[Discussion off the record.]

EXAMINATION BY MR. DOLD:

Question. My question to you on the exhibit you have before you, which has been marked MA-13, that was drafted by Mr. Skibine, do you know why at such a late date, June 29th, just two weeks before the decision, the letter was drafted for Ada Deer, or-and also, the Deputy Commissioner for Indian Affairs, Hilda Manuel?

Answer. I don't know as to Ada Deer, whether she communicated her recusal at that point. Gaiashkibos is still listed as the tribal chair. I think by this date he had not been-I think he had been moved out of office. Why it's on the two, either Ada Deer's or Hilda Manuel's, I think it goes to the appeal rights, whether it appeals to the BIA, or whether it appeals to the Secretary. So who signs the letter and whether it is for the Secretary's office or for the BIA triggers different appeal procedures, and so that's why I suspected it was written for either.

Question. But so at this point in time, June 29th, 1995, Mr. Skibine did not know that you were going to be the final decision maker?

Answer. I don't suspect that he did

[Anderson Deposition Exhibit No. MA-14 was marked for identification.]

EXAMINATION BY MR. DOLD:

Question. I'm showing Mr. Anderson what has been marked MA-14. It is a statement from Secretary Bruce Babbitt before the Senate Committee on Governmental Affairs dated October 30, 1997. I will allow you to take a look over it even though I only have one specific question on one line.

Answer. Okay.

Question. Directing your attention to page 2, at the top of the page, it says "Fourth, the Department based its decision solely on the criteria set forth in section 20 of the Indian Gaming Regulatory Act."

Is that a true statement?

Answer. It's not an accurate statement, because it's based on section 20 and 465, so the decision letter clearly states both criteria. I would note that independently section 20 was sufficient grounds, but certainly the letter discussed both [Anderson Deposition Exhibit No. MA-15 was marked for identification.]

EXAMINATION BY MR. DOLD:

Question. I'm showing Mr. Anderson what has been marked MA-15 and I will ask you to look it over, even though I don't have any questions on the substance of the e-mail. It is an e-mail from Mr. Keep marked "priority urgent" to John Leshy, Heather Sibbison, George Skibine, Tom Hartman, Michael Anderson, Hilda Manuel, Troy Woodward, and a couple of others.

My question to you is on the handwritten note at the bottom. It's not quite as legible as we would like, but I believe it reads, "Notify White House Counsel Office" with a circle around it. First of all, have you ever seen the document? Answer. Yes, I saw it probably when it went through the e-mail.

Question. Just for the record it's dated 3-21-97?

Answer. Yes. Since I'm on the list, I would have read the document.

Question. Do you recognize the handwriting?

Answer. It's not mine, but no, I don't recognize it.

Question. Do you know why you would want to notify the White House Counsel's Office on this matter?

Question. Have you had any contacts with them since they have left the Department of the Interior?

Answer. I have seen both John and Tom since they have left the department, yes. Question. In a social capacity or in a business capacity?

Answer. In a business capacity with Mr. Duffy, and social for Mr. Collier.

Question. What business did you conduct with Mr. Duffy?

Answer. Mr. Duffy is a lobbyist for the-a representative of the Shakopee Tribe and he has been in on behalf of the tribe to my office.

Question. The Shakopee Tribe are a Minnesota tribe?

Answer. Yes, that's correct.

Question. And they were opposed to the Hudson casino, is that correct?
Answer. That's what I understand.

Mr. BALLEN. Did you know that at that time?

The WITNESS. No, the only one I was aware of at the time was Mille Lacs. I wasn't aware of Shakopee's opposition.

Mr. BALLEN. Just to be precise, at the time of the Hudson Dog Track matter?
The WITNESS. Right.

Mr. BALLEN. Between April and July of 1995?

The WITNESS. That's correct.

EXAMINATION BY MR. DOLD:

Question. Has anyone ever discussed with you the political affiliation of the tribal representative, of any tribal representative in favor of the Hudson Dog Track? Answer. Political affiliation?

Question. Yes.

Answer. No. I mean I knew-no one discussed. I knew that Gaiashkibos was a Republican. I knew that when I was an NCAI director. I knew that Debbie Doxtator was a Democrat, but no one discussed those affiliations.

Question. Has anyone ever discussed with you that the Minnesota tribes have been strong Democratic supporters?

Answer. No, no one's discussed that with me. I know that. I knew that for a fact in 1992.

Mr. DOLD. Why don't at this time, I guess we are talking four questions, so why don't I turn it over to you, unless you want me to try to

Mr. BALLEN. If you have four questions left, I think

Mr. DOLD. I'm just trying to think through them a little bit.

Mr. ELLIOTT. Do you want time to think through while he asks his?

Mr. DOLD. That's what I was going to propose.

Mr. ELLIOTT. Go ahead.

Mr. BALLEN. All right.

EXAMINATION BY MR. BALLEN:

Question. Mr. Anderson, first of all, on behalf of the Minority we would like to thank you for coming here today and taking time from your busy schedule. Are you an American Indian background?

