Babbitt's Department of Ulterior

When wealthy casino tribes sought to derail a would-be competitor, campaign donations were the currency of the day

Like many Arizonans, I want to believe both Secretary of the Interior Bruce Babbitt and his former colleague Paul Eckstein.

Each man has an almost folkloric reputation for integrity.
Yet the Senate hearings that have spawned a Department of Justice probe into Babbitt's 1995 denial of an Indian casino permit in the Midwest--spurred in significant measure by Eckstein's testimony suggesting that Interior's rejection of the casino amounts to an illegal, political quid pro quo--have left us to wonder:

Which of our native sons is telling the truth?
While too much time has passed for any gun to still be smoking in Babbitt's decision to quash the casino, it is also true that we convicted Timothy McVeigh with less circumstantial evidence.

And incriminating facts, like shards of pottery, continue to be unearthed in the disputed, now notorious, decision to deny establishment of an Indian casino in the bucolic burg of Hudson, Wisconsin.

Consider: Secretary of the Interior Bruce Babbitt's two top aides played critical roles in the casino's rejection. Both then quit Interior and went to work for the tribes that lobbied to kill the Hudson deal to prevent any new competition for gambling revenue.

According to depositions taken by Senate investigators, both Babbitt's chief of staff, Tom Collier, as well as the secretary's top counselor on Indian gaming, John Duffy, were hired by wealthy tribes pleased with the Interior Department's controversial ruling, a decision worth hundreds of millions of dollars in casino income.

Collier also told investigators that he channeled $100,000 from a grateful tribe into Bill Clinton's reelection coffers.

Collier and Duffy orchestrated the Hudson denial after Interior's staff had repeatedly urged approval. The final order cited local opposition in Wisconsin as the justification.

No one mentioned that the town's residents had already approved the casino at the polling booth.

These revelations underscore Babbitt's deepening crisis at Interior as Attorney General Janet Reno ponders the appointment of a special prosecutor to unravel the mess.

While Reno considers her options, investigators from the Justice Department have been granted a 90-day extension to get to the bottom of a scandal that reached critical mass when Babbitt's old friend, Paul Eckstein, confronted him with pungent allegations of wrongdoing.

In the beginning, no one could have imagined such an implausible face-off between the two men.

On October 12, 1993, three impoverished bands of Wisconsin Chippewa--Mole Lake, Lac Courte Orielles and Red Cliff--petitioned the secretary of the Interior for permission to operate a casino at an existing dog track on nonreservation land in Hudson.

Opposition to the Chippewa request was led by a two-state coalition of seven tribes who operate some of America's most lucrative Indian gaming parlors. The Shakopee, for example, disburse nearly $400,000 a year to each tribal member and are such a stunning success that they are the subject of NPR profiles.

The wealthy tribes do not welcome competition; Hudson sits just across the state line from the upper Midwest's largest market, Minneapolis/St. Paul.

In October 30 testimony before the Senate Government Affairs Committee, Eckstein said that when he lobbied Babbitt on behalf of the poor Chippewas on July 14, 1995, Babbitt informed him that White House politics and huge campaign contributions from Indians influenced the Interior Department's decision.

If Eckstein's recollection is accurate--Babbitt disputes it--the law has been broken and Republicans seeking to club President Clinton now have a mighty stick indeed.

For his part, Babbitt maintained in sworn testimony before the Senate committee that the Hudson decision was made without thought of partisan politics or campaign contributions.

Babbitt's public statements came one full month after the secret depositions of his former aides, Collier and Duffy.

Sources familiar with the investigation find it impossible to believe that Babbitt was unaware of Collier and Duffy's situation when the secretary testified before the Senate committee probing into the illegal influence of campaign contributions.

After all, Collier and Duffy left Interior to work in the Washington office of Babbitt's old law firm, Steptoe and Johnson. They subsequently found themselves working for the Shakopee.

Old capital hands are familiar with the sort of happy coincidence that has Collier and Duffy employed by the very Indians whose gambling fortunes the pair ensured as Interior bureaucrats. But not everyone is as sanguine about the ways of Washington.

On March 19, federal appellate judge Barbara Crabb wrote of the Hudson casino order: "Drawing all reasonable inferences from the undisputed facts . . . I believe there is a distinct possibility that improper political influence affected the decision."

Crabb reversed an earlier ruling and ordered that tribes upset with the Interior Department's decision be allowed to depose the bureaucrats responsible. The discovery comes in lawsuits aimed at overturning the rejection of the casino.

Crabb went so far as to suggest that the official charged with making the final call, Ada Deer, assistant secretary of Indian Affairs, recused herself once she understood that politics, not policy, was driving the decision.

Crabb described Deer's behavior as "odd."
Odd, indeed.
We care about this interesting but obscure brawl in the north woods not only because our sense of civic curiosity extends beyond the intimate sartorial splendor of Marv Albert, but also because the uproar pitted two Arizona men we all know, Babbitt and Eckstein, against each other in a manner that the press found irresistible.

Buddhist nuns and Chinese influence peddlers caught up in the campaign-finance investigation might be too exotic for the average local reader, but the clash between Babbitt and Eckstein was pure People magazine. And it wasn't just the local rubes who succumbed to the lure of the folksy hook; the New York Times ran with the same angle.

After all, it was a terrific tale.
The two Arizona boys went to Harvard law together, took the bar together, and set up their careers together at the Phoenix law firm of Brown and Bain. When Babbitt ran for office, Eckstein managed the campaign, then served as part of Babbitt's kitchen cabinet.

Yet when Eckstein went to Washington to plead on behalf of a casino for the poor Chippewas, he discovered that his friend, the secretary of the Interior, was about to release the order denying the request.

Recounting the July 1995 meeting, Eckstein told the Senate that when he pleaded for time, Babbitt responded by saying that "Harold Ickes had directed him [Babbitt] to issue the decision that day."

Eckstein added that Babbitt followed that untoward remark with a troubling question: "Do you have any idea of how much these Indians with gaming contracts have given to Democrats?"

