the Tribe, as owners and operators of the Systems, to comply with the SDWA. The EPA
informed the Tribe that the Order becomes effective immediately upon receipt and
remain effective until: 1) the Tribe demonstrates compliance with the regulations
contained therein; and 2) EPA issues a closure letter. The EPA issued the Orders because
the Tribe failed to sign and return the Consent Orders previously provided to the Tribe.
The Administrative Compliance Order noted several violations which relate to: 1)
collecting lead and copper samples at certain points in the distribution system; 2) with
regards to groundwater systems, development and approval of a corrective action plan to
address significant deficiencies that have existed since August 15, 2013; 3) submission to
the EPA of the results of test measurement and analysis; and 4) notification to persons
served by the system of certain violations of drinking water regulations.

E. The “significant deficiencies” identified by the EPA “have the potential to impair [the
Nooksack Northwood Casino’s] water quality and jeopardize public health.””!

F. By failing to adhere to the requirements of the SDWA, and meet the requirements of the
EPA’s Orders, the Tribe has failed to maintain its gaming facility in a manner that
adequately protects the environment and the public health and safety.

G. In 2002, the Commission issued an interpretive rule regarding its authority under 25
U.S.C. 2710(b)(2)\(E). ” The rule sets forth a process to follow when the Commission
determines that a tribal government has failed to enforce environmental, public health
and/or safety standards. The rule provides if the absence of standards or failure to enforce
does not present immanent jeopardy to the environmental, public health or safety, the
Commission will refer the matter to the appropriate tribal regulatory authority. The
Commission will proceed to enforcement only where no corrective action has been
undertaken within a reasonable time and such inaction results in a condition of imminent
jeopardy to the environment, public health and safety. The Commission provided that a
finding of imminent jeopardy includes situations where conditions are present that pose a
real and immediate threat to public health and well-being, which, if uncorrected, could
result in serious illness or death. The concern here, as indicated by the letters from the
EPA, is that the water quality, specifically in relation to lead and copper is unknown, both
of which if present and uncorrected have the potential to jeopardize public health.
Information attained from the EPA website indicates that long term exposure to lead and
copper could result in serious illness or death. Therefore, and because the Tribe has not
completed corrective action after first being notified by the EPA of the issue in 2013, the

*! See Letter from Lisa Jacobsen, Tribal Drinking Water Coordinator, EPA, to Joseph Johnson-Bob, Nooksack
Indian Tribe (Oct. 23, 2013).
? See 67 Fed. Reg. 46109 (July 12, 2002).

14


Indian Gaming Commission before any licenses are issued, for Class II and III Gaming.*
This system shall include: (i) tribal licenses for primary management officials with
prompt notification to the NIGC of the issuance of such licenses; (ii) a standard whereby
any person whose prior activities, criminal record, if any, or reputation, habits and
associations pose a threat to the public interest or to the effective regulation of gaming, or
create or enhance the dangers of unsuitable, unfair, or illegal practices and methods and
activities in the conduct of gaming shall not be eligible for employment; and, (iii)
notification by the Indian tribe to the NIGC of the results of such background check
before the issuance of any such licenses.

R. Section 56.04.020(c) of the Tribe’s Ordinance provides that the Nooksack Gaming
Commission shall conduct a background investigation of each primary management
official, to collect fingerprints consistent with procedures adopted by the Tribe according
to 25 C.F.R. § 522.2(h), and to conduct an investigation sufficient to make a
determination under Section 56.04.020(d) of the Tribe’s Ordinance.

S. Section 56.04.020(d) of the Tribe’s Ordinance provides that the Nooksack Gaming
Commission shall review a person’s prior activities, criminal record, if any, and
reputation, habits and associations to make a finding concerning the eligibility of a
primary management official for employment in a gaming operation. If the Tribe
determines that employment of the person poses a threat to the public interest or to the
effective regulation of gaming, or creates or enhances dangers of unsuitable, unfair, or
illegal practices and methods and activities in the conduct of gaming, a tribal gaming
operation shall not employ that person in a primary management official position.

T. Section 56.04.020(e)(iii) of the Tribe’s Ordinance provides that a gaming operation shall
not employ as a primary management official a person who does not have a license after
90 days.

U. Section 56.04.020(f)(ii) of the Tribe’s Ordinance provides that the Nooksack Gaming
Commission shall submit a copy of the eligibility determination provided in Section
56.04.020(d).

V. 25 C.F.R. §573.4(a)(5) — NIGC regulations state that simultaneously with or
subsequently to the issuance of a notice of violation under §573.3, the Chair may issue an
order of temporary closure of all or part of an Indian gaming operation if a gaming
operation operates for business without either background investigations completed for,
or tribal licenses granted to, all key employees and primary management officials, as
provided in 25 C.F.R. §558.3(b).

