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State tries to help itself to tribe payments
Posted: July 9, 2005
Spivak & Bice
Talk about a money grab.
With the state in a budget crunch, Wisconsin Division of Gaming honchos last month came up with an efficient way of adding an extra $30 million to the state's coffers:
Draw down that sum electronically from the Ho-Chunk tribe's bank account - even though the deal authorizing tribal payments to the state has been thrown out by the courts and the entire dispute is now tied up in arbitration.
The move didn't play well in Indian Country.
"The first reaction was that of considering this an attempted theft by the state," said Ho-Chunk lawyer Tom Springer, a former Democratic lawmaker.
The tribe is so perturbed that it's thinking about calling the cops, Springer said. Ho-Chunk officials had three days to block the bank transfer, and they did so.
"We've looked at the elements for bank fraud, and we looked at the elements for potential theft," Springer said. The tribe, he said, has not decided whether to contact federal or local prosecutors.
As if relations between the Ho-Chunk and the state weren't already bad enough.
State officials, for their part, are saying they meant no harm when they initiated an electronic withdrawal of $30 million from the tribe's account at the Jackson County Bank on June 30. It was a routine move and the state fully expected the Ho-Chunk to block the fund transfer, said Sean Dilweg, a top aide to Secretary of Administration Marc Marotta.
"It was simply pro forma," Dilweg said.
The state tried a similar withdrawal from the Potawatomi tribe's bank account last month. But unlike the Ho-Chunk, the Potawatomi waited until the last minute to say that it would not be coughing up its $43.6 million payment, citing the need for a new compact.
Last year, the Potawatomi made its full payment.
"We got information that the automatic process for the transfer of funds was put into effect, and as soon as the state realized that it was put into effect, they rescinded it," Potawatomi lobbyist Marty Schreiber told us last week. "The state immediately called and let the tribe know that it was a mistake."
No such courtesies for the Ho-Chunk.
The state says the 6,400-member tribe is on the hook for $30 million annually under the 2003 state compact that gave it the green light to offer a full menu of casino games at its three large gambling halls. But last year the state Supreme Courttossed the compacts, which were signed by Gov. Jim Doyle and Wisconsin Indian tribes.
Since that ruling, the Ho-Chunk has twice refused to make the $30 million payment to the state, saying it would hang on to its money until the legal disputes are resolved and a new compact is in place. The tribe also pulled out many of its table games, so now it offers only slot machines, video poker games and blackjack at its casinos. The tribe's largest casino is located near Wisconsin Dells.
Last month, the casino negotiations between the Ho-Chunk and the state went to arbitration.
Doyle administration officials insist the state attempted to collect the money from the tribe last year in exactly the same manner, though they provided no records to back up the assertion.
"What we did this year is exactly what we did last year," said administration spokesman Tom Solberg, "and many years prior to that."
Dilweg suggested the Ho-Chunk is trying to create a dust-up because it's a tribe in flux, with many new leaders and money problems of its own. An outside 2004 audit said the Ho-Chunk was bleeding financially, something that forced tribal leaders this year to take the highly unusual step of cutting annual payments to their members.
"They are very difficult to deal with," Dilweg said of the Ho-Chunk, noting the tribe's decentralized leadership.
He said later, "There are a lot of issues out there on how they're handing their finances, and there are newly elected officials who are quite sensitive to money issues."
The state did send notices to the Ho-Chunk last year and this threatening to yank millions out of the tribe's bank. After getting this year's letter, the tribe's Legislature passed a resolution on June 29 objecting to the move.
The state's notices for the past two years are virtually the same.
But Ho-Chunk spokesman Jon Greendeer said officials at the tribe's bank and in the tribe's gaming commission and treasury department all agreed that the state never followed through with its threat last year.
"There was no attempt last year to do that," Greendeer said. "It was this year and this year only - this was a different protocol. I don't know if it was because of the state's budget."
Springer offered his own take.
"If this had happened last year, you wouldn't see the tribe reacting like this now."
