This interactive publication which includes all of the PowerPoint presentations for the Level III Commissioner Certification Trainings.
NIGA
CERTI Fl ED SEMINAR INSTITUTE COMMISSIONER CERTIFICATION TRAINING LEVEL Ill September 21 - 23, 2020 Virtual Webinar
NIGA Seminar Institute Commissioner Certification Training Level III AGENDA September 21-23 Zoom Virtual Meeting
Monday, September 21
Effective Regulation of Gaming Elizabeth Homer, Homer Law CHTD
9:00 AM 10:30 AM
10:30 AM 10:45 AM
Break
Hearing and Appeals Elizabeth Homer, Homer Law CHTD
10:45 AM 12:30 PM
12:30 PM 2:00 PM
Lunch Break
Network Risk Assessment Peter Nikiper, BMM Test Labs
2:00 PM 3:15 PM
3:15 PM
3:30 PM
Break
Employment Issues for Gaming Regulators Charlene Jackson, Jackson Law Tuesday, September 22
3:30 PM 5:00 PM
Conflict Management Elizabeth Homer, Homer Law CHTD Break Title 31/OFAC Josh Peukert , CPA Gaming & MICS Compliance AUP Junior Partner, Blue Bird CPA's Lunch Break Avoiding and Detecting Fraud: Active Investigation & Forensic Audits Sheryl Ashley, CPA Gaming & MICS Compliance AUP Partner, Blue Bird CPA's Break Managing a Tribal Gaming Regulatory Agency Billy David, Be-Co-Pa & Associates Wednesday, September 23
9:00 AM 10:30 AM
10:30 AM 10:45 AM
10:45 AM 12:30 PM
12:30 PM 2:00 PM
2:00 PM 3:15 PM
3:15 PM
3:30 PM
3:30 PM 5:00 PM
Surveillance Frauds, Threats & Vulnerabilities, PT 1 Billy David, Be-Co-Pa & Associates
9:00 AM 10:30 AM
10:30 AM 10:45 AM
Break
Surveillance Frauds, Threats & Vulnerabilities, PT 1 Billy David, Be-Co-Pa & Associates
10:45 AM 12:15 PM
Please plan to stay for the entire class on each day to get your certificate of completion. Please be on time for sessions
9/15/20
The Effective Regulation of Gaming
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What is Regulation? • Regulation in the broadest sense may be defined as a government measure or intervention intended to direct, alter, or otherwise affect the behavior of individuals or groups to produce a socially desirable outcome, e.g.: • Require individuals to wear seatbelts to reduce driving related mortality rates • Require businesses to pay taxes monthly to improve the collection of tax revenue
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What Purpose is Served by the Regulation of Tribal Gaming? Federal Perspective
Tribal Perspective • Realize fullest measure of tribal sovereignty • Improve the quality of life and standard of living of the tribal community • Take care of children, families, and elders • Achieve economic self-sufficiency • Create jobs and business opportunities • Provide quality health care • Provide adequate law enforcement • Provide adequate fire protection and suppression services • Protect tribal resources both human and natural • Preserve tribal identity and cultural existence for future generations
• Shield the Indian tribe from organized crime and other corrupting influences • Ensure that the Indian tribe is the prime beneficiary of the gaming operation • Assure that gaming is
conducted fairly and honestly by both the operator and players
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I want to tell the Committee about a young Choctaw man, only 37 years old. He got sick and needed a new kidney, but they told him at the hospital it would cost $250,000 and they wouldn’t do it unless he could put up at least half of the money. When we heard about it, we gave him the money out of our gaming account. The trouble was that we didn’t get all the right approvals from the Tribal Council, so we went back to Council to get their approval of what we did. The Council listened and when we got through, you know what they did? They enacted an ordinance that authorized me to spend the gaming money anytime a tribal member needs a transplant. They said from now on, no Choctaw will ever again die for lack of money.
This is what the gaming means to us.
Testimony of a Tribal Leader before the House Resources Committee on NIGC’s proposed Class II regulations, February 20, 2008, Miami, Oklahoma..
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How Does the Effective Regulation of Gaming Advance Tribal Goals? • Licensing screens out the people most likely to cheat and steal and keeps them out of tribal casinos and away from tribal cash • Internal Controls operate to ensure that casino managers and employees follow the procedures necessary to prevent fraud, theft & waste of tribal dollars • Monitoring serves to keep the staff honest • Auditing serves to keep management honest • Enforcement signals that the Tribe means business when it comes to safeguarding its assets • Regulations clarify the meaning of the statutory law and establish the standards of conduct that must be met • Hearing and Appeals ensure fairness and protect people from abuses of power
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What Makes Regulation Effective? Regulatory Agency • Independence • Sound Organizational Structure • Proper Delegation of Authority • Adequate Funding • Proper Balance of Power • Oversight • Governmental Support of the Regulatory System Regulator • Understands the Law • Understands Role • Understands Scope of Authority • Ethical, Principled, & Fair • Possesses Sound Judgment • High Work Ethic • Good Management Skills • Good Interpersonal Skills
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Regulatory Structure “Independence” An Independent Regulatory Agency is a governmental instrumentality created to interpret, implement, administer, monitor, and enforce statutory law within the limits of its delegated authority and to act and make decisions based on law and legal considerations ---
NOT POLITICAL CONSIDERATIONS
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“Independent”
• Does not mean:
• “Separate and Apart From” • “Free of Constraints” • “Unaccountable for its Acts & Decisions” • It Means: • Reasonably Insulated from Political Interference with its Decision making Processes in the Implementation and Enforcement of Civil Regulatory Law.
