ALLEY CENTER, Calif. - As construction crews clamber over their impoverished reservation here in the citrus groves of Northern San Diego County, Rincon Indian leaders are raising the hopes of 600 tribal members with plans for a Harrah's casino and more than 1,000 new jobs.
''We're looking forward to taking care of ourselves and not being such a dependent society,'' says John Currier, the tribal chairman.
But the efforts of the Rincon tribe are as much a reminder of all that can go wrong in the world of Indian gaming as they are an opportunity for tribal self-sufficiency.
Three-and-a-half years ago, investors in another Rincon gambling operation were accused of acting as a front for a Pittsburgh crime family plotting to take control of the facility to launder more than $2 million raised through other criminal activities.
Seventeen people, including a member of the Rincon tribal council, were indicted in what federal prosecutors described as a textbook case of organized crime's notorious appetite for infiltrating casinos and other businesses that generate large amounts of cash.
And that wasn't the first time the Rincons had brushed up against the Mafia. In 1993, 10 people associated with Chicago crime boss John ''No Nose'' DiFronzo and a San Diego mobster were convicted of racketeering and extortion in another attempt to take over a tribal gambling hall.
The Rincons may have had more than their share of bad luck, but they're not the only tribe that has attracted criminals or criminal associates.
To be sure, tribal gaming authorities and federal law enforcement officials insist there is no evidence of widespread infiltration of Indian gambling by organized crime. But gaming tribes from coast to coast have found themselves caught up in a variety of scandals that have spurred new questions about the lax oversight of Indian gaming operations.
The problem, according to gaming analysts and law enforcement officials interviewed by the Globe, stems from an underfunded and understaffed federal oversight agency that is able to give only a fraction of the scrutiny provided by public agencies that oversee casinos in Atlantic City and Nevada.
While more than 100 of the 800 New Jersey regulators provide a continuous presence in the state's 12 casinos, a few dozen regulators with the federal Indian Gaming Control Commission find themselves spread out across the country, making only occasional visits to more than 241 Indian gaming operations.
The federal government's reluctance to fund more vigorous oversight of Indian gaming comes in large measure from deference for the tribes' federally recognized status as independent sovereign nations. But tribes have been using sovereignty to claim the right to act as the primary overseers of their own casinos, and to hide financial information about gambling operations that is routinely disclosed by commercial gambling houses.
Now, as Indian gambling expands dramatically, gaming analysts say inadequate oversight of Indian casinos and increasingly vociferous sovereignty claims could open the door to a new wave of criminal activity.
''There's a historical tendency for organized crime to become attracted to casinos and the solution to that is effective controls,'' says Eugene Christiansen, a financial analyst who tracks the gambling industry. ''We're not seeing that with Indian gaming right now.''
Christiansen and others who worry about crime at Indian casinos insist they have no objection to Indian gaming per se, but fault the federal government for approving Indian gambling 12 years ago without adequately funding the NIGC.
The agency, which raises money through fees assessed on Indian casinos, has a maximum $8 million annual budget and a staff of 70 - with about 35 assigned to monitor more than 300 Indian casinos in 27 states from coast to coast.
By contrast, the New Jersey Casino Control Commission and the Division of Gaming Enforcement have a combined budget of $58 million and a staff of about 800 to monitor 12 casinos.
Kyle Nayback, the NIGC's director of congressional and public affairs, says the agency makes the most of its minuscule budget by helping tribes carry out their rights as sovereign nations to monitor their own facilities, at times with the assistance of public state agencies.
''We try to maximize our budget by providing technical assistance, education, and training to tribal governments,'' Nayback says. ''The current commission believes it's the best way to carry out federal law, given that we're working with sovereign, tribal governments.''
But some experts say it's the self-regulating nature of Indian gaming that makes it so vulnerable to criminal activity.
''Self-regulation can be dangerous,'' says I. Nelson Rose, a professor at Whittier Law School and a consultant to Indian gaming tribes. ''We certainly would not let a private casino in Nevada self-regulate.''