“ Ordinance, § 56.04.010(g).


therefore and that includes, when available, supporting evidence in the form of affidavits.”° If the
Tribe wishes to present oral testimony or witnesses at the hearing, it must include a request to do
so with the brief. The request to present oral testimony or witnesses must specify the names of
the proposed witnesses and the general nature of their expected testimony, whether a closed
hearing is request and the reasons therefore.””

Dated this_47f June, 2017

te

26 95 C.F.R. § 584.3(b)(2).
2795 C.E.R. § 584.3(b).

18


C. The Nooksack Tribal Council incorporated Nooksack Business Corporation II (NBC IT)
under Tribal law on March 6, 2007, by Tribal Council Resolution No. 07-29, to promote
economic development. The Nooksack Tribal Council amended the NBC II charter and
then dissolved NBC II on April 16, 2012."* The Nooksack Tribal Council then
established The Woods,'? another Tribal corporation wholly owned by the Tribe, and
granted it the full authority to conduct gaming necessary to operate the Tribe’s gaming
facility.' However, in October of 2012, the Nooksack Tribal Council revoked the
dissolution of NBC II and provided that no entity other than NBC II shall be permitted to
operate all or any portion of the Tribe’s gaming facility.'° NBC II Charter states that the
purposes of the corporation are: 1) to engage in any type of lawful business, enterprise or
venture; 2) to provide for the efficient and effective utilization of the resources of the
Tribe in a manner which protects the long-term interests of the Tribe; 3) to promote the
economic development of the Tribe; 4) to accomplish the segregation of tribal business
interests, assets and liabilities; and 5) to provide a vehicle for the Tribe to accomplish the
financing of projects used by the Tribe for any purpose.!°

D. The Charter requires that at a meeting of the Board, a quorum shall consist of five voting
Corporate Directors, and a majority of the quorum of the Board shall carry any issue.!”

E. The NBC II Charter provides that the business affairs of the corporation shall be managed
exclusively by the Corporate Board (Board),' which shall consist of:

a. The Chairman of the Tribal Council, designated as the Chairman/CEO of the
Corporation.

b. The Vice-Chairman of the Tribal Council, designated as the Vice-Chairman/Vice
CEO.

c. The Treasurer of the Tribal Council, designated as the Treasurer of the
Corporation.

d. The Secretary of the Tribal Council, designated as the Secretary of the

Corporation.
e. The remaining Tribal Council members shall be members of the Corporate Board.
f. All members shall be voting members.

?2 See Nooksack Tribal Council, Resolution # 12 -43 (April 16, 2012).

'3 See Nooksack Tribal Council, Resolution # 12 -45 (April 16, 2012).

i" See Nooksack Tribal Council, Resolution # 12 -111, p. 2 (Oct. 26, 2012).
Id.

‘© Charter of Incorporation, Article VII (April 16, 2012).

"1d, §§ 9 & 10.

'8 Id, Article XI, § (2).

10


A. 25 U.S.C. §§ 2710(b)(1)(B) and (d)(1)(A) — IGRA requires that to lawfully operate
Indian gaming, a tribe must have a tribal gaming ordinance approved by the NIGC
Chairman.

B. 25 U.S.C, § 2710(b)(2)(E) — IGRA requires that a tribal gaming ordinance must provide
that the construction and maintenance of the gaming facility, and the operation of that
gaming is conducted in a manner which adequately protects the environment and the
public health and safety.

C. 25 C.F.R. §§ 522.4(b)(7) and 522.6(b) — NIGC regulations also mandate that the gaming
ordinance provide that the tribe shall construct, maintain, and operate a gaming facility in
a manner that adequately protects public health and safety.

D. Section 56.08.040 of the Tribe’s Ordinance requires that the construction, maintenance,
and operation of any Class II and III Gaming facility shall be in a manner that adequately
protects the environment and the public health and safety.

. 25 C.F.R. §573.4(a)(12) — NIGC regulations state that simultaneously with or subsequently
to the issuance of a notice of violation under §573.3, the Chair may issue an order of
temporary closure of all or part of an Indian gaming operation if a gaming operation’s facility
is constructed, maintained, or operated in a manner that threatens the environment or the
public health and safety, in violation of a tribal ordinance or resolution approved by the Chair
under 25 C.F.R. part 522.

. Circumstance of Violation 1 - Failure to Maintain the Tribe’s Sole Proprietary Interest
and Responsibility for the Conduct of any Gaming Activity

A. Respondent is a federally recognized Indian Tribe with tribal headquarters located in
Deming, Washington.

B. Respondent operates the Nooksack Northwood Casino located at 9750 Northwood Road
in Lynden, Washington.

C. NIGC defers to the Secretary of the United States Department of the Interior (DOD in
areas which the Secretary has expertise. In a letter dated October 17, 2016, the Principal
Deputy Assistant Secretary — Indian Affairs informed Robert Kelly Jr., as Chairman of
the Nooksack Tribe that he is aware that four Council members’ terms expired in March
2016, an election was never held to fill their seats, and that the Council currently consists


W. 25 C.F.R. § 575.4 — NIGC regulations permit the Chair to issue a civil fine of $50,276 per
violation, against a tribe, management contractor, or individual operating Indian gaming
for each notice of violation issued under 25 C.F.R. §573.3.

