Jerry Brown negotiates gambling deals as tribes fill campaign fund

Published: Wednesday, Feb. 1, 2012 - 12:00 am | Page 1A

Gov. Jerry Brown is raising hundreds of thousands of dollars for his tax campaign from California Indian tribes at the same time many tribes are seeking to renegotiate lucrative gambling compacts with him.

The Democratic governor, who proposes increasing the state sales tax and income taxes on California's highest earners, is considered more accommodating of tribal interests than his predecessor, Gov. Arnold Schwarzenegger, and his administration is in compact talks "on various levels" with 15 to 20 tribes, Brown's tribal negotiator, Jacob Appelsmith, said Tuesday.

Any compacts Brown signs could significantly affect a gambling industry that generates more than $7 billion annually and millions of dollars in payments to the state.

More than nine months ahead of the November tax election, a handful of tribes have contributed more than $300,000 to Brown's tax campaign, a quarter of the $1.2 million Brown on Tuesday reported raising in 2011.

Tribes donated $925,000 to Brown's gubernatorial effort in 2010, and they contributed more than $200,000 last year to two charter schools he started in Oakland.

Brown spokeswoman Elizabeth Ashford said there is "no connection between any sort of donations and decision-making on this issue or others."

David Quintana, a lobbyist for the California Tribal Business Alliance, is among several tribal representatives who said tribes are donating to Brown's tax campaign because they think additional tax revenue will improve the state's financial condition.

It could also improve tribes' standing in future compact negotiations, relieving the state of historically "enormous pressure to try to extract more money" from wealthy tribes, said Jeff Cummins, a political science professor at California State University, Fresno.

Brown was a regular supporter of tribal interests when he was governor before, from 1975 to 1983, and Quintana said some tribes were "absolutely" waiting for Schwarzenegger to leave office before considering compact renegotiations.

"You had one of the worst governors for tribes of all time," Quintana said. "Then you have a person who is the best governor for tribal governments since himself in the late 1970s."

In one closely watched negotiation, Brown is in talks with a San Diego-area tribe that brawled with Schwarzenegger over payments to the state, resulting in a court ruling last year that Schwarzenegger overstepped when he demanded general fund payments from the Rincon Band of Luiseno Indians in exchange for casino approvals.

State finance officials said at the time that the ruling would not affect $360.5 million in general fund payments this year from Indian tribes with existing gambling compacts, and the administration has said it is not obligated to renegotiate the general fund provisions of those agreements.

Howard Dickstein, a tribal attorney, said the administration's position may be challenged, but he said most tribes are waiting to "see what comes of that current negotiation."

"I think that there are efforts being made ... earnest, good faith efforts to negotiate a compact," Dickstein said. "There's a lot at stake there."

Most of the state's tribal gambling compacts, negotiated before Schwarzenegger took office, do not require the kind of general fund payments he ordered. But most of them expire in 2020, and many tribes are mulling a renegotiation now.

"If you've got a 10- or 12-year-old casino, or you don't have a casino yet, but you've got a compact and you want to build one and you want to get advantageous financing, refinancing, you're going to want more than eight years to pay it back," said George Forman, a tribal lawyer.

He said tribes have "a natural, and I think justifiable expectation that they are going to get a fairer shake from this governor than they got from the last."

Tribal lawyers and other observers said Brown has indicated interest in revenue-sharing arrangements with tribes that provide payments to local governments for specific projects and programs related to casino impacts.

The California State Association of Counties lobbied the administration for such payments. DeAnn Baker, an association lobbyist, said her group has had "very good" conversations with Appelsmith but that "We don't really have a definitive response from the administration as to whether or not our concerns will be addressed."

Early last year, Brown negotiated his first Indian gambling compact, with the Habematolel Pomo of Upper Lake, replacing a 2009 deal negotiated by Schwarzenegger and rejected by the Bureau of Indian Affairs. The agreement Brown reached took less profit from the casino's initial operations than Schwarzenegger sought.

At the time, Appelsmith called the compact "a model for how the state and local communities and tribes can all work together toward achieving something positive for each of their interests."

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