See the article below regarding Agua Caliente’s decision not to appeal its case to the Supreme Court.

Indian tribe settles with state on reporting political donations
By James P. Sweeney
Copley News Service
07/09/2007

SACRAMENTO — Ending a five-year legal fight that threatened to punch a big hole in California’s political disclosure law, a Palm Springs Indian tribe has agreed to fully abide by the state’s campaign and lobbying rules.

In a settlement reached quietly with the state’s Fair Political Practices Commission, the Agua Caliente band also waived its sovereign immunity against prosecution for future violations of those rules.

And the tribe agreed not to appeal a Dec. 21 decision by the California Supreme Court, which concluded that the state’s need to protect its elections and political system trumped the tribe’s sovereign immunity from lawsuits. This means the Supreme Court ruling, reached on a 4-3 vote, stands.

“It is a big win for the state, a big win for the people and a big win for disclosure,” said Robert Stern, president of the Center for Governmental Studies and a co-author of California’s landmark Political Reform Act.

“This was a very important case because the tribes are so heavily invested now in campaigning in California,” Stern said. “If it had gone the other way, disclosure would have taken a huge hit.”
Agua Caliente Chairman Richard Milanovich said he was pleased with the settlement and happy to have the litigation behind him. He noted that three justices on a sharply divided state Supreme Court had agreed with the tribe.

“If we were to take this any further, say up to the U.S. Supreme Court, the makeup of the court today is such that it did not look very favorable,” Milanovich said.

A loss before the nation’s highest court would have had implications nationwide and would have opened another crack in tribal sovereignty.

“There are many tribal organizations and tribes that are going to be pleased that we took the action that we took because this would have had a blanket effect across the country,” Milanovich said. “So, was this the right case to try at the time? Probably not.”

The state sued in the summer of 2002, seeking to impose a more than $7.5 million fine against the tribe for failing to report some contributions and disclose others by the state’s deadlines. Nearly all of the state’s other tribes willingly comply with the political reporting law.

In the settlement, Agua Caliente agreed to pay the state $200,000. While the amount represents a small fraction of the original penalty sought, both Stern and Karen Getman, the former FPPC chairwoman who initiated the case, said it represents one of the largest fines the agency has ever collected.

“That’s a very big fine . . . but this case wasn’t about the money,” Getman said. “The issues were much bigger.”

As Indian casinos have grown into a nearly $8 billion industry in California, wealthy tribes have become political heavyweights that routinely give six-figure and occasionally multimillion-dollar contributions to candidates and campaigns.

Agua Caliente is one of the state’s biggest political donors, giving generously to candidates of both major political parties and even bankrolling a statewide ballot measure, the unsuccessful 2004 Indian gaming initiative, Proposition 70.

The state’s lawsuit alleged the tribe failed to report more than $8 million in campaign contributions within timelines designed to let the public know who is backing candidates and ballot measures.

Agua Caliente argued that it was reporting all the required information on its Web site. But state attorneys alleged that some contributions were not disclosed until long after the elections were held.

In one case, investigators said the tribe failed to report a six-figure contribution in 2002 to Proposition 51, which would have provided $15 million a year for transportation projects including a rail line from Los Angeles to the Palm Springs area, where Agua Caliente operates two casinos.

Nonetheless, the state’s case looked to be a legal long shot. It was almost impossible to overcome the legal shield provided by a tribe’s sovereign immunity, many warned Getman and her staff.
Then-Attorney General Bill Lockyer declined to represent the FPPC in the case, forcing the agency to hire private counsel. After the FPPC won an early round, Lockyer reconsidered and began filing briefs in support of the commission. But a private attorney — Charity Kenyon of Sacramento — remained the lead counsel.

“Everyone at the FPPC should feel more than a little vindicated,” Getman said yesterday. “It took a lot of hard work, a lot of guts. . . . It was a very important statement that the commission had to make.”

The issues in play could be kept alive by a parallel case pending against the Santa Rosa Tachi tribe of Lemoore, although that seems unlikely. The Santa Rosa litigation has been on hold pending the outcome of the Agua Caliente case.

Santa Rosa Chairman Clarence Atwell and the tribe’s attorney could not be reached to comment yesterday.

Kathryn Rand, a law professor and co-director of the Institute for the Study of Tribal Gaming Law and Policy at the University of North Dakota, said the case may illustrate a new relationship developing between states and tribes.

“On the face of it, the application of state law to a tribe is absolutely a slam dunk in favor of the tribe,” Rand said. “But given that the tribe has involved itself in state politics to the extent it has, it makes the issues a little trickier.

“I think we’re going to see more of that as Indian gaming continues to grow and remain controversial. We will see the usual rules of tribal-state interaction adapting to this new environment.”