5. Applicable Federal Law and Tribal Ordinance Provisions Relating to Failure to Submit
Attestation

A. Pursuant to 25 U.S.C. § 2710(b), a separate license issued by the Indian tribe shall be
required or each place, facility, or location on Indian lands at which class II gaming is
conducted.

B. 25 U.S.C. § 2710(d) states that Class III gaming activities shall be lawful on Indian lands
only if such activities are authorized by an ordinance or resolution that meets the
requirements of 25 U.S.C. § 2710(b).

C. 25 C.F.R. § 559 —NIGC regulations establish notification and submission requirements
for gaming facility licenses.

D. 25 C.F.R. §559.1 — NIGC regulations explain that the purpose of this part is to ensure that
each place, facility, or location where class II or III gaming will occur is located on
Indian lands eligible for gaming and obtains an attestation certifying that the construction
and maintenance of the gaming facility, and the operation of that gaming, is conducted in
a manner that adequately protects the environment and the public health and safety,
pursuant to the Indian Gaming Regulatory Act.

E. 25 C.F.R. §559.4 — NIGC regulations require that a tribe shall submit to the NIGC Chair
with each facility license an attestation certifying that by issuing the facility license, the
tribe has determined that the construction and maintenance of the gaming facility, and the
operation of that gaming, is conducted in a manner which adequately protects the
environment and the public health and safety. This means that a tribe has identified and
enforces laws, resolutions, codes, policies, standards or procedures applicable to each
gaming place, facility, or location that protect the environment and the public health and
safety, including standards, under a tribal-state compact or Secretarial procedures.

6. Applicable Federal Law and Tribal Ordinance Provisions Relating to Failure to
Maintain and Operate the Gaming Facility in a Manner which Adequately Protects the
Environment and the Public Health and Safety.


when a quorum existed, and would not recognize any subsequent action until a valid
election, consistent with the Tribe’s Constitution and the decisions of the Tribe’s Court of
Appeals, the Northwest Intertribal Court System, is held and a quorum of council
members is archived. The Principal Deputy Assistant Secretary stated that the lack of a
quorum results in an inability to take official action.

F. IGRA, NIGC regulations, and the Tribe’s Ordinance require that the Tribe maintain sole
proprietary interest in and responsibility for the conduct of its gaming activity.®

G. The Commission is committed to the principle that tribal gaming under IGRA must be
conducted by federally recognized leadership.? Moreover, the plain meaning of IGRA
established that only tribes recognized by the Secretary, acting through their designated
representatives, may engage in gaming.'° Implicit in the requirement that a tribe maintain
the sole proprietary interest in its gaming, is that there be a tribe or tribal government to
exercise that interest. Here, there is no quorum on the Tribal Council and, as such, no
governing Tribal body to exercise the sole proprietary interest over its gaming operation
or administer the revenues derived from that gaming establishment.

H. Furthermore, the entity that was established by the Tribe to govern the operation of the
Facility — NBC II — also lacks a quorum and is unable to serve the role established by its
corporate Charter. Meaning, there is no tribal entity with the power to control, or exercise
a proprietary interest, over its gaming operation. When a tribal council can no longer
make decisions or properly govern, it is “no longer possible for the NIGC to ensure that
the tribe [is] the primary beneficiary of the gaming operation, that gaming add{s] to the
strength of tribal government or tribal economic development, or that gaming support[s]
tribal self-sufficiency.”"!

9. Circumstances of Violation 2 — Failure to Conduct Background Investigations and Issue
Licenses to Primary Management Officials

A. Respondent is a federally recognized Indian Tribe with tribal headquarters located in
Deming, Washington.

B. Respondent operates the Nooksack Northwood Casino located at 9750 Northwood Road
in Lynden, Washington.

895 U.S.C. § 2710(b)(2)(A); 25 CFR § 522.4(b)(1); Ordinance, § 56.04.010(d).

° NIGC Commission Decision, In the Matter of: Sac & Fox Tribe of the Mississippi in lowa, NOV/CO-03-02 -
Order Granting Petition to Reopen, (Dec. 19, 2003).

'© NIGC Commission Decision, In the Matter of: Sac & Fox Tribe of the Mississippi in lowa, NOV/TCO CO-03-02
- Decision and Order (Sept. 10, 2003).