Answer. Yes.

Question. And you testified a little bit to this, but how long have you worked on American Indian issues in a variety of capacities?

Answer. I first worked for Indian tribes in 1978, and I have worked in on behalf of tribes most recently in the private sector as the Director of the National Congress of American Indians, and then of course my work at the Department of the Interior. Question. And just so we understand, the National Congress of American Indians is in fact a leading

Answer. Intertribal advocacy group.

Question. An intertribal advocacy group in the country for American Indians?
Answer. That's correct.

Question. So you are committed to helping American Indians; would that be a fair statement?

Answer. Yes.

Question. In fact, you know, in the discussion about Gaiashkibos, chairman of one of the tribes, you knew him from your time at NCAI, is that not a fact?

Answer. Yes.

Question. And if you could in this matter, the Hudson matter, you would want to help applicant tribes?

Answer. Yes. Our goal was to create economic development for tribes.

Question. And were you sympathetic to Mr. Gaiashkibos and these three applicant tribes?

Answer. Yes.

Question. If there were a way under the law and the facts as presented for you that you could have approved this application, would you have?

Answer. Absolutely.

Question. In all your years, sir, both as an attorney and working on Indian issues, has anyone ever questioned your professional integrity?

Answer. No.

Question. Have you always done what you feel to be right?

Answer. Yes.

Question. On these issues?

Answer. Yes, I have.

Question. And you also believe that one of your roles in the BIA was to try to aid in the economic development of Indian tribes?

Question. In your experience at the Bureau of Indian Affairs, do the Bureau of Indian Affairs area offices support most, if not all, tribal applications that are forwarded to Washington?

Answer. They seem to generally. I think because they, particularly if it's a difficult decision, if they want to preserve the right of review, they will send it forward, and they also sometimes don't want to take the heat for decisions at the local level, so they typically forward things for decision to the Washington level.

Question. And does the central office in Washington always agree with the area recommendations?

Answer. No.

Question. So it's not unusual for the central office to deny an application, even though it is supported by the BIA area office?

Answer. I don't know the exact record of disagreements. I know that those disagreements do take place.

Question. But in the Hudson Dog Track matter, it was the Washington office that had the final decision on this application?

Answer. That's correct.

Question. And that was consistent with the directive issued by Secretary Lujan under the Bush administration?

Answer. Yes.

Question. When you made this decision, sir, did you rely on the expertise of your career civil service staff to make your recommendation?

Answer. Yes.

Question. And that would be Mr. George Skibine and the Indian Gaming Management Staff?

Answer. Right. I saw him as the primary repository of expertise in the government.

Question. In relying on the Indian Gaming Management Staff, did anyone on that staff suggest to you or did Mr. Skibine suggest to you that there was support for approving this application of the three applicant tribes?

Answer. No. No, I never received recommendation from anyone in the Department at the Washington level for outright approval.

Question. And to your knowledge, the discussions and disagreements you have been asked about today within the Indian Gaming Management Staff centered on reasons for denying the application, denying the application; is that correct? Answer. That's correct.

Question. So to the best of your knowledge, the career staff concurred in the final decision that you made?

Answer. Yes.

Question. In fact, they recommended it to you?

Answer. Yes. The career director made the final recommendation to me.

Question. So any suggestion that's made the decision was made against the recommendation and over the objection of the career staff is false?

Answer. That's correct, false.

Question. Is it correct to say that the Hudson application was denied under section 20 of the Indian Gaming Regulatory Act?

Answer. Among the reasons, yes, section 20.

Question. And also, that it was denied under the Indian Reorganization Act, codified now as section 465?

Answer. Yes.

Question. And it's correct to say that some involved in the review of the application believed that the record did not support a finding of detriment to the community under section 20, some staff people?

Answer. There was discussion about the level of detriment. There may-I'm not aware of anybody disagreeing with the final conclusion.

Question. And you formed this belief based on the facts in the case?

Answer. Yes.

Question. Your opinion was not based on any improper interference by lobbyists? Answer. No.

Question. Any knowledge of campaign contributions made by opponents of the casino project?

Answer. No.

Question. And you believe there was a sufficient showing under section 465?
Answer. Yes.

Question. That that standard was met?

Answer. Yes.

Question. In fact, your belief was that this application could be denied under section 465 and/or section 20?

Answer. Yes.

Question. Sir, just to run through this with you, the application was denied in part because of the documented and substantiated opposition from the local community, including local government officials; is that correct?

Answer. It included that reason, yes.

Question. Did the Hudson city council, to your knowledge, pass a resolution opposing the casino?

Answer. Yes.

Question. And did you not also receive a letter dated April 25, 1995, signed by the mayor of Hudson and the 4th district alderman, who said that the casino would be detrimental to the City of Hudson?

Answer. I don't recall any letter.

Question. Did the local officials have concern as to actual detriment to the best of your recollection, including law enforcement, wastewater treatment, and problems with solid waste?

Answer. The reasons contained in the letter dealing with traffic and land use conflicts were communicated to me.