Eckstein did not, but Babbitt knew.
"He said a half-million dollars," Eckstein testified.
This was the sort of conversation one had with cabinet officials in the Warren Harding administration.

Eckstein left Babbitt's office, repeated the comments to his clients and departed Washington, heartsick.

When these remarks eventually surfaced in legal proceedings, Babbitt quickly denied them.

The floundering secretary then slipped into a concrete life jacket by changing his story, not once, but twice.

The press in Arizona was dumbfounded.
Reporters remembered Babbitt's candor and honesty as much as his clean and progressive gubernatorial administrations.

These same reporters were often represented by Eckstein, Arizona's premier media attorney and a man universally recognized for his rectitude.

Who was telling the truth?
Rather than investigate this difficult question, Arizona reporters served up a series of nostalgia pieces about Babbitt and Eckstein. When not hiking down memory lane, readers consumed talking-head articles of the sort where one side asserts and the other denies, the kind of journalism that obscures reality rather than illuminating it.

There exists a parallel universe where documents, facts and research supplant celebrity gawking. It's a universe where papers like the New York Times, the Wall Street Journal, the Minneapolis Star Tribune, the Milwaukee Journal Sentinel, the Washington Post and the Associated Press have all labored in an effort to understand the events at the Department of the Interior.

There are six distinct legal proceedings--and a seventh is pending--that swirl around Interior's decision on the Hudson, Wisconsin, casino.

Everywhere I looked I found moldy breadcrumbs marking a trail to the Interior Department, enough breadcrumbs to stuff Babbitt's holiday goose. And I wasn't alone.

A small army of lawyers has been badgering each other and endlessly nagging witnesses. There are thousands of pages of testimony and all of it is aimed at getting to the truth behind Babbitt's decisions at Interior.

The litigators are focused upon a narrow issue, a single decision involving Indian tribes whose names most of us cannot pronounce.

Overlaying these parochial concerns like an American flag on our national coffin is a stark question: Is the Clinton administration for sale?

Those who doubt whether Attorney General Janet Reno is capable of an investigation of Babbitt and Clinton devoid of partisan considerations will feel confirmed in their cynicism when they learn that not one of the attorneys in the Midwest has been contacted about his cases by Justice Department investigators.

Watching the Cash
At 77, attorney Patrick O'Connor, founder of the Minnesota powerhouse law firm that carries his name, is a legend. Younger legal partners talk about how they know of the gentleman through "the lore of the firm." In 1969, he served as the treasurer of the Democratic National Committee (DNC), the national fund-raising arm of his party, and is today a DNC trustee. In 1992, O'Connor raised funds as the Minnesota treasurer of the Clinton-Gore campaign.

Patrick O'Connor, you see, believes in money and access. As the point man for the Indian tribes bent on heading off the Hudson casino, he ensured that, every step of the way, cash fluttered to the Democratic party bottom line like flakes in a Midwestern blizzard.

His golden years are not the sepia-tone images of a bow-tied Henry Fonda ruminating about the complexity of the law. There is about Mr. O'Connor the subtlety of a Shriner in a clown car. He looks like a rumpled Irish ward healer and often acts like one: Recently, on national television, he offered to poke an ABC camera operator in the nose for violating his personal space. Yet even his enemies find the loquacious coot irresistible.

On the day that the Chippewas' casino application was denied, O'Connor's desk calendar reflects that he was already organizing appreciative fund raising. By the end of the next cycle of election-check writing, Indians who benefited directly from Interior's decision on the Hudson casino would fork over $270,000 to the Democratic party. And at minimum, $80,000 came from O'Connor's client tribes.

Associates claim that when the old man wants something, he is as persistent, and irritating, as a summer cough. In his quest to stop the Hudson casino, he began at the top.

On April 19, 1995, O'Connor sent a fax to the White House specialist on Indian Affairs, Loretta Avent.

"Please call me to discuss some aspects of this matter which I believe are important to the Clinton administration," O'Connor wrote to Avent.

Four days later, he cornered the president when Bill Clinton made an appearance in Minneapolis. He complained to Clinton that Avent had not returned his calls on the Hudson casino.

Clinton immediately summoned aide Bruce Lindsey with the instruction to take care of O'Connor, according to court records.

Lindsey later called the White House from Air Force One and the truth promptly began taking casualties.

On Lindsey's orders, Avent phoned O'Connor.
Her superiors might have made her phone O'Connor, but that did not mean she cooperated.

"She said there are 400 tribes or more. I only talk to the chairman of the tribes or the chiefs. I do not talk to lobbyists," recounted O'Connor in deposition. He then reminded Avent that she was talking to a lobbyist at that very moment.

Avent later reported that an agitated O'Connor hung up on her after threatening to go over her head by taking his case to the head of the DNC, Don Fowler.

In his account, O'Connor strongly disagreed with Avent's version of their call.

"I have no recollection of hanging up on her," said O'Connor. "I would be very surprised if I would ever hang up on any public official . . . I can't recall that I would say to her, 'Well, I'm going to talk to Fowler.'"

(Unfortunately for O'Connor's pettifogging, Avent had a silent witness on the line, White House domestic policy adviser Michael T. Schmidt.)

Less than a week later, O'Connor was in Fowler's office, making his pitch.
Avent, meanwhile, wrote a strong warning about O'Connor to her boss, Harold Ickes, the White House deputy chief of staff and the reelection campaign's chief fund raiser.

"The legal and political implications of our involvement [in the Hudson casino case] would be disastrous," said Avent.

Schmidt agreed in a memo to the White House counsel: "We legally can not intervene with the secretary of the interior on this issue . . . It would be political poison for the president or his staff to be anywhere near this issue."

Ickes ignored the advice and phoned O'Connor.
Later, when the political land mines exploded and everyone was counting their bloody toes, Avent would almost gleefully stick it to Ickes in a follow-up note: "My instinct on this was right. STAY OUT OF THIS. WHOEVER THE PRESSURE COMES FROM COULDN'T BE WORTH OUR GETTING INVOLVED. I DIDN'T. THANK GOD."