Furthermore, the yawning gap between oversight at Indian and commercial casinos comes at a time when the number of Indian gambling operations is growing, and gaming revenue is soaring - from about $100 million in the late 1980s to more than $10 billion today.
Analysts praise a few tribes, particularly those with major casinos known for establishing tight monitoring systems, such as Connecticut's Mashantucket Pequots. But they also say the large number of gaming tribes without the revenue to establish state-of-the-art oversight - as well as human nature - argue for greater federal scrutiny of Indian gaming.
''Is there larcenous intent in the hearts of tribal leaders to the same extent that there is in the larger society?'' asks Bill Eadington, director of the Institute for the Study of Gambling and Commercial Gaming at the University of Nevada, Reno. ''The answer is probably yes.''
Recent allegations of blatant criminal activity at Indian casinos include:
The theft of more than $2 million from a gambling hall run by the Kiowa tribe, in Carnegie, Okla. Shan Gachot, a tribal member and the casino's former manager, has accused tribal officials of using casino revenue as a personal petty cash fund for items such as medical expenses, utility bills, flowers, and even a homecoming gown.
Organized loansharking at the Salt River Pima-Maricopa casino, in Mesa, Ariz. State gaming officials have confirmed that the FBI is investigating allegations of illegal money lending at the casino's card room that might involve organized-crime figures.
The theft of more than $800,000 from the Mohegan Sun casino in Ledyard, Conn. - the largest theft in more than a decade of Indian gaming in the state. In this case, a single casino employee working in a currency counting room is accused of stealing the money over a period of more than a year by stuffing $100 bills down the front of his jumpsuit.
In each of these cases, tribal authorities helped provide evidence of criminal activity and called in federal or state investigators. Yet critics of Indian gaming policies say these incidents were so flagrant that they raise serious questions about more substantial criminal activity at Indian casinos that may go undetected because of lax oversight by the NIGC.
The inability of the NIGC to closely monitor all Indian gaming facilities is of concern in states that have no compacts with Indian gaming tribes, and therefore no role in overseeing Indian casinos.
The compacts generally eliminate questions about the legal status of Indian gaming, which helps tribal officials attract more reputable casino investors. They also often include agreements for joint oversight of Indian gaming by state and tribal agencies. But in Florida, where no compact exists, a standoff between state officials and the Seminole and Miccosoukee tribes over the legality of Indian gambling has left the state without any authority to oversee Indian casinos or their investors - and little faith that the NIGC is up to the task.
''The National Indian Gaming Commission is about as ineffectual as any regulatory body that I have ever seen,'' says Florida assistant attorney general Jon Glogau.
Concerns about whether state and federal authorities will ever increase oversight of Indian casinos are growing in part because of the newfound political influence of tribes making record campaign contributions and lobbying expenditures in state capitals and Washington.
A recent study by California Common Cause, a public interest group, showed that Indian tribes emerged from political obscurity to become the state's largest political donor in just a few years. Since 1995, tribes spent more than $100 million on two Indian gaming initiatives, state gubernatorial and legislative races, and a sophisticated lobbying operation.
And not all Indian campaign contributions have been above board. Earlier this year, a federal judge levied a $250,000 fine against the chief executive officer of the influential Cabazon Band of Mission Indians for funneling illegal donations to the 1996 Clinton-Gore campaign.
Mark Nichols, a non-Indian and the longtime director of the Cabazons, was convicted of encouraging tribal members to make $1,000 campaign contributions - and then reimbursing the Indians for their donations. It is illegal to conceal the true source of a campaign contribution to a candidate for federal office.
Meanwhile, increasingly vocal claims of tribal sovereignty are seen as yet another obstacle to increased oversight of Indian casinos. The issue stands in especially stark relief in Florida, where Miccosukee leaders have cited tribal sovereignty to prevent state and federal authorities from issuing subpoenas on tribal land.
The Miami-Dade State Attorney's office is attempting to prosecute tribal member Kirk Douglas Billie in the alleged murder of his two young sons three years ago. But Miccosukee officials say that tribal sovereignty, which generally exempts tribes from state civil laws, allows them to bar state law enforcement officials from their reservation.
