Costly Battle Over Casinos Looms
Schwarzenegger aims to raise up to $20 million to defeat two initiatives. He is set to sign his own tribal deal Monday to boost state coffers.
SACRAMENTO â€" Gov. Arnold Schwarzenegger is
preparing to raise as much as $20 million for an aggressive
campaign to defeat two gambling initiatives on the November
Schwarzenegger's political advisors are assembling a
campaign team and planning to open a headquarters for the
effort. One initiative could end Indians' monopoly on
Nevada-style gambling; the other would allow unlimited
expansion on tribal land.
The governor has promised to oppose the initiatives as part
of a deal he is scheduled to sign in the capital Monday,
whereby a handful of Indian casinos would contribute $1
billion to the state and $275 million a year thereafter.
They would in turn be able to expand their gambling
Money from the tribes is considered important to another
Schwarzenegger goal: delivering a state budget on time,
with no new taxes.
"We will raise the money we need to be competitive.
Obviously, we have the governor and we will use him
appropriately," said Beth Miller, a Schwarzenegger
political strategist. "It's going to be an expensive
As Schwarzenegger girds for the fight, his policy of not
accepting campaign donations from tribes could be
During the recall, he released a TV spot in which he made
the tribes the face of "special interests" flooding the
capital with campaign donations.
"All the other major candidates take their money and pander
to them," he said in the ad. "I don't play that game."
Now that at least some tribes are entering into long-term
agreements with the state â€" and would no
longer be negotiating with the governor â€"
Schwarzenegger aides suggest that the campaign money would
not necessarily be tainted.
"It can change their statusâ€¦. It's an
interesting question," said one Schwarzenegger aide,
speaking on condition of anonymity.
Sponsors of the two initiatives said they were not about to
surrender to the governor.
The Agua Caliente Band of Cahuilla Indians is pushing the
initiative that would allow unlimited expansion of gambling
on Indian land and in return require that tribes pay 8.84%
of their net revenue to the state.
Tribal spokesman Gene Raper said in an interview: "We're
not deterred at this point as to whether we go
aheadâ€¦. We never expected the governor
to be with us."
Greg Larsen is spokesman for the other initiative
â€" backed by racetracks and card rooms
â€" that would require the tribes to pay 25% of
their profits to local governments. If they refused to
abide by that or any of the measure's other provisions, the
tracks and card rooms would split 30,000 slot machines and
give 33% of profits to police, fire and education
Voters will "clearly see through the issues and understand
what's at stake," Larsen said.
The looming fight could prove awkward for one of the
governor's main political aides. George Gorton gets a
retainer fee from one of the campaign committees promoting
Schwarzenegger's agenda. He is also a strategist working
for the card club-racetrack initiative.
Gorton said Friday that he would continue in both roles,
having cleared it with the governor's office. "It's not
like it's the first time anything like this has ever
happened," he said. "Political consultants frequently end
up on opposite sides of their friends."
Schwarzenegger has turned tribes from political foil into
favored partner. For tribes participating in his deal, this
"is a complete turnaround. Now we're talking about a full
partnership," said a senior aide to the governor.
The governor's office said aides would not speak for the
record about the deal until it was formally signed.
The Indians are but the latest constituency the governor
once demonized, only to embrace as "partners" under the
demands of the job. As a candidate, he ran against
Sacramento, holding up a broom at a campaign stop outside
the Capitol to symbolize a commitment to sweep the building
clean of special interests.
But as governor he has assiduously courted some of the same
legislative leaders who have helped define the Capitol
"What we've seen is basically a 180-degree turnaround,
which, by the way, is somewhat understandable if you
understand California politics, where interest groups are
so powerful in setting and carrying out the public agenda,"
said Larry Gerston, a political science professor at San
Schwarzenegger is still predicting that he will sign a
budget before the new fiscal year begins July 1. But there
are stubborn points of disagreement with Democratic
The pending deal with the tribes would help the governor on
several fronts. It would permit him to say he delivered on
a major campaign promise: forcing the Indians to give up a
larger chunk of their winnings to help the state close its
deficit. It would pressure the remaining 100-plus tribes to
join the pact. Every tribe that buys in boosts the annual
payments to the state.
And it would mean a windfall for the state budget. That
could speed the budget's passage.
Schwarzenegger had estimated in his budget that he would
wrest $500 million from the Indians through the
negotiations. If the figure turns out to be $1 billion,
that means extra money for state roads that need repair,
extra money available for programs that serve the disabled
and frail elderly, extra money for higher education.
As it now stands, the Democrats desire a budget that has
about $2 billion more spending than Schwarzenegger wants to
"It's very helpful," said Assembly Speaker Fabian
NuÃ±ez (D-Los Angeles). "The more money in
the coffers, the easier it is to negotiate. This gets us
What Schwarzenegger has gotten from the Indians to date
falls short of what he had once anticipated. He had talked
of negotiating for 25% of casino profits, or more than $1
billion per year. The figure now being mentioned is
Schwarzenegger's office says that is all he could get. Had
he demanded a bigger piece of the pot, the tribes would
have walked away, according to one aide.
"These were negotiations that had taken months," the aide
said. "The nature of negotiations implies give and take."
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