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Why is Independence Important? • To regulate effectively, the regulator must apply the law to facts on the basis of legal and regulatory policy considerations in much the same way as a judicial body operates, but for the purpose of achieving the regulatory objective: Enforcing Compliance with the Law
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Independence • Regulatory bodies are responsible for making hard decisions that may be politically unpopular, e.g. • Denial of a gaming license to someone well- liked in the community • Imposition of a fine or sanction • Order to suspend use of or remove equipment
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The Case for Independence • When politically unpopular decisions are made, those aggrieved by such decisions often resort to political tactics and seek to bring political pressure on the agency. • The principle of independence is intended to shield both political and regulator officials from these situations in order to ensure that regulatory objectives are not undermined by political considerations.
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Regulatory v. Political Processes • The Enactment of Law is a Political Process • The Promulgation of Regulations is Largely Political in Nature, but • The Implementation and Enforcement of the Law is a Regulatory Process • Hence the Concept of Independence is much stronger in the Context of Implementation and Enforcement than in the Context of Rulemaking
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How is the Framework Supposed to Work? • The Legislature Enacts the Law through the Political Process • Establishing the “Independent Regulatory Agency” • Specifying the Functions, Duties, and Responsibilities of the Agency • Delegating the Agency the Necessary Authority to Implement and Enforce the Law • Imposing Standards for Agency Conduct • Providing for Agency Oversight Agency Authority & Functions, Duties, and Responsibilities • Typically, an Independent Regulatory Agency is Delegated Broad Authority to: • Interpret & Implement the Law through the Promulgation of Regulations (Quasi-Legislative Power) • Monitor Compliance and Enforce the Law (Quasi-Executive Power) • Apply the Law to Facts to Determine whether the Law has been Offended and Assess Sanctions (Quasi-Judicial Power)
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Making the Framework Work: Balance of Power Legislate + Execute + Adjudicate = “Basic Powers of Government” In the Constitution, the Framers Carefully Divided These Powers and Assigned them to the Three Branches of Government WHY?
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Why??? • To Provide a Strong Governmental Structure with Proper Checks & Balances • To Secure the Basic Rights and Fundamental Freedoms of the Citizenry Guaranteed by the Constitution • To Constrain Governmental Power • To Prevent Governmental Abuses of Power • To Ensure Fundamental Fairness and Due Process of Law
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How are these Objectives Achieved in Relation to Regulatory Agencies? • Regulatory Agencies may Possess Broad Powers, but they are Limited in Nature • A Regulatory Agency may not Act so as to Exceed the Scope of its Delegated Authority • Standards are Applied: An Agency is Prohibited from Acting in an Arbitrary & Capricious Manner • Agencies must Faithfully Interpret and Apply the Law as Intended by the Legislature. • Agency Actions & Decisions are Subject to Political and Judicial Oversight
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Effective Regulatory Structure
• May be Achieved through Various Organizational Models Structured to Meet the Particularly Structure of the Governmental Entity Creating the Agency • Structures may have Varying Degrees of Complexity from Basic to Complex • Structure of the Agency will Depend on the Organizational Components Necessary
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Citizenry (Electoral Process)
Legislature Legislates Confirms Executive Appointments
Executive Appointment
Judiciary Judicial Oversight
Regulatory Agency Legislative, Executive, Judicial
Gaming Operation
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Tribal Court
Council Legislates
Enforcement
Licensing
Operation
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Tribal Governing Body
Tribal Gaming Commission Rulemaking Hearings & Appeals
Office of Tribal Gaming Compliance Day-to-Day Regulatory Activities
Tribal Gaming Enterprise
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Electorate
Executive
Legislative
Judicial
Regulatory Agency
Gaming Enterprise
Gaming Facility
Gaming Facility
Gaming Facility
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Gaming Commission Commissioner or Commissioners
Legal Counsel
Audit & Enforcement Division
Office of Hearings And Appeals
Licensing Division
Gaming Enterprise
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Gaming Commission Commissioner or Commissioners
Hearings & Appeals
Legal Counsel
Executive Director
Licensing Division
Audit Division
Enforcement Division
Employee Licenses Vendor Licenses Facility Licenses Background Investigations
Gaming Machines MICS: Operational Special Investigations IT
Internal Audits Title 31 MICS: Accounting
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All Models Can Be Effective • The Key to Effective Regulation is not in a Particular Organizational Framework • The Key to Effective Regulation is Selecting the Right Framework in terms of: • The Overall Institutional Structure of the Tribal Government; • The Size and Scope of the Regulated Activity; • Available Resources; and • An Unwavering Commitment to the Framework and Making it Work by Everyone within the System. Commitment to the System • Even if a Government has Adopted an Excellent Gaming Ordinance Establishing a Well-Funded, State-of-the-Art Regulatory Structure with Clearly Defined Authority, Powers, Responsibilities, and Functions, there is NO Guarantee that the Agency will be Effective • A Regulatory Agency Cannot Be Effective without the Trust and Support of the Government that Created it.