But in the spring of 1995, Ickes was focused upon reelecting his boss, Bill Clinton, and raising the money necessary to do it.

He called O'Connor on April 25 and 26, missing him both times.
On May 8, O'Connor donned his Shriner's cap and wrote a letter to Ickes that brazenly crossed the legal line between policy, politics and campaign contributions. After thanking Ickes for his interest, O'Connor plunged into the muck.

"I assume these calls were prompted by my discussion with the President and Bruce Lindsey on April 24 when they were in Minneapolis. . . . I have been advised that (DNC) Chairman Fowler has talked to you about this matter and sent you a memo outlining the basis for the opposition to creating another gaming casino in this area."

After a recitation of his clients' fears that a new casino would harm existing tribal casinos, O'Connor cut to the chase:

"I would also like to relate the politics involved in this situation:
"1. Governor Thompson of Wisconsin supports this project.
"2. Senator Al D'Amato supports this project because it bails out Delaware North, the company that owns this defunct dog track and also operated another dog track in Wisconsin. Delaware North is located in Buffalo, New York.

"3. The chairman of the Indian tribe in the forefront of this project is active in Republican party politics; this year he was an unsuccessful candidate for the Wisconsin State Senate.

"4. All of the representatives of the tribes that met with Chairman Fowler are Democrats and have been so for years. I can testify to their previous financial support to the DNC and the 1992 Clinton-Gore Campaign Committee.

"5. The entire Minnesota (Democrats and Republicans) Congressional delegation oppose this project. The Wisconsin Democratic Congressional delegation (including Congressman Gunderson in whose district the dog track is located) oppose the project."

The correspondence with Ickes is extraordinary. O'Connor's brazenness in asking Ickes to break the law is exceeded only by his fiction.

Wisconsin Governor Tommy Thompson was mentioned no doubt because he was rumored to be a possible GOP vice presidential candidate and therefore, according to O'Connor, this should be a factor in White House thinking. But an ally of O'Connor's said the governor was not supportive of the casino.

In a May 23, 1995, memorandum between lobbyists working with O'Connor, Ann Jablonsky wrote, "I guess I would not say Thompson supports this project because he has not publicly made that statement, far from it."

Nor were the relevant congressional delegates united in opposition to the casino. Three members of the House from Wisconsin were insistently neutral, saying this was a matter among Indians.

And the fight was not between Republican Indians and Democratic Indians, as O'Connor would have Ickes believe. Not that it is pertinent to the decision, but in fact all of the tribes in this issue are strongly Democrat.

And the Delaware North smear is a flat-out lie.
Throughout the lobbying process, O'Connor's operatives quietly circulated newspaper articles that recounted the alleged mob ties of the Buffalo firm's founder, a man who passed away in 1968.

Delaware North does not, and has never, owned the Hudson dog track under consideration.

The Hudson track owners have filed a libel lawsuit for having been linked to the Mafia.

Delaware North is considering similar action.
It is against the law for Interior policy to evolve out of partisan politics or campaign contributions, and yet these are precisely the issues O'Connor asked Ickes to focus upon. It is also illegal for the White House to insert itself into the decision-making process at Interior.

Yet Ickes aides repeatedly contacted Interior on his behalf.
Patrick O'Connor did not rest simply because he'd managed to get the attention of the President of the United States.

On April 28, he took tribal leaders opposed to the casino to Washington, D.C., to meet with Don Fowler, chairman of the DNC.

Tribal leader Lewis Taylor recalled in his deposition discussing the casino and offering to raise cash for the DNC.

"I told Mr. Fowler that, you know, that we've got a number of heavy-duty issues," said Taylor. "We needed help and our friends are the Democrats and, therefore, I think we should donate to assist in some of these causes."

Because the DNC raises millions of dollars for Democrats, Fowler has incredible clout and access, yet any effort to influence decisions would lead to a grand jury or a special prosecutor.

Fowler testified that he was merely letting his old friend O'Connor vent and had no ulterior motives.

Yet a recently released memorandum conveys some insight into DNC thinking.
Before Fowler met with O'Connor and the Minnesota tribes, an aide wrote him a note outlining what the delegation wished to discuss. The memo is covered in handwritten notes, including questions about fund raising among the Indians.

"What happens to our relationship with Wisconsin tribes? Do they donate to DNC? Minnesota Indians give to DNC. WI doesn't," read the margin scrawl.

Fowler contacted Ickes asking for assistance and reminding the White House aide that he was calling on behalf of DNC supporters.

Fowler testified that he also contacted someone, he can't remember who, at Interior.

Babbitt's chief of staff, Tom Collier, said in his deposition that although he could not recall talking to the head of the DNC, if Fowler contacted anyone, it would have been him.

O'Connor was far from done.
On May 9, O'Connor contacted a partner in his own firm, Thomas Schneider.
Schneider is a friend of Hillary and Bill Clinton. Their children grew up playing with each other; the families vacation together.

Schneider also co-chaired the National Finance Committee throughout Clinton's first run for the presidency.

O'Connor asked Schneider to intervene with Ickes.
"I'm pretty certain he said he'd spoken with Harold Ickes . . . ," Schneider recounted in deposition. "He related Ickes' response, which was sort of he'd look into it type of response, and Pat, who's been around Washington, understands that sometimes that can be a blow-off, and he asked if I could, knowing that I know a lot of people in the White House . . . if I'd be willing to raise the issue in order to try to get the White House to actually look into it . . . actually pay attention."

Schneider met with Ickes on May 14 at a Clinton fund raiser at the Mayflower Hotel in Washington, D.C.

"I understand that you've been in contact with Pat O'Connor about some Indian casinos in Wisconsin," Schneider remembers telling Ickes.

When Ickes acknowledged the contact, Schneider told the White House deputy chief of staff: "From my understanding of the issue, you ought to take it seriously."

Ickes replied that he was on top of the matter.
"I appreciate that," Schneider remembered responding, "but you really ought to."

That was not good enough for O'Connor. At the end of May, he met with Schneider in Washington, and, according to Schneider, O'Connor "threw down the gauntlet."