"mre Sac & Fox Tribe of Mississippi in lowa/Meskwaki Casino Litig., 340 F.3d 749, 760 (8th Cir. 2003)

9


NATIONAL INDIAN GAMING COMMISSION

NOTICE OF VIOLATION and TEMPORARY CLOSURE ORDER

NOV - 17-02
TCO —- 17-02

Art George, Chairman (Agent for Service of Process)
Nooksack Gaming Commission

P.O. Box 960

Deming, WA 98244-0960

1. Notification of Violation and Temporary Closure Order

The Chairman of the National Indian Gaming Commission (NIGC or Commission) hereby gives
notice that the Nooksack Indian Tribe (Tribe or Respondent), located in Deming, Washington,
has substantially violated the Indian Gaming Regulatory Act (IGRA), NIGC regulations, and the
Tribe’s gaming ordinance by: Failing to maintain the Tribe’s sole proprietary interest and
responsibility for the conduct of the gaming activity; failing to conduct background
investigations, including federal criminal history checks, on Primary Management Officials;
failure to issue a license to all Primary Management Officials; and failing to maintain and
operate its gaming facility in a manner that adequately protects the environment, and the public
health and safety. The Respondent has further violated IGRA and NIGC regulations by failing to
submit an attestation certifying that by issuing the facility license, the tribe has determined that
the construction and maintenance of the gaming facility, and the operation of that gaming, is
conducted in a manner which adequately protects the environment and the public health and
safety.

As a consequence of the substantial violations, under 25 U.S.C. §§ 2705 and 2713(b), the
Chairman hereby gives notice that the Respondents are ordered to cease and desist from all
gaming activity at the Nooksack Northwood Casino located at 9750 Northwood Road in Lynden,
Washington effective immediately.

2. Authority

Under IGRA and NIGC regulations, the Chairman may issue a Notice of Violation (NOV) to any
person for violation of any provision of IGRA, NIGC regulations, or any provision of a tribal
gaming ordinance or resolution approved by the Chairman.' Further, under IGRA, the NIGC

"25 U.S.C. § 2713(a); 25 C.F.R. § $73.3.


10. Circumstances of Violation 3 — Failure to Submit Attestation

A. Respondent is a federal recognized Indian Tribe with tribal headquarters located in
Deming, Washington.

B. Respondent operates the Nooksack Northwood Casino located at 9750 Northwood Road.
in Lynden, Washington. The Nooksack Northwood Casino was open during the
following periods: January 1, 2014 to December 31, 2014; January 1, 2015, to December
31, 2015; January 1, 2016, to December 31, 2016; and, January 1, 2017, to the present.

C. On October 31, 2014, the Nooksack Gaming Commission issued a facility license to the
Nooksack Northwood Casino for the period of October 31, 2014, to October 31, 2017.

D. The Respondent submitted a copy of the renewed license to the NIGC on January 12,
2017. This submission did not include the required attestation that the construction and
maintenance of the gaming facility, and the operation of that gaming, is conducted ina
manner which adequately protects the environment and the public health and safety

E. On July 23, 2015, NIGC staff contacted Charlott Melland, Executive Director of the
Nooksack Gaming Commission, via email and requested submission of the required
attestation.

F. On January 17, 2017, NIGC staff again contacted Charlott Melland, Executive Director
of the Nooksack Gaming Commission, by email and requested a submission of the
tequired attestation.

G. On January 18, 2017, in an effort to facilitate submission of the required attestation,
NIGC staff spoke with Charlott Melland, Executive Director of the Nooksack Gaming
Commission and inquired if she had any questions regarding the requirements. Director
Melland stated that she did not and would work on submitting the information.

H. On January 19, 2017, in an effort to facilitate submission of the required attestation,
NIGC staff sent an email to Charlott Melland, Executive Director of the Nooksack
Gaming Commission, as a follow up to the January 18, 2017 reminding of the need to
submit the required attestation.

I. On May 15, 2017, while on a site visit conducted at Nooksack Tribal Government
Offices, NIGC informed the Tribe’s attorney, Rickie Armstrong, that the Tribe had not

12


F. NBC II Board Members are primary management officials:

a. The NBC II Board members: approve various contracts, including for leasing,
purchases, and, settlement of disputes with gaming machine vendors; approves
contracts for purchase of surveillance and kitchen equipment; approves contracts
for software maintenance and support; approves contracts for repair of the
facility; has unrestricted access to all casino records including, financials records;
approve casino expenditures of more than $10,000; approve purchases of gaming
machine purchases over $10,000; approved certain construction in excess of
$50,000; and provide secondary signatures on Nooksack Northwood Casino
checks over $3,000, all of which demonstrates financial management
responsibility.

b. In addition, NBC II Board members have access to restricted areas of the gaming
facility.

