The Oregonian/OregonLive

Editor's Note: This story was produced through a collaboration between The Oregonian/OregonLive and Underscore News. A future installment will explore a lawsuit in Washington state that could upend tribal gaming and, experts say, threaten the U.S. government's recognition of tribal sovereignty.

Since 2016, the Cowlitz Indian Tribe has paid millions to a Portland consulting firm and its owners to protect its highly successful ilani Casino Resort from unwanted competition — namely other tribes looking to expand their gaming operations in Oregon.

Ilani became the nearest casino to Portland when it opened in 2017 outside La Center, Washington, and it now boasts annual revenue of at least $300 million a year, according to one estimate.

Gaming is vital to Northwest tribal economies and, in this case, access to the highly lucrative gambling market in Oregon’s population center was at stake.

Cowlitz leaders turned to consultants Matthew Rossman and Bruce Studer and their company — best known for a nearly two-decade quest to build the state’s first private, non-tribal casino over the objections of tribes in Oregon. At the urging of an influential tribal leader, the late David Barnett, the tribe entered into a contract paying from $30,000 to $50,000 a month to R&S Strategy Group or its owners, Rossman and Studer.

According to a copy of the agreement and records of tribal meetings, as well as interviews with Rossman, the tribe aimed to stave off competitors, particularly the Confederated Tribes of Grand Ronde and the Confederated Tribes of Siletz Indians in Oregon.

Gaming dollars have been transformative for some tribes, funding various social programs. Casinos also have made some players in the business extremely wealthy. And few pursued the tribal gaming motherlode as aggressively as Barnett, who died in May at age 61.

Barnett’s father was a tribal chair who led the Cowlitz to securing federal recognition, and the younger Barnett played key roles in securing the tribe’s land and getting ilani built. He, too, was elected in 2020 as chair of the tribe’s general council, its top leadership post.

Barnett brokered a series of agreements between the tribe and Rossman and Studer, or at times with their company, R&S Strategy Group. Documents outline the arrangement in broad strokes, saying they would work to protect the ilani from competitors without specifying how.

The agreements included a clause that forbade the would-be casino developers from moving forward with a private casino that would compete with ilani. And if the pair did develop a casino, the Cowlitz tribe would have the option to manage it for them.

Rossman told The Oregonian/OregonLive that Barnett wanted to expand the Cowlitz tribe’s gambling operations into Oregon. He said the contract gave the Cowlitz tribe first right of refusal to run any casino Rossman and Studer developed if their campaign was successful.

“The goal was for the tribe to have a presence in Oregon,” Rossman said. “The majority owner would have been the Cowlitz, or Dave (Barnett).” Rossman added that the consulting agreements were reviewed and approved by outside law firms.

Barnett worked zealously to advance the tribe’s gaming interests — though attorneys hired by the tribe warned his own interests were too closely intertwined, according to tribal documents. They also said Barnett promoted a culture of fear within the tribe. The tribe’s attorneys wrote in a 2021 report that Barnett had threatened members with lawsuits, violence or banishment.

The Cowlitz declined to talk to The Oregonian/OregonLive about the agreement and the tribe’s goals.

However, Cowlitz leaders and their attorneys have privately raised numerous questions about the deal, according to tribal records obtained by The Oregonian/OregonLive.

Some questioned why the tribe was paying so much and what it was getting in return.

While declining to comment further, Cowlitz officials said the tribe had severed ties with Rossman and Studer.

“The tribe has a duty to review and evaluate its contracts when issues are raised,” the tribe said in a statement. “Following that review, a decision was made to end the contractual agreement with R&S.”

Orlando Moreno, a former manager of the Cowlitz tribe and an enrolled member of the Arizona-based Fort McDowell Yavapai Nation, said he objected to the contract when he first joined the Washington tribe’s administration in 2020. The Cowlitz seemed to be getting little of value, he said. More broadly, the notion of one tribe launching a secret effort to undercut others offended him.

“We have an unwritten agreement,” Moreno said. “At the end of the day, we’re all Indian Country. We support each other.”

Contentious backdrop

Cowlitz tribal leaders’ moves are playing out against the backdrop of significant changes in tribal gaming in Oregon.

Increasingly, tribes in Oregon are challenging the status quo, particularly the policy set out by recent governors that tribes can only operate one casino located on their respective reservations. The Confederated Tribes of Siletz Indians, operator of the Chinook Winds casino in Lincoln City, is pushing hard for permission to open a second casino in Salem. The Coquille Indian Tribe on Oregon’s south coast wants to build a casino in Medford.

The Grand Ronde, which operates the Spirit Mountain Casino & Lodge, said it has no interest in expanding and remains an advocate of current state policy — one casino per tribe on their respective reservations, said Justin Martin, a Grand Ronde tribal member and its lobbyist in Salem.

