The Forest County Potawatomi filed a lawsuit Thursday challenging the federal government's rejection of compact language that would have left the state on the hook for reimbursing the tribe if the rival Menominee Nation gets a casino in Kenosha.
In the lawsuit, which was filed in federal court in Washington, D.C., the Potawatomi contend that the Bureau of Indian Affairs incorrectly interpreted the language to mean the Menominee would have to reimburse the Potawatomi. The tribe also says the decision deprived it of its right to freely negotiate compacts with the state and restricts Gov. Scott Walker's discretion to set the terms for approving the new casino.
"Good government requires clear rules, and we think the BIA violated those rules," Potawatomi attorney Jeff Crawford said in a news release. "This Amendment would have clarified how the provisions of our ... gaming compact will be enforced. The federal government's decision only creates more questions and uncertainty for the Kenosha casino project."
BIA spokeswoman Nedra Darling didn't immediately respond to an email seeking comment. A spokesman for Walker declined to comment. In a statement, the Menominee accused the Potawatomi of trying to create confusion and said the courts will uphold the BIA's decision.
"Federal courts give agencies like the Bureau of Indian Affairs (BIA) a lot of latitude in making decisions," the statement said.
The lawsuit is just the latest twist in the complex, high-stakes saga surrounding the new casino.
The Menominee have been pushing to build a casino in Kenosha for years, hoping revenue from Milwaukee and Chicago gamblers will help pull the tribe out of poverty.
The federal government approved the idea in 2013, leaving the final decision up to Walker. He has until Feb. 19 to make a call. The Potawatomi, though, fiercely oppose the project, fearing it would cut into their Milwaukee casino's profits.
The Potawatomi say their gambling compact with the state requires the state to reimburse the tribe for any losses linked to a Kenosha casino. The tribe also maintains that the agreement requires the state refund payments the tribe made to the state to guarantee exclusivity in the region if the new casino is built. Walker's administration has warned that those back payments could total in the hundreds of millions of dollars. The tribe has already withheld its $25 million annual payment to the state out of concerns Wisconsin will end up owing the tribe if the casino goes forward.
As per the compact, the state and the Potawatomi turned to arbitrators last year to determine the financial terms for reimbursement. The arbitrators produced a compact amendment establishing that the state is responsible for ensuring the Potawatomi are reimbursed and laying out the process for determining the Potawatomi's losses. The Menominee have said they would reimburse the Potawatomi but under the new language the state would ultimately be responsible for making sure the Potawatomi get paid.
Kevin Washburn, assistant secretary of Indian Affairs in the U.S. Department of the Interior, rejected the amendment on Jan. 9. He wrote in a letter to Walker and Potawatomi Chairman Harold Frank that the new language shifts the cost of any impact on the Potawatomi to the Menominee in hopes of preserving the Potawatomi's "monopoly profits."
The Potawatomi argue in their lawsuit that this interpretation was completely wrong.
"The 2014 Compact Amendment is carefully crafted to create no contractual duty upon Menominee or any entity other than Potawatomi and the State of Wisconsin," the lawsuit said.
The BIA has 60 days to file a response.
Follow Todd Richmond on Twitter at https://twitter.com/trichmond1