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The Importance of Oversight • Governmental Support and Trust are Prerequisites to Effective Regulatory Agencies • It is Antithetical to Human Nature, however, to Place a High Degree of Trust in an Entity that Possesses Tremendous Power over which one has Limited Capacity to Control, Particularly where the Entity has the Power to Affect the Financial Health of one’s Most Valuable Asset
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Effective Oversight is Essential to Accountability • The Most Effective Check Against Agency Abuses of Power is Oversight because it Operates to Effect Accountability • If Accountability Measures are Built Into the Regulatory Framework, it is much Easier to Place One’s Trust in the Agency
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Accountability Measures
• The Statute Provides for: • Clearly Defined Agency Roles & Responsibilities • Clear Delegation of Powers • Due Process of Law • Qualified Appointees & Staff • Standards to Guide Conduct & Decisionmaking Judicial Oversight • Appropriate Political Oversight
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Principles for Oversight • No Person should ever be the Ultimate Arbiter of his or her Own Decisions • Political Processes are not Appropriate for Handling or Reviewing Civil or Criminal Law Enforcement Actions and Decisions in particular cases or matters because Political Processes Entail Political Considerations which are Inappropriate in the Context of the Application of the Law to a Particular Set of Facts • Judicial Bodies are the Appropriate Entities for Providing Oversight in the Context of Agency Action & Decisionmaking as the Interpretation of Law and the Application of the Law to Particular Facts is a Judicial Function
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Principles of Oversight • Decision Makers Make Better Decisions when they Understand that the Decision is Subject to Judicial Review • Judicial Review Serves as an Important Check Against Abuses of Power • Judicial Review Serves to Ensure the Proper Interpretation and Application of the Law • Judicial Review Serves as a Check Against Error, Bias, Poor Judgment in Decisionmaking, Misapplication of Law, and Misconduct • The Assurance of Due Process Increases Public Confidence in the Government and its Processes
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To Trust and Support… • Improves Regulatory Effectiveness • Strengthens the Regulatory Framework • Advances Statutory Objectives • Decreases the Potential for Conflict and Power Struggles • Encourages Sound Decisionmaking
• Advances the Tribal Interest • Increases Political Stability • Represents Half of the Equation
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The Effective Regulator • Inspires Trust and Confidence in the Regulatory Process • Understands his or her Responsibilities, Duties, Obligations as well as the Agency’s Functions under the Law • Acts within the Scope of Authority Delegated • Fairly and Objectively Applies the Law • Exercises Good Judgment • Is Ethical, Reasonable, and Fair • Has a High Work Ethic • Exercises Discretion • Ensures that Subordinates are held to the Same Standards of Conduct
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Primary Goal of the Regulator
• To Effect Compliance • With the Law Through • Fair and Reasonable Regulation • In Order to Ensure the Integrity of the
Regulated Industry without stifling its growth & profitability so as to • Foster Public Confidence and Achieve • All Regulatory Objectives
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End
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Administrative Hearings and Appeals
The Hearing Process
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DISCLAIMER
• This Presentation is Based on General Principles of Law and Jurisprudence Arising Primarily from the Federal Administrative Procedures Act. • The Law Governing the Hearing Process for Tribal Gaming Commissions is Tribal Law . • Accordingly, While this Presentation is Intended to Assist you with Basic Concepts and Principles, You Should Always Rely on Your Tribe’s Gaming Ordinance or Administrative Procedures Laws in Conducting Hearings • If Your Agency is Authorized to Conduct Hearings, but Tribal Law Does Not Contain Procedures Your Agency, if Authorized, Should Promulgate Regulations Establishing such Procedures and Make them Available to All Licensees.
Tribal Gaming Regulatory Agencies
• Tribal Gaming Regulatory Agencies are Typically Accorded Broad Powers, Including the Authority to: • Promulgate Rules • Monitor Compliance • Investigate Possible Violations • License • Enforce the Law • Sanction and Penalize • Adjudicate
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The Authority of a Regulatory Agency, however, is of a Limited Nature An Agency may only Exercise Such Power as it has been Delegated and NO MORE.
