Feds Inform Tribe to Stop Gambling Profit-Sharing Program
The Puyallup tribe is fighting a federal demand that it immediately stop sending its members $2,000 monthly profit-sharing payments drawn from the tribe's gambling income. The National Indian Gaming Commission, in a notice sent this week, said the tribe is misspending gambling profits by giving away more money than is permitted under tribal rules. The commission ordered the tribe to immediately halt those payments, which last year consumed 65 percent of the tribe's $134 million in net gambling revenues, The News Tribune of Tacoma reported Thursday.
Puyallup tribal officials, however, have a different take.
"We agree that their notice was sent out on June 12," tribal attorney John Bell said. "Beyond that, we don't agree with anything in it."
The federal commission began an audit earlier this year, shortly after the newspaper reported a rift among tribal members about the monthly payments.
The $2,000 payments are allotted to each of the tribe's 3,450 members as a way to share the benefits of its gambling operations, including the Emerald Queen Casino.
Federal American Indian gambling regulators said their complaint stems from alleged violations of the tribe's own "Revenue Allocation Plan." Such policies are required of all tribes that make such payments from gambling profits, and are approved by the Bureau of Indian Affairs.
The Puyallup tribe's plan, approved in 2003, says about 35 percent of its net gambling revenue can be paid to members.
Commission investigators said they discovered that the payments accounted for between 65 percent and 84 percent of the net revenues in the past three years.
"I don't see much room for disagreement on this. You are either in compliance or out of compliance, and they are out of compliance," said Shawn Pensoneau, the commission's director of congressional and public affairs.
But tribal attorney Bell points out that the tribe's plan also allows an additional 35 percent to be dedicated to the "general welfare of the tribe and its members."
The tribe believes that giving money directly to its members qualifies as "general welfare," but federal regulators disagree.
In a certified letter to Puyallup Chairman Herman Dillon, gaming commission Chairman Philip Hogan called the alleged violations "significant impediments to the tribe's long-term fiscal health and to the integrity of Indian gaming."
Hogan warned that the commission could assess fines of $25,000 per day for each of three violations specified in the notice if the tribe does not comply.
But Bell and tribal accountant David Peterson both insist that the $2,000 payments will continue during an appeal, which they expect the tribe to win.
"The payments are based on a solid legal foundation and will continue as is," Bell said.
The gaming commission also took issue with several other practices tied to the profit-sharing arrangement, including the tribe's use of trust accounts and the way it diverts part of the payments intended for children to their parents.
June 16, 2006
Posted By Larry Rutherford
Staff Editor, CasinoGamblingWeb.com
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