2017 has been the crux of the dispute. The compact, as written, includes no provision for continued payments beyond the 14th year. Given the absence of language, the Seneca argued that they had fulfilled the terms of obligation; the state argued a continued obligation was guaranteed upon renewal.

The Seneca Nation has made more than $1 billion in revenue share payments to the state since 2002. It has invested more than $1 billion in developing its three casino properties in Niagara Falls, Buffalo, and Salamanca. The Senecas ceased payments maintaining that their revenue sharing obligations expired in 2016, and in March 2017, they put the state on notice.

Seneca people told Indian Country Today they were floored, stunned, infuriated, confused and angry by the ruling. The vast majority of Senecas not only supported the nation’s case but had an overriding sense of confidence that the nation was right to end payments and would prevail in arbitration. Many stated it seemed like a slam-dunk case.

Why? Because, on its face, the compact did not expressly address revenue sharing beyond year 14. It is silent regarding payments in the renewal of the compact for years 15-21.

On the ground across the Nation’s two territories -- Cattaraugus and Allegany, it seemed everyone was asking: How could this happen?

Seneca Nation President Rickey Armstrong Sr. issued a statement: “Despite the panel finding that the compact, as written, simply does not address the topic of revenue share beyond year 14, a majority of the panel members determined that an obligation exists to continue revenue share payments to the state.”

Before, during, and after the nation’s monthly regular session of Council, there was a pervasive sense of injustice in the air. Three-time councilor Ross John isn’t shy about speaking his mind or mincing words; he said there was no other explanation but that the ruling was a case of blatant, willful racism. He is not alone in this assessment. While the claims of racism may seem harsh, many Seneca believe it is time to call the bias for what it is.

A history of unfair behavior

Collectively, Native people have a couple hundred years of genocide, extermination, invasion, dispossession, removal, residential schools, broken treaties, all manner of atrocities that make a case for unadulterated racism. American history is splattered with the evidence.

A treaty, according to Article 4 of the United States Constitution, is the supreme law of the land. An early treaty with the Six Nations Iroquois Confederacy--which includes the Seneca, is the 1784 Treaty of Fort Stanwix.

The Treaty of Ft. Stanwix was a “boundary line treaty” which established firm boundary lines and guaranteed lands of the Confederacy against seizure by the states. In this treaty, the US agreed to protect the territories of the Confederacy against all “encroachments, seizures, or other violations.”

A year earlier, in 1783, the State of New York devised a plan to expel the Seneca, Onondaga, and Cayuga nations from the state. In 1785 the state defied the Ft. Stanwix Treaty by forcing the Oneidas to cede 250,000 acres of their land.

In 1789 the Treaty of Ft. Harmar provided that agreed upon boundaries shall “remain as a division line between the lands of the Six Nations and the US, forever.”

The Canandaigua Treaty of 1794 established in writing that the aboriginal lands belonging to the Iroquois would be forever theirs. The treaty gave recognition by the United States government that the Six Nations territories are an allodium (land that is the absolute property of the owner). The Canandaigua Treaty was necessary to restore lands in western New York State that had been ceded by the Treaty of Fort Stanwix.

In 1820 New York Governor Dewitt Clinton acknowledged Seneca land rights stating, “This state will protect you in the full enjoyment of your property.”

The Treaty of Buffalo Creek went through several iterations in 1802, 1826, 1838 and 1842, --the last called the Compromise Treaty after efforts were taken by the Ogden Land Company to remove the Seneca from their lands by fraudulent means. In 1838, officers from the Ogden Land Company persuaded some Six Nations chiefs to sign the first Treaty of Buffalo Creek. Historical evidence indicates the chiefs were bribed with promises of land and persuaded to sign in a drunken state.

The Seneca had long inhabited the Finger Lakes region, but over time were forced out. The Seneca then moved to the Genesee Valley, then dispossessed of those lands, moved further to Western New York, eventually losing villages along the Buffalo Creek and Niagara region. Of the two final, and remaining territories, a large swath of Allegany was taken in direct opposition to the terms of the Canandaigua Treaty.

Treaties guaranteed tribal land protections in perpetuity, but many were “negotiated” under duress, by hook or crook, and violated soon thereafter. In 1965, just 54 years ago, the Treaty of Canandaigua was again violated—with the construction of the Kinzua Dam, built south of the Allegany Reservation. The Seneca lost 10,000 acres, flooding about one-third of their lands when the Army Corps of Engineers used the power of eminent domain to build the Kinzua Dam for flood control. It was later learned that an alternative path would have spared the flooding of the Allegany territory, saving the Seneca lands. It was also found that the building of the dam was ultimately for hydroelectric power, the profits of which were never shared with the Seneca, who were damaged by the dam. The Seneca lobbied, proposed reasonable alternatives, fought in court, and ultimately lost. Some 700 Seneca lost their homes and were displaced. It was called, “an intolerable stain on the honor of the United States.” Just one contemporary case of injustice on the trail of broken treaties that permeates Indian-white relations.