Limitations on Authority
Agency Authority is also Constrained by Certain Fundamental Principles
•Due Process of Law •Fundamental Fairness Adhere to Principles of
An Agency Must…
It Must Act Within the Scope of its Delegated Authority
It May Not Act in an Arbitrary and Capricious Manner
It Must Interpret the Law Fairly and Reasonably
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WARNING
• No Matter How Good its Hearing Procedures or HowWell it Conducts Hearings, an Agency Action or Decision is Vulnerable Upon Appeal if it Fails to Adhere to the Foregoing Principles
The Basics
• While a Gaming License is Usually Deemed a Privilege NOT a Right, Most Tribal Gaming Ordinances Grant Licensees some Right of Hearing if the Agency Denies, Suspends, or Revokes a Gaming License or if it Acts to Sanction a Licensee for a Violation of Law.
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The Right to Hearing
• The 5 th and 14 th Amendments of the U.S. Constitution guarantee all citizens the right to “Due Process of Law” when government actions deprive a citizen of life, liberty, or property. • This principle is applicable to actions of tribal governments by means of the Indian Civil Rights Act of 1968. 25 U.S.C. § 1301
• An Administrative Hearing is Typically a Significantly less Formal Proceeding than a Trial in a Court of Law • At the Same Time, Both Trials and Administrative Proceedings are Governed by the Same Constitutional Principles of Fundamental Fairness and Due Process of Law
Trial v. Administrative Hearing
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Due Process of Law
Entails the exercise of governmental power within settled principles of law conducted in such a way so as to safeguard the rights of the individual. More succinctly put… the right of a citizen to be heard and to defend against governmental actions or decisions impinging upon the protected rights or interests of the citizen under the Constitution and/or laws of the United States.
Administrative Proceedings
• The APA does not Subject All Agency Actions to the “Formal” Adjudicative Process contained in Section 554 of the Act • The Underlying Statute MUST require a “Hearing on the Record” to trigger the Formal APA Process • Most Agency Adjudications, thus, are “Informal” and prescribed by Agency Rule
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So What Process is Due?
• The Answer Depends… • What Does The Gaming Ordinance Require? • Formal “On-the-Record” Hearing? • Semi-formal Hearing? • Informal Meeting? • Exchange of written documents? • Is there other Applicable Tribal Law, such as a Tribal Administrative Procedures Act?
Basic Procedures
• The APA Provide Certain Minimal Procedures Applicable to Both Formal and Informal Adjudications See, 5 U.S.C. § 555: • Right to Counsel for Parties Compelled or Entitled to Hearing • Conclusion of Matters in a Reasonable Time • Right to Appear, including interested persons if the “Orderly Conduct of Public Business Permits” • Prompt Notice of Denial of Applications • Statement of Reasons for Denial
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Agency Procedures
• Tribal Law, however, may or may not Accord a Respondent the Same Procedures as Contained in the APA • The Right to be Represented by Counsel, for example, may Differ • The Degree of Formality may Differ • The Right to Appeal, Discovery, or other Procedures May Differ
Fundamental Procedures
• Due Process, however, Requires Certain Basic Procedures: • Notice
• Opportunity to be Heard • An Impartial Adjudicator • Fair Process
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Notice
• Due Process Encompasses the Notion that “Fundamental Fairness” Requires the Respondent to be Provided “Effective Notice.” Generally, “Effective Notice” Entails a Writing Containing:
• Date, Time, and Location of the Proceeding • Information as to the Nature of the Proceeding;
• Statement of Legal Authority and Jurisdiction (With Citations) • Narrative Statement of the Matters or Issue (With Particularity) • Reference to Potential Outcome (Fine, Suspension, Revocation) • Statement of Rights (Right to be Represented by an attorney present; Present Evidence; etc._ • Reference to Degree of Finality (Reconsideration, Appeal)
In Other Words…
• A Person Should Always Be Advised of • What is happening • When and Where it’s Happening? • Why it’s Happening? • What could Happen? • And, What they can do if its does.
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Example
• Dear Licensee:
• You are hereby advised that the Gaming Commission is in receipt of evidence indicating that you violated Section 15.1 of the Gaming Code, which prohibits any licensee fromaccepting any thing of value in excess of $25.00 froma gaming vendor. In particular, it is alleged that you accepted a Rolex Watch valued at more than $25.00 fromthe XYZ Gaming Machine Company. • You are furthermore advised that a hearing has been scheduled to afford you the opportunity to show cause why the Gaming Commission should not suspend or revoke your gaming license and/or assess a civil fine against you for this violation. • The hearing shall take place on January 1, 2008 at 2:00 p.m. at the Gaming Commission’s offices located at 1313 Mockingbird Place in Our Town, Oklahoma. • Under the Gaming Code you have a right to be represented by an attorney at the hearing as well as the right to present witnesses or other evidence, provided that you submit a witness list and copies of any documents you plan to present at the hearing on or before December 1, 2002. If you choose to be represented by counsel, you should have your attorney contact the Commission’s Attorney at 1600 Pennsylvania Ave… • If the Gaming Commission determines that you have violated Section 15.1 of the Gaming Ordinance, it may suspend or revoke your gaming license and/or assess a civil fine against you up to $5,000.00. In the event you are assessed a fined or your license is revoked, you will have the right to appeal the Commission’s decision to…(the full Commission; tribal court; etc). • Should you fail to appear at the hearing, the Commissionmay issue a final determination and assess any of the aforementioned civil sanctions. Under the Gaming Code, failure to appear at hearing constitutes an admission of the facts alleged and a waiver of your right to appeal the Commission’s determination
Rights of Parties at Hearing.