G. On May 3, 2017, Dustin Thomas, NIGC Acting Director of Compliance issued a letter of
concern to the Chairman Kelly, pursuant to 25 C.F.R. § 573.2, regarding the Tribe’s
failure to conduct background investigations on and issue licenses to primary
management officials. Specifically, the letter requested the Tribe provide evidence of
background investigation, eligibility determination, and notice of results for Robert
Kelly, Jr. in his capacity as Chairman of NBC II. The letter also requested that the Tribe
provide evidence that Nadene Rapada, in her capacity as Secretary of NBC II, and Robert
Solomon, in his capacity as a NBC II Board Member, either possess current gaming
licenses or evidence of current complete background investigations, eligibility
determinations, and notice of results.

H. On May 16, 2017, Senior Tribal Attorney Charles N. Hurt, Jr. responded to Acting
Director Thomas’ Letter of Concern. Mr. Hurt’s letter acknowledges that the NBCII
Board serves as the governing body of the Nooksack Northwood Casino, but claims that
the Board has delegated the day-to-day management and operation of the facility to a
management team. As detailed in paragraph F of this section, the NBCII Board has
engaged in management of the Casino.

I. The Nooksack Tribal Gaming Commission has not performed background investigations,
has not submitted notices of results, and has not provided notice of licensing decisions for

members of NBC II.

J. Licenses previously issued to NBC II Board Members have expired.

11


of four members, one of which was allegedly recalled via an election on April 2016. °
The Principal Deputy Assistant Secretary, citing to Article II, Section 4 of the Nooksack
Constitution and Bylaws, noted that “[a]t any special or regular meeting of the tribal
council, five (5) members present shall constitute a quorum and the tribal council may
proceed to transact any business that may come before it. The Principal Deputy Assistant
Secretary concluded that because the Tribe lacks a quorum to conduct tribal business as
required by the Nooksack Tribe’s Constitution and Bylaws, the Department will only
recognize those actions taken by the Council prior to March 24, 2016, when a quorum
existed, and will not recognize any actions taken since that time because of the lack of a
quorum. The Principal Deputy Assistant Secretary stated that the DOI was not
interpreting the Tribe’s Constitution or interfering in internal tribal matters, rather DOI
was acting pursuant to the government-to-government relationship between the United
States and the Nooksack Tribe, and therefore, would only recognize action taken in
accordance with the Tribe’s Constitution and Bylaws. The Principal Deputy Assistant
Secretary added that under Federal law, the United States has a duty to ensure that tribal
trust funds, Federal funds for the benefit of the Tribe, and the day-to-day government-to
government relationship is with a full quorum of the Council as plainly stated in the
Tribe’s Constitution and Bylaws.

D. On November 14, 2016, in a letter to Robert Kelly, Jr., as Chairman of the Nooksack
Tribe, the Principal Deputy Assistant Secretary reiterated that pursuant to the Nation-to-
Nation relationship, the DOI would not recognize actions taken by Chairman or the
current Tribal Council members without a quorum consistent with the Tribe’s
Constitution.® Accordingly, until the Council is seated through an election consistent with
tribal law and the decisions of the Northwest Intertribal Count System, the DOI would
not recognize any referendum election, and the Tribal Council Primary Election
scheduled for December 17, 2016, or the Tribal Council Regular Election scheduled on
January 21, 2017. The DOI offered the Tribe assistance and support to carry out
elections.

E. On December 23, 2016, in a letter to Robert Kelly, Jr., as Chairman of the Nooksack
Tribe, the Principal Deputy Assistant Secretary again explained that pursuant to the
Tribe’s Constitution and Bylaws, the Tribal Council is no longer operating with a quorum
and therefore lacks authority to conduct business on behalf of the Tribe.” Accordingly,
DOI would recognize only those actions taken by Tribal Council prior to March 24, 2016,

5 See Letter from Lawrence S. Roberts, Principal Deputy Assistant Secretary — Indian Affairs, Dep’t of the Interior,
to Robert Kelly, Jr. Chairman, Nooksack Tribe (Oct. 17. 2016).
° See Letter from Lawrence S. Roberts, Principal Deputy Assistant Secretary — Indian Affairs, Dep’t of the Interior,
to Robert Kelly, Jr. Chairman, Nooksack Tribe (Nov. 14. 2016).
7 See Letter from Lawrence S. Roberts, Principal Deputy Assistant Secretary — Indian Affairs, Dep’t of the Interior,
to Robert Kelly, Jr. Chairman, Nooksack Tribe (Dec. 23, 2016).

8


K. 25 C.F.R. § 556.6(b)(1) — NIGC regulations require that before issuing a license to a
primary management official, a tribe shall create and maintain an investigative report on
each background investigation. An investigative report shall include all of the following:
(i) Steps taken in conducting a background investigation; (ii) Results obtained; (iii)
Conclusions reached; and (iv) The basis for those conclusions.

