Inspector General investigating Interior’s handling of CT tribes’ casino issue

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A rendering of the proposed casino in East Windsor.

Washington – The Interior Department’s official watchdog on Monday confirmed it is investigating why the agency rebuffed a request by Connecticut tribes to approve changes to its gaming compact needed to win state support for a new casino in East Windsor.

DOI Inspector General spokeswoman Nancy DiPaolo said the investigation was prompted by a February request from Sens. Richard Blumenthal and Chris Murphy and Reps. John Larson, D-1^st District, and Joe Courtney, D-2^nd District. The lawmakers wanted the inspector general’s office to look into the way the Bureau of Indian Affairs handled a request by the Mashantucket Pequot and Mohegan tribes to amend their agreements with the state government.

“Our team is working diligently on their letter of request,” DiPaolo said of the office that acts as the independent watchdog of the Interior Department.

Each tribe already operates a casino in the state. But the tribes have formed a joint venture to operate a third casino off tribal land in East Windsor.

The tribes’ agreements with the state hold that the operation of a new casino in the state would violate a deal under which the tribes’ pay 25 percent of the slots revenue from their tribal casinos, Foxwoods and Mohegan Sun, to the state. To be sure it wouldn’t lose that revenue, the state required that the agreements be amended and approved by the Interior Department’s Bureau of Indian Affairs (BIA) before the state would approve the East Windsor casino.

But the agency never acted on the request, even though documents released through Freedom of Information Act requests show Interior Department staff had drafted approval letters to send to the tribes.

In May of last year, an Interior Department official sent the tribes a letter that said the Trump administration agreed with the Obama administration that the “existing exclusivity agreement with the state would not be affected by a new commercial agreement that would be jointly and exclusively owned by the tribes.”

The letter from Connecticut’s lawmakers requesting the investigation said the Interior Department’s decision to take no action “suggests that the Interior (Department) has failed to honor its legal trust responsibilities to the two tribes.”

The tribes say the Interior Department was influenced by the lobbying of MGM, a gaming rival of the tribal joint venture, whose new casino could divert some customers from another new casino MGM is opening in Springfield.

The Interior Department denies those allegations.

But a recent Huffington Post story says Deputy Secretary of the Interior David Bernhardt met last fall with former Interior Secretary Gale Norton, now a lobbyist for MGM on a single issue — MGM’s opposition to the proposed new casino planned by the Mashantucket Pequot and Mohegan.

According to the ethics agreement Bernhardt signed, he is prohibited from participating in matters involving his previous employer, the lobbying firm Brownstein Hyatt Farber & Schreck, which also represents MGM.

Both Norton and Bernhardt denied discussing MGM, telling the Huffington Post the meeting was merely a “social visit.”

“We are grateful there’s an IG investigation into this issue because since last fall, none of the department’s actions have passed the smell test,” said Andrew Doba, a spokesman for the tribal joint venture. ” Something clearly happened to pollute the process, which should be problematic for an administration that promised to drain the swamp.”

The announcement of an IG investigation comes four months after the Connecticut tribes and the state sued Interior Department Secretary Ryan Zinke over his agency’s handling of the amendments to the tribes’ gaming compacts. The say the law required Zinke to approve or reject the amendments within 45 days.

In its court filings responding to the suit, the Interior Department said the 45-day rules does not apply to the Pequots.  The Pequots had never been able to reach an agreement with the state and that Foxwood is operating under the terms of “secretarial procedures” authorized under a different section of the Indian Gaming Regulatory Act or IGRA.

The Mohegan Tribe, however, was operating under a state gaming compact that is subject under IGRA to the requirement that its amendment be approved within 45 days unless the Interior Department can demonstrate that its terms violate federal law or the department’s trust responsibilities to the tribe.

The Interior Department says it has no obligation to act on the Pequot amendment so the entire case is moot, but recently released emails from career agency officials reviewing the tribes’ request indicated they did not see that as a reason not to approve the amendments.