• In a Formal Proceeding, a Respondent has a Right to a “Full and Fair Opportunity” to Participate, including the: • Right To Appear (and, usually to be Represented by Counsel (At Respondent’s Own Expense). • Right To Inspect Evidence of the Proponent • Right To Testify And Present Evidence • Right To Call Witnesses • Right To Confront And Cross-examine Witnesses
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The Agency
• Has a Corresponding Rights and Duties, Including The” • Right to Call Witnesses and Present Evidence • And the Duty to Present Sufficient Evidence to Meet its Evidentiary Burden • “Clear and Convincing Evidence” • “By a Preponderance of the Evidence” • “Substantial Evidence” • The Right to Cross-Examine Respondent and Respondent’s Witnesses.
The Adjudicator
• Hearings may be Conducted by Various Types of Adjudicators: • Sometimes Hearings Are Conducted by a Body or they may be conducted by a Single Adjudicator, such as:
• Hearing Officer • Presiding Official • Administrative Law Judge
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The Adjudicator
• Must be “fair and impartial” • This means that the Adjudicator should:
• Have no “pecuniary” (financial) interest in the matter (or other conflict of interest); • Be Unbiased (free of personal animus) • Not have Prejudged the Outcome
Discovery
• Discovery is the Means Through which Evidence is Exchanged Between Parties • The Requirement for and Scope of Discovery Depends on the Relevant Legal Authority • In Administrative Proceedings Discovery is Typically more Limited than in the Context of a Trial. • Discovery may Simply Involve the Exchange of Documents or it Could Entail Witness Interviews, Depositions, Interrogatories, or the Use of Subpoenas, for example.
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The Record – Regardless of whether there is a Statutory Requirement for Administrative Hearings to be “On the Record,” a Record Should be Maintained in any Oral Proceeding (Audio Recording Will Suffice unless Court Reporter Required by Law). An Administrative File Should Also be Opened and All Documents introduced as well as Investigative Reports and any other Relevant Materials Should be Included in it.
Conducting the Hearing
Without these Items, the Agency is Extremely Vulnerable if the Matter is Subsequently Appealed
The Agency’s Jurisdiction is Clearly Established
Oaths are Administered and Recorded
Bear in Mind the Importance of the Record and See that…
The Adjudicator, Respondent, Witnesses, and Attorneys are Clearly Identified for the Record
Ensure that Responses are Verbal
Establish the Time, Date, and Location of the Hearing
Establish the Reason for the Hearing
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Burden of Proof
In Criminal Trials the Burden of Proof is on the state or federal government and in Civil Cases the Burden of Proof is on the Plaintiff.
At Trial the Party with the Burden of Proof Presents First.
In Administrative Proceedings the Party Bearing the Burden of Proof Depends on what is Contained in the Statute, in some cases it will be the agency while in others it may be the Respondent.
The Default Rule in Federal Administrative Proceedings is that the Agency Bears the Burden of Proof and thus presents first.
Administrative Proceedings Unless Otherwise Required by Statute or Rule are not Bound by Formal Rules of Evidence
Generally, Hearing Officers Simply Permit all “Relevant” or “Probative” Evidence to be Submitted
Evidence
And, Exclude only that Evidence that it Irrelevant, Immaterial, or Unduly Repetitious.
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Findings of Fact/Conclusions of Law
At the end of the Hearing Process, the Adjudicator may Announce its Findings or it may Instruct the Attorneys to Submits Proposed Findings of Fact and Conclusions of Law
Even if the Adjudicator Announces the Findings, they Should be Reduced to Writing so as to Reflect the Facts Relied Upon and the Legal Conclusions Made
This need not be a long, complicated document, but it should cover the basics, including the Authority of the Agency toMake the Decision; the Authority Relied upon in Coming to the Decision; the Agency’s Jurisdiction over the Respondent and the Subject Matter; and the Final Decision
Jurisdiction Authority of Tribunal
Burden of Proof
Duty to Establish Facts
Hearing
Evidence
Species of Proof including testimony, records, exhibits, documents, objects, etc.) Principle governing judicial oversight of a subordinate decision maker
Standard of Review
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In most Tribal Gaming Ordinances, the Gaming Regulatory Agency has Jurisdiction over All Licensees
Violations of the Gaming Ordinance
Jurisdiction of Agency
Licensure Decisions
Patron Dispute
Enforcement Actions
Classification Determinations
Establish Jurisdictional Authority of the Tribunal
This matter comes before the Tribal Gaming Commission which has jurisdiction over all licensing appeals from the Tribal Office of Licensing and Enforcement pursuant to Section 1 of the Tribal Gaming Ordinance.
