Bruce Babbitt’s Nemesis: Death of an Indian Casino

by Gary Larson

25 January 2005

Ten years ago, a casino was to be the deliverance of the St. Croix Meadows Dog Racing Track. Then Bruce Babbitt got involved.

…the U.S. Supreme Court on Monday [Jan. 10, 2005] declined to hear an appeal by three Wisconsin tribes seeking to turn the greyhound racing track in Hudson, Wisconsin, into a casino.

Weeds overrun the race track near Hudson, Wisconsin. Greyhounds no longer run there. With gate receipts tumbling, owners shut down St. Croix Meadows Dog Racing Track in 2001. Ten years ago, a casino was to be the track’s deliverance, and a ticket out of perennial poverty for three impoverished bands of Lake Superior Tribe of Chippewa (Ojibwe). No longer.

When the high court did not take up their appeal, the Indians and their track owner-partner, a white guy from Miami, lost their 10-year war against a politicized “liberal” bureaucracy, politicians with upturned palms and a Byzantine court system. But not without a fierce struggle . . .

Lengthy, brutish, litigious at the end, it amounted to a casino war among tribes, their hired guns a-blazing. It pitted wealthy tribes with thriving, well-located casinos vs. remote Ojibwe bands with ramshackle casinos and bingo halls not geographically blessed by being near metro markets.

Today, the poor Indians and their deep-pocket patron, track owner Fred Havenick, find their casino dreams dashed. Their struggle at what Judge Robert Bork called “the bloody crossroads of law and politics,” triggered two Congressional inquiries (1997-98) and an $5 million investigation by Independent Counsel Carol Elder Bruce (1998-99). At the time, only a silly intern named Monica was bigger News of the Day.

The casino was to be the solution (“bailout,” insist news media) for Havenick’s “financially ailing” (ditto) racing venue. His track did have location, location, location -- covetously, just 30 minutes east of the Twin Cities market. Teaming with three Ojibwe bands, all from north central Wisconsin, Havenick crafted a novel tribal-private business venture to clear the path for a casino at his track. They called it Four Feathers Joint Venture, Ltd. It seemed such a win-win thing for him and the Ojibwe -- the Lac Courte Oreilles, Red Cliff and Mole Lake bands.

Conventional wisdom said this casino was to be a “slam dunk”. A final nod from the Bureau of Indian Affairs (BIA) was needed to put private land “into trust” for the an off-reservation casino. This is found in law under the casino-friendly Indian Gaming Regulatory Act (IGRA) signed by President George H.W. Bush in 1988.

Four Feathers’ plan: Remake the 160,000 sq. ft. grandstand into a job-creating, tax-paying, ancillary local business-building, native American poverty-busting, intrastate tourist magnet. Slots. Racing. Table games. BINGO!

On the eve of approval, “politics took over…when the issue was kicked upstairs,” said a candid BIA “career” staff member. Clinton appointees at the BIA were about to assert themselves. Money was about to change hands. The agency’s decision was about to become PO-lit-i-cized, somewhat like pardons later on, in the scandal-ridden Clinton era. Opposing tribes, ever-expanding their own “gaming floors,” joined forces with a vocal anti-casino Hudson citizenry. They trotted out the usual (and suspect) anti-casino themes -- crime, “outside” riff-raff, traffic snarls, lessened property values, and that dreaded “expansion of gambling.“ (Media always bite on this red herring.)

Tribes' long enemies, united now by casino-driven wealth, the Dakota (Sioux) and other Ojibwe (Chippewa), formed a mighty lobbying consortium. By one count, they hire 17 well-connected lobbyists. Cost is no object. (In the 1995-96 election cycle, the wealthy “opposing tribes,“ as the Independent Counsel calls them, ante up at least $417,250 in political contributions, all to "Ds," according to the I.C.’s Final Report on Aug. 22, 2000.) Lobbying to kill a casino starts inauspiciously, on February 12, 1995, in an unlikely place -- the Washington office of Minnesota Congressman James Oberstar (D-MN.). Eight wealthy tribes’ reps show up, with two key BIA officials, for the 2 p.m. meeting. Four other Congressman, all “Ds,” join in, some with aides. It is S.R.O. in his office as 16-term Congressman Oberstar declares the purpose of the meeting:
To strike down a proposed casino in the neighboring Badger State.

