Schwarzenegger ponders contributions from tribes

Chris T. Nguyen

Friday, July 16, 2004 | 8:47 a.m.

LOS ANGELES -- The need to raise enough money to fight two gambling initiatives on the November ballot may lead Gov. Arnold Schwarzenegger to break the pledge he made during last year's recall campaign not to take campaign contributions from Indian gambling interests, campaign advisers said.

The governor needs millions of dollars to persuade Californians to vote against Proposition 68 and Proposition 70, campaigns that have each raised nearly $10 million and threaten to derail negotiations with tribes to share casino profits with the state in exchange for expanded gambling rights.

Now, with four months remaining until the Nov. 2 election, campaign advisers said Schwarzenegger has not ruled out accepting contributions from the same groups whose money he turned down during his recall campaign against former Gov. Gray Davis.

That decision "is still on the table," said Todd Harris, a Schwarzenegger strategist, adding "it's premature for us to elaborate on it."

"We are always evaluating and re-evaluating our campaign contributions," said Marty Wilson, Schwarzenegger's chief political fund-raiser.

Administration officials referred calls about the governor's fund-raising efforts to outside consultants, including Wilson.

If Schwarzenegger is going to beat the two initiatives, he needs the money from Indian tribes that support him, analysts said.

"The tribes are major campaign contributors, so it would be foolish to set up a campaign and try to block that revenue source," said Bill Eadington, director of the Center for the Study of Gambling at the University of Nevada, Reno.

Meanwhile, the governor's vehicle for raising money to fight the two propositions, the Committee for Fair Share Gaming Agreements, has not raised a single dollar, according to campaign finance reports filed with the secretary of state's office. However, two anti-Proposition 68 committees run by Indian tribes have raised $15 million on their own.

Supported by card clubs and racetracks, Proposition 68 would allow them to operate slot machines, while the tribe-backed Proposition 70 would give tribes unlimited gambling rights.

Schwarzenegger formed his committee shortly before announcing new compacts with five tribes last month.

The compacts, which were approved by the Legislature, were designed to give the state $150 million to $200 million annually in exchange for allowing five tribes to operate additional slot machines beyond the 2,000 limit. The tribes are also making a one-time $1 billion payment to the state this year. All will be paid by bonds sold by the tribes.

The stakes are high for Schwarzenegger, whose new compacts could be challenged in court if either of the ballot initiatives passes in November.

Last September, Schwarzenegger said it would be improper to accept campaign contributions from tribes because, if elected, he would have to negotiate new gambling agreements with them.