L. 25 C.F.R. § 556.6(b)(2) — NIGC regulations require that tribes to submit a notice of the
results of the applicant’s background investigation to the Commission no later than 60
days after the applicant begins work. The notice of results shall contain: (i) Applicant’s
name, date of birth, and social security number; (ii) Date on which applicant began or
will begin work as a primary management official; (iii) A summary of the information
presented in the investigative report, which shall at a minimum include a list of: (A)
Licenses that have previously been denied; (B) Gaming licenses that have been revoked,
even if subsequently reinstated; (C) Every known criminal charge brought against the
applicant within the last 10 years of the date of application; and, (D) Every felony of
which the applicant has been convicted or any ongoing prosecutions; and (iv) a copy of
the eligibility determination made under § 556.5.

M. 25 C.F.R. § 558.3(a) — NIGC regulations require that after a tribe provide a notice of
results of the background check to the Commission, a tribe may license a primary
management official.

N. 25 C.F.R. § 558.3(b) — NIGC regulations require that within 30 days after the issuance of
the license, a tribe shall notify the Commission of its issuance.

O. 25 C.F.R. § 558.3(c) — NIGC regulations require that a gaming operation shall not
employ a primary management official who does not have a license after 90 days.

P. Section 56.04.020(a)(ii) of the Tribe’s Ordinance, defines primary management official
to mean: (A) The person having management responsibility for a management contract;
(B) Any person who has authority to: (1) hire and fire employees; or (2) set up working
policy for the gaming operation; or (C) the chief financial officer or other person who has
financial management responsibility.

Q. Section 56.04.010 of the Tribe’s Ordinance establishes the Nooksack Gaming
Commission. The Nooksack Gaming Commission was empowered to establish a system
which adequately checks the background of the primary management officials, and that
oversight of said individuals and their management is conducted on an ongoing basis; and
provides for verification of background check results by the Chairman of the National


Chairman proceeds to enforcement rather than simply referring the matter to the Tribe’s
governing body.

H. The Chairman has not issued a letter of concern related to violation 3. Pursuant to 25
C.F.R. § 573.2(d) the Chairman may take enforcement action without first having issued
a letter of concern if the enforcement action states the reasons for doing so. The NIGC
was recently made aware of the EPA’s action against the Tribe for failure to adhere to the
requirements of the SDWA. Upon learning of the EPA’s letters and Actions, NIGC Staff
immediately contacted the EPA to determine the seriousness of the violation and the risk
posed to facility patrons and employees. Due to the potential for imminent jeopardy to
the health and safety of patrons and employees of the Nooksack Northwood Casino by
the Tribe’s failure to adhere to the requirements of the SDWA, as specified in the EPA’s
action against the Tribe, the Chairman determined that a letter of concern would cause
unacceptable delay. An immediate enforcement action and closure of the facility is
needed to ensure the protection of the environment and the public health and safety.

12. Measures Require to Correct Violation 1

As indicated in the Secretary’s letters, the Tribe must hold a valid election and achieve a quorum
of council members who may then exercise the responsibility to maintain the Tribe’s sole
proprietary interest and responsibility for its gaming.

13. Measures Required to Correct Violation 2

There is no way to correct the late submissions and employment beyond 90 days without a
license of primary management officials employed by the Tribe. In order to correct ongoing
violations of the IGRA, NIGC regulations, and the Tribe’s Gaming Ordinance, Respondent must:

A. Within 15 days, starting from the date of service of this Notice, collect fingerprints from
all primary management officials currently unlicensed and forward them to the NIGC

with appropriate fee for processing;

B. Within 30 days, starting from the date of service of this Notice, perform complete
background investigations and obtain FBI criminal history checks.

C. Within 45 days, starting from the date of service of this Notice, make the required
eligibility determination.

15


16. Closure Order

Under the authority of 25 U.S.C. § 2713(b) and 25 C.F.R. §§ 573.4(a) and (b), the Chairman
gives notice that the Respondents are ordered to cease and desist from all gaming activity in the
Nooksack Northwood Casino. This order is effective immediately. The Chairman may rescind
the Temporary Closure Order for good cause shown.”*

17. Expedited Review

Under 25 C.F.R. § 573.4(c), within seven days after service of this Order, any party served with
this Order may request, orally or in writing, informal expedited review by the Chairman. The
Chairman must complete such review within two days after his receipt of a timely request.
Within two days after the expedited review provided by 25 C.F.R. § 573.4(c), the Chairman must
decide whether to continue the Order and must provide an explanation of the basis for the
decision.

* 18. Fine; Submission of Information

The substantial violation cited above may additionally result in the assessment of civil fines
against the Respondents in an amount not to exceed $50,276 per violation per day.”* Under 25
C.F.R. § 575.5(a), Respondents may submit written information about the violation to the
Chairman within 15 days after service of this notice of violation (or such longer period as the
Chairman may grant for good cause). The Chairman shall consider any information submitted in
determining the facts surrounding the violation and the amount of the civil fine, if any.

