Lastly, the definition of “management” in the new 25 C.F.R. §502.25 is expansive enough to
include any agreement tribal gaming operations may enter into. For example, the Kootenai
Tribe’s KRICS enters into agreements to resurface the parking lot every few years. Is that
agreement between the Tribe and the pavement company a management contract or collateral
agreement that necessitates NIGC approval? What about agreements with newspapers and other
advertising platforms? The proposed regulation appears to make those agreements either
management contracts or collateral agreements requiring NIGC approval.

The Kootenai Tribe recommends deleting the definition of management and consulting
with tribes to determine what actually constitutes management of a gaming operation.

We look forward to working the NIGC on a path back to decolonization of our tribal
governments and business operations and reconciliation between our governments.

Sincerely,

Chairman

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For example, the proposed regulation would include any agreement between a tribal member and
a third-party as part of a management agreement requiring NIGC approval. How does the NIGC
expect a tribe to comply with this regulation when it is not even a party to that agreement and
has no say over its terms? If a third party and a tribal member owned business refuse to turn over
their contractual documents, will the NIGC then refuse to approve a management agreement
despite the fact the tribe and its management contractor are not parties to those agreements and
have no say over their terms?

The Kootenai Tribe believes the current “collateral agreement” definition is sufficient and
consistent with the IGRA. We recommend the NIGC discard its proposed definition
change.

Streamlining the NIGC Investigative Process

The proposal states that the NIGC intends to streamline the NIGC’s investigative process. The
proposed regulations, however, do not reflect that intention. Requiring NIGC investigations
every five years certainly does not streamline the process. And eliminating the deposit
requirement, while a welcome change, also does not streamline the process.

The NIGC should adopt new regulations or transparent internal policies that streamline
the investigative process, respect tribal regulators role, and provide greater accountability
to tribes and management contractors that fund the investigation. The following principles
should be included in the new regulations or policies:

© Only new entities, key employees or principals to management contracts shall be
subject to background investigation and suitability determination by the NIGC
when a management contract amendment is submitted for approval. The NIGC
shall accept information obtained through tribal background investigations and
suitability determinations as part of the agency’s investigation and shall not
require additional information unless the NIGC has reason to believe that a new
key employee or principal poses some risk to the tribal gaming operation. The
NIGC must consult with the tribal regulator and describe the reasons leading to
the belief of increased risk.

e NIGC shall not require a deposit from management contractors for purposes of
defraying costs to the agency for background investigations and suitability
determinations. The agency shall provide detailed, monthly invoices to both the
tribe and the management contractor showing the costs incurred by the NIGC.
The detailed invoice shall include any expenses, hours worked by investigators
and other information that shows the reasonableness of the costs and time
associated with the background investigation and suitability determination.

Definition of Management (Proposed new §502.25)

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Kootenai Tribe of Idaho

P.O. Box 1269
100 Circle Drive
Bonners Ferry, ID 83805
Ph# (208) 267-3519
Fax (208) 267-2960

February 28, 2018

Mr. Jonodev Chaudhuri, Chairman
National Indian Gaming Commission
1849 C Street NW, Mail Stop 1621
Washington DC 20240

Sent via email: Vannice_Doulou@nige.gov

RE: Comments on 2018 Consultation Topics

The Kootenai Tribe of Idaho (“Kootenai Tribe) appreciates this opportunity to provide comments
lo the proposed changes to the management contract approval process, background investigations
and the definition of “management”.

The Kootenai Tribe has operated the Kootenai River Inn in Ktunaxa Territory on the Kootenai
Indian Reservation since 1986. Our management team consists of a General Manager employed
by the Tribe and the Hagadone Hospitality Company, a company with deep roots in northern
Idaho and northwestern Montana. The Tribe added gaming in 1993 and later added a spa. The
Kootenai River Inn Casino & Spa (“KRICS”) is a successful business providing needed revenue
for our government operations. Through the guidance of our past and current Tribal Councils and
the hard work of our management team, the KRICS is debt-free.

The gaming portion of the enterprise consists primarily of Class III games regulated by the Tribe
and the State under the Kootenai-Idaho Class III Gaming Compact. The Tribe also offers Class II
bingo once a month. While bingo often brings in less than $200 per session after payouts and
labor, community elders enjoy the game so we continue to offer it. By doing so, however, the
Tribe subjects itself to additional National Indian Gaming Commission (“NIGC”) regulation
under the Indian Gaming Regulatory Act (“IGRA”).

The Kootenai Tribe manages its gaming, hotel and spa operations by hiring a management team
with the expertise and infrastructure to do so. The Tribal Council provides oversight and
guidance so that the operation provides revenue and benefits to the Tribe and its community in a
cost-effective and efficient manner and reflecting Kootenai culture and ways of life.

