Casino interests spend millions on lobbying, political campaigns

Observer Staff

2/28/2006 12:00:00 AM

(Editor's note: The following series of articles were written by Associated Press writer Tim Martin of the Lansing bureau following a recent visit to the Isabella Reservation. The stories were preceded by the following explanation: "Gambling is big business in Michigan. Michigan casino owners and American Indian Tribes that want to open new casinos have spent more than $32 million on government lobbying and political campaigns since 2000, The Associated Press has found. This is one in a series of stories exploring the details of that spending and the effect casinos have had in Michigan.")

LANSING (AP)-Michigan casinos making a solid profit off gambling have spent tens of millions of dollars since 2000 on lobbying and political campaigns to protect their turf.

Much of the $32 million found in an Associated Press analysis of state and federal records was spent by owners of existing casinos to prevent or delay new casinos or the expansion of gambling at horse racing tracks around the state.

Gambling is big business in Michigan, one of the nation's gaming leaders. The state's 20 casinos-including 17 run by American Indian Tribes and three Detroit casinos-brought in an estimated $2 billion last year. At least another half-dozen Tribal casinos are in the planning stages.

Michigan casino owners have shown they're willing to dig into their profits to keep the cash flowing.

Detroit and Tribal casinos spent about $19.5 million promoting a 2004 ballot proposal requiring voter approval for most types of non-Tribal gambling expansion in the state.

The successful measure derailed an effort by horse racing track owners to add slot machines to their gambling lineup.

Tribes that have wanted to open new casinos claim their rivals also have worked to delay-or even stop-their casinos from opening with lobbying and lawsuits.

"Millions of dollars have been spent on these lawsuits (restricting casinos), and no one has stepped up and taken responsibility for paying the bills," said Tom Shields, whose Lansing-based firm Marketing Resource Group helps handle public relations for the Pokagon Band of Potawatomi Indians and the Nottawaseppi Huron Band of Potawatomi Indians, both planning southwest Michigan casinos. "The question is, who is paying for it."

The Tribes that own casinos say they lobby the federal government and make political donations for a variety of reasons, including the protection of Tribal sovereignty, schools, roads and other reservation issues.

"Tribes have a very unique status. Congress can pass laws that affect just Indian Tribes," Saginaw Chippewa lobbyist Larry Rosenthal said. "They've always been part of the political process-not just giving money, but in a lot of ways. To suggest that it is just to protect their economic interests simply is not true."

Federal records show that Indian Tribes have spent at least $9.3 million lobbying federal government officials on everything from gambling and land disputes to child welfare and protection of sacred artifacts since 2000, the AP found.

Detroit casinos and Indian Tribes have reported spending close to $2 million lobbying state officials since 2001.

Michigan Tribes also have sent about $1.5 million combined to federal candidates, political parties and similar organizations since 2000, according to an AP review of data provided by PoliticalMoneyLine, which tracks campaign contributions.

The total amounts spent range from more than $15 million by the powerful Saginaw Chippewa Indian Tribe, which brings in about $400 million a year running the Soaring Eagle Casino and Resort near Mt. Pleasant, to about $3,000 spent by the Hannahville Indian Community in the Upper Peninsula.

Spending has increased with each election cycle and money continues to flow as the 2006 election approaches. Casino-related donations have come under scrutiny in the aftermath of the scandal involving Washington D.C. lobbyist Jack Abramoff, who pleaded guilty in January to federal charges of conspiracy, tax evasion and mail fraud. Abramoff represented the Saginaw Chippewas from 2001 to 2003. The Tribe-and federal prosecutors-says it was defrauded.

In the wake of the Abramoff scandal, a few politicians from both parties-including President Bush-have given the money back or donated it to charity. Others in Congress are calling for lobbying reforms and even a moratorium on new Tribal casinos.

The Saginaw Chippewas defend their contributions as a way to protect the Tribe's overall interests. The standard of living on the Tribe's Isabella County reservation has improved dramatically in the last decade as the casino has expanded and flourished.

Full adult members of the Tribe receive annual payments that Tribal leaders liken to shareholders sharing the wealth of a profitable business. The annual amount reportedly has reached $70,000 per member, although Tribal leaders will not confirm the amount.

New homes, a cultural center, and improved medical and education benefits for Tribal members are directly attributable to the Mt. Pleasant casino's success.

"The economic engine that drives our Tribe is the Soaring Eagle," said Saginaw Chippewa Public Relations Director Joseph Sowmick.

Some critics say it's the push by more and more Tribes and their out-of-state casino partners to gain those economic benefits for themselves that is driving casino growth in the state.

"It's just way, way out of hand," said Todd Boorsma, spokesman for the anti-gambling group Michigan Gaming Opposition, or MichGO.

The irony may be that much of the money being spent is being given by casino owners interested in the same goal as Boorsma-fewer casinos.

The coalition that backed the 2004 ballot proposal, for instance, included anti-gambling groups, pro-gambling groups, teachers, politicians from both political parties and other organizations. But the cash came mostly from casinos.

The Saginaw Chippewa Tribe donated more than $9 million. Detroit's MGM Grand Casino provided more than $8 million.

Both sides of the proposal were heavily funded by gambling interests, with horse track owners funding the opposition. The two sides raised a combined $27.5 million.

The funding of anti-gambling groups also has raised concerns in the casino industry. Some Indian Tribes that have fought long court battles to try and open casinos suspect the anti-gambling groups are connected to their competition, although the anti-gambling groups deny it.

23 is Enough is among the anti-gambling groups that does not accept money from gambling interests, according to spokesman John Helmholdt. The west Michigan group has raised more than $160,000 through a political action committee since 2004.

Boorsma said MichGo in southwest Michigan is not backed by gambling interests and has raised less than $25,000 most years. The goal for this year is $150,000.

MichGo has hired the same attorney used by Taxpayers of Michigan Against Casinos, which has fought in both state and federal courts against gambling expansion. TOMAC says it does not get money from casino interests.

But the Pokagon Band, which has worked since 1996 to open a casino near New Buffalo in southwest Michigan, suspects the anti-gambling groups are helped by big-money casino interests that don't want new competitors.

It notes that the former owner of the Blue Chip casino in Michigan City, Ind., hired a lobbying firm to try and block casino competition in Michigan. Kevin Flynn later got a $5 million bonus five years after the sale of his casino because the Pokagon casino, which would have been less than 15 miles away, did not open by late 2004. The casino's new owners said the lack of competition made the casino more valuable.

The Pokagon Band now hopes to open its casino in 2007.