The director of the Florida Gaming Commission was Eddie Naylor, a former state senator who had happily surrendered his seat for the fat salary the new agency offered when casino gambling arrived in the early 1990s and the state felt compelled to try and regulate it. His office was three blocks from Lacy’s, and the meeting had been easy to arrange. Far from the grungy digs of the Board on Judicial Conduct, his suite was in a modern building with fine furnishings, a bustling staff, and apparently no budget constraints. Florida was happily in the gambling business and its pliant taxing schemes were working smoothly.
One look at Lacy and Naylor decided he should leave his large desk and chat around the coffee table. At least twice before the coffee arrived, she caught him glancing at her legs, which were on full display courtesy of a skirt that was almost too short. After some preliminaries she said, “Obviously, our office investigates complaints against nonfederal judges in the state. There are a lot of them, and they keep us busy. Our investigations are confidential, so I ask for your cooperation in that regard.”
“Certainly,” Naylor said. Nothing about the guy inspired trust, from his shifty eyes and greasy smile to his ill-fitting suit and dress shirt straining at the buttons. Probably has a generous expense account, she thought. He could easily pass for another lobbyist working the streets of Tallahassee.
To impress her, he went through a windy summary of duties of “his commission.” All gambling in the state had been herded into one oversight agency, and he was the man in charge. Horse racing, dog racing, lottery, slots, casinos, cruise ships, even jai alai, were now under his jurisdiction. It seemed to be a mammoth undertaking, but he was up to the task.
“How much oversight do you have over the Indian casinos?” she asked.
“All casinos in Florida are run by the Indians, the Seminoles being by far the largest tribe and biggest operators. Frankly, though, and to be perfectly candid, when it comes to the Indian casinos we have very little oversight and control. A tribe that has federal recognition is its own nation and makes its own laws. In Florida, we have entered into treaties with all casino operators, and this allows us to collect a small tax on their profits. Very small, but it adds up. There are now nine casinos and they are all doing quite well.”
“Can you go into a casino and inspect its operations?”
He shook his head gravely and admitted, “No, nor can we check the books. Each casino files a quarterly report showing its gross revenues and net profits, and we tax from there. But, frankly, we have to take their word for it.”
“So a casino can submit whatever it wants?”
“Yes, that’s the current state of the law, and it’s not likely to change.”
“And a casino pays no federal tax of any kind?”
“That’s correct. By entering into treaties, we sort of cajole them into paying a little to the state. We do this by building a road here or there, and by providing a few services like emergency medical treatment and some educational support. On occasion they’ll ask for the state’s help for this and for that. But, truthfully, it’s completely voluntary. If a tribe says no to any form of taxation, there’s nothing we can do. Fortunately, none of them have taken that position.”
“How much do they pay?”
“One half of 1 percent of net. Last year that was about $40 million. It funds the bulk of our commission and the rest goes into the Florida rainy-day fund. May I ask where this is going?”
“Sure. A formal complaint has been filed alleging some bad behavior by a circuit court judge. It involves a developer who’s apparently in bed with a tribe and its casino and a judge who’s sharing in the profits.”
Naylor set down his coffee cup and shook his head. “Quite frankly, Ms. Stoltz, I’m not that surprised. If a casino wants to fudge on its financials and skim cash off the top, or under the table, doesn’t really matter, there’s little to stop it from doing so. It’s a perfect storm for corruption. You start with people who are not that sophisticated, and suddenly they’re raking in more profits than are imaginable. They attract all manner of crooks and con men who want to help. Add the fact that most of the business is in cash that’s absolutely untraceable, and it’s just a bad mix. We here at the commission are often frustrated by our lack of oversight.”
“So corruption does happen?”
“I didn’t say it happens. I said the potential is there.”
“But nobody’s watching?”
He recrossed his thick legs and thought about this. “Well, the FBI has the authority to investigate wrongdoing on Indian land, any kind of bad behavior. That’s pretty intimidating, I suppose. And again, these folks are not that sophisticated, so the idea of the Feds poking around keeps them in line. I should add that most of our casinos contract with reputable companies who know how to run casinos.”
“Could the FBI go in with warrants and grab the books?”
“I’m not sure. It’s never been done, as far as I know. And over the past twenty years the FBI has shown little interest in Indian affairs.”
“Why is that?”
“Don’t know exactly, but I suspect it’s a question of manpower. The FBI is focused on fighting terror and cybercrime. A bit of swindling in an Indian casino is of little interest. Why bother? The Indians have never had it so good, at least not in the past two hundred years.” He dropped another cube of sugar into his coffee and stirred it with a finger. “This wouldn’t be the Tappacola, would it?”
“It is.”
“I’m not that surprised.”