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Loophole allows casino owner to donate $10,000 to governor's reelection campaign

Loophole allows casino owner to donate $10,000 to governor's reelection campaign

An entity seeking to open the 14th full-fledged casino in the Hoosier State last month donated $10,000 to the reelection campaign of Republican Gov. Eric Holcomb.

Indiana law prohibits owners and officers of state-regulated casinos, even those who hold just 1% of the company, from donating to candidates for state or local office. It is a level 6 felony, punishable by up to 2 1/2 years behind bars and a fine of up to $10,000.

The donation to Holcomb, however, appears to be perfectly legal since it came from the Pokagon Band of Potawatomi Indians, whose 166 acres of federally recognized tribal land in South Bend, including the 175,000-square-foot Four Winds Casino, are not subject to state regulation.

That may change in the near future, at least in regard to the casino.

The Michigan-headquartered tribe is in the process of negotiating a gaming compact with Indiana that could allow it to replace its 1,800 slot-style bingo machines at South Bend with actual slot machines, table games and sports wagering.

In September, the Pokagons also announced plans to construct a 23-story hotel tower with 317 rooms, including 83 suites, adjacent to the casino, along with a spa, convention center, meeting space, ballroom, lounge, bar and grill, an outdoor rooftop swimming pool and terraces with views of adjacent greenery.

As a result, if a compact is enacted, Four Winds South Bend will be positioned to directly compete with the gaming and hospitality amenities at Northwest Indiana's five commercial casinos, along with enjoying the advantage of being the only casino in the state legally able to donate funds to political candidates.

Holcomb top recipient

The tribe's Oct. 18 donation of $10,000 to the Holcomb campaign was not its first to the Indiana chief executive.

The Pokagons also gave the Eric Holcomb for Indiana campaign committee $10,000 on Sept. 17, 2018, and $10,000 on Nov. 3, 2016 — making the Hoosier governor the single largest recipient of donations by the tribe, according to state campaign finance records.

The campaign committee of Lt. Gov. Suzanne Crouch last year was given $5,000 by the tribe, records show.

That money likely was transferred to Holcomb's account June 24 when Crouch gave her running mate a record-breaking $1 million donation.

The Pokagon's communications director did not respond to a request for comment about the tribe's donations, particularly its unique status as the only Indiana casino owner not barred from seeking to influence public policy with campaign contributions.

The governor's office referred all questions about the tribe's most recent donation, including its impact on gaming compact negotiations, to the campaign.

Kyle Hupfer, Holcomb for Indiana campaign manager, said the donations provided to the governor's re-election bid by the Pokagons were made in accordance with state law.

"With each campaign donation we receive, we work to comply with all campaign finance requirements, which we've done with this contribution," Hupfer said. "This includes being transparent and reporting the contribution within seven days of its receipt."

Negotiations underway

Holcomb has designated Sara Tait, executive director of the Indiana Gaming Commission, to lead the state's negotiations toward a gaming compact with the Pokagons.

Tait declined to address the status of negotiations since federal law obligates the state to negotiate "in good faith," which she said "could be undermined if we were to regularly provide public updates."

"If a compact is reached, it will undergo a public legislative process pursuant to state law, and if the parties are able to reach that point we will be in a position to address the compact at that time," Tait said.

A 2015 law, House Enrolled Act 1540, requires any compact negotiated by the governor also be ratified by the Republican-controlled General Assembly before being submitted to the U.S. Interior Department's Bureau of Indian Affairs for final approval.

The Indiana statute mandates the compact address gaming management, state and local revenue sharing, infrastructure and site improvements, administration and regulation of gaming, and game types operated by the tribe.

The law also states the list of mandatory negotiating topics "does not preclude additional items and terms from being negotiated and agreed to in any tribal-state compact," which potentially could lead to restrictions on Pokagon campaign donations to match the prohibition imposed on Indiana commercial casino owners.

Legislators get donations, too

State records show the tribe has donated thousands of dollars to key state legislators since 2016, including House Speaker Brian Bosma, R-Indianapolis; Senate President Rod Bray, R-Martinsville; Senate Democratic Leader Tim Lanane, D-Anderson; and the leaders of the House and Senate committees likely to consider any gaming compact submitted to the Legislature.

Lawmakers representing South Bend at the Statehouse also have received a total of $12,000 from the Pokagons in the past four years, according to state campaign finance records.

Altogether, the tribe has donated $95,000 to Indiana political candidates, with $57,000 going to Republican candidates or campaign committees, and $38,000 to Democrats, records show.

Matt Bell, president of the Casino Association of Indiana, a trade organization representing seven of the 13 state-regulated casinos, said its members are aware of the donations made by the Pokagons to the governor's re-election campaign.

"The Pokagons are exercising their lawful rights to contribute to Indiana political campaigns, and we respect their right to do so," Bell said.

As for whether Indiana's commercial casinos want the same ability to donate to campaigns, Bell said: "There is not consensus on that across the industry."

"They have not asked for that privilege," he said.

Prior Holcomb casino questions

In August, the state's ethics watchdog concluded no laws or rules were violated when Holcomb last year flew to two Republican Governors Association meetings on private planes paid for by the parent company of Gary's Majestic Star casinos.

Inspector General Lori Torres determined Holcomb was under no obligation to list the trips as gifts on his state financial disclosure statement because the flights were arranged by the RGA, intended to benefit the RGA, and reported, as required, to federal tax authorities as in-kind contributions to the Republican governors group.

Spectacle Entertainment, formerly known as Centaur Gaming, spent $21,486.15 to fly the governor and his wife Janet Holcomb to the July 22-25, 2018, RGA meeting in Aspen, Colorado, and $33,961.95 to take the Holcombs to the Nov. 27-29, 2018, RGA meeting in Scottsdale, Arizona.

Holcomb is RGA policy chairman and a member of the organization's executive committee. In those roles, Holcomb is expected to assist the RGA in its mission of electing more Republican governors and to meet with RGA donors, according to the IG report.

The RGA also was the top contributor to Holcomb's 2016 gubernatorial campaign, due in part to the organization's role in redirecting to Holcomb contributions returned to donors after Gov. Mike Pence aborted his re-election bid to run for vice president.


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