Schneider said O'Connor "absolutely" expected the White House to do something.

And Schneider was confident the White House would honor its commitment to him.

"I have a relationship," explained Schneider, "that usually, if they say they do, they do . . . Harold is not someone to pull a lot of punches and we had a relationship that if he said he was going to do something, he'd do it."

O'Connor would not be put off.
He expressed doubts about Ickes' resolve.
So Schneider picked up the phone and got the White House deputy chief of staff on the horn.

Schneider revisited the casino issue and told Ickes that O'Connor had some doubts about Ickes' follow-through.

"He [Ickes] laughed and just said, 'I told you I would. I will,'" said Schneider.

Ickes' staff began contact with Interior on May 18 and continued to call through the first week of June.

The three tribes and the dog-track partner seeking the casino permit did not mount a national lobbying effort until the closing moments of the drama, when they realized they were about to be torpedoed. They simply, and naively, went through the regulatory process at the Bureau of Indian Affairs and the Department of the Interior.

In contrast, O'Connor mounted a no-stone-unturned effort in which he pushed the following buttons on behalf of his clients: President Bill Clinton, Clinton aide Bill Lindsey, White House deputy chief of staff Harold Ickes, DNC chairman Don Fowler, DNC finance director David Mercer, Democratic senators and fund raisers Bob Kerry and Tom Daschle, the chief fund raiser for Clinton-Gore '96 and national finance co-chair of the '92 Clinton campaign, Tom Schneider.

As O'Connor's lobbying with the Democratic party's financial apparatus began to congeal into opposition against the Hudson casino, Paul Eckstein strolled into this web of campaign fund raisers on May 2 like a sheep about to be shorn by a rough-handed Basque.

On July 13, Paul Eckstein flew to Washington, D.C.
That evening Tom Schneider hosted a fund raiser in his yard for Clinton that raised $420,000; the president attended.

The next day, the Interior Department killed the Hudson casino. Paul Eckstein left Bruce Babbitt's office, their friendship in ruins and Babbitt's stature in the Democratic party poised to fall from pillar to pariah. Babbitt's own comments about White House intervention and campaign contributions had set the stage for the ugliest chapter in Babbitt's political career.

Astroturf Opposition
After contacting the Interior Department, White House aide Jennifer O'Connor (no relation to Patrick O'Connor) wrote a memo to her boss, Harold Ickes. She informed him that the Hudson casino application was ready to be killed.

O'Connor noted that Interior's justification for the casino denial focused on three areas of concern: political opposition from the Minnesota congressional delegation as well as that state's tribal casino interests; political fallout from the expansion of Indian gaming; and, finally, the excuse Interior would settle upon publicly to scuttle the casino, sentiment in the town of Hudson.

"The local community is almost uniformly opposed to the casino," wrote O'Connor.

Following an inquiry from a senator, Babbitt asked special assistant Heather Sibbison to write a memorandum in reply.

Sibbison confirmed the importance of local resistance as a justification. It was the first line of defense in her response.

"The Common Council of the City of Hudson adopted a resolution expressing opposition to casino gambling at the dog track . . . ," wrote Sibbison.

Indeed, when the announcement of denial was issued on July 14, the deputy assistant secretary for Indian Affairs, Michael Anderson, wrote in his three-page order: ". . . the Common Council of the City of Hudson adopted a resolution expressing its opposition to casino gambling . . ."

None of which is true.
Hudson's city fathers never adopted a resolution opposing the casino.
Like any controversial issue, gambling had its supporters as well as detractors in Hudson.

Voters, however, had approved gaming at the polls and the town had signed a contract with the casino operators contingent on Interior's approval. Opponents refused to accept the results, pushing a resolution through the council that said that while the casino was not opposed, neither was it supported.

Still not satisfied, anticasino forces attempted to get a resolution passed that specifically opposed the casino.

Unfortunately, the momentous council vote that both the White House and Interior hid behind was a clumsy charade covered in the greasy fingerprints of the rich tribes and their antigaming allies in Hudson. As much as an expression of local community will, the council's behavior had its roots in gambling interests in Minnesota. In the end, the antigaming initiative was so transparent, so beyond the law, that its sponsors in Hudson were forced to drop the matter.

Meet the Tilsen family.
Ken Tilsen is an attorney who practiced for decades in Minnesota before taking up arms in Wisconsin.

Asked in a deposition about Tilsen's identity, lobbyist Patrick O'Connor is vague.

"He has done some work for some of the Indians. I can't recall which tribe," said O'Connor.

More to the point, the minutes for the March 16, 1994, meeting of the Minnesota Indian Gaming Association reflect Tilsen's presence and participation:

". . . Mr. McCarthy took the roll, a quorum was present. Mr. Ellis (chairman) introduced Mr. Ken Tilsen who gave a report on the (Hudson) dog-track issue. Doug Twait made a comment thanking Mr. Tilsen for his comments. Mr. Townsend asked some questions on the financial issue and on the position of the Governor of Wisconsin. Mr. McCarthy was instructed to set up another meeting with Mr. Tilsen."

Back in Wisconsin, Tilsen served on two informal committees: A Better Future for Hudson and the Friends of Hudson.

The Better Future committee stirred up opposition to the casino and even purchased a full-page ad in the local daily; Tilsen wrote the ad's text.

The other committee, the Friends of Hudson, worked to get John Breault, an antigambling candidate, elected mayor.

On behalf of Breault, the Friends of Hudson did two mailings. In order to buff these mailings to their highest luster, the Friends of Hudson used a firm to organize a telephone polling operation. In the idyllic environs of Hudson, this was big-city slick.

The telephone polling was done by an outfit called Direct Expression.
Registered in Minnesota, Direct Expression is a firm specializing in American Indian gaming promotion, according to state records. It worked on behalf of the Prairie Island Sioux, one of the wealthy Minnesota tribes opposed to the Hudson casino.

Direct Expression is owned and operated by Mark and David Tilsen, sons of Ken Tilsen.

Once in office, Mayor Breault organized a council resolution to oppose the casino portraying it as detrimental to the town of Hudson.

