Part 1 - Look Who's Cashing In At Indian Casinos - Hint: It's not the people who are supposed to benefit

Part 2 - Playing the Political Slots - How Indian casino interests have learned the art of buying influence in Washington

Short Articles
Amid Scandal, Texas Tribe Asks, Where's Our Money?
George Bush vs. the Tigua

Facts

Jesusita Salazar, a member of the Kickapoo Traditional Tribe of Texas, lived until recently in a two-room house with electricity and indoor plumbing.  But her home was in the path of the planned expansion of the tribe's Lucky Eagle Casino, a garage-like building near the Rio Grande and about seven miles southeast of Eagle Pass.  Not to worry.  The tribal chairman, Makateonenodua, offered to build a new house for the elderly grandmother if she gave up her existing one.  She agreed.  But the ambitious project, launched in late 2000, ran out of money.  Tribe members charge it was siphoned off by the Kickapoo leadership.  The 100,000 sq. ft. gambling complex stands unfinished.  The debacle has left Salazar bereft.  "My new home is now just a one-room hut"," she says, "I never got reimbursement for my home, which took me years to save my money from Social Security checks.  I am now worried that one day I will be homeless."

Salazar's lack of redress is a by-product of the corruption, secretiveness and abuse of power that in many cases go unchecked in Indian gaming.  For several years, despite evidence of financial irregularities, Kickapoo tribe members felt powerless to halt what they characterized as a severe misuse of casino funds.  Thanks to one of the industry's biggest regulatory loopholes, there is no single independent body to audit Indian casino finances.  Nor are tribal casinos required to disclose financial information, either to the public or to their members.

The watchdog National Indian Gaming Commission (NIGC) is privy to some data but, citing tribal sovereignty protection, won't make it public.  Native Americans who try to expose corruption, including many of the Kickapoo, have been threatened with reprisals by tribal leaders.  Federal agencies sometimes respond to their complaints; more often, they do nothing.  But one thing is consistent: the victims tend to be the poorest of the Indians.

For generations the Kickapoo ranked among the country's most destitute tribes.  As late as the 1980s, some members subsisted on as little as $1,700 a year.  Then in 1996 the tribe opened the Lucky Eagle.  Although the casino does not release data, Time estimates its annual gross revenue at more than $25 million.  Some of the profits, coupled with $10.6 million in federal aid in recent years, have benefited the tribe.  The reservation now has a community center, a day care facility and a clinic.  But health care and other services are erratic, housing remains substandard, and not a penny has trickled down to the tribe's 470 adult members.  So where di all the money go?  "Everybody's asking," says Vicky Trevino, an Oklahoma Kickapoo who lives on the reservation.  "Nobody's given us answers."

Many Kickapoo put the blame on Isidro Garza Jr., who until last month ran the gaming operation with an iron fist.  The casino's beneficiaries, tribe members charge, were primarily Garza's immediate family and tribal allies, including his friend, tribal chairman Makateonenodua.  Garza's son Timoteo, a self-styled computer consultant, was on the casino payroll, as were other family members.  "Isidro Garza wasted our money," says Melina Anico, granddaughter of a Kickapoo religious leader.  "And he was permitted to do so by the tribal government."  Garza, it turned out, was no stranger to controversy.  Before tribal leaders hired him to run Lucky Eagle, he had headed a construction company that ran up a string of unpaid bills, accumulating more than $500,000 in judgments and IRS tax liens.  (The back taxes have since been paid.)  At Lucky Eagle, Garza received an annual salary rumored to be at least $500,000.

The tribe got fed up.  Over the past year, Anico and others tried to enlist the government's support.  In letters to federal officials and law enforcement authorities, they produced a litany of charges.  Among them: casino officials had skimmed money from table games and destroyed casino surveillance videotapes; they had laundered large sums of money through Mexico, in transactions of $10,000 or less to skirt federal law; on the eve of an NIGC inspection they had hauled away boxes of documents; they had diverted casino cash to support Garza's unsuccessful 1998 run of U.S. Congress and to elect Timoteo Garza to a seat in the Texas state legislature this year.  But the letters were ignored.  The Bureau of Indian Affairs (BIA) passed the buck, saying it wasn't an "investigative arm" of the government.  The NIGC failed to respond.  Tribal members like Anico who spoke out lost their casino jobs.

Accusations of misconduct didn't come only from the tribe.  In a lawsuit against the Kickapoo in 1999, Diamond Game Enterprises, which leased gaming devices to the Lucky Eagle, charged that the casino had refused to make monthly payments and that the machines had been tampered with, in essence siphoning off money from the owners.  During the proceedings, Diamond's chief operating officer sought a restraining order to prevent Garza from making off with the company's machines.  In an affidavit submitted to the court, he cited, "Isidro Garza's apparent willingness to participate in illegal activity" as one reason for his concern.  In the end, the two sides settled out of court.

As the alleged abuses at Lucky Eagle grew, more than half the tribe's adult members signed a petition for a recall election to remove Makateonenodua as chairman and get rid of Garza.  But when the petition was filed in July, members of the council that ran the tribe's day to day affairs began pressuring the signatories to back down.  Frustrated by the council's tactics, the tribe's elder statesmen conducted their own referendum on Oct. 28.  About 200 tribe members took part.  Those who wanted to toss out the council and Garza stepped to one side of a sidewalk.  Those who wanted no change stepped to the other.  All but one voted to replace the current leadership.  A second election chose a new slate of officials.  "It's something good for the Kickapoo," tribal elder George Whitewater, 82, told the San Antonio Express-News.  "there's been too much greed and thieving going on."

After their victory, exuberant dissidents seized control of the casino.  Makateonenodua and his allies initially put up a fight, securing a federal court order that preserved their positions.  The BIA, citing the sidewalk election's failure to conform to the tribe's constitution, also initially refused to acknowledge the new leaders.  But under continued pressure from tribe members, the agency recognized the provisional government late last month, with the understanding it would schedule a secret ballot.

That same week, federal agents finally descended on the casino and carted away boxes of records.  Even though the tribe appears set on a new course, members look longingly at what other tribes have accomplished and are angered by Garza's broken promises.  "He took a lot of money from the tribe," Trevino says, "A lot of money my people would have used for other causes."

For his part, Garza denies all the charges.  He insists he spent only personal funds, his cut of casino profits.  "I have a contract with the tribal council," Garza says, "that compensates me for a percent of the profit of the casino."  Could he say how much of the casino's profits he got to keep?  "No," he says, "I think that's between the council and us."