19. Appeal

Within thirty (30) days after service of this Notice of Violation, the Tribe may appeal to the full
Commission. The Tribe may request a hearing under 25 C.F.R. Part 584, or may waive its right
to an oral hearing and instead elect to have the matter determined by the Commission solely on
the basis of written submissions under 25 C.F.R. Part 585. In either event, a notice of appeal
shall be submitted to the National Indian Gaming Commission, 1849 C Street, NW, MS# 1621,
Washington, DC 20240. Please also provide a copy via e-mail to Michael_Hoenig@nige.gov.
The Tribe has a right to assistance of counsel in such an appeal. A notice of appeal must
reference this NOV.

If the Tribe elects to have a hearing, within ten (10) days after filing a notice of appeal, it must
file with the Commission a brief that states with particularity the relief desired and the grounds

7495 C.F.R. § 573.4(c)(3).
?5 Annual Adjustment of Civil Monetary Penalty to Reflect Inflation, 82 Fed. Reg. 12,068 (February 28, 2017)

(codified at 25 C.F.R. part 575).
17


regulation of gaming, or create or enhance the dangers of unsuitable, unfair, or illegal
practices and methods and activities in the conduct of gaming shall not be eligible for
employment.

. 25 U.S.C. § 2710(b)(2)(F)Gi)(IID — IGRA requires that a tribe notify the Commission of
the results of a background check before the issuance of a license to a Primary
Management Official.

. 25 C.F.R. § 502.19 — NIGC regulations define primary management official to mean: (a)
The person having management responsibility for a management contract; (b) Any
person who has authority: (1) To hire and fire employees; or (2) To set up working policy
for the gaming operation; (c) The chief financial officer or other person who has financial
management responsibility; or (d) Any other person designated by the tribe as a primary
management official.

. 25 C.F.R. § 556.4 - NIGC regulations require that a tribe shall perform a background
investigation for each primary management official.

. 25 CPLR. § 522.2(h) and 25 C.F.R. § 556.4(a)(14) — NIGC regulations require that a tribe
shall collect fingerprints from an applicant for a primary management official position
and conduct a criminal history check, including a check of criminal history records
information maintained by the Federal Bureau of Investigation.

. 25 C.F.R. § 556.5(a) — NIGC regulations require that a tribe conduct an investigation
sufficient to make a determination concerning the eligibility of a primary management
official for granting of a gaming license, an authorized tribal official shall review a
person’s: (1) Prior activities; (2) Criminal record, if any; and (3) Reputation, habits, and
associations.

25 C.F.R. § 556.5(b) — NIGC regulations require that if the authorized representative, in
applying the standards adopted in a tribal ordinance, determines that licensing of the
person poses a threat to the public interest or to the effective regulation of gaming, or
creates or enhances the dangers of unsuitable, unfair, or illegal practices and methods and
activities in the conduct of gaming, an authorizing tribal official shall not license that
person in a primary management official position.

25 C.F.R. § 556.6(a) — NIGC regulations require that when a tribe employs a primary
management official, the tribe shall maintain a complete application file containing the
information listed under § 556.4(a)(1) through (14).


Chairman may issue an order of temporary closure of an Indian gaming operating for a
substantial violation of IGRA, NIGC regulations, or an approved tribal ordinance.” NIGC
regulations also provide that “(simultaneously with or subsequently to the issuance of a notice
of violation..., the Chairman may issue an order of temporary closure of all or part of an Indian

gaming operation if one or more[] substantial violations are present.

3

3. Applicable Federal Law and Tribal Ordinance Provisions Relating to Failure of a
Tribes to Maintain Its Sole Proprietary Interest and Responsibility for the Conduct of
any Gaming Activity

A.

25 U.S.C. § 2710(b)(2)(A) — IGRA requires that a tribal gaming ordinance must provide
that a tribe have the sole proprietary interest and responsibility for the conduct of any
gaming activity.

. 25 C.F.R. § 522.4(b)(1) — NIGC regulations also mandate that the gaming ordinance

provide that the tribe shall have the sole proprietary interest and responsibility for the
conduct of any gaming operation.

Section 56.04.010(d) of the Tribe’s Gaming Ordinance, Resolution 93-47, (Ordinance),
approved by the NIGC Chairman on October 27, 1993, requires the Tribe, or a tribally-
charted corporation wholly owned by the Tribe, shall have sole proprietary interest and
responsibility for the conduct of any gaming activity.

4. Applicable Federal Law and Tribal Ordinance Provisions Relating to Failure to

Conduct Background Investigations and Issue Licenses to Primary Management
Officials

A.

25 U.S.C. § 2710(b)(2)(F)(i) — IGRA requires that a tribe have in place an adequate
system to ensure that background investigations are conducted on primary management
officials.

25 U.S.C. § 2710(b)(2)(F)(ii)(D) — IGRA requires the issuance of a tribal license for
primary management officials with prompt notification to the Commission of the
issuance of such licenses.