The motion said that crowds at the casino would swamp city services, forcing Hudson to, for example, build a brand-new waste-treatment plant.

Oddly enough, no one from Hudson's city staff had supplied any of the information in the motion.

Asked if there was a shred of evidence to support these ominous predictions, Mayor Breault admitted in deposition, "Doesn't look that way."

Trapped, the mayor admitted that the motion was written, not by the Hudson city attorney, but by the Friends of Hudson.

And where did the Friends of Hudson get the projections for the number of gamblers that would flock into the casino and overwhelm the infrastructure?

From the wealthy tribes opposed to the Hudson casino.
Hudson city attorney William Radosevich was out of town when this remarkable resolution surfaced. Upon his return, Radosevich quickly drafted a letter warning the council that this reckless behavior would land everyone in court and the ensuing judgment might well bankrupt the town.

He reminded the mayor and council that the town had entered into a contract with the casino to provide services in return for yearly revenues of $1.15 million. Not only could they be taken to court for breach of contract, but if the Interior Department used the bogus motion as any sort of justification for denying the application, the town of Hudson would be liable for damages in excess of . . . readers may insert a really huge number here.

And so the motion died.
Only to be resurrected again by the Friends of Hudson, who, according to court records, forwarded the phony motion to officials at the Department of the Interior.

On July 14, Interior administrator Michael Anderson denied the casino application, confusing the two motions by the mayor and council of Hudson and citing the overwhelming local opposition.

The tribes who lost their casino sued the town of Hudson.
A Wisconsin state prosecutor is also investigating the campaign finances of Mayor Breault.

In their rush to deny the application, the Interior Department ignored the residents of Hudson who, in the only plebiscite on the issue, voted in 1994 to welcome the casino.

Raise Your Right Hand
The truth, the whole truth and nothing but the truth is the standard attorneys demand of us in trial. But lawyers in this case--and all of the key players are lawyers--appear to struggle heroically with veracity once they are under oath.

Even worse, their memory appears ruined by government service.
In a New York Times Sunday Magazine cover story written by Michael Lewis, White House deputy chief of staff Harold Ickes cautioned that government investigators "are no longer trying to get at the truth. They are just trying to get you on perjury."

This comment, which appeared the same month that Senate staffers interrogated Interior officials about the Hudson deal, might explain a new form of testimony: "To the best of my memory . . . I can't recall . . . my recollection is . . ."

If documents or eyewitnesses surface later that contradict your sworn statement, you simply say, "Ah, yes, now I remember. But my best recollection, when you first inquired, was that I had no memory."

If an interrogator, or a citizen, has the impudence to look askance at your apparent dementia, you have only to remind him that he could not possibly grasp how important you once were, how busy your days . . .

The consequence of this willful forgetfulness is the same as shredding evidence. And no question is ever clearly resolved.

John Duffy, Babbitt's onetime counselor on gaming issues, was not only part of the secretary's inner circle, but by all accounts, except his own, he ran point on the Hudson casino issue.

You need a Pentium chip to compute the number of times he told Justice Department investigators that he did not recall what he did at the Department of the Interior. Despite Duffy's appearing as numb as a cod and only half as articulate, Babbitt's old firm, Steptoe and Johnson, hired him.

From Duffy's deposition:
"Q: 'Paragraphs 3 and 4 of the affidavit purport to describe a meeting that Mr. Eckstein had with you and others on May 17, 1995. You said earlier that you didn't recall a meeting on that date. Does looking at this help your recollection in that regard?'"

"A: 'It does, but only slightly. . . . So, I mean, I have only a fractured and incomplete recollection. I really just don't have a clear recollection of a meeting in which these various parties were in attendance.'"

"Q: 'Do you have any reason to think as you look at paragraphs 3 and 4 that Mr. Eckstein's description of the meeting is erroneous in some way?'"

"A: 'Well, again, I am not trying to be difficult, but I don't have a clear recollection of the meeting, so I can't really say whether he is accurately reflecting it or not.'"

"Q: 'Do you have any reason to think that a meeting didn't occur on that day?'"

"A: 'No. I have no way of confirming or denying that this meeting occurred. I simply don't remember . . .'"

Elsewhere in the same deposition:
"Q: 'So, you don't remember any meetings or phone conversations you might have had with Mr. O'Connor about the matter?'"

"A: 'I don't recall having a conversation with him about this matter. No. I have not heard any information that would lead me to believe that I did have such a conversation with him.'"

"Q: 'Back in time when the decision was being made, by that I mean before July 14 of 1995, did you ever have a conversation or communication with Mr. Collier about Mr. O'Connor's representation in the Hudson Casino matter?'"

"A: "'I don't think so, but I think at some point there was something that suggested that Mr. Collier had asked me to call him. I don't know that that is correct or not. That is my recollection. But I don't recall ever calling him or talking to him or knowing about it. It wasn't part of my radar screen as I was processing through this application.'"

In fact, the first meeting O'Connor had with an Interior official was with Duffy. Elsewhere in the deposition Duffy reminded the Justice Department's investigators that his was not the authoritative word on the Hudson casino.

"Q: '. . . would it seem likely to you that you and Mr. Skibine (Interior official) by this time had concluded that the application was going to be denied?'"

"A: '. . . I just want to caution that when we talk about the application being denied or approved, the game isn't over until the fat lady sings, or in this case until Michael Anderson (deputy assistant secretary for Indian affairs) signs the document. . . . I think I had certainly come to the position where I was recommending denial . . . but the Department's decision is not being made by me or by Mr. Skibine. It is not being made until Mr. Anderson signs his name to it.'"

Heather Sibbison, special assistant to Babbitt, graduate of Columbia law, worked directly with Duffy. When the White House staff of Harold Ickes contacted Interior--at least three instances of such contact are recorded and more are suspected--Sibbison handled the replies. Closely involved in the Hudson casino application, she and Duffy differed over Anderson's role.

"Q: 'Of the Secretary's inner circle, Mr. Duffy was the person who was responsible for keeping an eye on Indian gaming issues?'"

