Tribal casino payouts have some foreseeing red

TACOMA – The Puyallup Tribe of Indians takes the direct approach with profits from its Emerald Queen Casino. Every one of the tribe’s 3,450 members gets a monthly check for $2,000.

Since the program began in 2002, the Puyallups have paid out $280 million.

But as the tribal population increases, the payments have become a topic of heated debate.

Puyallup leaders say there’s no problem, citing the casino’s healthy profits.

But a group of concerned members says the payments have put the Puyallups on an economic treadmill they can’t keep up with and can’t get off.

Members of the group, who declined to be identified by name, told the News Tribune newspaper of Tacoma that the tribe recently restructured more than $130 million in loans so that only interest payments will be made over the next five years. The tribe then will face a balloon payment.

“The tribe is essentially operating on a paycheck-to-paycheck basis,” said a member of the group, which calls itself Full Circle of the Puyallup Nation. “There is no consideration given to long-term debt. They have no idea how they’re going to come up with the money to pay that balloon in five years.”

David Peterson, hired by the tribe as its head accountant, would not discuss the details, but he said restructuring is a normal part of business.

The payments to tribal members are part of a large and complex business plan – well-thought-out and entirely above board, he said.

“Some people start scurrilous rumors and blow up situations beyond recognition,” said John Bell, the tribe’s top attorney. “Five banks, I think, now are involved. … They are not going to get involved in something if they think there’s a chance they won’t get their money back.”

Numbers provided by Full Circle indicate that without a new source of income, the payments cannot continue at their present rate if membership continues to go up. Without restructuring the loan, projections indicate, the gap between revenue and expenditure would have grown steadily toward a $39 million deficit in 2010.

Membership in the tribe has increased by 1,000 people since the payments began. Last year, the payments took $83.5 million of the casino’s net revenue of $126 million. The rest goes to finance most of the rest of the tribe’s activities.

This year, tribal membership is expected to increase by another 229 people.

Many people now depend on the monthly checks, critics say.

“It would be political suicide to touch the per caps, and they know it,” a Full Circle member said.

Three council seats are up for re-election this year – the primary is in March and the election in June, At least three members of Full Circle are expected to run for seats, which has some dismissing their concerns as campaign rhetoric.

Finding the truth is complicated by the secretive and highly personal nature of tribal politics. Tribal members who complain angrily about the problems in private don’t want their names publicly revealed, saying they fear retribution from the council. The council has the power to hand out tribal jobs and grant special grants of cash to families.

The tribe does have plans for other money-making ventures. Most promising is tribal property on the Blair Waterway at the Port of Tacoma.