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Tribes and tribulations: fears of gaming, economic impact hamper Indians' search for home in state.

A LANDLESS BAND OF Cherokee Indians who would like to call Arkansas home are close to giving up their search in the Land of Opportunity.

The relocation efforts of the United Keetoowah Band of Cherokee Indians based in Tahlequah, Okla., have so far been rebuffed by city officials around the state.

It has nothing to do with anti-Native American sentiment, community leaders say. Instead, there are concerns about what impact the band's economic enterprises could have if established on sovereign land.

"I wish them well," says Jim Cherry, president of the Greater Hot Springs Chamber of Commerce. "I just can't wish them well right here in Hot Springs. At first we embraced the idea. We felt it would be a unique tourist attraction."

But the more he and other city and state leaders learned about the multitude of economic possibilities, including the possibility of gambling, on Indian land, the more they withdrew the welcome wagon.

If the Keetoowahs could find land to purchase in Arkansas, the band could petition the U.S. Department of the Interior to have the land placed in federal trust, a status that would exempt the land and businesses on it from all state and local taxes and regulations.

Seeking the blessing of state and local officials, the Keetoowah have made no secret of their desire to buy land and have it declared sovereign. A murkier area is what intentions the band has for any land it might acquire in Arkansas.

Sources have told Arkansas Business that a management official representing the Keetoowah has indicated the land would be used to establish casino and bingo operations--free from state taxes and regulations.

Chief John Ross of the Keetoowah denies any knowledge of this. Terry V. Anderson of Green Bay, Wis., whose American Development Co. represents the Keetoowah in their search for land, could not be reached for comment.

According to information from Wisconsin law enforcement sources, Anderson's company is believed to be a group of private, non-Indian investors looking to purchase land for tribes that can be taken into trust and turned into regulation-free gambling enclaves from which they will receive a portion of the profits.

Gambling Is Big Business

The federal Indian Gaming Regulatory Act of 1988 paved the way for gaming operations -- from bingo to sophisticated casinos -- to flourish tax free on tribal lands.

And flourish it has.

According to the December issue of Indian Gaming, there are 118 gaming operations on federal Indian land in 24 states.

In Minnesota alone, where there are 11 recognized tribes and approximately 16 gaming operations, the industry already has surpassed the billion-dollar mark in annual revenues.

Indian tribes nationwide are scrambling to have lands placed in trust, most with hopes of starting gaming and related economic ventures that beckon as a way out of the poverty and social problems that have long plagued Native Americans.

Ross says the United Keetoowah Band's purpose in moving to Arkansas is simple: The band, a tribe within the Cherokee Nation of Oklahoma, wants to cut ties with the larger Indian group. Having its own land base is an essential first step.

The Keetoowah, a federally recognized tribe, are seeking land outside of Oklahoma because the Cherokee Nation won't consent to the tribe having federal land of its own in Oklahoma.

Ross is the self-styled chief of the separatist group of Keetoowah. His title as chief is recognized by a faction of the Keetoowah loyal to him, but not by some Keetoowah who refuse to renounce their Cherokee Nation membership or by the federal Bureau of Indian Affairs.

In shopping the prospect of a reservation in Arkansas, Ross has mentioned a variety of possible business uses for the land -- ranging from a Native American theme park, printing plants and service stations to more traditional Indian businesses like tobacco shops.

Numerous city and state officials interviewed for this story say Ross or his representatives did not rule out the possibility of setting up gaming operations.

"They have never told us specifically what they wanted to do with the land," says Jim Pledger, director of the state Finance and Administration Department.

"The only thing |Ross~ would tell us is, if it was illegal in Arkansas, we won't do it," says Leonard Bland of Ozark in Franklin County.

Bland co-chaired an exploratory committee formed to study the possibility of the Keetoowah moving to Ozark after Ross contacted officials there. Following a trip to Tahlequah, Bland says the committee voted 9-1 against pursuing efforts to encourage the tribe.

"The sense that I got from the committee was that if this group was looking for cultural identity, we would work with them," Bland says. "But we saw their interests as solely economic."