"A: 'Yes.'"
"Q: 'Mr. Anderson doesn't stick out as someone who was very involved in the process. Is that fair to say?'"

"A: 'Yes.'"
Anderson's deposition is an anomaly. Lawyerly wiggle phrases like, "To the best of my recollection . . ." simply do not appear in his testimony. Asked if he was ever contacted by anyone at the White House, the DNC, the Clinton-Gore campaign or Patrick O'Connor, Anderson answered no to each question. Clearly, unequivocally and without qualification. He was not offered a job with Steptoe and Johnson and remains at Interior.

Someone who did find employment with Babbitt's old firm was his chief of staff, Tom Collier, whose deposition contains the following exchange.

"Q: 'Other than talking to (O'Connor), what other involvement in the Hudson matter did you have in 1995?'"

"A: 'I don't think any. I don't recall any. My days were--I never had an experience in my professional career like my days were in that job. I would have 15 meetings a day and 40 or 50 phone calls a day on a variety of subjects, sometimes doing one while I was doing the other.

'And so the recollection that I have of meetings or phone calls really, unfortunately, were only those that were of some significance, like where I made a decision, where I did something.

'But to the best of my recollection--I just don't have any recollection . . .'"

Mr. Collier is too modest. It was Mr. Collier who, upon talking with O'Connor, reopened the Hudson casino case. The customary period for comment had closed, with the BIA recommending that the casino be approved.

Collier's decision marked the first time the Interior Department ever took such action.

"Q: 'Since you returned to private practice, have you represented in any capacity any of the tribes that were opposed to the Hudson Casino application?'"

"A: 'Yes, I have.'"
"Q: 'Which tribe or tribes?'"
"'A: 'The Shakopees (O'Connor's clients).'"

"Q: 'Have you ever solicited political contributions of any kind from any members of any tribes that were opposed to the Hudson Casino matter?'"

"A: 'Solicited political contributions? The Shakopees asked my advice on how best to make a significant contribution to the President's re-election campaign, and I gave them that advice. I did not solicit a contribution from them on behalf of the President's re-election campaign.'"

"Q: 'Do you recall how large a contribution or contributions the tribe made and to which entities the contributions were made?'"

"A: 'Give me a second.' (Witness confers with counsel.) . . . 'A hundred thousand.'"

"Q: 'To the DNC?'"
"A: 'To the DNC.'"
Further down the food chain in the Hudson casino dispute, far outside the Beltway, perhaps even beyond the reach of the Sunday Times, depositions in Wisconsin had a more aggressive spin upon the plausible-denial phenomena.

Antigambling activist Ken Tilsen, a former Minnesota attorney and once the organizer of the Wounded Knee defense committee, was no more cooperative than his counterparts at Interior. An excerpt from Tilsen's deposition:

"Q: 'What was your involvement with the Better Future for Hudson Group?'"
"A: 'I don't know what group you are giving that name to.'"
"Q: 'Let's use that name for the group that published Exhibit 17 (the full-page newspaper ad Tilsen wrote).'"

"A: 'I think that would be inaccurate. I do not know that that was the name of the group.'"

"Q: 'Well, why don't we, for the purpose of this deposition, use that name because it was used by members of the group who in fact paid for this ad in earlier deposition testimony.'"

"A: 'My recollection is that they would be erroneous. That's not my recollection.'"

"Q: 'Well, what would you call the group that did this ad?'"
"A: 'A group of local business people and others.'"
"Q: 'Did they have a name for their group?'"

"A: 'Not to the best of my knowledge. People's recollections differ. That's my recollection. . . .'"

"Q: 'What was your connection with the group that ran the ad?'"
"A: 'I don't know what the term "connection with the group" means. I can't answer that question. You have to be more specific with your questions.'"

"Q: 'Did you ever meet with them?'"
"A: '"Them" assumes an organization. I met with certain people, but I don't know what "them" means.'"

"Q: '"Them" means the people that met on a fairly regular basis and ran that ad.'"

"A: 'I don't know how to answer it.'"
Mr. Tilsen, though himself a witness in the case, presented himself at a deposition as the attorney representing another Hudson resident. Unfortunately, Tilsen was not licensed to practice law in Wisconsin. The court reporter captured this exchange when Tilsen's presence was challenged:

"Tilsen: 'Why are you questioning me? I think it's--I think that you're--I think that you have no right to question me and I think that your questions are presumptive and irrelevant, and I think furthermore that you have a full knowledge of what the appropriate proceeding is to deal with this issue before the court and you have neglected your duty. You have presumed to take the responsibility of the court onto yourself and I think you are subject to censure for failing to carry out your duties if you feel I shouldn't be here . . .'"

The attorney representing the three tribes seeking the casino permit summoned the police when Tilsen refused to cease posing as a lawyer. The police officer asked Tilsen to vacate the office.

"Tilsen: 'Well, I'm not leaving. I will accept a citation for violation of the trespass statutes, which is what I understand that he wanted you to do, and we'll dispute--we'll find out in court whether or not I am legally trespassing or not. . . .'"

"Officer Weigang: 'Mr. Tilsen, the only thing that concerns me right now is that you're on somebody else's premises. They have asked you to leave and you're refusing to do so.'"

"Tilsen: '--trespass is--trespass is--the failure to leave--'"
"Officer Weigang: 'I'm going to go--'"
"Tilsen: 'Let me finish the sentence. Please. It's an important sentence. Trespass is the failure to leave unless one has a claim of right. I am sure the Wisconsin statute provides for a claim of right. I claim a right. I've litigated the question of a claim of right many times. I've litigated a claim of right in trespass cases to the Supreme Court. I believe the Wisconsin statute provides for a claim of right. I claim a right to be present because this is a public deposition, if for no other reason.

'Read the statute. What does it say? What does it say? You're reading it to yourself. You don't want to read the claim of right part.'"

"Court Reporter: 'Wait, just wait, wait.'"
"Tilsen: 'I wonder why you refuse to read the claim of right provision in the statute?'"

"Officer Weigang: 'I haven't been able to find it yet.'"
At this point a lawyer licensed to practice in Wisconsin informed the policeman that the state had no claim of right statute.

