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CRIT Response to Senator John McCain
Senator John McCain, Chairman
Dear Senator McCain:
As the Chairman of the Tribal Council of the Colorado River Indian Tribes (CRIT), I am writing in the hope of clarifying some of the points and statements made during the September 21, 2005 oversight hearing of the Senate Indian Affairs Committee on the regulation of Indian gaming. To that end, we would ask that this letter be made part of the official record of that hearing.
We appreciate the fact that the Committee decided to hold this hearing in an effort to comprehensively examine the issue of the National Indian Gaming Commission's (NIGC) jurisdictional authority over Class III gaming. As we all know, the position we originally presented to the Administrative Law Judge on this issue was reaffirmed by the Federal District Court in our suit against the NIGC.
I want to assure you and the other members of the Senate Indian Affairs Committee that CRIT was never eager to engage in this lawsuit. We had hoped to resolve these issues amicably and cooperatively with the NIGC. It was only when these efforts failed and we were inappropriately sanctioned by the NIGC that we believed assertive but appropriate action had to be taken. I am sure that no member of Congress would support the actions of a Federal agency that overstepped its statutory and regulatory authority.
As correctly noted at the hearing by Senator Dorgan, tribes across the country have questioned from the beginning the Commission's authority under IGRA to impose and enforce Minimum Internal Control Standards (MICS) on Class III activity. CRIT is the only tribe to have litigated the issue, but, again, it did so only because it was forced to defend itself against a Notice of Violation and fine. The question of statutory authority has been openly debated since 1998, and the court's decision should not have caught the Commission by surprise.
The testimony and colloquies at the hearing incorporated a number of inaccurate statements of fact, which we would like to correct. First, you expressed your understanding that when the NIGC sought to conduct its MICS audit in January of 2001, the Tribe would not permit the audit team to enter the Reservation. In fact, the audit team was welcomed to the Reservation and was given a conference room and technical support to conduct what was expected to be a three week audit. Its members were given access and escorted cordially throughout the gaming facility and supporting offices without restriction. Only on the second day of the audit did a dispute arise, when tribal representatives asked the audit team to point them to a statutory provision in IGRA that authorized the imposition and enforcement of MICS on the Tribe's Class III activity. The audit team was unable to do so. Tempers flared and a stalemate ensued. The audit team left the Reservation and did not resume the interrupted audit until after the litigation was commenced. That audit, once resumed in 2003, was conducted with the full, complete, and voluntary cooperation of the Tribe.
With respect to the report the audit team ultimately issued in 2004 after conclusion of the audit, Chairman Hogen stated before your Committee at the September 21st hearing that the report was forty pages long and contained twenty-three items. Chairman Hogen got his numbers transposed, but that is a minor point. We do not suggest that the forty items noted in that report is an acceptable result. It is not, and we took the necessary steps to bring all items into compliance, as recognized by the NIGC in a subsequent letter. Nonetheless, those forty items do not reflect an unregulated gaming operation run amok. We seriously doubt that any gaming operation in the country - tribal or otherwise - could emerge from a comprehensive internal controls audit with a perfect slate. Chairman Hogen expressed particular concern about the audit report on surveillance capability. Only four items in the entire report related to surveillance. Three of those four addressed a technical capability issue, specifically, that three particular surveillance cameras (out of a total of 208 cameras in the entire casino) did not transmit images of "sufficient clarity." Casino management had already ordered enhanced capability equipment several months prior to the audit, and that equipment has been fully incorporated into the Tribe's surveillance system. If a tribal employee told the audit team otherwise, s/he was uninformed on the accurate status of the equipment.
We are also aware that statements were made at the hearing that CRIT flatly denied the NIGC access to any financial information on its tribal gaming operation. That is not correct. The NIGC continues to have full access to all of the Tribe's Class II books and records, as it continues to receive the Tribe's annual independent audit report on all of its gaming activities, Class III and Class II alike. The Tribe properly challenged the NIGC for exceeding the Commission's statutory authority. No proceeding has ever been brought against the Tribe for denial of proper NIGC access to tribal gaming financial records.
I would like to address another issue raised during the oversight hearing about the possible "chaos" and "regulatory void" that will ensue if the NIGC cannot impose Class III MICS and audit tribes for compliance. This expression of alarm simply does not reflect reality. CRIT has required mandatory internal control standards since it enacted its first Gaming Code in 1994. In its most recent Compact with the State of Arizona, the Tribe negotiated an agreement to apply the NIGC's Minimum Internal Control Standards as the applicable tribal/state compact law, regardless of the court's ultimate determination of the NIGC's authority under federal law. During the September 21st hearing, the Indian Affairs Committee was told that the NIGC has conducted forty-one MICS audits since 1999. Ironically, the number of times that CRIT's BlueWater Casino has been audited, visited, monitored, and regulated by the Arizona Department of Gaming since our casino opened far exceeds forty-one. In Arizona, there is no lack of vigorous regulation.
We understand that the Committee is concerned by the court's decision on the CRIT case and its possible implications throughout Indian country. CRIT has no wish to be obstructionist. To the contrary, we would like to work with the Committee on any "fix" to address any and all concerns the Committee has. We believe that the Arizona model of compacts and tribal-state regulation - the model used by CRIT and your other constituent tribes - is a paradigm of stringent regulation that should be taken into consideration in meeting any perceived need for greater federal involvement.
I want to thank you for this opportunity to set the record straight. We reiterate our commitment to ensuring the highest standards of oversight and financial transparency. We look forward to working with you in a cooperative and comprehensive manner.
Daniel Eddy, Jr.
Cc: Senate Committee on Indian Affairs