The case of the Kinzua Dam is on exhibit in the Seneca’s national museum and an annual walk of remembrance is held. It is an especially painful reminder of the most recent treaty violation. Becky Bowen, director of the Seneca Nation Archives, is a removal survivor— her family’s home was lost to the dam. The Seneca Nation hired a world-renowned hydrologist and engineer to study the proposed dam and flood control. A viable alternative to the Kinzua Dam was proposed that would have avoided damage to the Seneca territory. Archival documents show that the Army Corps of Engineers, the Secretary of the Interior, and Congress declined to consider the alternative.

Bowen explained that in the wake of the removal there was a lot of anger, but that the Seneca people kept it to themselves. When the arbitration ruling came down, that buried anger was reignited. “It’s no different here, it’s another instance of a decision that has gone against us,” said Bowen referring to the arbitration decision. “You look at the system— it began with deceit and bad intentions,” said Bowen. “We always have to be aware that the system is against us.”

The assaults on Native people, land base, the way of life, and sovereignty has long since moved from the battlefields to the courts— where tribes are still fighting to defend themselves, their lands, and resources. Native people have had to deal with an inherently biased, self-serving system of justice that is stacked squarely against them. Standing Rock is an example.

Given historical knowledge and current trends, and in light of the arbitration ruling the Seneca people are asking: "Can we ever get a fair shake?"

A fair shake?

President Armstrong, when asked if he thought the Seneca Nation got a fair shake with the arbitration panel’s ruling, did not hesitate. He simply said ‘No.’

Councillor John called the ruling a “political decision.” Following Saturday’s session of Council, John shared his sentiments. “To the third judge, it was simply a matter that the Nation should have to pay. He didn’t recognize IGRA (the Indian Gaming Regulatory Act) or its provisions.”

The gaming regulatory act was established in 1988 to regulate the conduct of gaming on Indian lands. The law provides that “... any doubts in the interpretation of the compact must be resolved in favor of the compacting tribe.” The ruling indicated that the panelists declined to consider the language and provisions of federal gaming law language that favored the nation.

The Senecas' nominee — Kevin Washburn, a University of New Mexico Law School professor, former Interior Department official, and member of the Chickasaw Nation— cast the dissenting vote, saying it “rewrites the compact in a way that harms the nation and provides an unjustified windfall to the state.”

Henry Gutman, a New York City lawyer who represented the state in the earlier compact dispute with the Seneca Nation over exclusivity violations, was the state’s appointee to the panel. William Bassler, a professional arbitrator, mediator, and former federal judge in New Jersey, was the third panelist, jointly designated by Washburn and Gutman.

Despite an unfavorable ruling, Armstrong said that in retrospect, the nation doesn’t have any regrets. “It was a crap shoot,” he said. “We took a chance and entered arbitration with open eyes. We assembled the best possible team. Ultimately we felt we had an obligation to defend the compact and the interests of our people.”

Throughout the dispute, the nation has stated its willingness and desire to make revenue contributions to the three local municipalities hosting the casinos. The nation proposed a workable alternative in the form of direct payments to the host communities, rather than payments to the state, but the state quashed that idea.

The arbitration ruling is binding and final. There is no recourse for the nation, no appeal, no stay. Since ceasing payments, the nation has put the money in escrow, so in their stated view, there is nothing lost. The Nation is now regrouping and reviewing their options. The two parties have agreed to meet and confer on terms of a “remedial order” by February 19.

The nation is now looking seven years down the road to 2023 when the compact expires. When it comes to negotiating terms for a new compact, the Seneca leadership says it will do everything it can to create a situation that secures a strong, sustainable future for generations to come.

Given historical knowledge and current trends, and in light of the arbitration ruling, the Seneca people are asking: "Can we ever get a fair shake?"

Comments (1)
No. 1-1

I live in Western NY, and none of those casinos should ever have been allowed in this area. You don’t put casinos in places that have a huge number of people not making a living wage, who are on government subsidies of some kind, or who make a living wage, but not much more.
We were told, the casinos would provide living wage, full time jobs. We got a few of those, but most were part time, low paying, no benefit jobs. We were told the bankruptcy and crime rates would not go up. We got skyrocketing bankruptcies and a huge crime problem. Niagara Falls used to be a nice place to go to. Now, as you drive through the city to the casino or to the Falls, you pass street after street of vacant boarded up houses, of empty storefronts. You see prostitution all over the place. And any drug you want, is as easy to get as candy. People gambled their paychecks at the casino. When they’d gone through that, they got into their bank accounts. When that wasn’t enough, they turned to cash advances on their credit cards.
And when that wasn’t enough, they stole. From family, from employers, from charities they’d been entrusted to manage. People even feigned a serious disease, so that people would set up a charity for them...and they gambled that money away.
People have destroyed their families, lost jobs, and gone to jail in the name of that damn casino. I’ve seen so many people have to sell off belongings to satisfy a bank who still ended up with the house. I’ve seen women who got jobs waitressing at the casino, making good tips-and crying because they hate the drunken patrons who sexually harass them, and the fact that those patrons aren’t always thrown out by security. But where else do they go for a job in this area? The manufacturers have gone to Mexico, and the good paying union jobs just don’t exist here anymore. And no one has the money to go to college or trade schools.
I do agree with the Seneca position on the payments due the state. It seems to me, the agreement is pretty cut and dried. But, I wish they’d never put those casinos in Western NY.