Across the country, Indian businesses are raising additional concerns about tribal sovereignty.
For instance, the Mashantucket Pequots were cited in a federal audit earlier this year for using a government health program to improperly dispense more than $5 million in discounted prescription drugs to more than 20,000 non-Indian casino employees and dependents.
And late last year, a federal judge in Oklahoma sentenced the non-Indian former president of a phony bank for swindling depositors by saying he had obtained Apache tribal sovereignty for the First Americans Bank and was exempt from federal regulations.
The Apache never authorized First Americans, but some banking officials remain concerned that claims of tribal sovereignty are encouraging Indians to establish what are normally considered offshore banks on reservation land, traditional havens for tax evaders and drug runners seeking to launder profits.
''We've been very leary of reservation-based offshore banks,'' says J.D. Colbert, president of the North American Native Bankers Association, an organization of more than a half dozen Indian banks that have signed sovereignty waivers to comply with federal and state regulations. ''Generally what happens is you have non-Indians coming into Indian Country, selling a tribe on the idea, then lining their pockets and leaving.''
Many tribes are using sovereignty to withhold financial information on individual Indian casinos that is normally disclosed by commercial casinos. And federal officials seem in no rush to encourage gaming tribes to air details of their financial operations.
At a hearing last year before the Senate Committee on Indian Affairs, NIGC chairman Montie R. Deer opposed a recommendation by a blue-ribbon federal commission that would require Indian tribes to disclose the same financial data as the owners of commercial casinos.
''Public release [of the information] in other than aggregate form does have impact on tribal sovereignty,'' Deer says.
Although the recent allegations of casino thefts in Connecticut and Oklahoma might seem like isolated crimes committed by low-level employees, the current boom in Indian gaming has also attracted major investors who have had alleged criminal associates.
Three years ago, a faction of Maine's Passamaquoddy tribe contracted with New York real estate investor Tamir Sapir to build and operate a high stakes bingo hall in Albany Township as a prelude to the operation of a full-fledged Las Vegas-style casino.
Local residents, fearful that a gambling hall would change their rural quality of life, vigorously opposed the idea. But few seemed to realize that Sapir is a former business partner of Sam Kislin, a fellow Russian emigree and fellow New Yorker who was later identified in an FBI document as an associate of a Brooklyn-based Russian criminal organization.
In a Globe interview, Sapir said that during the 1980s he and Kislin were partners in Joy Lud International Distributors, an electronics firm known for its Soviet emigree clientele. ''It was a great partnership, a beautiful partnership,'' Sapir said.
Sapir insisted Kislin has never been involved in Russian organized crime and Kislin himself has denied the allegation. But an FBI document reviewed by the Globe and provided by the Center for Public Integrity says companies connected to Kislin helped launder millions of dollars of illegally obtained Russian money into the United States.
Objections to Sapir typify the widespread criticism of Indian gaming partnerships as fronts for non-Indian investors who are attempting get around state laws prohibiting commercial casinos.
Still, some defenders of Indian gaming are saying existing oversight regulations are sufficient in part because Indian casinos have quietly come under increased federal regulation designed to thwart money laundering.
Since 1996, Indian gaming facilities and commercial casinos alike have been required to report all cash transactions involving more than $10,000. In addition, several tribes are voluntarily filing ''suspicious activity reports'' with the US Treasury Department's Financial Crimes Enforcement Network.
But, once again, many see lax oversight by the Internal Revenue Service, which enforces the FinCen regulations, and the inability of the NIGC to directly monitor more than a handful of Indian casinos at a time, as an invitation to crime.
''A scandal of some kind is almost inevitable,'' says Eadington. ''The only real question is how big it's going to be.''
Globe correspondent Daniel Barabarisi contributed to this article.
SHAN GACHOT, a Kiawa tribal member and its casino's former manager, has accused tribal officials of using casino revenue as a petty cash fund. (Globe Staff Photo / Evan Richman)