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Jill Smythe appeals the finding of unsuitability and subsequent denial of a gaming license issued by the Director of the Tribal Licensing and Compliance Office on April 1, 2004. Smythe’s appeal is timely filed. She has appeared here today in person and wishes to proceed. Is that correct Ms. Smythe?.
State the Issue
Ms. Smythe, under Tribal law, an applicant for a gaming license has the burden of proof in all appeals. It is, therefore, your responsibility to present evidence sufficient to persuade the Commission that the Director’s finding and decision should be set aside.
Establish Burden of Proof
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It is, therefore, up to you to provide “clear and convincing” evidence sufficient to establish that you are entitled to prevail in this matter.
Establish Evidentiary Standard
Upon conclusion of the evidentiary hearing, the Commission shall consider all of the evidence presented by the parties and determine whether as a matter of Tribal law the Decision of the Director shall be affirmed or reversed.
Establish Standard of Review
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► Exceeds Authority of Agency ► Improper Interpretation of Law ► Unfair or Abusive Processes ► Arbitrary and Capricious
Appeals: Standard of Review
THE TERM “INDEPENDENT” REALLY MEANS SOMETHING WHEN IT COMES TO ADJUDICATIONS
EFFORTS BY THIRD PARTIES TO INFLUENCE THE DECISIONS OF HEARING OFFICERS ARE IMPROPER – THERE SHOULD BE NO EX PARTE CONTACTS WITH ADJUDICATORS ONCE A NOTICE OF HEARING IS ISSUED, EVEN AGENCY STAFF SHOULD REFRAIN FROM DISCUSSING DISPUTED FACTS WITH THE ADJUDICATOR AND SHOULD NOT OPINE AS TO THE APPROPRIATE OUTCOME
Miscellaneous
HEARINGS SHOULD BE OPEN – THIS DOESN’T MEAN AN INVITATION NEED ISSUE, BUT IT DOES MEAN THAT THE PUBLIC SHOULD NOT BE EXCLUDED IF THEY SHOW UP
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Miscellaneous Continued
IT’S THE LITTLE THINGS THAT CAN GET YOU REVERSED– BE SURE THAT ALL PROCEDURAL REQUIREMENTS ARE MET – IF THE STATUTE REQUIRES PERSONAL SERVICE OF THE NOTICE OF HEARING, PROVIDE PERSONAL SERVICE; IF THE STATUTE SAYS FIVE DAYS, GO AHEAD A INTERPRET IT AS FIVE “BUSINESS” DAYS.
JUST BECAUSE A HEARING HAS BEEN SCHEDULED DOESN’T MEAN THAT AN ALTERNATIVE MEANS FOR RESOLVING THE MATTER SHOULD BE DISCOUNTED – SETTLEMENTS MAY BE ADVISABLE IF APPROPRIATE TO THE CIRCUMSTANCES
End
Homer Law, Chtd. 1730 Rhode Island Ave., N.W. Ste. 501 Washington, D.C. 20036 (202) 955-5601
(202) 955-5605 (fax) www.homerlaw.com
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FACTS
Jill Smythe, a tribal member, was initially employed by the Tribal Gaming Operation (TGO) in June of 2007 as a cage cashier. Her license was issued after a routine background investigation that revealed no negative information. Since then she has been promoted twice and now serves as the count room supervisor. Her employment record has been excellent. All of her annual performance appraisals have been outstanding and she was selected for the “employee of the month” award on four occasions. Two years ago she received the “employee of the year” award. Shortly after being hired, Jill met Larry, a limousine driver, at the casino. They dated for a couple of years before getting married in the fall of 2009. About two years ago Jill and Larry began experience some difficulty in their marriage and formally separated in April of 2014, but have not instituted divorce proceedings. It is rumored that Jill and Larry are attempting to reconcile. When Jill’s license came up for renewal, the Commission instituted a routine background check. It revealed that Jill and Larry’s joint tax return for 2013 had been audited. The audit resulted in a large penalty assessment for underpayment of taxes. The investigation also revealed that Larry had been charged with writing bad checks on the couple’s joint account, but the cases were still pending in district court. Concerned, the Commission investigator ran a Lexis search on both Jill and Larry, and learned that in 2006 Larry had been a government witness in a federal racketeering case against John Williams, a notorious St. Louis mobster. Though Larry was never charged, newspaper accounts alleged that Larry, who had worked for Williams as an accountant for several years, was granted immunity in exchange for his testimony. Williams was convicted of federal racketeering, tax evasion, and money laundering charges. He remains incarcerated. On the renewal application, Jill disclosed that the couple had been required to pay a penalty to the IRS, but no details were provided. The application contained no information about the pending charges against Larry or his close association with Williams. The Tribal gaming investigator recommended non-renewal based on the omission of information on the application and her association with Larry. The recommendation was accepted by the Licensing Director. Jill has been suspended from work pending the outcome of her appeal to the Tribal Gaming Commission.
