Natives Slip Through Big Loophole in Campaign Finance

Native Americans groups, or sovereign tribes that live alongside other U.S. citizens but are subject to several exemptions from U.S. tax and other laws, are getting another break in the campaign finance reform law meant to reduce the impact of special interests on political campaigns.

"They are basically just reaching into the till that is full of business and gambling money and writing checks to politicians and political parties," said Jan Baran, an elections law attorney.

While most special interest groups will lose their ability to donate soft money and are limited to low caps on direct contributions if and when the campaign finance bill is enacted, tribes which participate in the $5 billion a year Indian gaming industry will not be subject to the same rules.

An existing rule by the Federal Elections Commission already exempted tribes from the same contribution limits that apply to other Americans. But lawmakers, who had an opportunity to close the loophole during recent debate on the measure, decided to leave the exemption in place.

"Under the current law, individuals have an overall cap of $25,000 a year that they can give to candidates and federal political committees. Indian tribes don't have that overall aggregate cap," said Ken Gross, a former council for the FEC.

The exemption allows Indian tribes to donate the maximum amount to every single candidate running for federal office, easily totaling hundreds of thousands of dollars in cash each election cycle.

"They have a big pot of money to use and make political contributions and as long as they distribute it on a per candidate or per committee basis within the limits, there is no cap on how much they can spend so they are in a good position," Gross said.

And give they do. During the 1994 election cycle, Indian gaming groups gave more than $600,000 to federal candidates and political parties. In 1996, they gave close to $2 million and during the 2000 cycle, nearly $3 million. Millions more went to state candidates.

"We have taken a long time. We suffered a lot because we didn't understand this political process and now that we have learned the process and we have a level playing field, we have got to be treated fair," said Erine Stevens, chairman of the National Indian Gaming Association.

The exemption could put Indian tribes in a position to donate more than any other single interest group in America.

Politicians don't seem to mind. Lawmakers don't appear in a hurry to close the loophole during a House and Senate reconciliation conference. And if the bill is signed into law by the president, Indian groups can start cashing in their chips.