After 14 years and hundreds of millions in revenue, Tucson's tribal casinos have not met federal and state requirements to lift Indians out of poverty and reduce tribes' dependence on taxpayer money.

The federal law and state compacts legalizing Indian casinos here say the operations should promote tribal self-sufficiency, develop tribal economies and strengthen tribal governments. Progress has been slow:

● One tribal government is more reliant on federal and state aid than it was a decade ago, while the other improved slightly. The Pascua Yaqui government has increased by 73 percent its per-person spending of federal dollars since 1997, when adjusted for inflation. Federal spending by the Tohono O'odham Nation has gone down by about 10 percent in that time. For both tribes, welfare rolls are steady or rising — food stamp usage is unchanged at 18 percent among Yaquis and while it has fallen among O'odham, it still averages 23 percent. The portion of members using an indigent health-care plan is up 27 percent among Yaquis and 13 percent among O'odham over six years.

● Stabs at economic development have mostly fizzled, and have created only a fraction of the positions needed to relieve joblessness. Unemployment among Yaquis has plummeted to 13 percent, but the overall rate is unchanged in 18 years among Tohono O'odham — and both rates still are three to five times as high as Tucson's.

● Tribal councils and officials have argued over how to spend and oversee casino money, and the disagreements often have broken down governments instead of building them up.

The slow starts come despite about $300 million in gross gaming revenue that a Star analysis estimates flowed last year into Southern Arizona's five Indian casinos — four in the Tucson area and one about two hours west of Tucson at Why. A new Desert Diamond Casino that opened Thursday has the potential to boost O'odham income another 20 percent, said casino CEO Scott Sirois.

Tribes will not release casino revenues — they are not subject to public-records laws that apply to other state and local governments. But the Star analysis, based on the tribes' mandatory contributions to local agencies and governments as well as other financial information, estimates that the O'odham earned about $196 million from gaming last year while the Pascua Yaqui made $104 million.

The combined total, $300 million, adds up to about 15 percent of Arizona's $1.94 billion in gaming revenue last fiscal year.

Yaqui officials confirmed the tribe made "more than $100 million" last year; O'odham Chairman Ned Norris Jr. said the nation's casinos make $80 million a year, but that's the same number the tribe has been using since 1999, two years before the second Desert Diamond Casino opened south of Tucson.

Tribal leaders say they're making progress, but they need more time to reverse decades of poverty and neglect. They say they are working toward the goals laid out in the compacts, but the Star's investigation found a trail of political spats that impeded progress and a focus on meeting the needs of a few while the needs of many go unmet.

"When you look at the needs of the nation, 14 years later have we accomplished the things we wanted to accomplish? I don't think we've really made a dent," said Norris, who has worked for the O'odham Nation for 30 years and been chairman for three months. "I think we've made some headway, and I think we've got a long way to go yet."

Casino money was supposed to cut tribes' dependence on federal funding and help members get off welfare.

But the tribes have coupled casino money with federal money to maximize spending, adding some services they could not afford on casino money alone.

The Yaquis have increased their spending of federal tax dollars per tribal members by 73 percent since 1997, federal tax audit records show. Adjusted for inflation, spending went from $999 per person in 1997 to $1,731 in 2005, the most recent year for which records were available.

O'odham federal spending went down by about 10 percent in that time, when adjusted for inflation, from $1,274 to $1,149 per member. The tribe spent $32.1 million last year on Tohono O'odham Community College, public safety and diabetes prevention, among other programs, audit reports show.

Norris said the tribe won't ask for less because the federal government is obligated to care for indigenous people in payment "for taking our land."

Tribal leaders said they are making the most of everything available to them instead of merely getting by with what the government gives them, the way they did before casinos.

"That's a complete new day from being told, 'Congress appropriated "X" and that's what you get,' " said Margo Cowan, who served as general counsel to the Tohono O'odham Nation during three administrations.

The O'odham's new dialysis center was built with casino money, but the federal government will pay the continuing expense to staff it.

"There would never be enough money on the (Indian Health Service) side to build a new clinic or build a dialysis center," Cowan said. "On the gaming side, it would have been quite a stretch to not just build it but staff it forever."

The O'odham Nation relies on grants from the U.S. Department of Housing and Urban Development to build new homes. Norris estimated 500 members need housing, but the tribe is exploring ways to use gaming money to meet the need.

The Yaquis seek as much federal grant money as possible to finance new buildings and programs in combination with casino money, said Councilman and former Chairman David Ramirez. Two $4 million recreation centers, one for seniors, are under construction on the Yaqui Reservation, near West Valencia Road and South Camino de Oeste. Taxpayers paid half of the bill and gaming profits covered the rest.

Neither tribe makes a strong case that casino money has strengthened its government.

One tribe's ancient way of making decisions by consensus doesn't mesh easily with the fast-paced business world. The other's frequent feuds have stalled progress.

