One Reason Why Arnold Won
His Attack Ads Involving Indian Gaming, and Their Larger Context and Significance

By EDWARD LAZARUS

Thursday, Oct. 16, 2003

Over the next several months, political analysts will pore over the carcass of California's recall election, to determine the factors behind Arnold Schwarzenegger's astonishing, overwhelming victory.

Certainly, they will focus on the electorate's hatred of Governor Gray Davis, and the obvious shortcomings of Lieutenant Governor Cruz Bustamante (Arnold's main opponent). And doubtless, they will mull over Arnold's natural affinity and talent for politics, and the astonishing power of his celebrity to ward off questions about his lack of experience, undefined platform, and troubled history with women.

But to this list I would add another - and perhaps less obvious - factor: the end of Anglo guilt over America's often brutal conquest of the native peoples who originally inhabited what has become the United States.

This easing of conscience, largely attributable to the proliferation of Indian casinos, already has transformed the legal relationship between Indian tribes and the nation that overwhelmed them. It will doubtless have baleful consequences for the many hundreds of thousands of Native Americans who are in no position to exploit the economic bonanza of reservation gaming.

Schwarzenegger's Anti-Indian-Tribe Advertising

In the weeks leading up to the recall election, Schwarzenegger's paid television advertisements focused, unsurprisingly, on two prominent issues. One was the giant budget deficit that opened up during Gov. Davis's tenure. Another was Davis's cozy relationship with special interest groups.

Naturally, Schwarzenegger wanted to point out Davis's financial mismanagement. Just as naturally, he also wanted to advance himself as the candidate who could end the practice of government by campaign contribution that too often holds sway in Sacramento (as elsewhere, of course).

So it was no surprise that Schwarzenegger advanced these themes. But what was surprising was the way he advanced them. In the final two weeks of the campaign, one of Schwarzenegger's most prominent television spots claimed, in essence, that Davis had cut the Indian tribes of California a sweetheart deal by allowing them to run incredibly lucrative tribal casinos while paying no state taxes.

The ad was a highly effective double-whammy. First, it highlighted Davis's fiscal woes by suggesting he had foregone substantial potential tax revenues. Second, it painted Davis as a captive of a special interest group - the California tribes, who have been known to pour millions into the coffers of pro-gaming politicians.

The ad, however, was also profoundly misleading. It is certainly true that - as the ad said - Davis negotiated a tribal gaming agreement with the state's tribes that did not require them to pay state taxes. But it was hardly Davis's fault that this occurred.

The Real Reason Why California's Tribes Don't Pay Taxes on Casino Proceeds

The legal and political background of Davis's deal with the tribes makes clear why David plainly was not to blame.

First, as a legal matter, California (like all other states) does not have the power to unilaterally impose state taxes on Indian gaming proceeds. Rather, the tribes enjoy a limited right of sovereignty that exempts them from such taxes.

Thus, Davis faced a stark choice: Either he could refuse to negotiate a gaming agreement at all, or he could negotiate one that convinced the tribes to voluntarily pay taxes.

For his own part, Davis probably would have been happy not to negotiate an agreement with the tribes. He was never enthusiastic about Indian gaming. To the contrary, Davis seems to have something of an aversion to gambling, tribal or otherwise.

But as a practical matter, Davis did not have the option of snubbing the tribes - as his predecessor Pete Wilson had. At roughly the time Davis became governor, the people of California - in response to the Wilson administration's refusal to permit Indian gaming - passed a ballot initiative giving Indian tribes the right to engage in gaming without paying any taxes to the state.

The California Supreme Court ultimately ruled on technical grounds that this initiative violated the state constitution. Nevertheless, upon taking office Davis faced both a popular mandate in favor of Indian gaming, and the near-certainty that a properly designed Indian gaming initiative would pass and become law in the next election cycle.

