Ken Garcia: With election nearing, governor kowtows to powerful Indian tribe

There’s nothing quite like an election year for a politician to make new friends and influence people. And it’s all the more touching when those friends turn out to be former bitter adversaries.

That will explain how one of the wealthiest American Indian tribes recently got the deal of a lifetime from Gov. Arnold Schwarzenegger. The deal will allow the Agua Caliente Band of Cahuilla Indians to more than double the number of slot machines in its two Palm Springs casinos and bring Las Vegas-scale gambling to the California desert.

Officials from the governor’s office have portrayed the recent pact, which is expected to sail through the Legislature this week, as the result of tough, ongoing negotiations between Schwarzenegger and tribal leaders that will result in a great economic boon for California. And it is true that the state could get about $82 million annually from the pact if the tribe installs all 5,000 slot machines allowed under the deal.

But as recent history shows, that is hardly a bonanza for the Golden State, not when you consider that our tough-guy governor — when he wasn’t running for re-election — was demanding that tribes with gambling concerns “pay their fair share,” which at the time was nearly double the amount the Agua Caliente group recently agreed to pay.

Such principled stances become easily blurred during campaign races. It was just a scant two years ago that the governor was talking about certain tribes ripping off California, with his finger directly pointing at the Agua Caliente group, which was trying to greatly increase its casino operations through a ballot initiative. Schwarzenegger campaigned against the measure, which was soundly defeated, and the governor made a fierce and extraordinarily well-funded enemy in the process.

But there’s nothing like a little time and money to patch up old wounds, and as it turns out the special interests the governor vowed to fight somehow connected with his own. That’s why the governor has found a bunch of new allies as he campaigns for re-election, with teachers and prison guard unions and tribes whose compacts he once blocked now lining up to negotiate new deals before November. Even though the Agua Caliente tribe has been desperately seeking a new compact for years, it didn’t negotiate with the governor on a deal all of last year. So when exactly did negotiations begin in earnest? In late spring, according to the tribe’s public relations manager.

In betting, luck and timing are everything.

The Agua Caliente tribe, and its considerable political power, is near and dear to my heart. Two years ago when I was writing extensively about the stunning explosion of Indian casinos in California and the state’s growing addiction to gambling revenues, I went down to Palm Springs to talk with the tribe’s longtime chairman, Richard Milanovich. Not fully understanding from afar the scope of the tribe’s landholdings, I asked Milanovich in the tribal council’s headquarters just off the main strip in Palm Springs whether he could show me around the tribe’s original reservation.

He looked puzzled. “You’re standing on it,” he said.

The tribe is, by far, the biggest landowner in Palm Springs and neighboring Cathedral City, controlling 65 percent of all the developable land in those towns. It has its own bank, its own museum, two casinos (with a third planned), a resort hotel, spas and a restaurant. Its long-range plan is to develop its extensive properties in the center of Palm Springs into a sprawling entertainment district with hotels, condominiums and other projects.

Yet the tribe’s power is not just in its considerable wealth — it earned approximately $260million last year from its slots alone — but because, like other federally recognized tribal groups, the Agua Caliente Band of Cahuilla Indians is not beholden to local and state laws. And that means it doesn’t even need planning approval for its current and future development projects. Sovereignty, indeed, does have its rewards.

As evidenced by the about-face from Schwarzenegger and the genuflections it receives from state lawmakers, the tribe’s true muscle is felt far away in Sacramento. The group has spent well in excess of $15 million in state elections during the last eight years — a force that no politician wants to see opposing them come election time.

So while I’m sure that doubling the “tax” the tribe will pay to the state for the ability to greatly expand its gaming operation will help the state’s bottom line, it’s still a far cry from the 25 percent Schwarzenegger was holding out for two years ago.

Will we see lots of other “good deals” for California and its Indian tribes in the coming months? If I were a gambling man, I wouldn’t bet against it.

Ken Garcia’s column appears Tuesdays, Thursdays and weekends in The Examiner. E-mail him at or call him at (415) 359-2663.

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