25 U.S.C. § 2710(b)(2)(F)(ii)ID — IGRA requires that a tribal gaming operation maintain
a standard whereby any person whose prior activities, criminal record, if any, or
reputation, habits and associations pose a threat to the public interest to the effective

225 U.S.C. §§ 2705(a)(I) and 2713(b)(1).
525 C.E.R. §573.4(a).


submitted the required attestation, and requested his assistance in facilitating the
submission of the required attestation.

J. As of today’s date, the required attestation has not been received by the NIGC.

K. The Chairman has not issued a letter of concern related violation 2. Pursuant to 25 C.F.R.
§ 573.2(d), the Chairman may take enforcement action without first having issued a letter
of concern if the enforcement action states the reasons for doing so. As specified above,
the NIGC has requested the attestation on five separate occasions to no avail. Given the
correspondence between the United States Environmental Protection Agency and the
Tribe, it appears that the Tribe has not submitted the attestation because it is unable to
certify that it enforces the laws, standards, or procedures applicable to its gaming facility.

11. Circumstances of Violation 4 — Failure to Maintain and Operate the Gaming Facility in
a Manner which Adequately Protects the Environment and the Public Health and
Safety.

A. Respondent is a federal recognized Indian Tribe with tribal headquarters located in
Deming, Washington.

B. Respondent operates the Nooksack Northwood Casino located at 9750 Northwood Road
in Lynden, Washington. The Nooksack Northwood Casino was open during the
following periods: January 1, 2014 to December 31, 2014; January 1, 2015 to December
31, 2015; January 1, 2016 to December 31, 2016; and, January 1, 2017 to the present.

C. On March 27, 2017, the United States Environmental Protection Agency (EPA) informed
the Nooksack Indian Tribe that it plans to issue six Unilateral Administrative Orders to
address serious violations of the Safe Drinking Water Act (SDWA) relating to the Tribe’s
public water systems (Systems), including the System providing water to the Nooksack
Northwood Casino.'? The EPA informed the Tribe that it would issue the Unilateral
Orders unless, by April 3, 2017, the Tribe signed and returned Administrative Orders of
Consent (Consent Orders) or provided evidence that the underlying violations were fully
returned to compliance.

D. On April 6, 2017, the EPA informed the Tribe that it had issued six Unilateral Orders to
the Tribe as the EPA determined that violations of the SDWA occurred at six water
Systems, including the Nooksack Northwood Casino Water System.”° The Orders require

° See Letter from Edward J. Kowalski, Director, EPA - Office of Compliance and Enforcement to Bob Kelly,
Chairman, Nooksack Indian Tribe (March 27, 2017).

20 See Letter from Edward J. Kowalski, Director, EPA - Office of Compliance and Enforcement to Bob Kelly,
Chairman, Nooksack Indian Tribe (April 6, 2017).

13


D. Within 60 days, starting from the date of service of this Notice, prepare the required
investigative report and submit the notice of results with eligibility determination to the
Commission.

E. Within 90 days, starting from the date of service of this Notice, submit the required
notice of licensure, or if the Tribe does not issue the license, notify the Commission and
also submit the eligibility determination and notice of results.

According to the Nooksack Business Corporation II charter, only members of the Nooksack
Tribal Council may serve as Members of the NBC II Board. The Department of the Interior has
taken the position that “[flollowing the “recall” of Position B Councilmember Carmen Tageant
for “treason,” the only members of the Nooksack Tribal Council who, after March 24, 2016, hold
office by virtue of winning a majority of votes in a general election were Council Chairman
Robert Kelly, Council Secretary Nadene Rapada, and Position A Councilmember Robert
Solomon.” # Accordingly, NIGC will only accept licensing submissions for those three members
as board members of the Nooksack Business Corporation II. All other individuals claiming to be
NBC IL board members must refrain from activities that are deemed to be management of the
Tribe’s gaming operation. Please keep in mind that even with evidence of background
investigations and licensure of the recognized NBC II Board Members, those three members will
not represent a quorum according to the Nooksack Business Corporation II charter.

14, Measures Required to Correct Violation 3

The Tribe must submit the required attestation certifying that by issuing the facility license, the
Tribe has determined that its maintenance and operation of the gaming facility is conducted in a
manner which adequately protects the environment and the public health and safety as the Tribe
has identified and enforces all laws, resolutions, codes, policies, standards or procedures
applicable to the Nooksack Northwood Casino. We note that in order to meet this standard, the
Tribe must first resolve its violations with the EPA.

15. Measures Required to Correct Violation 4

To correct this substantial violation, the Tribe must close its gaming operation until such time as
the Tribe can operate its facility in a manner which protects the public health and safety, which
includes compliance with EPA’s orders regarding violations of the SDWA.

?3 See Nooksack Indian Tribe v. Zinke et. al., No. 2:17-cv-00219-JCC, Dkt. 26, n. 6 (W.D.WA April 3, 2017).
16