APPLICABLE PROVISIONS OF TRIBAL GAMING ORDINANCE
3.2 No person may be employed by the Tribal Gaming Operation as a key employee or primary management official without a valid and current gaming license from the Tribal Gaming Commission, which shall only issue such license upon a finding of suitability following a full investigation into the background of the applicant. 3.3 Any person whose prior activities, criminal record, reputation, habits and/or associations pose a threat to the public interest or to the effective regulation of gaming, or creates or enhances dangers of unsuitable, unfair, or illegal practices and methods and activities in the conduct of gaming, shall be deemed unsuitable for employment in the Tribal Gaming Operation. 3.4 For the purposes of this section, the following definitions apply: 1. Key employee means a person who performs one or more of the following functions: (1) Bingo caller; (2) Counting room supervisor (3) Chief of security; (4) Custodian of gaming supplies or cash; (5) Floor manager; (6) Pit boss; (7) Dealer; (8) Croupier; (9) Approver of credit; or (10) Custodian of gambling devices including persons with access to cash and accounting records within such devices; (11) Any other person whose total cash compensation is in excess of $50,000 per year; or the four most highly compensated persons in the gaming operation. 2. Primary management official means: (a) The person having management responsibility for a management contract; (b) Any person who has authority: (1) To hire and fire employees; or (2) To set up working policy for the gaming operation; or (c) The chief financial officer or other person who has financial management responsibility.
The Tribal Gaming Regulatory Agency Office of Licensing and Compliance
December 1, 2014
Jill Smythe 1313 Mockingbird Lane Anytown, Oklahoma 77777
Re:
Application for Renewal of Gaming License
Dear Ms. Smythe: The Director of Licensing and Compliance has completed its review of your application for renewal of your gaming license and hereby informs you that your application is denied based on a finding of unsuitability. Accordingly, you are not eligible for continued employment with the Tribal Gaming Operation. As you are aware, Tribal law requires that all tribal gaming licenses must be renewed every two (2) years. In the course of completing your background investigation for license renewal, the Commission discovered facts and circumstances that should have been disclosed on your application for renewal. Based on these facts, the Office of Licensing and Compliance finds that your financial history and associations creates or enhances dangers of unsuitable, unfair, or illegal practices and methods and activities in the conduct of gaming is inappropriate for employees of the Tribe’s gaming facility. You have the right to file an appeal with the Gaming Commission within the next 60 days. Should you fail to file a timely appeal, this decision shall be deemed final. The process for appealing the Gaming Commission’s denial of your license is attached. If you decide to appeal this Gaming Commission’s decision, you must follow those procedures specifically.
Sincerely,
Stella Wright Director Enclosure
TRIBAL GAMING REGULATORY AGENCY SUITABILITY DETERMINATION
1.
APPLICANT INFORMATION EMPLOYEE NAME:
Jill Smythe 12/25/76
DATE OF BIRTH: TRIBAL AFFILIATION: SOCIAL SECURITY #:
Tribal Member 555-55-555
(X) ( )
APPLICANT STATUS:
KEY EMPLOYEE
PRIMARY MANAGEMENT OFFICAL
POSITION:
Count Room Supervisor
2.
SYNOPSIS OF BACKGROUND INVESTIGATION CONDUCTED A routine background investigation of Jill Smythe was initiated pursuant to her application for renewal of her gaming license. The investigation included a criminal and credit history check and interviews with co- workers, friends, and family members. Since Ms. Smythe’s initial hire, she married Larry Smythe. During the investigation, I learned that Jill and Larry Smythe underpaid their income taxes for 2013 and they now owe the IRS approximately $30,000 in back taxes plus fines in the amount of $20,000. Additionally, I learned that Larry has been charged with writing bad checks on his joint account with Jill and the cases are now pending in district court. It was also discovered that in 2006 Larry was a government witness in a federal racketeering case against John Williams, a notorious St. Louis mobster. Though Larry was never charged, newspaper accounts alleged that Larry, who had worked for Williams as an accountant for several years, was granted immunity in exchange for his testimony. Williams was convicted of federal racketeering, tax evasion, and money laundering charges. He remains incarcerated. In relation to Jill Smythe, an FBI criminal history report was received and reviewed with the following findings: No arrest history No record of conviction SUITABILITY DETERMINATION Based upon the findings of background investigation and the confirmation of the applicant’s information and taking into consideration the applicant’s prior activities, criminal records (if any), reputation, habits and associations, it has been determined that the above named individual: ( ) Should be granted a gaming license (X) Should be denied renewal of a gaming license ( ) Should have gaming license revoked
3.