Against this background, Davis decided to negotiate an agreement with the tribes that was more favorable to the state than the "no limits" proposal that was sure to be on the next election ballot. And he succeeded.

The deal Davis struck placed limits on slot machine play (the biggest casino draw). It also got the state a share of gaming revenues, albeit not in the form of "taxes." Indeed, the Davis deal has garnered the state more than $100 million in revenue from the tribes.

So if it the deal was a "sweetheart" deal for anyone, it was a sweetheart deal for the State of California. But the Schwarzenegger ad portrayed it very differently.

How Californians' Attitude Towards the State's Indian Tribes Has Changed

Of course, it is hardly news when a political candidate - such as Schwarzenegger, in this case - dispenses with accuracy when going for his opponent's political jugular. However, what is news, I think, is the amazing transformation in the attitude of Californians towards the state's Indian population.

Only a few years ago, Californians were so taken with the idea of "fairness to Indians" that they decisively approved the initiative I mentioned above, allowing nearly unfettered Indian gaming. But now, thanks to the incredible success of tribal casinos, Indian tribes have been transformed in the public consciousness from victims of historical oppression into just another grasping, corrupting special interest group.

Indeed, if Schwarzenegger's decision as to what group to target is any test, Indian tribes may even have surpassed unions and corporate fat cats to become the very worst possible example of such a group.

The Law, Too, Has Changed Its View Toward Indian Tribes

In this regard, California is no anomaly. In the world of law, Indian tribes are rapidly losing their once preferred position.

Back in the 1970s and 1980s, Supreme Court watchers commonly joked that Indians always won at the Court (and that when they did, either Justice Thurgood Marshall or Justice Harry Blackmun would write the opinion). Exactly the opposite is true now. Now, Indians seem virtually always to lose at the Court.

In the last decade, the Court has repeatedly been called upon to consider the degree to which Indian tribes enjoy full sovereignty over their lands. The Court has considered, for instance, the right of tribes to exercise jurisdiction over non-Indians. And the Court has also considered the right of States to exercise jurisdiction over tribes. In almost every instance, the Court has sided with the non-Indian, or with the states, in opposition to tribal interests.

There is a deep irony in this switch. Thirty years ago, when the vast majority of tribal governments had few resources and little inclination to flex the muscles of sovereignty, the Court gladly recognized their theoretical powers. Yet now, when many tribal governments have both the resources and inclination to wield real governmental authority, the Court often denies them that right.

Indians Without Casinos: The Shift In Public Perception Leaves Many Out

I have little doubt that Indian gaming has played a role in this tectonic shift in the law. The creation of Indian casinos - sometimes by tribal groups of infinitesimal size and attenuated tribal lineage - has created a powerful, and often woefully inaccurate perception of Indians. According to this perception, tribes and their members are merely rich opportunists, taking advantage of long-lost tribal affiliations in order to feast on our national obsession with games of chance.

Such images have crowded out a national recognition dating back to the days of Chief Justice John Marshall. This was the recognition that the United States, under the standards it set for itself as a conquering nation, recognized both its special responsibility for the peoples it often brutally dispossessed, and the continued integrity of their tribal governments.

This profound change in perception - this loss of our consciousness of guilt -- is understandable, but tragic. Notwithstanding public perception, many Indian tribes, and hundreds of thousands of tribal members, are too remote from major population centers to take meaningful advantage of their right to conduct gaming activities.

These Indians remain, with no conceivable end in sight, mired in the worst poverty and despair this nation knows. The non-gaming Indians are thus twice victims - first of the conquest, and now of the financial success of their better situated brethren, which have convinced many Americans that they no longer need help. For them, it seems, every roll comes up snake eyes.


Edward Lazarus writes about, practices, and teaches law in Los Angeles. A former federal prosecutor, he is the author of two books: Closed Chambers: The Rise, Fall, and Future of the Modern Supreme Court and Black Hills, White Justice: The Sioux Nation Versus the United States, 1775 to the Present.

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