The Grand Ronde publicly opposed the ilani project. In 2010, it filed an ultimately unsuccessful appeal of the U.S. Department of the Interior’s decision to approve it, claiming that the casino was located outside traditional Cowlitz territory and arguing that the tribe was not federally recognized in 1934, a key test under the Indian Gaming Regulatory Act. A federal appeals court, however, found the tribe was nonetheless “under federal jurisdiction.”

Grand Ronde officials were surprised when informed of the Cowlitz’s efforts that appeared to be aimed at the Oregon tribe.

“It’s obviously disappointing and absolutely the opposite of the open and transparent policy we strive for,” Martin said. “Whether or not it’s legal, it’s just smarmy.”

Tribes, forcibly relocated onto reservations, have closely guarded their legal franchise on casino gambling to fund health clinics, childcare centers and other services. Some give proceeds to tribal members in what is called a per-capita distribution.

The nine federally recognized tribes in Oregon have organized against efforts to legalize private, non-tribal gaming in the state, including ballot initiatives led by Rossman and Studer.

The duo has tried at least four times since 2005 to get voter approval to amend the constitution to allow private casinos. They managed to get their initiative on the ballot in both 2010 and 2012 and lost by wide margins in both. They scuttled their 2020 effort due to the pandemic.

Travis Boersma, the billionaire co-founder of Dutch Bros Coffee, sought this year to open a casino-like gambling hall at a horse track in Grants Pass over objections from tribes. Boersma argued the operation was exempt because it was tied to racing, but shuttered the whole operation when the state denied a key operating permit.

And there are nationwide threats to gaming as an economic tool for tribes. A case before a federal court in Washington state challenges the Indian Gaming Regulatory Act, which sets out a procedure for regulating gaming on Indian land. If the challengers succeed, they could open the door to private, non-tribal casinos nationwide and, experts worry, weaken the very underpinnings of tribal sovereignty.

Barnett’s vision

Barnett went to high school in the blue-collar logging town of Aberdeen, Washington. He was a gifted distance runner — he never lost a race in four years — and got a scholarship to compete at the University of Washington. He eventually found his niche as a real estate developer.

He kept his eye on the ultimate prize — a tribal casino.

Indeed, ilani has been a watershed for the 5,000-member Cowlitz tribe, which claims ancestral lands that stretch from the Cowlitz River south to the Columbia. As recently as 2000, the tribe — which declined to sign treaties with the U.S. government in 1855 — was not federally recognized and had no reservation.

Barnett’s father played an important role in the effort to secure federal recognition. The son was determined the tribe should take the next logical step – construction of a casino. Even Barnett’s staunchest critics give him credit for making ilani happen. He sold the land to the tribe where the Casino now stands. But Barnett also stood to benefit from the casino financially.

In 2004, years before the Cowlitz tribe had formally reclaimed any of its ancestral lands, Barnett’s company, Salishan Co., entered into a development agreement to build the resort casino that would become ilani in partnership with the powerful Mohegan Tribe, an experienced operator based in Connecticut. (Salishan Co. has no relation to Salishan Resort on the Oregon coast.)

According to U.S. Securities and Exchange Commission documents filed by the Mohegan Tribal Gaming Authority, a publicly traded arm of the tribe, ownership of the company that would control and operate the casino was split three ways — nearly half to a Mohegan company, 40% to Barnett’s company, and the balance, 10.85%, to the Cowlitz tribe.

By the spring of 2017, ilani was on the verge of opening its doors. But there was a last-minute snag. The National Indian Gaming Commission informed the Cowlitz and Mohegan that it wouldn’t approve the ilani management agreement because of concerns over Barnett’s conduct, according to SEC filings and a 2020 lawsuit the Mohegan filed against Barnett’s Salishan Co.

It’s unclear what conduct the commission was concerned about.

But Barnett could be erratic and aggressive, not hesitating to verbally abuse other members of the Cowlitz tribal government. Audio and video of a tribal gaming authority meeting in 2016 captured his profanity-laced tirades directed at tribal members who opposed him.

He had brushes with law enforcement, including a 2009 incident in which he suffered a traumatic brain injury after he was thrown from the back of a pickup truck driven by his then-girlfriend.

The woman told deputies she was attempting to flee in Barnett’s truck after an argument. Barnett, from the moving vehicle’s open truck bed, was attempting to break through the back window when he fell out onto the pavement.

Barnett wasn’t charged with a crime, but three weeks after the crash, he told deputies that if they had tested his blood they likely would have detected alcohol and drugs, according to a police report.

Barnett would continue to fight substance abuse issues off and on for the rest of his life. After his death last May, the cause was widely reported as a heart attack. It was actually “acute fentanyl intoxication,” according to the King County Medical Examiner’s Office.

“It became apparent that issues in Mr. Barnett’s personal background would likely render him, along with any entity in which he held an interest, unsuitable for involvement in the management of the ilani casino,” the Mohegan said in its 2020 lawsuit filed against Barnett’s Salishan Co.

