Five past and present members of the Osage Nation Gaming Enterprise Board are taking the tribal Gaming Commission to court to challenge fines imposed upon them as individuals for actions they took as board members.
The appeal, filed April 13 in Osage Nation Trial Court, attacks the gaming regulators’ March 15 decision to issue fines ranging from $1,000 to $5,000 for alleged failure to cooperate with the investigation into the casino executives’ expenses and compensation. The largest personal fine, $5,000, was levied against board chairman Geoff Hager, $2,500 fines were issued against current board members Bruce Pollock and Claudette Carnett, and $1,000 fines were leveled against Mark Simms and Julie Malone, both of whom resigned from the board before the Commission issued its rulings.
The dispute stemmed from the Commission’s investigation into the spending habits of casino executives, most notably those of former Chief Executive Byron Bighorse, who between January 2019 and September 2021 charged nearly $400,000 in food, alcohol, golf outings, golf clothing and equipment to the casinos with very little of the required documentation to back those expenses, including who was present at the events he was hosting. Bighorse is married to Principal Chief Geoffrey Standing Bear’s daughter, Jennifer Bighorse, who was the casino’s marketing director until the fall of 2021.
The Commission’s decision of March 15, the appeal says:
- Unconstitutionally cast the Commission as prosecutor then judge;
- Unconstitutionally failed to extend, as required, the Nation’s sovereign immunity to officials who were acting within with scope of their duties as board members;
- Violated the doctrine of separation of powers by usurping Congress’ role as the sole governmental body with the power to remove board members;
- Failed to issue a show-cause notice to the accused board members that described their alleged breach, how it could be cured, and that offered a meeting with the commission to discuss it, as required under Osage law;
- Failed to follow the Commission’s own rules, which state that if the alleged breach is corrected before the commission holds a licensing hearing, it has been cured – and that even by the admission of Commission Director Elizabeth Hembree, all the requested documents were delivered before the hearing date; and
- Arbitrarily imposed varying fines on the board members even though all were accused of the same violation buttressed by the exact same evidence.
The Gaming Commission’s decision to fine Gaming Enterprise Board members was unprecedented, but the way in which it acted was also marked by some firsts, according to the appeal, which was drafted by attorney Greg Laird, who was hired by the Gaming Enterprise in the middle of the dispute after its former attorney, Graydon Dean Luthey, resigned.
Too many hats? Acting as both prosecutors and judges
Laird noted the Gaming Commission hired a special prosecutor – Victoria Holland – to prosecute the licensing actions against the five board members, something it did because the commission said it had a “conflict of interest” if the commissioners and its regular lawyer, Eugene Bertman, acted as both prosecutors and judges during the licensing hearing that took place March 2.
Yet in the past, such a conflict raised no alarms, Laird noted: He reviewed Commission minutes and found, for instance, that in 2019 Bertman was the lone attorney present at two other licensing hearings at which he recommended the licensees be revoked because they had failed to appear.
Flipping roles from prosecutor to judge, Laird wrote, is a clear violation of due process – or legal fairness – and violates the Constitution of the Osage Nation (as well as that of the United States).
“Due process of law has been defined many ways, but at a minimum it required an independent tribunal,” he wrote. “Prosecutor is defined by Law.com dictionary as someone ‘who prosecutes another for a crime in the name of the government,” and “tribunal is defined by Black’s Law Dictionary as ‘the seat of a judge; the place where he administers justice, a judicial court; the bench of judges.’
“Under the current system, the Commission members, the same three individuals, act as both prosecutor and the tribunal. Under no rational definition of due process can this Court allow this procedure to remain in place.
“Plaintiffs respectfully request the current rules be deemed unconstitutional and a violation of Osage Nation Law and suspend all such proceedings until the Commission or the Osage Nation Congress corrects the issue.”
Board members immune due to sovereign immunity
The lack of due process alone should be enough to vacate the judgment against the five gaming board members, but they are also protected by Article XIX of the Osage Constitution, Laird argues. That article says the Osage Nation and everything under it is immune from suit or process in any forum unless the Nation waives sovereignty. It expressly adds that sovereign immunity extends to Nation officials and employees when they are acting within the scope of their duties and authority.
The five board members were all acting within the scope of their duties and, in fact, had no ability to obtain the documents that the Commission wanted – Bighorse’s confidential severance package, for instance – as individuals. They could only obtain them as a board.
Only Congress can remove board members
Laird also dives into the proposition that the licensing actions against the board members violates the separation of powers doctrine of the Osage Constitution, which dictates that only Congress can remove members of boards and commissions.
Laird argues that by bringing any licensing action against the board members, the commission started an illegal process through which the board members could have been removed from office without congressional action – for the simple reason that they had lost their gaming licenses, which are required for board members, they would necessarily be ineligible to serve.
No show-cause notice
The board members are considered primary management officials under Osage law, and by the Commission’s own rules, it is required to issue a “notice to show cause to [licensees] prior to any action of suspension,” the appeal says. That notice, the law says, “shall describe the alleged breach, shall describe the steps necessary to effect a cure and shall provide the licensee with an opportunity to meet with the Gaming Commission to discuss the matter,” the appeal says.
“The discontinuance or correction of the alleged brief shall constitute a cure thereof … if the alleged breach is not corrected or discontinued … then the Gaming Commission shall institute the notice and hearing procedure …”
The appeal says no show-cause notice was ever issued and that the other provisions were roundly ignored.
The Gaming Commission has 21 days from the time it was served with the appeal to respond, after which the legal dispute will start winding its way through the tribal court system. It is expected the legal issues will ultimately be decided by the Osage Nation Supreme Court.