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Letter from Assemblyman Sam Hoyt to Governor Pataki

August 12, 2002

Hon. George E. Pataki, Governor
NYS Executive Chamber
Albany, NY 12224

Dear Governor Pataki:

In recent weeks, I have been inundated with calls from local business people, homeowners, religious leaders, and others concerned about the prospect of full-service casino gaming in the center of downtown Buffalo. I have also heard from several members of the Seneca Nation of Indians ("Nation") who do not support casino gambling and who question the integrity of the vote by which the Nation approved casino gaming.

To respond to my constituents’ concerns, I turned to the language of the Gaming Compact ("Compact") that was apparently approved by the Nation. However, all I found was more, and more troubling, questions. There are very serious matters unresolved, or badly resolved, in the Compact.

The purpose of this letter is to bring those matters to your attention. It would be irresponsible to go any further in committing either the State or City to this Compact without first resolving these most pressing issues.

Your 1996 Report on Casino Gaming

According to your own 1996 report, a stand-alone casino in Buffalo would result in a net loss of jobs for Western New York, unless it were established as a full-service, Las Vegas style casino. Although that would result in a net gain of jobs, it would be at the expense of local businesses. Also, your study assumed that the region would have one, not several, casinos. Furthermore, it did not consider that the single casino would be established on sovereign Indian land. Governor, how do you reconc ile these findings from your own report with the Gaming Compact? The Compact would authorize as many as 3 casinos in Western New York, each on sovereign Indian land?

Many local business leaders doubt their ability to compete with the tax free retail of alcohol, cigarettes and other goods on Indian land carved out in the middle of downtown. As discussed below, any land acquired by the Nation for a casino will become reservation land subject to all the privileges and immunities normally attached to sovereign Indian land.

Even if the Compact contained restrictions on the type of activity that the Nation could conduct on this property (which it doesn’t), such negotiated limitations would be unenforceable. Only the federal government has the power to restrict the use a sovereign Indian Nation may make of its lands. How shall I answer my constituents’ questions about the Seneca’s tax-free competitive advantage? Will Buffalo and Erie County be compensated for the lost sales and property taxes that result?

Casinos and Municipal Services

There is no provision for local law enforcement to patrol in, or have jurisdiction over, the casinos. In fact, Section 7(a) of the Compact, states that the jurisdiction of New York State and the Seneca Nation over casino property, will be as it is presently vis-à-vis reservation lands. Further, Section 7(b) provides that the Nation Gaming Operation "shall provide security personnel to protect each Gaming Facility."

Governor, the situation contemplated by the Compact would be absolutely unique. While the allocation of jurisdiction over existing reservation property works, it will not work here. The Compact would carve out of each downtown area an entirely new mini-reservation. Where will the Senecas base their police and fire services? What happens when fire or crime spills out from the sovereign territory into property under municipal jurisdiction?

Land Acquisition by Seneca Nation

The Compact authorizes the Nation to acquire land for casinos and "to meet the housing needs of the Nation’s members." The Compact acknowledges the reality that the Seneca Nation already has sufficient, federal authority to acquire land within its "aboriginal" territory. Seneca Nation Settlement Act of 1990, 25 USC Sec. 1774, et. seq. Additional land acquired thereunder will become reservation land, subject to all the protections and freedoms that entails.

Once acquired, this additional reservation land is automatically subject to the federal "Non-Intercourse Act" that prohibits any person or entity from entering into any agreement for the sale or lease of Indian land without express federal authorization. In fact, it would take a federal TREATY for the Nation to lease, sell or otherwise transfer that land.

The Compact supplements the Settlement Act’s grant of authority to the Nation with the State’s pledge to assist the Nation’s acquisition of additional land, up to and including use by the State of its power of eminent domain. The Compact assumes that the land acquired for casinos in Niagara Falls and Buffalo will not be adjacent to existing reservation land. That was not the intent of the Settlement Act. Clearly, the State’s negotiators did not fully grasp what the impact would be of such irreversible transfers of city property to the Seneca Nation . How can you ask Buffalo and Niagara Falls to accept the carving out of permanent, mini-reservations, within their boundaries?

Term of Agreement

The original term of the Compact is 14 years. Unless the State or the Nation objects in writing, the Compact states that its "term" will be automatically renewed for a "period" of 7 years. If either party objects "to the automatic renewal of the term," there is an agreement to meet and try to resolve the disagreement through "good faith negotiations." In the event the parties do not come to agreement, the only issue that may be turned over to the "Dispu te Resolution" procedures established by the Compact is either party’s "good faith."

The Compact says nothing about the State receiving any share of the proceeds from the Nation’s Gaming operations after the original 14 years. Since the State’s percentage changes over the 14 years of the original term, and the Compact very clearly delimits the State’s share during that time, it is not reasonable to assume any State share during the 7 year renewal term will be implied. Which percentage share would be deemed intended to carry over? Where would this leave the cities?

The Compact’s dispute resolution procedure on the matter of renewal is very clear that only a party’s "good faith" may be raised.

Termination of the Compact

The Gaming Compact allows "either party" to terminate the agreement if the Indian Gaming Regulatory Act is repealed. Absent such an unlikely occurrence, the State may not terminate the Gaming Compact early. The Nation, however, may unilaterally terminate the Compact at any time, merely by adopting: ". . . a referendum revoking the Nation's authority to conduct Class III Gaming." This grievous lack of mutuality of obligation is appalling.

The original vote within the Seneca Nation was highly contentious, political, and close. Already, some Nation members who intend to seek elected office within the Seneca Nation have declared their opposition to casino gaming, and their intent to seek its demise should it have become a reality prior to their attaining office.

Audits and Accounts

Nothing in the Compact establishes the cities’ share of the proceeds from casino gaming, and nothing authorizes City officials any access to accounting or audit records from the gaming operations. Under the terms of the Compact, it will be a material breach for the State to share whatever records it ultimately does obtain regarding the gaming operations' accounts with any other person or entity (which would include the cities of Niagara Falls and Buffalo). A careful reading of the Compact reveals t hat the State will have very limited access to Nation accounting information concerning its casino operations, and Buffalo and Niagara Falls will have none. Was this really intended?

And, the Compact goes further. It purports to restrict the scope of the State’s duly enacted Freedom of Information law. At section 15(e), the Nation and the State would "agree" that records dealing with gaming operations under the Compact are not subject to New York’s Freedom of Information Law. What authority does the Seneca Nation or the Governor’s office have to limit the reach of a duly enacted state statute?

Mutuality of Agreement and Judicial Enforcement

The Compact does not contain a waiver by the Nation of its Sovereign Immunity. In fact, it expressly preserves the Nation’s Sovereign Immunity. That means the Nation cannot be sued, not by the State, not by a city, not by a patron to a casino. However, the Nation may commence suit against any party if it chooses to do so. Sovereign Immunity from suit, which extends even to immunity from counterclaims, is strictly construed.

No court will have jurisdiction over any claim that the State or a city might seek to raise against the Nation arising from, or related to, the Nation’s acquisition or use of land contemplated in the Gaming Compact.

Governor, I sincerely hope that you have answers to these questions and explanations for the glaring inequities discussed above. If not, I call upon your better judgment to use whatever powers you have to declare the negotiations a failure and refuse to sign the Compact. Otherwise, Buffalo and Niagara Falls will pay dearly for the State’s miscalculations.

Sincerely,

 

SAM HOYT

MEMBER OF ASSEMBLY

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