18-030


The Kootenai Tribe has serious concerns regarding the proposed regulatory modifications to the
management contract approval process and the definition of management. The modifications
apply a one size fits all requirement that ignores the unique situations that exist throughout
Indian Country. Further, the requirement ignores self-determination and dismisses a tribe’s
ongoing business relationship in favor of increased federal oversight and interference in tribal
self-governance.

Management Contract Approval Process (proposed changes to Parts 531, 533 and 535)

The National Indian Gaming Commission (“NIGC”) has not clearly identified the reasons it
believes treating management contract amendments as new contracts are necessary.

The NIGC’s Notice of Consultation Topics for 2018 recognizes that past NIGC Chairpersons
“ha[ve] approved amendments to agreements that extend the agreement’s term beyond five or
seven years.” Amendments to agreements do not require additional background investigations or
suitability determinations. See, 25 C.F.R. Part 535. And for good reason. Established operations
like the Kootenai Tribe’s KRICS do not need additional oversight to protect the Tribal
government.

Why is it now necessary to modify the regulations so that management contractors are
investigated by the NIGC every five to seven years? Given that many tribes, and certainly the
Kootenai Tribe, have moved further toward self-governance, what new events led the NIGC to
believe it must do more to protect tribes?

NIGC statements during the Portland and Oklahoma consultation sessions referenced
gamesmanship and overreach by management contractors and the need to protect tribes from
such. It is unclear where this gamesmanship and overreach is occurring. The Kootenai Tribe is
unquestionably not being gamed or taken advantage of by its management contractor after thirty-
plus years of working together.

Our tribal governments heard the arguments that tribes are incapable of regulating their gaming
and in danger of being overrun by organized crime when the Indian Gaming Regulatory Act
(‘IGRA”) was being negotiated in Congress. Congressional leaders acknowledged repeatedly
“that in 15 years of gaming activity on Indian reservations there has never been one clearly
proven case of organized criminal activity.” Senate Report 100-446, Additional Views of The
Hon. John McCain.

In the words of another Congressional leader:

Where is the problem? There have been grand claims that this is good for the
Indians because it ‘protects them’ from unscrupulous managers and organized
crime. But there is no data on that at all.... And they do not need one more
commission or another bureaucracy, and still more outside intervention from
those people who say they know it all but know too little.

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134 Cong. Rec. 25379 (September 26, 1988) (statement of the Hon. Mr. Sikorski
of Minnesota).

Those statements were true then and remain true today.

The passage of the IGRA included a role for the NIGC to approve management contracts, while
also respecting the right of tribes to self-government and run their own business affairs. We
understand, then, that NIGC has a role to play. But that role must be balanced with the right of
tribes to self-govern and self-regulate. The proposed regulations do not reach that balance.
Instead, they increase federal interference in our self-government for reasons unknown.

Congressman Lujan noted that “{t]he Indian tribe, as a party to the management contract and as
the owner of the [gaming] operation, is in the best position to evaluate the reasonableness of the
contract term and management fee.” 134 Cong. Rec. 25379 (September 26, 1988) (The sponsor
of the legislation, the Hon. Congressman Udall, agreed).

The Kootenai Tribe takes seriously its responsibility to its citizens and is invested in seeing its
economic enterprises succeed. The Kootenai Tribal Council is actively involved in the operations
of the KRICS and provides daily oversight and guidance to its management team. The Kootenai
Tribal Gaming Commission investigates the KRICS management team and employees with
thorough criminal and financial background checks as required by the Idaho-Kootenai Class III
Gaming Compact and in coordination with the National Indian Gaming Commission and the
State of Idaho.

The Kootenai Tribe, therefore, is in the best position to determine whether the management
agreement is fair and reasonable, whether its management team is suitable, and whether the
longstanding business relationship should continue. And since the Tribe regulates the majority of
its gaming through the Kootenai-Idaho Class III Gaming Compact, including background
investigations of its management team, it is unclear what more is offered by also requiring the
NIGC to conduct background investigations every five or seven years.

The Kootenai Tribe suggests the NIGC modify the proposed regulations in Parts 531, 533
and 535 to explicitly state that amendments that extend the terms of an agreement shall be
treated as amendments that do not require additional background investigations, provided
the tribal regulator has performed a background investigation on the management
contractor and its key employees and principals in accordance with an approved tribal
gaming law or a tribal-state compact.

Proposed Definition of “Collateral Agreement” (Proposed change to §502.5)

The proposed regulatory definition of “collateral agreement” goes far afield of what the IGRA
envisioned. The IGRA provided that “any reference to the management contract described in
paragraph (1) shall be considered to include all collateral agreements fo such contract that relate
to the gaming activity.” 25 U.S.C. §2711(a)(3). The proposed regulation defines “collateral
agreement” so broadly, however, that it is unclear what would nof constitute an agreement
requiring NIGC approval.

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