Indian Casino Sellout? Senator McCain v. BIA Chief Babbitt

 by Gary Larson  

| View comments |  Print This Post

What did Secretary of the Interior Bruce Edward Babbitt say to his longtime friend, Phoenix lawyer Paul Eckstein, on July 14, 1995? Why did it trigger an 18-month, $5 million Independent Counsel investigation? Why should we care? Because, as Albert Camus wrote in Caligula, “Lies are never innocent.”

“A little inaccuracy sometimes saves ton of explanation.”
– Saki [H.H. Munro]

Summer 1995: An Indian casino is proposed for a struggling dog racing track at little (pop. 8,000) Hudson, Wisconsin, on the Minnesota border near the lucrative Twin Cities market. An application for the dog track casino is pending at the Bureau of Indian Affairs (BIA). It is thought to be a slam dunk.

Career staffers at BIA at the Department of the Interior said so. No problem. Not, at least, any problem known to the casino applicants, three impoverished bands of Wisconsin Ojibwe (Chippewa), teaming up with the dog track owner in a novel joint venture at Hudson.

A draft letter of approval is freshly minted at the bureau. BIA district offices in Minneapolis and Ashland, Wisconsin, have approved it. Whatever could go wrong? Go wrong. Go wrong. As it turned out, “politics upstairs” at BIA will decide the issue.

Enter Interior Secretary Bruce Edward Babbitt.

A former two-term governor of Arizona, Babbitt holds the trump card at BIA. He's the chief. A respected pick for the job, tapped by President Clinton, Babbitt's name was once mentioned for the United States Supreme Court. In 1988 he ran briefly for president, filing in 50 states, before bowing out and supporting Michael Dukakis. In short, Babbitt is a man with tall credentials and a notable record of public service.

Wealthy tribes opposing the Wisconsin casino hire a phalanx of high-priced lawyer-lobbyists.  Cost is no object.  Three heavyweight Washington lawyer-lobbyists in the employ of the casino-enriched tribes meet on June 8, 1995, with then-chairman of the Senate's Indian Affairs Committee, Senator John McCain.

One is a former White House counsel under Nixon, Patrick Emmit O'Donnell.  Another is a “retired” four-term Congressman from Illinois, Thomas Corcoran.  Accompanying them is a native American lobbyist from South Dakota, now representing the Minnesota Indian Gaming Association, staunchly against the Wisconsin casino.

To Senator McCain, forever eager to ensure organized crime does not slither in and grab hold of Indian gaming, they tell an amazing — and bogus — story. They allege the Hudson dog track is owned by a mob-related company.  It is a red herring of the smelliest variety.    

McCain says he will forward their ghastly information to the Department of Justice (DOJ).  One of the lobbyists later crosses path with McCain at a conference in Williamsburg, Virginia.  He asks the senator if their “evidence” was conveyed to the DOJ. Senator McCain answers yes, he did. 

In a fax the very next day to his tribal clients, the Washington lobbyist waxes enthusiastic:  "Lewis, mission accomplished! Justice [DOJ] will be looking into Delaware North and Hudson!" " Lewis" is Lewis Taylor, chairman of the St. Croix Indians who run a casino in Turtle Lake, Wisconsin, 50 miles from Hudson.  (Delaware North, reputedly related to organized crime, has nothing at all to do with the Hudson dog track, never did. Anything goes in down 'n dirty smear politics?) A month later those wealthy Indians in the Upper Midwest will hit pay dirt at the BIA:

On July 14, 1995, casino dreams of the three dirt-poor tribes are dashed. Their casino application is denied, quietly, really without much comment. Rival tribes had hired an army of lobbyists (17 by one count) to kill their clients' would-be competition. Well, who would WANT to share billions of dollars in casino profits over the years?

Collectively, the consortium of tribes opposing the new casino ante up hundreds of thousands of dollars,  lots more to come, presumably to derail the proposed casino in Hudson. So much for noblesse oblige of casino-enrich Indians. And death to that quaint notion about being brethrens' keepers. One BIA staffer is prescient when he writes, even before his agency's unexpected, unexplained denial, “monopolies abhor competition.”