"Officer Weigang: 'I'm going to ask you to leave now. If you refuse to leave then I am going to take you into physical custody for failure to obey a police officer.'"

"Tilsen: 'It has to be a lawful order to obey, and a lawful order to obey depends upon whether or not I have a lawful claim of right . . .'"

"Officer Weigang: '. . . I'm asking you to leave right now. If you refuse to leave, I'm going to take you into custody . . ."

"Tilsen: '--police officer? The problem with that, of course--'"
"Officer Weigang: 'I don't want to hear any of the problems with this on your point of view. You either leave or I'm going to arrest you.'"

Several minutes later, Tilsen left.

The Decision
In court records, Larry Kitto, a lobbyist for the tribes opposing the Hudson casino and an associate in Patrick O'Connor's firm, was blunt in his assessment: ". . . we needed help from the president of the United States to make sure that Bruce Babbitt and the Department of the Interior thoroughly and openly evaluated the project and took all the facts into consideration."

Critics familiar with Interior claim that Babbitt and his closest advisers were particularly sensitive to White House concerns long before the Hudson casino became an issue.

And Kitto has no problem with such behavior at Interior. He expected a helping hand.

"I would hope somebody in the White House called the Department of the Interior and said, 'take a good look at this,'" he said in a deposition.

"I hope people know who they work for. I'm assuming that they take their--Babbitt takes his orders from somebody in the White House."

Despite Kitto's candid bluster, Babbitt cannot legally take direction on gaming decisions from either the White House or lobbyists bankrolling Democratic fund raising. And the FBI is investigating to find out exactly what, if any, impact these influences had upon Interior's rejection of the Hudson casino.

There is one hell of a series of dramatic events available for law enforcement review.

Court documents and Senate depositions show clearly that Babbitt's top aides, Tom Collier, John Duffy and Heather Sibbison--political appointees all--not only drove the controversial Hudson casino decision, they repeatedly overruled Interior's career staff in order to do so.

In the Hudson casino application, Babbitt's Department of the Interior for the first time ever reopened a case for public comment after a regional office finished its investigation.

The Hudson case marked the first time Babbitt's Department of the Interior vetoed a recommendation by a BIA regional office.

Babbitt's political operatives informed the White House at the end of May 1995 that the Hudson casino application was dead in the water; yet within weeks, career Interior staff in Washington, D.C., unaware of the back-channel machinations, echoed the regional BIA office by urging approval of the Hudson casino.

The staff recommendation was dismissed.
All of this unprecedented activity took place while lobbyists opposed to the casino twisted the arms of the Democratic party's most senior fund raisers both at the DNC and the White House. Even the president was lobbied.

The message wasn't subtle: The men who controlled the purse strings of the wealthy Indian tribes needed help.

And Indian money is increasingly a source of partisan fund raising. On Monday, the New York Times ran a lengthy story about the controversial donations to the Democratic party from tribes across the nation.

In the Hudson casino case, the decision was particularly sensitive because it pitted three impoverished tribes against a coalition of seven wealthy reservations who were loath to share the pot of gambling gold.

Interior's own regulations list only two reasons to deny casino permits to tribes: potential harm to tribes making the application; detriment to the local community.

Critics complain that these criteria were ignored by Babbitt's people. It is hard to argue otherwise.

There was a meeting on May 22, 1995, that is critical if you want to understand the palace intrigue at Interior.

Debbie Doxator, chair of the Oneida reservation and an opponent of Hudson, and her lobbyist, Scott Dacey, met with senior Interior staff in Washington.

The news was not good.
Michael Anderson, deputy assistant secretary for Indian Affairs, explained how the criteria worked.

Afterward, Dacey wrote a detailed memorandum.
"The term 'detrimental' means activities which might arise other than normal competitive pressures. For example, an argument establishing detriment might include increased auto traffic, a drain on the area water supply or other environmental concerns. However, even environmental concerns can be offset by parties willing to negotiate new traffic patterns, additional parking lots, new roads, new sewers, etc.

"Public sentiment or opinion is not considered 'detrimental,' therefore, little weight is given to communities which pass resolutions in opposition to gaming unless they demonstrate an impact on the community. Moreover, the economic impact a gaming establishment might have on other gaming or non-gaming establishments is also of little concern to the BIA because it falls into the definition of a 'normal competitive pressure.'"

In his deposition, Anderson testified that Dacey's memorandum is an accurate recounting of their meeting.

Dacey, who wanted to stop the Hudson casino on behalf of his clients, the Oneida, was not optimistic after the Interior meeting.

In the section of his report labeled "analysis," Dacey concluded: "With respect to the Hudson track, things don't look good. . . . Things might change when the politicians like Babbitt and Duffy become involved, but without the law on their side, it will be difficult to kill the deal."

But the politicians already were involved.
Dacey, a Republican, was unaware of just how involved the politicians were because he wasn't part of O'Connor's Democratic loop.

O'Connor had already solved the problem.
His clients wanted Interior to give them time to research and submit an economic report on the proposed casino.

O'Connor testified he believed in "going right to the top."
He contacted Babbitt's chief of staff, whom O'Connor referred to under oath as "our man Collier."

After O'Connor and Collier huddled, Duffy reopened the Hudson case to allow further comment on February 8, 1995.

By the end of May, when Dacey was properly going through career staff channels at Interior to learn the criteria from the BIA's Anderson, Ickes' staff was repeatedly on the phone to Duffy's office.

On two occasions, Duffy's assistant, Heather Sibbison, informed the White House that the Hudson casino was dead.

No one told the career staff at Interior.
On June 8, 1995, Tom Hartman, writing on behalf of the Indian Gaming Management staff, found that the Hudson casino posed no detriments to local communities or nearby tribal casinos.

Hartman wrote his analysis after reading the Peat Marwick economic impact report that O'Connor had insisted on including in the record. By comparing the various financial studies, Hartman determined that the financial threats to nearby tribal casinos were scant: the Shakopee, for example, might suffer as much as an 8 percent decline in revenue, well within the range of normal competition.

