Two Florida tribes are wrangling with federal agencies over their finances. Critics say the disputes further tarnish the integrity of Indian gaming and raise troubling questions about the state's Seminole casino pact.
Federal prosecutors and the IRS reportedly are investigating Seminole billing irregularities involving more than $2 million in payments to vendors.
Seminole spokesman Gary Bitner said in a statement last week: "Prosecutors contacted the tribe after the Tribal Council in early July ordered that the information be reported to the IRS." The tribe said it is "fully cooperating" with investigators.
In the meantime, the Miccosukee Tribe is claiming that its members don't owe any taxes on income they receive from the tribe's gambling operations.
In a Miami federal court filing, lawyers for the 850-member tribe accuse the IRS of "abuse of authority" in its investigation into the tribe's gambling distributions and former chairman Billy Cypress.
The Indian Gaming Regulatory Act of 1988 requires tribes with gambling facilities to report all member payments to federal authorities. The law says such "payments are subject to federal taxation."
Critics of Indian gaming say that tribal claims of "sovereign" status have led to abuses.
Mark Thibault, president of the Miami-based Andrew Jackson Institute, which opposes Indian casinos, said, "Florida Indian gaming has been playing by its own rules for decades. This hurts everyone but the tribes."
Controversial as the Miccosukees' tax-free claim may sound, Thibault said, "That is something every other native tribe in America does."
As for the investigation into Seminole vendor payments, Thibault likens the tribe's practices to "money laundering -- both with the use ofdouble bookkeeping and illegal distributions."
"All of this hurts every honest taxpayer in Florida," the Miami attorney said.
But Thibault says more damage is inflicted on the tribes' competitors.
"Whathas not been reported is the damage being done to the pari-mutuel industry of Florida. These operations are forced to fight an uphill battle with one hand tied behind their back.
"This inhibits their ability to expand and hire more Floridians," Thibault alleged.
Under the Seminole casino compact approved by the Florida Legislature and the U.S. Department of the Interior, the tribe agreed to pay the state $1 billion in gaming revenue over the next five years. In exchange, the tribe won exclusive rights to offer Las Vegas-style slot machines and deal banked card games such as blackjack and baccarat.
Bitner said Floridians have no cause for alarm.
"The tribe has lived up to every letter of its 2007 compact, including the payment of more than $200 million to the state of Florida," he said.
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Reach Kenric Ward at kward@sunshinestatenews.com or at (772) 559-4719.