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State tries to help itself to tribe payments
Posted: July 9, 2005
Spivak & Bice
Talk about a money grab.
With the state in a budget crunch, Wisconsin Division of Gaming honchos last month came up with an efficient way of adding an extra $30 million to the state's coffers:
Draw down that sum electronically from the Ho-Chunk tribe's bank account - even though the deal authorizing tribal payments to the state has been thrown out by the courts and the entire dispute is now tied up in arbitration.
The move didn't play well in Indian Country.
"The first reaction was that of considering this an attempted theft by the state," said Ho-Chunk lawyer Tom Springer, a former Democratic lawmaker.
The tribe is so perturbed that it's thinking about calling the cops, Springer said. Ho-Chunk officials had three days to block the bank transfer, and they did so.
"We've looked at the elements for bank fraud, and we looked at the elements for potential theft," Springer said. The tribe, he said, has not decided whether to contact federal or local prosecutors.
As if relations between the Ho-Chunk and the state weren't already bad enough.
State officials, for their part, are saying they meant no harm when they initiated an electronic withdrawal of $30 million from the tribe's account at the Jackson County Bank on June 30. It was a routine move and the state fully expected the Ho-Chunk to block the fund transfer, said Sean Dilweg, a top aide to Secretary of Administration Marc Marotta.
"It was simply pro forma," Dilweg said.
The state tried a similar withdrawal from the Potawatomi tribe's bank account last month. But unlike the Ho-Chunk, the Potawatomi waited until the last minute to say that it would not be coughing up its $43.6 million payment, citing the need for a new compact.
Last year, the Potawatomi made its full payment.
"We got information that the automatic process for the transfer of funds was put into effect, and as soon as the state realized that it was put into effect, they rescinded it," Potawatomi lobbyist Marty Schreiber told us last week. "The state immediately called and let the tribe know that it was a mistake."
No such courtesies for the Ho-Chunk.
The state says the 6,400-member tribe is on the hook for $30 million annually under the 2003 state compact that gave it the green light to offer a full menu of casino games at its three large gambling halls. But last year the state Supreme Courttossed the compacts, which were signed by Gov. Jim Doyle and Wisconsin Indian tribes.
Since that ruling, the Ho-Chunk has twice refused to make the $30 million payment to the state, saying it would hang on to its money until the legal disputes are resolved and a new compact is in place. The tribe also pulled out many of its table games, so now it offers only slot machines, video poker games and blackjack at its casinos. The tribe's largest casino is located near Wisconsin Dells.
Last month, the casino negotiations between the Ho-Chunk and the state went to arbitration.
Doyle administration officials insist the state attempted to collect the money from the tribe last year in exactly the same manner, though they provided no records to back up the assertion.
"What we did this year is exactly what we did last year," said administration spokesman Tom Solberg, "and many years prior to that."
Dilweg suggested the Ho-Chunk is trying to create a dust-up because it's a tribe in flux, with many new leaders and money problems of its own. An outside 2004 audit said the Ho-Chunk was bleeding financially, something that forced tribal leaders this year to take the highly unusual step of cutting annual payments to their members.
"They are very difficult to deal with," Dilweg said of the Ho-Chunk, noting the tribe's decentralized leadership.
He said later, "There are a lot of issues out there on how they're handing their finances, and there are newly elected officials who are quite sensitive to money issues."
The state did send notices to the Ho-Chunk last year and this threatening to yank millions out of the tribe's bank. After getting this year's letter, the tribe's Legislature passed a resolution on June 29 objecting to the move.
The state's notices for the past two years are virtually the same.
But Ho-Chunk spokesman Jon Greendeer said officials at the tribe's bank and in the tribe's gaming commission and treasury department all agreed that the state never followed through with its threat last year.
"There was no attempt last year to do that," Greendeer said. "It was this year and this year only - this was a different protocol. I don't know if it was because of the state's budget."
Springer offered his own take.
"If this had happened last year, you wouldn't see the tribe reacting like this now."
