Senecas say ar­bi­tra­tion rul­ing vi­o­lates U.S. law in sig­nal that rev­enue war with state isn’t over

The Buffalo News - - CITY&REGION - By Tom Pre­cious NEWS AL­BANY BUREAU CHIEF

AL­BANY – Sig­nal­ing that its dis­pute with New York State is not over, the Seneca Na­tion on Fri­day said this week’s ar­bi­tra­tion de­ci­sion or­der­ing the tribe to pay $266 mil­lion to the state vi­o­lates fed­eral law.

Seneca Pres­i­dent Rickey Armstrong Sr. said the ar­bi­tra­tion panel’s two mem­bers who ruled against the tribe “ef­fec­tively amended the agreed-upon terms” of a casino com­pact be­tween the state and Senecas.

“It has done so in com­plete dis­re­gard of fed­eral law that gov­erns the com­pact and with­out fol­low­ing the nec­es­sary fed­eral pro­ce­dures for mak­ing com­pact amend­ments,” Armstrong said of the panel’s Wed­nes­day’s ar­bi­tra­tion de­ci­sion.

Armstrong’s re­ac­tion in­di­cates – with­out di­rectly say­ing so – that the tribe is in no hurry to ad­here to what the state says is a bind­ing or­der from the ar­bi­tra­tion panel. The panel found that the Senecas were wrong to withhold casino rev­enue­shar­ing pay­ments dat­ing back to Jan. 1, 2017.

The Cuomo ad­min­is­tra­tion be­lieves the Senecas must, per the ar­bi­tra­tion de­ci­sion re­leased Wed­nes­day evening, im­me­di­ately pay the $266 mil­lion. Un­der terms of the orig­i­nal com­pact signed in 2002, the tribe agreed to pay the state 25 per­cent of its net slot ma­chine rev­enues from its casi­nos in Buf­falo, Ni­a­gara Falls and Sala­manca. In re­turn, the state granted ex­clu­siv­ity to the tribe’s three Las Ve­gas-style casi­nos in a sprawl­ing area of West­ern New York.

But the Seneca Na­tion main­tains the com­pact’s lan­guage is silent on that rev­enue-shar­ing pro­vi­sion af­ter the com­pact’s 14th year. So, it halted pay­ments to Al­bany be­gin­ning with slot pro­ceeds that the state says were due in the be­gin­ning of 2017.


The ar­bi­tra­tion panel, while ac­knowl­edg­ing some murk­i­ness in the lan­guage of the com­pact, said the tribe was wrong to withhold the state’s pay­ments be­cause the over­all terms of the com­pact – in­clud­ing rev­enue shar­ing by the tribe and the ex­clu­siv­ity terms agreed to by the state – all car­ried on past the com­pact’s 14th year.

The $266 mil­lion in back pay­ments cov­ers the pe­riod through 2018. The tribe, the ar­bi­tra­tion panel said, still owes this year’s first quar­ter – the amount of which has not yet been de­ter­mined. It must also re­sume quar­terly pay­ments to the state, which, in turn, shares one-quar­ter with lo­cal gov­ern­ments in the area.

Ar­bi­tra­tion mem­bers sid­ing with the state this week were a New York City lawyer tapped for the panel by Gov. An­drew M. Cuomo and a pro­fes­sional ar­bi­tra­tor who was jointly se­lected by the state and the Seneca Na­tion. A third ar­bi­tra­tion mem­ber, who was se­lected by the Senecas to serve on the panel, did not sign off on the or­der.

“Sim­ply put, the com­pact is rooted in fed­eral law and amend­ing the com­pact re­quires that proper pro­ce­dures be fol­lowed. A ma­jor­ity of the panel mem­bers ig­nored both of these crit­i­cal is­sues,” Armstrong said.

It is un­cer­tain what op­tions may be at play for the Senecas, such as per­haps tak­ing their treaty dis­pute to fed­eral au­thor­i­ties at the U.S. De­part­ment of In­te­rior. Armstrong, in a writ­ten state­ment Fri­day morn­ing, would only say that the tribe is still re­view­ing the ar­bi­tra­tion de­ci­sion and its le­gal rights. When com­pleted, “we will de­ter­mine a path for­ward.”

One path might be to fed­eral court. But that is a route, ac­cord­ing to the com­pact, only open to the state if the Senecas de­cline to fol­low the ar­bi­tra­tion panel’s rul­ing. Any such court ac­tion would have to oc­cur in fed­eral court in Buf­falo.

Ear­lier this week, in a meet­ing with re­porters and ed­i­tors at The Buf­falo News, Cuomo seemed to ac­knowl­edge the ar­bi­tra­tion panel’s de­ci­sion might not end the dis­pute.

“They had said they would honor the ar­bi­tra­tion de­ci­sion, and they signed a con­tract say­ing they would honor the ar­bi­tra­tion de­ci­sion. What does that mean? Ap­par­ently not much,” Cuomo said.

In the re­cently ap­proved 2019 state bud­get, there is no line item not­ing that the state planned on re­ceiv­ing the Seneca’s back pay­ments or fu­ture pay­ments. How­ever, of­fi­cials said they ex­pect such a no­ta­tion to be made on the state’s of­fi­cial fi­nan­cial plan for 2019, which will be re­leased in four weeks. They have not said how much money from the Senecas would be in­cluded in that doc­u­ment.

Buf­falo News file photo

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