Fresh from the meeting -- in fact, the next day -- Interior Secretary Bruce Babbitt’s Chief Counselor at BIA, John Duffy, a political appointee, re-opens “the file” on the casino at Hudson. This will allow extra time for anti-casino folks to marshal their forces on the Hill. Four Feathers is left out of the loop.

After pressure-packed lobbying, BIA rejects the dog track casino on July 14, 1995. “Local opposition“ is said to be the reason, and is immediately challenged by Four Feathers as a smokescreen for the real reason -- ugly partisan politics.

Four Feathers learns of the rejection from its lobbyist, hired just for this issue, Paul Eckstein of Phoenix. Longtime Democrat, Babbitt’s former law partner in Phoenix, and his classmate at Harvard Law School, Eckstein had asked to meet with his friend after sensing impending doom for his clients. Babbitt agreed. They met privately, for only a half-hour, on July 14, 1995. Reports of their astonishing conversation ignite a political firestorm. Later it will be the focus of Independent Counsel Bruce’s investigation into Secretary Babbitt’s role, if any, in the Hudson casino denial on his watch at BIA, and what he told Congress (including Senator John McCain) and Paul Eckstein about it.

Eckstein reports Babbitt asked him if he knew the sums of money “those Indians” -- or, “those tribes” -- were giving to “their [Democratic] party.” (Babbitt denies it.) Babbitt then answers his own question, “about a half million dollars,” according to Eckstein (Babbitt denies this, too.) Babbitt tells Eckstein that no less than White House Deputy Chief of Staff Harold Ickes, Jr., had ordered the denial be made that day. (Babbitt later asserts he invoked Ickes’ name only to clear his old friend Eckstein out of his office. This claim will provide a field day for pundits and editorial cartoonists.)

After the 1995 denial comes a deluge of litigation: Starting in September, multiple lawsuits are filed, criminal and legal, in state and federal courts. Legal papers fly, alleging all sorts of mischief. Two fallouts along the way, both lightly reported:
-- In Minnesota, Hennepin County (Minneapolis) District Judge Deborah Hedlund imposes sanctions totaling $85,315, paid by certified check with interest, for obstruction of justice, against O’Connor & Hannan, the lead law firm representing wealthy tribes opposing the rival casino. Chalk one up for Four Feathers.
-- In Wisconsin, Four Feathers gets a rare break: Western Wisconsin Federal District Judge Barbara Crabb (Madison) at last allows wider “discovery.” New information, some spilling in from state suits, causes her to revisit the issue. Press reports, too, bring new, untested evidence of “undue political influence.” (Cited in Judge Crabb’s new order are investigative articles in the New York Times, by Donald Van Natta, Jr., and the Minneapolis Star Tribune, by Greg Gordon.)

After “protracted” negotiations, and pressure from the Court, an out-of court settlement is announced in Madison, Wisconsin, in late 1999. Federal District Judge Crabb approves its terms. The agency, for its part, will “vacate and withdraw” its 1995 rejection. Four Feathers agrees to file a new application. And BIA staff in the first decision are recused from considering the new application.

On February 10, 2002, seven years nearly to the day the anti-rival lobbyists rallied in a Minnesota Congressman’s office, and seven months after the dog track at Hudson was closed, the Bureau of Indian Affairs finally approved Four Feathers’ new casino application. BIA’s News Release called the casino to be “in the best interest of the Tribes without being detrimental to the surrounding community.” It was a total reversal of the 1995 decision, from basically the identical record. Go figure?

Four Feathers’ lawyers are not so fortunate in their next legal rounds. Wisconsin Governor Scott McCallum, filling Governor Tommy Thompson’s term, vetoes their off-reservation casino under a curious provision in the federal IGRA. This veto is upheld by the U.S. Court of Appeals for the Seventh Circuit (Chicago) and appealed to the Supreme Court which, on January 10, 2005, declines to hear the appeal.

Rather with a whimper, the 10-year war to kill a casino at an obscure Hudson dog track ends up at the doorstep of the Supreme Court. It is buried in wire reports of myriad cases not being heard. Few recognize it as the last battle of a casino war started in 1995 at the BIA. But three still-impoverished Ojibwe bands recognize this as fini for their casino dreams for the dark, now weed-overgrown track 30 minutes from the bustling Twin Cities metro market. So near, and yet so far away. The End?

Gary Larson is a retired association CEO and former newspaper and business magazine editor. He is a graduate of the School of Journalism at the University of Minnesota, and NOT the retired cartoonist. Larson is a regular at Intellectual Conservative; prior columns are found under Culture, Media.