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Babbitt's Department of Ulterior

Page 11 of 12

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.

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Michael Lacey
Contact: Michael Lacey