Denial is traced later by pro-casino interests to inter-agency double-dealing by a well-connected bunch of political appointees, mostly lawyers, some native American lawyers. Some will move on to Washington law firms providing counsel to the wealthy tribes they once served — “regulated”? - -at the bureau. (Revolving doors, technically legal in this case, are a way of life in the dismal swamp, inviting money-grubbing self-dealing. What a country, huh?)

BIA political appointees provide “cover” for their rejection order, signed by a former Clinton-Gore campaign worker. “Detriments” they are called, such as to the local community, and forget there's no evidence. Opinion trumps facts. Besides, any reason will do with Big Money flowing into political campaigns. Shades of a black-hatted guy named Abramoff in years to come, buying favor with the upturned palms crowd.

Scads of contributions grease the skids. Tribal funds driven by their casino profits go nearly exclusively to Democrats. Primary beneficiaries of the largess are the Democratic National Committee (DNC) and the Clinton-Gore campaign. Poor tribes, not having “the resources,” so to speak Orwellian, are defenseless, deer in headlights in that “pay-to-play” game. Fair? Who said anything about fair?

Why give to the DNC and to Clinton-Gore? One supposes, just a wild guess, well-heeled Indians believe Democrats in high places, such as Donald Fowler at DNC, and Harold Ickes, Jr. at the White House, will persuade a supposedly apolitical BIA to trump a casino in Flyoverland.

When the casino scandal becomes the subject of front-page articles, it is overshadowed by media abuzz about the White House antics of an intern named Monica.

Curious reporters doing their jobs, including Don Van Natta of the New York Times, sift through reams of information now pouring in from three lawsuits after the BIA denial.

Records now show the opposing tribes' generosity. The wealthy ones gave over $412,000 to Democrats in just that one election cycle. More to come. Links and allegations fly.

The articles prompt the chairman of the Senate's Indian Affairs Committee, Senator John McCain (R-AZ), to ask Babbitt, what the hell is going on at BIA? Why, McCain asks, “did high-level White House attention go to where the money is, reversing [a decision] in favor of tribes which have given the most money to the DNC?” Good question. Babbitt never really answers it.

Agency decisions should be made, McCain warns, “in strict isolation of how much money any tribe has contributed for partisan campaign purposes.”

McCain asks about the July 14 tete-a-tete between two Arizonans, Babbitt and Phoenix lawyer Paul F. Eckstein, an old friend of the Secretary since law school days. Eckstein is lobbying for the three destitute Wisconsin tribes and their dog track-owning partner in Four Feathers Joint Venture, Ltd.

At the meeting's start, for no perceptible reason, Babbitt blurts out the name of Deputy White House Chief of Staff Harold Ickes, Jr., a confidant of Bill and Hillary Clinton. Ickes wants, says Babbitt, a negative casino decision to go out that day, “before sundown,” words to that effect. Ickes had been aware of the casino denial at least since May 18, 1995, because that information was in a confidential memo to him from his White House aide who had called the bureau. Pressure? Nah. What pressure?

Eckstein is puzzled. Why did Babbitt invoke Ickes's name? Still more puzzled when, at the end of their conversation, Babbitt asks a startling question: Did Eckstein know how much “those Indians” — or “the Indians” not being specific — gave to their party, the Democrats?

A dumbfounded Eckstein says he has not the faintest idea. Babbitt then answers his own question, “about a half million dollars” as if it's germane, according to Eckstein's sworn testimony, and backed up by his contemporaneous conversations with three Washington friends.

There will be hell to pay for Babbitt's maybe off-the-cuff statement.

A “profoundly disturbed” John McCain says in a letter to Babbitt he wants to know about that reference to Ickes, and a lot more about that “half a million dollars” from “those Indians” in contributions to Democrats.

Never happened, insists Babbitt. At least not the “half million dollars” part:

“I most respectfully dispute Mr. Eckstein's assertion that I told him that Mr. Ickes instructed me to issue a decision in this matter without delay.”
– Babbitt to Sen. McCain, July 30, 1996.