Tax-Exempt Worries

Ross says the type of businesses the Keetoowah would establish if they got land in Arkansas would depend on the wishes of the surrounding community, saying the tribe "can go either way."

In Tahlequah, the tribe has operated smoke shops, which have been closed by the state, and a 350-seat bingo hall that Ross says generates about $10,000 a month from bingo games held twice a week.

Cherry, the Hot Springs chamber president, says the issue of gambling "wasn't satisfactorily addressed." But he says the primary reason Hot Springs shied from the Indians was concern that their tax-exempt status would present an unfair trade advantage and jeopardize the survival of local merchants.

Ross has suggested working out an agreement for the tribe to make a voluntary contribution to the local tax base to offset that advantage, a common practice in Minnesota where community tax concerns and booming Indian economies peacefully co-exist.

"We're not asking anything from the state," Ross says. "The misconception is that we'll move in there and really take advantage of the tax base."

Besides the fear of unfair advantage, another problem underlying the Keetoowah effort in Arkansas is their representation by Anderson's American Development Co.

The company was incorporated in Wisconsin but lists a business address and telephone number in Ione, Calif.

An Arkansas Business reporter using the phone number reached an answering machine that says nothing more than leave a message or send a fax after the tone. The identity of the party is not mentioned.

Efforts to reach Anderson through the company were unsuccessful.

Records show Anderson has been arrested in Wisconsin for theft and securities violations and ordered to quit selling securities. He has avoided jail by pleading guilty to reduced charges and making restitution to victims he allegedly bilked.

Citing an ongoing examination of Anderson's activities, Wisconsin officials are tight-lipped about additional information they may have regarding Anderson's current activities on behalf of ADC.

It is not unusual for outside investors to assist Indian buyers.

Ross says he's unaware of Anderson having any run-ins with the law and notes that "if he's a shady character, the |Bureau of Indian Affairs~ won't let us deal with him."

Ross is referring to background checks that are supposed to be conducted on the non-Indian business principals involved in joint ventures with tribes on federal land.

'That Problem'

The arrangement the Keetoowah now have with ADC is this: The company will help the tribe acquire land and provide the financial backing to create businesses.

Ross says the investors would receive 40 percent of the net profits from those businesses.

Norm Pint, a special agent team leader with the gambling enforcement division of the Minnesota Department of Public Safety, says there's always "that problem" of investors looking to capitalize on the Indians' ability to get sovereign land for economic development.

"The bottom line is that most of the tribes don't have vast resources to build casinos, so that's always a concern because where do they get the money to do this?" Pint says.

Ross readily acknowledges the Keetoowah, like most Indian tribes, need help from outside investors.

"Tribes can't do it on their own," he says. "I don't know of any tribe that can afford to do it on their own."

One of Ross' antagonists, Chad Smith, a prosecuting attorney for the Cherokee Nation, says Indian tribes like the Keetoowah who are seeking trust land are "easy prey" for investors. They see the Indians as a way to a lucrative investment, Smith says.

"It's sort of like the tail wagging the dog," Smith says. "The economic interests from outside have a big interest in what the United Keetoowah Band does."

Smith filed a successful appeal that voided Ross' election, in the government's eyes, as the recognized Keetoowah chief.

Ross acknowledges there's a dispute over his leadership, but he says the BIA has recognized him as Keetoowah chief spokesman. Ross says 7,432 Keetoowah recognize him as chief, but others estimate his followers at around 200.

Community leaders in Hot Springs acknowledge becoming wary of ADC after the company failed to provide copies of its financial statements and articles of incorporation as requested.

"My question is, who is the American Development Company that is backing them?" asks Hot Springs Mayor Melinda Baran, echoing concerns from other city leaders.

An investment broker by profession, Baran says she specifically requested the financial statements from Lee Moore, a Hot Springs man working with ADC and the Keetoowah. The documents were never provided.

"I like to get the facts," Baran says. "If I don't get them, I don't do business."

