The US Department of the Interior has called for a federal investigation into the legal standoff between the state of New York and the Seneca Nation of Indians.
The state recently passed a judgement that the tribe must pay $470 million in back taxes, a decision that was then upheld by a three-judge panel of the US Second Circuit Court of Appeals.
On Friday September 24th, lawyers for the Seneca tribe submitted a letter to a federal court in New York. The letter was sent by Assistant Interior Secretary for Indian Affairs Bryan Newland to E. Sequoyah Simermeyer, who chairs the National Indian Gaming Commission (NIGC).
Newland quoted the Indian Gaming Regulatory Act (IGRA) in the letter and questions the NIGC’s role in investigating potential violations of the law.
In the letter Newland wrote:
“… The Department shares its serious concern about the panel’s extension of the revenue sharing provision … and whether this agreement may violate the (Seneca) Nation’s ordinance requirement that it maintain sole proprietary interest in its gaming operations and be the primary beneficiary of its gaming enterprise,”
According to lawyers, this letter has since instigated an internal investigation as to the validity of the state’s demands for payment.
The IGRA allows tribal nations to operate gaming facilities on their lands. However, any Class III casino games must be ratified by a gaming compact agreed with the state. The Seneca tribe agreed a compact with New York State in 2002 which included a revenue-sharing agreement of 25%. The initial compact was signed for 14 years with an automatic seven-year extension.
The Seneca tribe claims that the revenue-sharing agreement was for the initial 14-year period while New York State has countered that the agreement also cover the extension period of seven years.
Thomas Cunningham, the chief compliance officer for the NIGC then wrote a letter to the Seneca tribe’s lawyers stating that the continued revenue-sharing in the extension period is questionable at best. He noted that federal laws prohibit states from imposing taxes without offering the tribes something in return.
In the letter Cunningham wrote:
“Here, the state’s actions and the agreed upon 14-year period within which the tribe was to compensate it for them appear to be long since complete, yet the percentage of revenues the nation is required to pay the state remain unchanged,”
The lawyers have also submitted this letter to the courts as evidence that the $470 million judgment should be set aside.
New York state’s lawyers have called the submission of the letters nothing more than a delaying tactic. However, should a federal investigation be launched, it could be some time before a final decision is made in this case.