A year later, deeper in the controversy, Babbitt in a defensive letter to Senator Fred Thompson (R-TN) regains his memory about invoking Icke's name. Not only that, he says why. More reason for head-shaking!

“I do believe that Mr. Eckstein's recollection that I said something to the effect that Mr. Ickes wanted a decision is correct. Mr. Eckstein was extremely persistent in our meeting and I used this phrase [about Ickes] simply as a means of terminating the discussion and getting him out the door.”
– Babbitt to Sen. Thompson, Oct. 10, 1997.

So it was a brush-off! Ironically, Eckstein testified that if only his then-friend had asked him to leave, he would have, gladly.

Editorial cartoonists have a field day. Paul Greenberg of the Arkansas Democrat-Gazette (don't let the name fool you) captures the essence of the Kafkaesque nature of the gambit in his newspaper column:

Understanding the ethical thicket [politics in D.C.] requires making a short story long. Back in 1962 Mr. Babbitt became friends with a fellow law student named Eckstein. Upon graduation they joined the same small firm [in Phoenix]. They shared similar political philosophies . . . both became politically active. They took their families on overnight trips together to the Grand Canyon. When Mr. Babbitt ran for office, Mr.Eckstein was right there to run those campaigns.
– Nov. 5, 1996.

After intense Senate and House hearings, enough suspicion is aroused for the appointment of Independent Counsel Carol Elder Bruce. A three-judge panel summoned by Attorney General Janet Reno taps Ms. Bruce for the job. She is a widely-known Washington attorney and, coincidentally, former law partner of Clinton's personal counsel. (Well, it is a small world.)

Eighteen months later, at a cost to taxpayers of $5 million, the I.C.'s work is completed. Her Final Report finds Babbitt's testimony “highly questionable.” Babbitt's misdeeds, if any, are not indictable. Her Final Report finds Babbitt's toss-off reply to McCain “confusing.” Well, it was a “he said, he-said” deal, hearsay, not a great deal on which to spring an indictment on a sitting Secretary of the Interior.

About his testimony to Congress, punctuated frequently by a stream of Washingtonian memory lapses — “I-don't-know” and “I can't recalls” — the Final Report offers a blistering commentary while not indicting so much as a ham sandwich:

The string of facts and circumstances raise the specter that the Hudson casino decision on July 14, 1995, might have been corrupted by bribes disguised as political contributions from opposing tribes [seeking] to prevent competition in their [sic] gaming market.

BINGO! The Final Report continues hard-edged:

Secretary Babbitt's sworn testimony both to the Senate and House committees, and his erroneous [sic] response early to his old acquaintance Sen. McCain, raised more questions than it answered, and heightened pre-existing skepticism that the senators have about the Secretary 's truthfulness in this entire matter.
– at p. 447.

Not exoneration, as liberal mainstream media characterized it, nor redemption. But at least the ordeal was over. Babbitt would claim he was a victim, perhaps of the Vast Right Wing Conspiracy. Now nearly a tragic figure, like Conrad's “Lord Jim” after the shipwreck, Babbitt returns to private law practice in Washington, proving the revolving door he used before, still works.

Epilogue: The poor Ojibwe's application for a casino at the edge of bordertown Hudson, 16 miles from St. Paul, Minnesota, was revisited at the BIA six years later, to settle a momentous three-tribe lawsuit against the agency. By court order, none of the principals in the July 14, 1995, decision at BIA was permitted to participate. Shocking to some not in-the-know, the '95 denial order was overturned under essentially the same set of facts (the record) as in 1995. No detriment! But by now, the financially-strapped dog track was fait accompli. No gaming, no more betting on the greyhounds, and a loss of 300 jobs. Meanwhile, those Wisconsin and Minnesota tribes that objected strenuously to competition, deploying an army of lobbyists supported by Big Money in the “right places,” still enjoy their shared monopoly, safe from like competition. And the impoverished tribes are still impoverished. Life goes on in Foggy Bottom.

For the after-story on what happened in this case, go to my previous article here, “Bruce Babbitt's Nemesis: Death of an Indian Casino.”

Politics: General

Read more articles by Gary Larson