Indian Gaming: More Corrupt Than Ever

When sleaze meets sleaze, magic happens. One glance across a crowded room, and they instantly recognize kinship. But when supersleaze teams up with supersleaze, a fusion-like chain reaction flashes to life, consuming everything in range.

And that's what happened when Jack Abramoff met Indian gambling.

Oh, I know the media is all atwitter over the political implications for ruling Republicans, but as usual, they are missing the soul of this saga -- the political correctness and hypocrisy that surrounds Indian gaming.

Let me explain. I have no moral objections to most vices, including gambling, and when I can get away with it, I indulge in several vices myself. So the morality of gaming is not my beef with Indian casinos. It's what I learned way back in the 1980s about what's really going on behind all that helping the poor Indians blather.

While working on our savings and loans book "Inside Job" in 1986, my co-author, Mary Fricker, and I followed one of our S&L crooks to a small Indian reservation outside Palm Springs. It was the home of the Cabazons, the very tribe that took their case for gambling rights to the U.S. Supreme Court and won -- sparking the Indian gaming revolution.

What we found there was unnerving, to say the least. Sure, there were Indians -- about 25 of them -- but they weren't in charge. Instead, a group of Los Angeles-based mafioso were running the operations, people with names like Rocco. The gaming operations were run by a non-Indian "management" company. They would front the money to build, maintain and operate the various gaming operations, with the promise that the tribe would get a share of the "profits" as calculated by Rocco and friends.

This is how Indian gaming began. After being chased out of Las Vegas and New Jersey by state and federal heat, the mob discovered Indian reservations. It was like a gift from the Mob Gods. One mobster testifying before Congress was asked how the mob viewed Indian reservations. He replied, "As our new Cuba."

That's because Indian reservations are sovereign nations within a sovereign nation. The mob could set up casinos, pay off tribal leaders and skim casino proceeds with impunity. If the FBI showed up, they had tribal security usher them out the gate, because they had no jurisdiction on reservation property.

During our short investigation of the goings-on at that Indio, Calif., Blazoning reservation:

Three members of the tribe were found shot in the head a week after threatening to go public with corruption at the gaming facilities
• An illicit arms-sales operation was set up peddling machine guns
• The non-Indian head of the tribe's gaming management company, John Philip Nichols, was sent to prison on a hire-for-murder charge
• The S&L crook who led us to the reservation in the first place, and who had financed the tribe's high-stakes bingo parlor, was charged with running fraudulent insurance companies and running off with customer premiums
• The same fellow was later sued by the federal government for tens of millions in fraudulent loans he got from now-defunct S&Ls

There was more. And it's still going on.

We heard reports back then of similar activity on Indian reservations in Florida and Minnesota. Mobbed up management companies were rounding up their own tribes coast to coast. One operator was pitching so many tribes, he referred to his targets as "chief of the week" sessions.

Indian gaming proponents are quick to counter, "That was then; things have changed."

They've changed all right; they got smart. The likes of one-time Republican National Committee chairman Frank Farenkopf, and later, GOP lobbyist Jack Abramoff, stepped in. While Democrats saw Indian gaming as supporting another downtrodden minority, something "we have to put up with because of how we screwed the American Indians in the past," the GOP saw it another way. The GOP saw Indian gaming the same way the mob saw it: as a cash cow.