Nearly $2 million in state money meant to ensure Oklahoma is receiving its cut from tribal gaming operations was used to pay law firms representing Gov. Kevin Stitt in legal fights with the tribes, payment records show. The money came from annual fees tribal nations pay the state to regulate gaming operations in Oklahoma.
Oklahoma Attorney General Gentner Drummond said he is looking into whether the funds were properly used to pay for legal counsel for Stitt in several lawsuits.
More than $1.9 million in gaming compliance program funds was paid to outside law firms representing the governor in legal actions over the past three years. The figure, which is more than previously reported, comes from state payment records reviewed by The Frontier.
The money to pay legal fees came from the state’s gaming compliance fund, a separate pot of money from the exclusivity fees the tribes pay the state for the rights to run gaming operations in Oklahoma. Tribes pay more than $1 million a year into the gaming compliance fund.
One of the architects of the model gaming compact Oklahoma voters approved in 2004 told The Frontier and KOSU that Stitt should have gotten approval from the Legislature before using the money for lawsuits with the tribes.
Attorney Scott Meacham worked under Gov. Brad Henry as secretary of finance and revenue and then state treasurer and helped negotiate the original gaming compacts with the tribes nearly 20 years ago. Gaming compliance money is not intended to be used for legal fees for outside litigation to negotiate a new compact, he said.
Meacham went further and said that tribes who remit money to the state could take legal action if they believe the money is not being used for its original intent.
“Because that’s a contract between the tribe and the state, the tribes could have a cause of action against the state now for potential misuse of those funds,” Meacham said.
Phil Bacharach, a spokesman for Drummond, said the Attorney General’s Office isn’t aware of any legislative approval to support using the money to pay legal fees.
“This is a matter of interest and concern that he intends to explore further,” Bacharach said in a statement.
Abegail Cave, a spokeswoman for Stitt, said the payments to law firms is a proper use of the money and language in the state’s model gaming compact with the tribes allow for it. Cave said Stitt’s predecessor Gov. Mary Fallin also used some of the money to pay for legal fees from gaming-related lawsuits with tribal governments, but did not provide specific examples.
“Use of the funds is not restricted, and to the extent anyone were to stretch to argue a restriction should be read into the compact, current and historic usage would still be appropriate,” Cave said.
Matt Morgan, chairman of Oklahoma Indian Gaming Association, said the money can be used for litigation, but only in certain circumstances.
Morgan, an attorney and former gaming regulator, said state regulators are obliged under the model gaming compact to try to resolve issues with the tribes before going to court. He said he believes Stitt’s use of the funds is unlawful and not in the spirit of the gaming compact.
Compliance fees are supposed to be used for oversight and to hire accountants and other staff to pore over the books of gaming operations, Morgan said. If the state needs to hire attorneys to ensure a tribal nation is in compliance with the compact, money could be spent on that.
“If you have to hire a lawyer related to that purpose, I think that would be within what that was intended for,” Morgan said.
Last week, Drummond announced he was going to take over representation of the state in a federal lawsuit in Washington, D.C., brought in 2020 by the Cherokee, Chickasaw, Choctaw and Citizen Potawatomi tribes against the U.S. Department of Interior, Stitt and tribal officials from a few, relatively smaller tribes that signed new gaming agreements with the governor. The larger tribes argue the gaming compacts those smaller tribes signed with Stitt, who was being represented by outside attorneys in the case, are not valid. They point to the Oklahoma Supreme Court Ruling in 2020, which sided with the legislative leaders, who were advised by then Attorney General Mike Hunter that the compacts were not valid.
Oklahoma Senate President Pro Tempore Greg Treat and House Speaker Charles McCall both wrote letters in July supporting Drummond’s intervention in the case.
Drummond wrote in a letter to Stitt dated July 25 that the cost to defend that lawsuit was squandering state funds and harming state-tribal relations.
“Oklahoma’s relationship with our tribal partners has suffered greatly as a result of your divisive rhetoric and refusal to follow the law,” Drummond wrote to Stitt.
“The citizens you were elected to serve are the ones who suffer from this irresponsible approach. Instead of working in partnership with tribal leaders to enact compacts that benefit all four million Oklahomans, you insist on costly legal battles that only benefit the elite law firms you hire. Millions of dollars of state resources have been squandered on these futile efforts.”
For that lawsuit alone, the state has spent nearly $600,000 on attorneys fees. Records show the state paid the law firm of Ryan, Whaley, Coldiron, Jantzen and Peters $184,013. Another $17,311 went to the firm Troutman, Pepper, Hamilton, Sanders for their work defending Stitt in the Washington, D.C., lawsuit brought by some of Oklahoma’s largest tribes. The state also paid Wall Street law firm Sullivan & Cromwell $394,900 to defend Stitt.
But other lawsuits filed against Stitt over the tribal gaming issue pushes the total fees paid to outside attorneys from gaming compliance funds over the past three years to more than $1.9 million.
The state gaming compliance program was created after Oklahoma voters approved Class III gaming in 2004. The fund originally operated under the Office of State Finance but was later folded into the Office of Management and Enterprise Services. Tribes that have gaming compacts with the state pay a one-time $50,000 startup fee into the compliance fund, as well as an annual $35,000 annual fee on top of gaming exclusivity fees the tribes pay the state that fund education, mental health and other government programs.