________________________________________________ Stella Wright, Director of Licensing and Compliance
_______________________
Date
Tribal Gaming License Application Notice to Applicants
Authority Indian Gaming Regulatory Act, 25 U.S.C. 2701 et seq. and Tribal Gaming Ordinance and Regulations. Purpose To protect the tribe, employees, patrons, and public by ensuring that gaming activities are free from criminal activities and corruptive elements. The required information is used to determine the suitability of the applicant to be employed by or associated with the gaming activities. Burden of Proof An applicant is seeking the granting of a privilege. The burden of proving the applicant’s qualifications is at all times on the applicant. Disclosure of Information An applicant may be subject to denial or other action for failing to provide all information, documentation, and assurances as required or requested, or failing to reveal any material facts, or providing misleading or untrue information. The Tribal Gaming Agency reserves the right to request additional information at any time. Waiver or Claim for Damages An applicant accepts any risk of adverse reaction, financial loss, or public notice which may result from any action taken with respect to an application. By filing an application, an applicant expressly waives any claim for damages as a result of any action taken with respect to that application. Withdrawal of an Application An application may not be withdrawn without the permission of the Tribal Gaming Agency. Privacy Act Notice In compliance with the Privacy Act of 1974, the following information is provided: Solicitation of the information on this form is authorized by 25 U.S.C. 2701 et seq . The purpose of the requested information is to determine the eligibility of individuals to be employed in a gaming operation. The information will be used by the Tribal Gaming Agency and by National Indian
Gaming Commission members and staff who have need for the information in the performance of their official duties. The information may be disclosed to the appropriate federal, tribal, state, local, or foreign law enforcement and regulatory agencies when relevant to civil, criminal, or regulatory investigations or prosecutions, or when pursuant to a requirement by the Tribe or the National Indian Gaming Commission in connection with the hiring or firing of an employee, the issuance or revocation of a gaming operation. Failure to consent to the disclosures indicated in this notice will result in the Tribe’s being unable to hire you in a primary management official or key employee position, or other positions as determined by the Tribe. The disclosure of your Social Security Number (SSN) is voluntary. However, failure to supply a SSN may result in errors in processing your application. Notice Regarding False Statements In signing this application, I understand that a false statement on any part of the application may be grounds for not hiring me, or for firing me after I begin work. Also, I understand that I may be punished by fine or imprisonment. (U.S. Code, title 18, Section 1001) License Fees: The level of fees for issuance or renewal of a gaming license, and the payment of such fees, shall be in accordance with tribal regulations. Special Instructions • Complete each question. If not applicable, indicate so with “N/A” • Please type or print all answers. Do not use pencil. Failure to do so will cause delays and/or denial of your application. • If needed, attach additional documents or explanation sheets • Submit two current passport quality photographs. Ensure the photograph is a full facial view. Write your name and social security number on the back of each picture. Identification Requirements As part of your application, we will require that you provide positive proof of your identity; including one or more of the following official documents:
• Certification of birth; • Valid driver’s license; • State identification card; • Military identification card; • Valid passport; or • Alien registration card, if you are a registered alien.
Applicants initials_______
TRIBAL GAMING COMMISSION Administrative Hearing __________________________________________________________________________ Appeal of Denial of Renewal of Gaming License FINDINGS OF FACT AND Jill Smythe, Petitioner CONCLUSIONS OF LAW ______________________________________________________________________________ FINDINGS OF FACT 1. Petitioner, Ms. Smythe, __________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 2. _____________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ __________________________________________________________________________ 3. _____________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ __________________________________________________________________________
4. _____________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ __________________________________________________________________________ 5. _____________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ __________________________________________________________________________ 6. _____________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ __________________________________________________________________________ 7. _____________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ __________________________________________________________________________
CONCLUSIONS OF LAW Based upon the above Findings of Fact and the laws that apply to the requirements for a person to be eligible for a Happy Tribe Gaming License, the Happy Gaming Commission does hereby: ____(affirm/reverse)____ the finding that Petitioner, Jill Smythe, is suitable/unsuitable for a Gaming License on the following grounds: 1. _____________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ __________________________________________________________________________ 2. _____________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ __________________________________________________________________________ 3. _____________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ __________________________________________________________________________
4. _____________________________________________________________________ ___________________________________________________________________________
___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ __________________________________________________________________________
Based upon the above, the Tribal Gaming Commission hereby finds that Jill Smythe is ___(suitable/unsuitable)___to hold a gaming license, and therefore determines that her gaming license ___shall/shall not)____ be renewed.
This Decision is hereby Confirmed by:
___________________________________
________________________
CHAIR
DATE
___________________________________
________________________
VICE-CHAIR
DATE
___________________________________
________________________
COMMISSIONER
DATE
3/10/2017
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