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Casino-profit cleanup

Published March 9, 2004

Nothing better illustrates the excess of gambling than the way Florida Seminole tribal leaders have poured through their casino profits. Tribal leaders spent tens of millions of dollars in recent years, frittering away much of the money on cars, vacations and lavish gifts at the expense of legitimate tribal needs. Now, after too long a wait, the federal government is finally putting on the brakes, giving the tribe the option of cleaning up its act or risk losing the lucrative casinos. This is an appropriate use of regulatory power. Seminole leaders have a responsibility to the tribe and to the larger society on which gambling preys.

Profits from the Seminoles' casinos in Tampa and South Florida finance most of the tribe's $300-million-plus annual budget. In 2002, this honey pot made headlines as a federal embezzlement trial exposed how some tribal council members spent between $5-million and $10-million annually from their personal discretionary accounts. Council member David Cypress testified that he blew his budget and spent an estimated $57-million in less than four years. There were trips, six-figure investments in friends' businesses, an untold number of Lexuses and Cadillacs.

The Seminoles have had time to address these problems and to instill a management culture more befitting their standing in the corporate world. That's where Philip Hogen, the chairman of the National Indian Gaming Commission, has helped. Hogen made clear to the tribe last month he expects an end to the free-wheeling days. Tribes are supposed to use gambling proceeds to meet the "general welfare" of its members, to promote economic development or to fund other responsible causes. Tribes that waste money can face civil fines or have their casinos closed.

Hogen, a Sioux and former U.S. attorney in South Dakota, brings a prosecutor's sharp scrutiny to the regulatory process. Rank-and-file Seminoles stand to benefit as a result. Tribal leaders have committed to bring spending under control, and to make the decision-making process more accountable. Closing casinos, Hogen told the St. Petersburg Times' Jeff Testerman, "is kind of a last resort enforcement tool. Our object will be to get compliance through discussion with tribal leadership."

Hogen has shown at this early stage an ability to balance sensitivity to the Seminoles with no-nonsense management concern. This tribe is big business, and its gambling operations affect far more than its 3,000 members. The government should be working to induce the Seminoles to spend as much as possible on education, economic development and other programs that wean the tribe away from gambling. By taking such a strong, visible role, Hogen could shape the tribe's future in a more positive way by cleaning up the spending practices and raising expectations for a people set back by a culture of cronyism.

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