News: CJ Exclusives

Murky Legal Language Could Let Catawbas Open N.C. Casino

Federal settlement could force N.C. to provide casino location

KINGS MOUNTAIN — The Catawba Indian Nation’s plan to build a $340 million casino/resort in Cleveland County would end the Eastern Band of Cherokees’ gaming monopoly in North Carolina. First, the proposal must receive unprecedented federal approval in a case complicated by murky laws, allegations that campaign contributions influenced opponents, and the certainty of litigation.

The Rock Hill, S.C.-based Catawbas filed an application Sept. 4 with the U.S. Department of the Interior’s Bureau of Indian Affairs to take 16 acres of land near Kings Mountain into federal trust.

The goal is to build a 220,000-square foot gambling facility, two hotels with 750 rooms, and restaurant, entertainment, and retail outlets. The tribe claims direct and indirect economic impact to the Cleveland County area will be $300 million annually when the complex is fully operational in 2015. Economic developers also project the complex will generate $100 million in state revenues yearly and create 4,000 permanent jobs in an area where unemployment typically exceeds the statewide rate.

Notwithstanding the gaudy economic projections, Gov. Pat McCrory, House Speaker Thom Tillis, R-Mecklenburg, and Senate Leader Phil Berger, R-Rockingham, are among those opposing the project.

The tribe says it is permitted to purchase land in North Carolina to expand its reservation as the result of a 1993 federal settlement on historic land claims that were not honored in previous treaties with the federal government. The agreement outlines its 1,000-acre South Carolina reservation and a service area that includes six North Carolina border counties — Mecklenburg, Cleveland, Gaston, Cabarrus, Rutherford, and Union.

Placing land in federal trust is the necessary first regulatory step before a gambling facility could open.

Possible conflicts with IGRA

“Whatever Interior does is going to be precedent setting. … It’s a case of first impression,” said Matthew Fletcher, professor of law and director of the Indigenous Law & Policy Center at Michigan State University, who has studied the Catawba initiative.

The tribe maintains its federal settlement agreement exempts it from the Indian Gaming Regulatory Act, the law that regulates all Indian gambling.

“Of course, the state and the [Cherokees] are going to sue if [Interior takes] the land into trust,” Fletcher said. If Interior doesn’t take the land, “then the Catawbas will sue.” Either way, a lawsuit is inevitable, he added.

This case is unprecedented “because of the provision in the statute that says IGRA doesn’t apply,” he said.

If the land is taken into federal trust, “the tribe could acquire land in North Carolina … and open a bingo hall there, and North Carolina would not be able to do anything about it,” Fletcher said. Bingo operations are allowed on all federal trust lands, even if the state allows no other gambling operations. But it’s possible to conclude that the Catawba settlement agreement instead would allow wide-open gambling, including table games and slot machines, because the language of the settlement is imprecise.

Under review

“The application is still under review in our BIA Eastern Regional Office,” said Nedra Darling, a spokeswoman in the Bureau of Indian Affairs’ Washington, D.C., office. She declined to discuss the case further.

“I’ve seen no argument to justify it whatsoever,” McCrory told Carolina Journal. “I don’t agree with the loophole that the Catawbas are using to gain traction on that effort.”

“I think some of the biggest opposition that still exists are senators or legislators that have ties with the Cherokees,” said Catawba spokeswoman Elizabeth Harris. “I think they’re just trying to protect some of the interests in that area, which is understandable.”

Indeed, the Indian Country Today Media Network reported in its online newsletter that the Cherokees have made political contributions totaling $1.3 million since 2004.

More than 100 House members signed a letter from Tillis to Interior Secretary Sally Jewell opposing the Catawba application. Almost all of them “received campaign donations from the [Cherokees] in 2012 ranging from $500 to $4,000, the amount Tillis received, according to Follow the Money,” the story said.

The Gaston Gazette reported that since 2006, Berger received $20,000 from the Cherokees. Sen. Tom Apodaca, R-Henderson, received the most, $25,000.

The Eastern Band of Cherokees operates one casino in Cherokee, and Oct. 15 the tribe broke ground in Murphy on a second casino. The state approved a compact with the Cherokees in 2012 to expand the tribe’s Class II gaming operations to Class III, allowing higher-stakes table games to be played.

Harris said the Catawbas also have political backing — from local officials, a vital component of Interior Department approval of a land-in-trust application.

“We have very good support from the Cleveland County Chamber of Commerce, and the Cleveland County commissioners, and the City of Kings Mountain,” Harris said. “They’ve also sent letters supporting the project. Obviously that doesn’t get the same media attention as what’s going on in Raleigh.”

In their opposition letter to Kevin Washburn, assistant secretary of Indian Affairs at the Interior Department, Sens. Berger, Apodaca, Martin Nesbitt, D-Buncombe, and Jim Davis, R-Macon, wrote that IGRA “is the sole avenue for the conduct of gaming by federally recognized Indians on tribal lands.”

By entering into the settlement agreement and opting to be exempted from IGRA, the Catawbas “affirmatively chose to defer to the state to determine whether the Catawba Tribe would be authorized to conduct lawful gaming,” they wrote.

They argue the Interior Department may acquire trust lands only in South Carolina, “and that all non-reservation properties acquired by the Catawba Tribe are to be held in fee simple and subject to South Carolina law.”

‘Dangerous precedent’

Allowing the tribe to pursue gaming in North Carolina without legislative approval “would set a new and dangerous precedent … infringing on the fundamental sovereignty reserved to the several states by the U.S. Constitution,” the letter stated.

“The opponents are misreading the act. It specifically references North Carolina in many ways,” Catawba tribal attorney Greg Smith said.

It defines ‘state’ to include North Carolina for some purposes, including eligibility for federal services to be made available to tribal members in the Catawbas’ service area, which includes the six North Carolina border counties, he said.

The tribe’s gaming rights “will be governed by those federal laws that apply to the tribe,” Smith said. “The tribe is willing to enter into a compact with the state, and it should be noted that North Carolina state law authorizes the governor to enter into compacts with federally recognized tribes for gaming purposes.”

Fletcher’s reading of the settlement agreement comes down on the side of North Carolina regarding the Catawbas’ claim that they can operate gaming facilities without state approval.

“They’re just like any other citizen of South Carolina or presumably North Carolina. If they can talk the governor and the legislature into going along with them in opening a casino, then they can do it,” he said.

But he cautioned this is uncharted territory, and federal statutes negotiated with Indian tribes often are entangled with other federal statutes that may conflict or complicate simple resolutions.

“The Eastern land claims all up and down the seaboard are riddled with governance-type statutes, provisions that nobody really seriously considered that have created a mess,” Fletcher said.

He said there are many “loose-hanging provisions in these land claim settlement statutes that are litigated over left and right because nobody knows what they mean, and they were just really poorly drafted,” Fletcher said. “This is one of them.”

Dan Way is an associate editor of Carolina Journal.