OLYMPIA -- Gov. Chris Gregoire is benefiting from more than $650,000 in campaign contributions from Indian tribes that hit the jackpot in 2005 when she killed a gambling compact potentially worth more than $140 million a year to the state.
Unlike 22 other states that collect millions from revenue sharing agreements for tribal gambling, Washington gets no money from tribal casinos under the compact that Gregoire renegotiated with the Spokane Tribe.
Gregoire backed away from the 2005 agreement that included revenue sharing in an attempt to keep gambling from expanding too quickly and after listening to concerns from a wide range of groups, including other tribes, said her spokesman, Pearse Edwards.
But gambling experts say the state's arrangement, which gives the governor power to approve or reject gambling agreements with the tribes and allows those same tribes to contribute to political campaigns, is ethically problematic but not illegal.
"It's a payoff," said University of Nevada-Las Vegas professor William Thompson, who has been studying tribal gambling since 1988. "She shouldn't take any campaign money, nor should her political party, and it smells too quid pro quo for my liking."
Even Gregoire's fellow Democrats in the Legislature question the deal.
"Why would you give someone a monopoly without taking a cut?" asked Sen. Ken Jacobsen, D-Seattle.
The bulk of the tribal campaign contributions came from tribes that opposed the 2005 agreement Gregoire killed.
The governor's spokesman said "there is no quid pro quo."
"We are required under federal law to negotiate with the tribes on a government to government basis," Edwards said.
"Regarding the potential revenue, the tribes employ tens of thousands of people across the state, mostly non-Indian, who are providing nearly a billion dollars in wages and benefits. They've contributed millions to local governments for local infrastructure programs. They contribute millions to charities. The list goes on and on," he said. "They contribute over $100 million to health and education programs around the state."
The final compact negotiated by Gregoire included a provision that allowed other tribes to expand casino operations without revenue sharing. Twenty-seven of the state's 29 federally recognized tribes signed on to the Spokane compact's provision. Not all of them operate casinos.
State tribes have pumped more than $600,000 in campaign contributions into the state Democratic Party since 2004, which in turn contributed to Gregoire's campaign.
Tom McCabe, executive vice president of the Building Industry Association of Washington, which has contributed heavily to Gregoire's Republican challenger, Dino Rossi, said the incentive is obvious.
"Politically, they can't afford to have her lose," McCabe said. "So they are going to have to spend whatever it takes to have her win. They know if Rossi wins, all bets are off."
Tribes have also contributed to Republican candidates but at a tiny fraction of the level they have given to Democrats.
In 2005 the state Gambling Commission and the Spokane Tribe reached an agreement that would have allowed more than 7,000 video gambling machines and a six-tiered revenue sharing structure. The renegotiated deal without revenue sharing allowed only 4,700 machines.
If the original compact had been approved, other tribes would be entitled to similar levels of expansion under the same terms.
Depending on the number of tribes participating, the state could have received from $40 million to more than $140 million annually.
The money would have been dedicated to projects of "mutual importance to the state and tribes" such as Puget Sound cleanup, salmon protection, culvert expansion and transportation projects.
But in an Oct. 27, 2005, letter, before the deal was submitted for nonbinding legislative review, Gregoire asked the Gambling Commission to renegotiate.
In a 2006 letter recommending the renegotiated agreement, Gregoire said she had "asked the parties to reconsider the provisions related to the off-reservation facilities ... and revenue sharing."
Attorney Scott Crowell, who represented the Spokane Tribe, said Gregoire's staff was actively involved in the new negotiations.
"The state had a formal negotiation team through the Gambling Commission but they were in fairly regular contact with (Gregoire's then-Chief of Staff) Tom Fitzsimmons in her office because ultimately the agreement is between the governor of the state and the tribe," Crowell said.
"It is true that a number of tribes did come out and announce their opposition to that first compact. The Spokane took some offense to that because the Spokane did not interfere with the compacts negotiated by the other tribes with the state. We felt it improper for them to take issue with ours.
"That said, some of them expressed concern that the agreement with the Spokanes was setting a new template that would impact them, particularly in the area of revenue sharing." .
Crowell said the compact would impact other tribes only if they chose to sign on to the agreement. Signing the existing compact was the most expedient way to obtain state permission to expand tribal gambling.
Gregoire saw that as a problem and called for a renegotiation of the 2005 compact with the Spokane Tribe after receiving input from interested parties, including other tribes and local law enforcement officials, Edwards said.
"It was almost like triggering a gambling arms race in the state," he said. "What would occur under the revenue sharing is that it would have led to an almost unlimited expansion of gambling -- unlimited tables, unlimited betting -- and that is something that the governor wanted to avoid."
Other states provide a model of what happens when tribal casinos enter into revenue sharing arrangements, Edwards said.
"It opens up a Pandora's box on gambling and where does it stop?" Edwards said.
Gregoire was protecting the state's interest, he said.
"It's not about who gives and doesn't give, it's about good public policy," Edwards said. "This is a free country and if someone wants to make a donation to any party, to any group, they are free to do so. The governor and the tribes have the relationship they have because of the mutual respect they have for each other."
The governor sees no need for a firewall to prevent the contract negotiations from crossing over into the expectation of campaign contributions, Edwards said.
"There's not a legislative vote but there are public hearings. ... There is a process (in place) where other representatives of state government look at that," he said.
But Jacobsen, the Seattle state senator, said there wasn't enough transparency.
"By the time anybody in the Legislature heard about it, it was a done deal. There are a lot of people, Democrats and Republicans, who were a little bit grumpy about that because, God, that's a lot of money we gave them without getting anything back."
Asked if there should there be a firewall between groups that negotiate with elected leaders, Jacobsen said: "When you start talking money, people are getting tempted," adding that even if there isn't outright corruption, it looks bad.
Thompson, the UNLV professor, agreed.
"The (federal) 1988 Indian Gaming Act dictates how the tribes may spend the money they get from gambling," he said. "There is nothing in there that allows them to spend the money on political campaigns ... the tribe will say it's not casino money, it's tribal money -- they've laundered it -- but the money is coming out of casinos."
Thompson said he is not aware of any state laws that would prohibit political contributions to campaigns but said the solution is clear. "Number one, the Legislature should participate in every compact."
BY THE NUMBERS: INDIAN CASINOS AND COMPACT WITH STATE
Twenty-one tribes in Washington operate 27 casinos under a compact with the state. Unlike some states where the tribes and the state have agreed to share revenue, Washington state receives no tax money from Indian gambling.
Annual revenue of tribal casinos in Washington state:
2005
$1.02 BILLION
2006
$1.19 BILLION
2007
$1.34 BILLION
FROM 18,225 TO 27,300
Total number of gambling terminals allowed in Indian casinos before latest compact and then afterward.
FROM $5 TO $20
Wagering limit on certain machines before latest compact and then afterward (15% of machines).
$604,131
Contributions to state Democratic Party from tribes since 2004.
$1.6 MILLION
Contributions to Gov. Chris Gregoire's campaign from Democratic Party since 2004.
$49,000
Direct contributions from tribes to her since 2004.
Sources: Washington state; Public Disclosure Commission