Two weeks after Duffy's office informed the White House that the application was dead, Hartman recommended approval of the Hudson casino. Hartman's report was ignored.

On July 14, 1995, Paul Eckstein met first with John Duffy and then with his old friend Bruce Babbitt to lobby on behalf of the Chippewas and their Hudson casino.

It was too late.
Later that day, Michael Anderson signed a brief order rejecting the casino. The order contradicted everything Anderson had told Dacey and Doxator on May 22.

Anderson's order, edited by Duffy, ignored the department's own criteria.
Instead, Anderson's order fabricated two new standards for denial: community opposition and impact upon competing tribal casinos.

But there was no clear mandate of community opposition and Interior's own staff, after reviewing the Peat Marwick report, found the threat to other reservation casinos to be minimal.

In depositions Interior officials claimed they had another, sub-rosa, concern. They did not want to stir up antigambling sentiment by granting a gaming license off a reservation.

Anderson said under oath that the department had never granted such gambling in the past.

The next day he corrected himself in deposition and said two such applications had been approved.

Babbitt's press liaison said earlier this week that in actuality there have been 10.

The story keeps changing.
In the Hudson casino case, Interior ignored the statutes, then created criteria that don't hold up upon inspection, and, finally, resorted to invoking shadow concerns.

Yet Babbitt, Collier, Duffy and Sibbison all insist in their statements that politics and campaign contributions had no influence upon the decision.

And when Ickes testified before the Senate committee, he said his office's calls to Interior weren't political pressure, merely an effort to check on "status."

Sibbison agreed that the correspondence with the White House were simply "status reports."

Clearly there is nothing in the paperwork that suggests that Ickes imposed his will upon Interior.

The question is: How did Interior's political operatives interpret Ickes' interest, and the interest of the Minnesota congressional delegation, and the interest of DNC chairman Dan Fowler and the interest of the DNC's trustee, Patrick O'Connor.

The official line on the status reports is misleading.
After all, O'Connor didn't need the White House to check on the status of his client's concerns. From the beginning, O'Connor had access to Interior's top people.

When you examine the record, the explanations of the political appointees at Interior have high odor.

It's like listening to Bruce Babbitt's explanations of how Ickes' name popped up in the conversation with Paul Eckstein.

First Babbitt said Eckstein was mistaken. He denied ever saying that Ickes wanted a prompt decision.

Then Babbitt told Senator Fred Thompson that he did mention Ickes.
But he insisted that his statement was still operative because it was the modifier, "prompt," that Babbitt objected to.

Finally, he settled upon, yes, okay, he'd mentioned Ickes. But he'd made the whole thing up to get rid of Eckstein, who was getting on his nerves.

Babbitt sat in front of the Senate committee looking like the uncomfortable love child of John Dean and Richard Nixon, swearing under oath that he was telling the truth.

The Fallout
Paul Eckstein was incredulous.
"It's like being in some silly food fight. The Republicans have all these puff pastries, and the Democrats have their own stockpile of jelly doughnuts. All I've got in this mess are a few hard rolls," said Eckstein of the campaign fund-raising scandal ignited by his dispute with Babbitt.

There is more than cynicism at work when Republicans take to their fainting couches at the thought that party donations might influence policy.

Throwing Bruce Babbitt to a special prosecutor makes a mockery of campaign-finance reform, but according to anonymous sources in the Justice Department who spoke to the Washington Post at the beginning of the week, that is Babbitt's fate.

Now Eckstein sees that his few hard rolls were actually bullets, and he is without hope. You see, Eckstein has enormous respect for Babbitt's public career as attorney general, governor and member of the Clinton cabinet.

Citing the emotional toll, Eckstein will no longer discuss his confrontation with Babbitt. His remarks are no longer needed in any case; the die is cast.

Both Ickes, who is already gone from his coveted position in the White House, and Babbitt are victims of the political game both men played with relish.

Babbitt's apologists forget too quickly that he always kept his eye on the smarmy realities of an unseemly craft while in Arizona. His word was not his bond, friends who were liabilities were jettisoned, and political expediency was no stranger to his administrations.

When an old colleague engineered a victory at the polls, the campaign manager proceeded to a raucous election-night party where he had too much to drink, left and approached an undercover vice officer. Babbitt ended the man's career with a finger snap.

At a time when the state's universities languished in mediocrity, vacancies on the Board of Regents were not filled by the best and the brightest. Instead, Babbitt appointed real estate developer Don Pitt and construction mogul Herman Chanin, two men whose primary qualification were their unstinting donations to Bruce Babbitt and the Democratic party.

If Babbitt watchers then are not entirely surprised by his current dilemma, they also remind themselves that effective politics comes with a price. Saints do not win elections. And Bruce Babbitt wielded real power on behalf of progressive policies in a state that routinely chooses the likes of Evan Mecham, J.D. Hayworth, Joe Arpaio and Fife Symington.

The demise of Ickes and Babbitt are unlikely endings for public careers begun with the sort of idealism you might wish upon your children.

As young men, both took separate paths to the Deep South to help put an end to segregation. Ickes lost his kidney when white thugs stomped him during a voter-registration drive for blacks in rural Louisiana.

Babbitt returned to Arizona with indelible memories, memories that framed his decision to create the Martin Luther King Jr. holiday in a state that resisted the celebration with all of its cracker might.

But that was a long time ago.
There are many who argue that Bruce Babbitt is the most enlightened champion of the environment at the Department of the Interior since Stewart Udall.

The Hudson gaming decision, however, had nothing to do with natural resources. High-stakes gambling was the issue on the table.

In the Midwest, each individual of the Shakopee Indian nation received $396,700 last year from gaming revenue. If the Hudson casino had been allowed, the Interior Department's own analysis showed that income--in a worst-case scenario--would have dropped to $363,900, a not insignificant loss but still a legacy of prosperity.

The Chippewas who sought the new gambling parlor subsist on an income of $6,000 per tribal member.

Bruce Babbitt sided with the wrong tribes for the wrong reasons.

--Lacey

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