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The Byrne Report

MIG Attack


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LAST WEEK, we talked about how U.S. Sen. Dianne Feinstein's husband, Richard Blum, is a controlling stockholder in Perini Corp. Blum's company enjoys $2.5 billion in war contracts in the Middle East, thanks, in part, to his wife's hawkish votes on the Defense Appropriations Subcommittee for military construction.

This week, we'll chat about how Massachusetts-based Perini is a charter member of the military-industrial-gambling complex (MIG). The powerful engineering firm books a billion dollars a year building casino resorts for Las Vegas gambling concerns and Indian tribes. And just as Feinstein's war votes have helped Perini overseas, her recent actions regarding Indian casinos in California appear to have benefited her husband's company here at home, at least indirectly.

In Southern California, Perini has constructed casinos for the Pechanga and Pala bands of Luiseno Indians; the Santa Ynez band of Chumash Indians; and the Morongo and San Manual bands of Mission Indians.

In the north state, Perini built the Las Vegas-style Thunder Valley Casino for the United Auburn Indian Community in Placer County, not far from Sacramento.

The project was financed with $215 million from Station Casinos, a Nevada-based gambling corporation that develops Indian casinos and manages them for 25 percent of the take. Thunder Valley was the second casino that Perini constructed for Station Casinos. When it opened two years ago, the Northern California gambling market--with 23 working Indian casinos and 14 more proposed--was saturated.

As Las Vegas-controlled casinos proliferate in the North Bay, it is important to understand the hidden rules that govern where casinos do and do not get built. Enter Feinstein, a longtime proponent of Indian gambling, Indian sovereignty and tribal exemption from civil regulation--except when it suits her purpose to challenge Indian sovereignty and the exemption from environmental law that it bestows.

"I have grown deeply concerned about the proliferation of off-reservation gaming and the trend toward reservation Œshopping' funded by out-of-state gaming interests," Feinstein pronounced last year. In January she introduced a Senate bill to specifically squash the Lytton band of Pomo Indian's urban casino project in San Pablo, in the East Bay.

The move against the San Pablo casino marks the second time that Feinstein has used the power of the Senate to shape the gambling market in Northern California. In 2003 she introduced a bill to specifically force the Federated Indians of the Graton Rancheria in Sonoma County to comply with environmental laws. The Gratons, and their Las Vegas backer, Station Casinos, treated the threatening legislation as an opportunity to get out of a politically awkward land deal. They moved their proposed gambling resort away from a federally funded wetland area near San Francisco Bay to a politically unprotected--but no less wet--wetland just outside the city of Rohnert Park. Mission accomplished, Feinstein dropped the bill.

For successful tribes, the trick is to partner up with Las Vegas money and install a hundred million dollar gambling operation, no matter what the locals think about it, under the rubric of tribal sovereignty. But the concept of tribal sovereignty is a creation of Congress, and what Congress giveth, it can also taketh away. Feinstein's selective interference in the development of casino sites reveals who holds the best hand in the Indian casino game (rich white people, as usual).

Why does Feinstein object to casino-reservation shopping by the Lytton band in San Pablo, while not objecting to the Graton Rancheria's shopping expedition in Rohnert Park? The residents of both areas are largely opposed to the casino projects. If the developers were not fronted by sovereign tribes, the projects would probably founder on environmental issues alone. And yet the senator favors one tribal project over another, Graton over Lytton.

And why does she object to "out-of-state gaming interests" developing casinos in certain counties, but not in Placer County, where, coincidentally, her husband's firm was able to build a casino for the company that now stands to benefit from two interventions by Feinstein?

Feinstein's machinations are partially about curbing market forces. Rural casinos depend upon attracting customers from Sacramento, San Francisco and Oakland. Erecting casinos in the cities will kill rural casinos. Why drive 50 miles to Rohnert Park, when you can take BART to San Pablo?

But Feinstein is not an equal opportunity casino broker. A thriving casino in Rohnert Park, for example, would attract customers away from Indian casinos to the north in Hopland and Geyserville. But Feinstein has shown little interest in protecting those tribes from competition--perhaps because they are not partnered with Station Casinos, which has a history of contracting Perini, which would probably love the Rohnert Park job.

This is the only reasonable explanation I can derive from Feinstein's actions and the salient facts.

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From the February 9-15, 2005 issue of the North Bay Bohemian.

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