The scandal involving high-powered lobbyist Jack Abramoff and members of Congress is likely to slow the spread of Indian casinos that have rapidly become a $19 billion industry.
But beyond that, recent revelations also raise questions about the fundamental nature of the relationship between Uncle Sam and native American tribes around the country, which is based on a complex history of treaties, forced removals, and the controversial notion of "sovereignty."
Two things are under heavy scrutiny these days: the 1988 Indian Gaming Regulatory Act (IGRA), which is meant to control Indian casinos, and tribes' unique position regarding campaign contributions.
Today, 223 tribes operate 411 casinos in 28 states. Some are modest in size and out of the way; others are huge operations near metropolitan areas or along major highways. Some are on traditional reservation land; others - to the consternation of local communities - have popped up elsewhere.
As gambling revenues grew, so did tribes' efforts to court political allies in approving new casinos or to prevent rival tribes from opening gambling operations. Mr. Abramoff collected millions of dollars to facilitate both, and he urged tribes to make direct contributions to candidates and political-action committees.
By the 2004 elections, tribal campaign contributions had grown to more than $8 million, from a few thousand dollars in 1994. One crucial factor here is the loophole in federal campaign-finance law exempting tribes from the limits applied to corporations and unions.
"Oversight of tribal casino cash flow into political campaigns is cursory at best, and tribes are the only enterprise in the entire United States allowed to give corporate money to campaigns," Rep. Mike Rogers (R) of Michigan said last week in introducing a bill that would impose a two-year moratorium on new Indian casinos.
Other proposed reforms in Congress would prohibit "reservation shopping" for casino property not contiguous to existing reservations, require the approval of governors and state legislatures for new casinos, and direct the US Department of the Interior (which oversees Indian affairs) to determine whether new casinos would have a negative economic impact within a 50-mile radius.
The Senate Indian Affairs Committee last week heard from tribes, federal agencies, and affected communities.
Sen. John McCain (R) of Arizona, who chairs the committee, chastised Interior Department officials for failing to complete work on regulations for Indian casinos. "It really is unacceptable 17 years later not to have regulations written to implement a law which now applies to a $19 or $20 billion-a-year business," he said.
Senator McCain and other lawmakers also want to examine tribes' unique relationship with the federal government. "I'm a strong advocate of tribal sovereignty and the government-to-government relationship, which has been decided by our courts," McCain said. "But when you have an operation where 99 percent of the patrons are non-Indians, then this puts a different cast on the entire issue."
That's exactly the point stressed by those concerned about new casino projects. For example, the Pokagon Band of Potawatomi Indians wants to build a casino along Lake Michigan near the small town of New Buffalo, Mich., not far from Chicago. "It seems plain and simple to us that a massive casino designed to attract over 4-1/2 million people a year into a community of 2,500 people would have a significant impact," said Liz Thomas, who owns a small resort.
Similarly, the Cowlitz tribe in southwestern Washington State has proposed a large casino in a rural area between two large potential markets, Seattle and Portland, Ore. "People have their life savings tied up in homes and small businesses that are going to be displaced if the awesome power of the federal government is used to effectively site a development like this," said Alvin Alexanderson, who lives nearby.
Casino gambling has helped some tribes improve their lot, as measured by education, housing, and healthcare. But these indicators remain well below the rest of the country. And most tribes, because of location and other factors, are unlikely to ever see the benefits of casinos.
"Real per capita income of Indians living on reservations [$8,000 a year] is still less than half of the national average," Joe Garcia, president of the National Congress of American Indians, said in the State of Indian Nations address last week. "Unemployment is still double what it is for the rest of the country. And the poorest counties in the United States are on tribal lands."
Just as the campaign-finance issue is contentious, so is how casinos win federal approval. Also controversial: the efforts of restored or newly recognized tribes to gain an economic base by building casinos.
The Cowlitz, for example, are a "landless" tribe. They regained official recognition in 2002, but they have no reservation.
"It's important to let [landless] tribes have the same economic benefits of the tribes that had reservations and have gaming facilities or other economic benefits to help their tribal members," said Philip Harju, a member of the Cowlitz Tribal Council. "All the Cowlitz want is to be able to take care of the Cowlitz people."
Wednesday, the Indian Affairs Committee is holding an oversight hearing on tribes and the Federal Election Campaign Act.