She notes that there are probably those in Hot Springs "lathering at the mouth at the idea of casinos opening up again."

However, she says the city must be cautious about whom they enter into agreements with.

The controversial chief points to his goodwill gesture in seeking support from community leaders -- rather than just buying land and moving in -- as evidence the tribe is sincere in its primary goal of simply finding a land base.

But he seems to be tiring of the rejection.

"We're going to give one more shot in Arkansas," he says. "After that, we're going to try somewhere else."

Recently, Ross approached Pine Bluff city leaders about relocating near that southwest Arkansas city.

Many of the community leaders who have had contact with Ross describe him as "straightforward" or "sincere." But, as chamber president Cherry notes "leaders change."

"It's too much of a wide open, loose cannon to get involved in right now," he says.

Cherry and others expressed concerns that any agreements worked out with the Keetoowah before their land became sovereign would not be legally binding.

Ross proposes that legislation be passed by Arkansas' congressional delegation to address those fears and provide assurances.

Pointing to the tourism an Indian reservation could generate and the federal money that flows into communities with an Indian presence, Ross holds out hope that some area will reach out to the tribe.

"The only thing we can do is ask," he says. "It's up to you all if you want us or not."

Indian Gaming: Boom or Bust?

State-Regulated Gambling Operations Often the Big Losers

SINCE THE PASSAGE OF THE Indian Gaming Regulation Act in 1988, gaming has boomed seemingly without major problems in Minnesota, a state with a long history of cooperation with its 11 Indian tribes.

Yearly revenues from 16 Indian gaming facilities have topped the billion-dollar mark in yearly revenues, money which is usually split between tribes and private financial backers.

For many Minnesota tribes, gaming has been a way for them to take their economic futures into their own hands and decrease reliance on federal programs for their well-being.

One Minnesota gambling enforcement official explains that Indian gaming has widespread acceptance there because of a gradual evolutionary process that transformed small-time bingo operations into multimillion-dollar casinos.

"It isn't like they acquired this land minutes before they opened casinos," says Norm Pint of the Minnesota Department of Public Safety's gambling enforcement division.

Also, Pint says, tribes and communities generally reach agreements that result in the tribes making financial contributions to the communities in which they're located.

In some cases though, the losers turn out to be state-regulated gaming operations.

Perhaps the most salient example involves the thoroughbred racing operation at Canterbury Downs in Shakopee, Minn.

Over a two-year period since the opening four miles away of a $20 million, 140,000-SF casino with more than 1,000 slot machines, 75 blackjack tables and an 1,800-seat bingo hall, Canterbury has lost $10 million, says General Manager Terry McWilliams.

"Our pari-mutuel handle fell 45 percent on the day they opened, and it continued on that level for the remainder of the year," he says. "We have not seen the casino gambling let up in any way, shape or form."

McWilliams says market surveys conducted by track management have "unequivocally" shown that both the track's serious and casual fans are patronizing the nearby casino, as well as the state's other Indian casinos.

Uncertain Future

As a result, the racetrack's future is uncertain.

In other states where there is not a deep-rooted history of tribes living on trust land, states have had difficulty reconciling their interests in regulating gaming and the Indians' rights in developing their lands.

In Connecticut, where charitable gaming is allowed, officials initially refused discussions with a tribe that wanted to establish a commercial casino because such gaming is illegal there.

After a lengthy court battle, the state was forced to allow the $58 million casino, which was financed by Malaysian developers.

The Connecticut case is being cited by some tribes as precedent that charitable gaming laws authorize commercial casinos on Indian lands.

Meanwhile, Connecticut, backed by seven other states, has petitioned the U.S. Supreme Court to clarify provisions in the Indian Gaming Regulation Act that have led to the clash between state laws and Indian gaming.
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Title Annotation:includes related article; Cherokee Indians
Author:Walters, Dixie
Publication:Arkansas Business
Date:Dec 21, 1992
Previous Article:No room at the inn; Arkansas hotels, restaurants enjoy booming business in wake of Hurricane.
Next Article:News from the Northwest.

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