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State, Pojoaque agree to divide up $10M account

Pojoaque Pueblo, whose gambling operations include the Buffalo Thunder Resort and Casino, shown above, has reached a deal to divide up $10 million generated from the pueblo’s slot machine revenue that was set aside during a legal dispute with state government. (Eddie Moore/Albuquerque Journal)

Copyright © 2019 Albuquerque Journal

The legal fight over more than $10 million in Pojoaque Pueblo gambling revenue that was seized by the federal government last year has ended.

Under a recent court settlement, the pueblo will get back about $4.1 million of what the U.S. Attorney’s Office in Albuquerque previously described as “the proceeds of illegal gambling.”

The remainder, $6.2 million, is to be released to New Mexico state government.

The settlement means that, in effect, Pojoaque has ended up paying a much smaller share of its gambling revenue to the state than other tribes over the two-year period in which the $10 million was generated.

Still, Gov. Michelle Lujan Grisham’s office says the settlement was “an example of turning a muddled situation into a net positive” and that the state could have lost the entire $10 million.

The money was held in an account overseen by a trustee between 2015 and 2017 after Pojoaque’s 10-year-old gambling compact with the state expired and as the two sides fought in court over terms of a new agreement.

The amounts deposited by the pueblo represented what Pojoaque would have been paying to the state as revenue-sharing from slot machines proceeds under the pueblo’s expired compact.

Gambling revenue from Pojoaque Pueblo’s Buffalo Thunder casino, above, and the pueblo’s other casino went into an account that totaled $10 million while the state and the pueblo fought in court over a new gaming compact. (Eddie Moore/Albuquerque Journal)

The arrangement called for distributing the money after the compact dispute was resolved – which happened in August 2017 after a crucial court ruling went against Pojoaque – either through negotiation or by court action.

The settlement deal splitting the $10 million-plus account – 60% for the state, 40% for Pojoaque – was approved by a federal judge on June 4.

Last week, Lujan Grisham spokesman Tripp Stelnicki said Matt Garcia, governor’s office chief counsel, “conducted a risk assessment, frankly, and this outcome was undeniably most favorable for the state.”

“There were a lot of potentially unfavorable outcomes here, and the state was able to find a favorable one,” Stelnicki said. “When I say unfavorable outcome, I mean the potential for the state to receive literally nothing as opposed to $6 million.”

Pojoaque endorsed Lujan Grisham in last year’s general election and records show the pueblo contributed $11,000 to her campaign (although it also donated to Jeff Apodaca, a competitor for Democratic gubernatorial nomination). The Follow the Money site shows Pojoaque also donated to her prior successful campaigns for the U.S. House in the 1st Congressional District.

The pueblo’s political support had nothing to do with the recent settlement, said Stelnicki. He said the result “would have been the same with a hypothetical pueblo that donated an equal amount to a Republican candidate.”

“The governor and her administration operate in the collective best interest of New Mexicans,” he said. “The campaigning is done and in the past.”

Compact court fight

Pojoaque in 2015 wouldn’t sign a new state gambling compact that other tribes agreed to. The new compact increased the share of slot machine revenue tribes must pay to the state. Pojoaque, which has two casinos, also wanted to lower the minimum age for gambling to 18 and the lifting of state bans on serving alcohol in gaming areas and cashing payroll, Social Security or welfare checks at casinos.

A two-year legal battle between the pueblo and the administration of former Gov. Susana Martinez ensued. U.S. Attorney Damon Martinez, with jurisdiction to enforce law on Indian land, allowed Pojoaque to continue gaming operations with no state compact on the condition the pueblo set aside the slot revenue payments it would have made to state under the old compact that had expired.

Eventually, in August 2017, Pojoaque signed the same new compact as other tribes, after a federal appeals court ruled that Pojoaque had to negotiate a compact with the state and not the federal government – in effect mandating that the pueblo agree to the state’s terms.

The pueblo maintained that the Martinez administration had refused to negotiate a new compact in good faith; the Martinez team argued Pojoaque wanted to play by “a different set of rules” than other tribes.

More litigation

With $10 million to divvy up after the compact issue was resolved, the court fights continued. The feds seized the holding account last year to address an “impasse” between the pueblo and the state over distribution of the money.

State officials maintained Pojoaque shouldn’t be rewarded with what would amount to getting a pass on state taxes for the two years it had no compact. Pojoaque said the money should come back to the pueblo to promote the welfare of its people and economic development.

The pueblo’s court filings argued that Pojoaque also had also lost money during the extended battle over the compact. When the state threatened vendors with fines for doing business with Pojoaque casinos, the pueblo lost access to the most profitable gambling machines, the pueblo said. Pojoaque maintained it lost an estimated $8.84 million in gaming revenue as a result.

Pojoaque Gov. Joseph Talachy called the new settlement “not the best-case scenario,” but that pueblo officials are happy the case was settled. He acknowledged in response to a Journal question that $4 million for the pueblo might be considered “a little bit of a win.”

“But, again, we got the settlement now, but we have to pay increased revenue-sharing that we were pretty adamant was unfair,” said Talachy.

“There was a lot of impact on our operation during the litigation,” he added.

Pojoaque officials are happy that the Lujan Grisham administration “was willing to sit down and talk, and settle out of court,” Talachy said. “It could have gone either way.”

“We’re pleased the current administration is more empathetic and willing to do the right thing,” he said, “rather than fighting for the sheer sake of being angry or being bitter or anything.”

Lujan Grisham spokesman Stelnicki said her administration “is committed to establishing and rebuilding more productive and cooperative relationships with New Mexico tribes and pueblos. This effort reflects that commitment.”

“That was certainly not the case over the last 8 years,” he added.

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