Tuesday, April 5, 2005 | 9:23 a.m.
SACRAMENTO -- When a Sonoma County Indian tribe started building a casino in June 2002, Attorney General Bill Lockyer said it might be illegal and vowed to fight it.
But he backed away from his legal ruling three days later, and nothing came of the secretive negotiations he had said could bring a lawsuit and loss of the tribe's gambling compact.
Last November, the expected Democratic candidate for governor flew to Houston to accept $25,000 from backers of the casino and another $21,200 from a Texas company pushing to expand slot machines in that state.
That's leaving at least one Sonoma supervisor wondering if there are politics involved.
The legal issues are still pending nearly three years later.
Lockyer's initial legal interpretation that the Dry Creek Rancheria's casino was illegal would affect Indian gambling statewide if it stood. But Lockyer said the issue needed more study, and he still has never issued a final legal opinion.
Lockyer also invoked, for the first time, a provision requiring the Pomo Indian band to negotiate over alleged environmental and safety violations at its casino carved into a hillside in the Alexander Valley's wine country. He asked the tribe to halt construction and said the state could "unilaterally terminate" the tribe's gambling compact unless problems were resolved in 60 days.
But a spokesman noted Lockyer was acting at the behest of then-Gov. Gray Davis, and said little more could be done because of the loose requirements Davis negotiated in 1999. The circus tent-like casino opened in September 2002 at the end of a winding dead-end road.
Just before Thanksgiving two years later, Lockyer accepted the $25,000 from the casino's backers, campaign contribution records show.
At the same event he accepted $21,200 from an obscure Nevada-registered firm run by Billy Bob Barnett, a former professional football player and honky-tonk owner who unsuccessfully sought to develop a Las Vegas casino and now is pushing for slot machines at Texas racetracks.
Barnett's Big City Capital LLC has a $1 million stable of Texas' top gambling lobbyists, several of whom also represent a firm fighting to put a controversial new type of slot machine in California. None of the Big City lobbyists who would comment could understand why Barnett would contribute to a California politician, and Barnett could not be reached despite repeated attempts.
The Houston fund-raiser attracted an "eclectic group" of donors including trial lawyers and business officials, said Lockyer spokesman Nathan Barankin. But campaign records show only the three gambling contributions for that time and location.
Two of the three are the largest contributions of all the $114,400 in gambling donations Lockyer accepted in the last two years, records show, and both are at or just below the legal limit.
Nevada Gold _& Casinos Inc., of Houston, which owns 69 percent of Dry Creek Casino LLC, gave $20,000. The company gets 20 percent of the casino's profits in exchange for helping fund and develop the casino. Another subsidiary, Gold River LLC, has a casino development agreement with the La Jolla Band of Luiseno Indians in north San Diego County.
Quest Entertainment Inc., which makes gambling equipment, gave $5,000. Quest's president and founder, Cynthia Thompson, is a founder and financial adviser to Nevada Gold. The two companies share neighboring offices at the same Houston address.
"There's certainly no active litigation or anything involving the tribe ... and the tribe is separate and distinct from the business" that runs the casino, Barankin said. "Everything with Dry Creek had been pretty much resolved as to existing matters."
Gov. Arnold Schwarzenegger's administration has since shifted negotiations over tribes' compliance with environmental and public safety standards to the General Services Department, Barankin said.
But Sonoma County officials who oppose the casino still want Lockyer to take action on matters they say have never been resolved.
"Tribal gaming interests are a powerful political interest in California. The fact that the attorney general's efforts have ground to a halt does raise a question, are politics involved?" said Sonoma County Supervisor Paul Kelley. At the least, he said, "the status of the land deserves a legal opinion from the attorney general. ... They need to complete it, good, bad or indifferent."
Lockyer, who declined to be interviewed, has been criticized before for accepting tribes' money while his office oversees casinos through his Division of Gambling Control.
He accepted $437,000 in gambling contributions over four years before intervening in the Dry Creek dispute, money that newspaper articles and editorials suggested might have swayed those decisions and a contemporaneous ruling that cut the number of key casino employees who must be approved by the state.
Robert Stern, president of the Los Angeles-based Center for Governmental Studies, said if Lockyer "is supervising, getting involved (in gambling matters), then clearly there is an appearance issue. That's obviously a basic problem with our campaign finance system: people who donate to public officials usually want something from them."
The only declared candidate for governor, Democratic Treasurer Phil Angelides, collected at least $78,800 from gambling interests through last year.
Schwarzenegger campaigned on a refusal to take money from Indian gambling interests, but benefited last year from a _$1 million fund-raiser organized by Sacramento Kings owners Gavin and Joe Maloof as their family casino business was negotiating a deal to help run a tribal casino in the San Francisco Bay area.
None of the three Lockyer contributors would comment despite repeated requests from the Associated Press. The tribe's chairman, Harvey Hopkins, and attorney, Jerome Levine, did not return telephone messages from the AP.
The River Rock casino continues to operate on its hilltop overlooking the Russian River, drawing busloads of patrons as the closest casino to the San Francisco Bay area 75 miles to the south. Casino developers estimate four million people live within a two-hour drive.
Last summer the tribe built "the biggest parking garage in Sonoma County," said Kelley. "You can't tell me that's not going to have an impact on Highway 128 and emergency services."
The county's efforts to intervene have gone nowhere, with one legal challenge still pending in a federal court, said Sonoma County Fire Chief Vern Losh, who believes the casino to be a public safety threat.
Kelley thinks Schwarzenegger and Lockyer could intervene under the state's compact with the tribe. A Schwarzenegger spokesman said no intervention is pending there.
Recent compacts signed by Schwarzenegger contain stricter provisions for environmental protection and consultation with local governments.
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