Question. Did the neighboring Town of Troy also pass a resolution opposing the casino?

Answer. Yes.

Question. And the record also included, or did it, to the best of your recollection, letters from local elected representatives, including Representative Sheila Harsdorf of the assembly, who opposed it?

Answer. I'm not aware of those letters.

Question. Was it your position, sir, to give defense to the stated official views of democratically elected local officials?

Answer. Yes. I believe those were the best expression of the surrounding communities' views on the application.

Question. Did you think it was your responsibility to question the motives of these officials?

Answer. No.

Question. Did you believe it was your job to substitute your own opinion for that of the local democratically elected officials of the towns concerned?

Answer. In this context, where there was a rationale behind the resolution, no,

I didn't feel I could substitute my judgment.

Question. Are you elected by the citizens of Hudson to represent them?

Answer. No.

Question. Are you elected by the citizens of Troy to represent them?

Answer. No.

Question. We could go through, there are letters from the local business community and the other tribes in the area, but I believe you testified to that, and answered the record in that regard; is that correct?

Answer. Yes, I have testified.

Mr. DOLD. With regard to what? I'm sorry.

Mr. BALLEN. Other expressions of local support and opposition.

EXAMINATION BY MR. BALLEN:

Question. Sir, were both sides in this matter, to your knowledge, supporters and opponents of the casino free to send their views into the department until a final decision was made?

Answer. Yes. It was my understanding that, given our practice was to receive information and to meet with basically whoever wanted to.

Question. Was this a formal rulemaking process with defined comment periods that closed, or was this an informal process where people were free to submit their views?

Answer. No. This was generally informal, and really up to and including the day of the decision. If someone brought information that changed the decision, we would certainly look at it.

Mr. DOLD. Was there an official comment period, though, set by the area office on this matter?

The WITNESS. There was certainly a deadline set for consultation. I'm not sure I would state that as a formal comment period or not. I don't-I imagine the practice expected was the practice of the Gaming Management Staff was that if it came in after the deadline they would still review it.

EXAMINATION BY MR. BALLEN:

Question. In fact, didn't the applicant tribes get an opportunity to make their case to the central office people, to the best of your knowledge?

Answer. To the best of my knowledge, the Gaming Management Staff met with persons involved in this matter.

Question. And in fact, how about lobbyists for the applicant tribes? Were they afforded an opportunity to meet with Interior officials, to the best of your knowledge? Answer. They certainly were not banned, and I expect those meetings took place. Question. To just go through this so you can state your point of view clearly and in one spot, did the fact that the proposed casino was not on or contiguous to the applicant tribes' reservations factor into your decision?

Answer. Yes. It was a key factor.

Question. Why was it a key factor?

Answer. Because the tests for detrimental impact is certainly swayed by location of where the casino is going to be located. The further away you get, the less compelling the rationale for locating the tribes' casino on a faraway location. Question. And this was, in fact, quite far from the three applicant tribes?

Answer. Right. Eighty to 188 miles, depending on the tribe.

Mr. DOLD. Was this the furthest application that you had seen.

The WITNESS. The one that I had seen, the City of Milwaukee had accepted and the governor had concurred in an application to take one for Potawatomie which was 250 miles away. In that case, the city supported the application, but yes, as far as the Babbitt administration, I think it's the farthest one.

EXAMINATION BY MR. BALLEN:

Question. Sir, we covered this earlier. Did environmental concerns factor into your decision to reject this application?

Answer. Yes.

Question. Specifically, threats to the St. Croix National Scenic Riverway?

Answer. That's correct.

Question. And in making that determination, there is an environmental

Answer. If I might add that I think it was there needed to be a sufficient environmental assessment of that problem, I'm not sure if the actual threat was identified.

Question. Right. In coming to that conclusion, there is an environmental specialist on the staff of the Indian Gaming Management group?

Answer. Yes.

Question. Is that correct?

Answer. That's correct.

Question. And you relied on the expertise of your staff, or the staff of the Indian Gaming Management, to come to that conclusion, is that correct, the environmentalist who was specifically assigned to that responsibility?

Answer. Yes, right.

Question. Was there also substantial was there also strike that, please, was there also concern expressed by staff members as to whether or not this particular contract would have been in the best interests of the applicant tribes?

Answer. Yes. I was informed by Mr. Skibine and Mr. Hartman, one of the two, that there were significant problems under the Indian Gaming Regulatory Act as to the terms of the side lease agreement on a parking lot and whether that would have violated IGRA was it was presented to the department.

Question. To the best of your recollection, what was that side agreement that you recall about the parking lot?

Answer. The tribes would have paid Gallaxy Gaming Company, at the time I thought it was $1.5 million, I understand it may be millions more, for renting their parking lot, which was far above the market value of the parking lot. We, in the gaming area, guard and watch for those situations and the gaming commission does as well, because oftentimes, in order to make a deal more attractive, gaming management companies will go outside strict revenue processes, and they will add on side agreements that technically violate IGRA. The General Accounting Office has criticized the department for not scrutinizing those deals more carefully. So cer