Ultimately, Mohegan bought out the share owned by Barnett’s Salishan Co. On April 17, 2017, Mohegan agreed to pay $114.8 million over several years.

Details of the buyout were included in the 2020 lawsuit as the Mohegan casino operators sought to pause payments to Barnett’s company during the pandemic, which had temporarily shut down the casino. The two sides settled the lawsuit in August 2020. The terms were not disclosed.

Controversial strategy

Barnett’s proposal to bring on R&S Strategy Group was controversial from the start.

Documentation and audio from a 2016 meeting of the Cowlitz Tribal Gaming Authority make plain that members worried about the public relations black eye they could suffer if the agreement leaked. They also thought the consultants were asking too high a price for their lobbying work.

“I think the Oregon tribes are going to come together and fight this,” said gaming authority board member Carolyn Medeiros. “And the $30,000 a month is stupid.”

Adding to their qualms was the fact that Barnett had already paid $30,000 out of his own pocket. Now he was urging the tribe’s gaming authority board members to adopt the contract itself, assume the monthly payments and repay his expense.

Barnett raged against dissenters, according to the audio, and heaped praise on R&S for its political savvy.

“They work with a lot of legislators,” Barnett said. “They’ve got connections. They’re not nobodies. … You should be thanking me for getting us in front of this thing.”

Barnett wanted the council to act fast, saying he worried Rossman and Studer had approached the Grand Ronde. Barnett warned gaming board members that Rossman and Studer could sign a deal with the Grand Ronde if the Cowlitz didn’t hire them.

Martin, the Grand Ronde lobbyist, confirmed that Rossman and Studer did approach the Grand Ronde about consulting. He said his tribe was not interested.

Barnett prevailed, and the Cowlitz tribe signed an agreement with R&S Strategy Group in late 2016.

According to tribal documents and a copy of the contract, the tribe agreed to pay $30,000 a month for 36 months followed by a $500,000 balloon payment at the contract’s expiration.

In November 2020, the tribe entered into another memorandum of understanding with Rossman and Studer personally. This time, the contract called for the tribe to pay $50,000 a month over 42 months.

It’s not totally clear what the Cowlitz Tribe got in return. The intervening years brought no major changes in Oregon’s tribal gaming landscape. Rossman declined to get into specifics but said the tribe got its money’s worth. Studer did not respond to questions.

But concerns among tribal leaders grew, coming to a head at an Oct. 24 meeting of the Cowlitz Tribal Council. According to the council member who spoke to The Oregonian/OregonLive, those concerns included whether the tribe’s efforts could violate federal laws against blocking competition.

Four attorneys from Orrick, a prominent national law firm, attended the meeting, according to an attendance list provided to The Oregonian/OregonLive. Among them were two antitrust specialists from the firm’s offices in Washington, D.C., and Houston, and a Seattle-based white-collar crime specialist.

It’s unclear why the tribe would consult antitrust attorneys. Under the Sherman Act, antitrust laws are intended to curtail business arrangements that would fix prices or reduce competition on grounds these arrangements are generally bad for consumers.

But the Sherman Act generally comes into play when competitors conspire to divvy up a market or fix prices — and no other tribe was involved in the Cowlitz deal.

Rossman and Studer, whose agreement with the tribe instigated the debate, don’t operate a casino. Their campaign to change Oregon state laws remains a longshot bid.

“Working to keep a competitor out of the market is fundamentally anticompetitive,” said Dan McCuaig, a private practice attorney in Washington, D.C., who spent nearly a dozen years prosecuting antitrust cases for the U.S. Department of Justice. “But if the other company in the agreement isn’t really a competitor, there’s no antitrust case.”

Asked about those issues, Cowlitz officials again declined to comment. Rossman also declined to address that specific issue.

The late October meeting was not the first time concerns were raised about the relationship with the consultants. The law firm Quarles & Brady advised the tribe in a 2021 written report that Barnett’s conduct in awarding the consulting contract with R&S Strategy Group should be investigated internally.

“To be clear, there is no evidence that Barnett committed any federal criminal offenses,” the Quarles & Brady report states. “However, the alleged facts surrounding his dealings with R&S, his dual roles on tribal council and in development projects, and the federal funding the tribe receives raises serious concerns that warrant further investigation or disclosure to federal authorities.”

It’s unclear whether the tribe pursued those concerns.

Tribal leadership issued a memo to members in recent days advising them not to discuss or disclose tribal matters publicly.

But several tribal members and former employees told The Oregonian/OregonLive that they hoped speaking up would end what they called a culture of bullying and fear.

“Tribal leadership has forgotten where we came from. This is not our way,” said Robin Ladue, a 68-year-old retired psychologist and tribal member. “This is about honesty and integrity.”

Lead image: The ilani Casino Resort near Ridgefield, Washington. Photo by Dave Killen / The Oregonian

Jeff Manning is a reporter for The Oregonian/OregonLive who covers business, healthcare and higher education.