Chukchansi dispute halts $1 million in donations

The Fresno BeeFebruary 21, 2014 

CASINOS CHUKCHANSI

Chukchansi Gold Resort & Casino, near Coarsegold.

ERIC PAUL ZAMORA — THE FRESNO BEE Buy Photo

Madera County officials and 30 local agencies that include many nonprofit groups have been pulled into the battle between Chukchansi Indian factions over annual tribal donations.

Under a contract with the county, the tribe is obligated to donate $1 million annually to local groups. This year's recipients include schools, animal welfare agencies, tribal organizations, churches and veterans groups.

But the money has been held back because of the ongoing legal wrangling between the two leadership factions.

In November, the tribal council led by Nancy Ayala submitted a list of recipients to Madera County and held a banquet for the agencies that earned the grants.

Ayala's group, whose leader is now Tex McDonald, operates the Picayune Rancheria of Chukchansi Indians business complex and oversees operations at Chukchansi Gold Resort & Casino. Leadership of the tribe is still in flux.

The federal Bureau of Indian Affairs announced last week that it intends to recognize the seven members of the 2010 tribal council. That council includes Ayala and the other group's leader, Reggie Lewis. McDonald's group is appealing the BIA decision.

In December, the Lewis group legally challenged the tribal donations, alleging the other faction improperly designated a casino account to pay them.

A New York state court, which has been serving as a mediator in the conflict, said that casino revenues are supposed to pay off the tribe's debts of more than $250 million after financing bonds for the casino complex were restructured last year.

The court upheld the Lewis group's challenge, and so the money has not been distributed.

The withheld funds include a $50,000 grant for the Eastern Madera County Society for Prevention of Cruelty to Animals for a spay and neuter program. Last year, the all-volunteer organization raised $40,000 for the work -- but none from the Chukchansi program, said Sharon Fitzgerald, the animal group's board chairwoman.

She said the tribal donation is expected to allow her organization to concentrate its fundraising on money to build a no-kill shelter.

The group has received money twice previously from the tribe, Fitzgerald said.

Madera County officials said they are considering legal action.

"The Board of Supervisors is very concerned about the fact that the annual grants have not been funded and they are serious about bringing a resolution to this obligation," said Eric Fleming, county administrative officer.

However, a final decision about litigation has not been made, said Doug Nelson, Madera County counsel. He said supervisors are weighing factors such as cost and whether legal action will resolve all the issues.

As mitigation for the impacts of its casino, the Chukchansi signed an agreement with the county to provide funds annually for community projects and programs. Such agreements are standard for Indian casinos in California.

Meanwhile, the two factions continue to heap blame on each other.

Richard Verri, lawyer for the Lewis faction, said the Ayala group was trying to curry favor with county officials by doling out tribal assets, in hopes of encouraging the officials to "look the other way to what was going on on the rancheria."

David Leibowitz, spokesman for McDonald's group, said the Lewis group is responsible for keeping the donations in limbo.

"The money for the grant program is there and the tribal council absolutely wants to pay that money to the grant recipients," Leibowitz said.

The Lewis group, he said, is making "another attempt to embarrass the tribe or sabotage their practices."

He said the tribe is not trying to duck out on its commitment.

"This is a very necessary thing that the tribe does as part of an agreement for having the casino property," Leibowitz said. "You just don't break your word like that to your neighbors."

The reporter can be reached at (559) 441-6166, mbenjamin@fresnobee.com or @beebenjamin on Twitter.

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