The O'odham have established a semi-independent board to oversee their casinos. Mixing business and politics is dangerous, so the tribe separates them, said Eddie Brown, a gaming-board commissioner.

The tribal legislature decides by consensus how to spend casino money. That slows things down, but it also ensures each budget decision is careful and intelligent, Norris said. Also, the transparency prevents corruption, Cowan said.

The tribe spends most of the money on programs and gives about $1 million to each of its 11 districts. It also has given about $2,000 to each eligible member three times in the past 10 years.

The Yaquis have a distinctly different strategy. The government and the casinos run like a family business, with regular advice and criticism coming directly from council chambers. The 11-member council decides how all the money is spent and no money is paid directly to members.

The intense political involvement works well, said Sol Casinos CEO Wendell Long.

"This is such a huge source of income, and it could be such a financial disaster if something happened to the revenue stream, that I would think it would be wrong for them not to have a very strong interest in the casino, almost a dereliction of duty not to have a strong interest," he said.

Although Long insists politicians have nothing to do with day-to-day business operations, Councilman Ramirez and Chairman Peter Yucupicio said they visit the casinos daily to see what's going on and to attend management meetings.

"I want to know how they're spending our money, and what they're doing," Yucupicio said in an interview at Casino del Sol last week, with Long sitting across the table.

A consultant hired by the Yaqui council last year reported a common sentiment among members: The council's involvement in daily management "prevented long-term planning, as well as limited the ability to successfully manage the businesses."

Yucupicio said he doesn't remember the report, but that the current management is right for the casinos and the tribe.

The Yaqui casinos have had four CEOs, all non-Yaqui, in five years. With each new management shake-up, "the progress that we were making slowed down," said Aurora Valencia, who has worked for the tribe's gaming enterprises most of her life and is related to three councilmen. The tribe would be further ahead if the council and casino leaders had a shared vision earlier, she said.

Additionally, nepotism has led to lax oversight on more than one occasion.

Most recently, state investigators laid blame on former CEO Edmund Miranda for mismanagement after an employee was caught embezzling $269,000 over nearly four years. But Miranda told investigators some employees were outside his control.

"There were people in certain positions who truly were not qualified to be there" but who were related to powerful people, he told state investigators. "For political reasons, you were not able to replace them."

Economic development would help the tribes bring in more revenue to address social woes and decrease reliance on taxpayer money.

So far, local tribes have made gradual headway.

A small fraction of the tribes' citizens receive the highest level of direct impact from casinos — employment. Nine percent of adult Yaquis work in their two casinos, and the O'odham nation's three casinos employ 2 percent of its adults.

Both tribes have made strides in overall job growth, doubling the number of people working for the tribal governments since before casinos.

Unemployment — in the 60 percent range before gaming — remains high. Around 18 percent of the O'odham and 13 percent of Yaquis were jobless in any given month this year, state Department of Economic Security data shows. Tucson's average this year is 3.7 percent.

Both tribes have college-aid programs, but left unaddressed are the dismal high school graduation statistics, including a 26 percent dropout rate in 2005-06 at Baboquivari High School on the O'odham Nation, the Arizona Department of Education said. The dropout rate in Tucson Unified School District the same year was 2 percent.

Because Yaqui teens attend high schools in Tucson, there is no state-calculated dropout rate, but the tribe reports that 41 percent of students graduate from high school.

"We need to do more with our education system," Yucupicio said, especially focusing on staff retention. The tribe has an education department, but many children attend TUSD schools.

One obvious way to create more non-government jobs is to create more businesses that need employees. Both tribes once gave members grants to start small businesses, but with few exceptions they failed. Both have dropped the programs.

The tribes have opened their own businesses, too, some of which have failed.

The Yaquis opened a profitable gas station and convenience store and a pet-boarding business; the O'odham operate a successful ice company and a vending-machine firm. This weekend, the tribe opened an art gallery in Tubac.

But none of these ventures drives employment; each employs only a handful of workers.

O'odham Chairman Norris has a list of areas where he would like to focus the tribe's attention, not the least of which is the growing youth gang problem. The tribe's five new youth centers are a starting point; improving the school system is the next step, even if it means bringing in the state's top school officials and risking state intervention, he said.

It's also time to start investing gaming revenues in a housing program and road improvements, Norris said.

"We have to accept some of that responsibility now that we have the revenue source to begin to address those kinds of issues," he said.

Yucupicio said he would like to see the Yaquis finish what they've started, from a library project and a wellness center, both of which are under way, to providing better accommodations for the nation's growing language and culture program.

But his hands are tied when it comes to dreaming big. The 2-square-mile nation is landlocked, limiting economic-development opportunities and ensuring the tribe has to keep relying on taxpayer money to survive, Yucupicio said.

"We need a lot more years. And even then, we don't have enough land, resources or anything to take care of all the needs," he said. "It's not there. Someday, maybe. Someday."

Star reporters Becky Pallack and Cathy Burch take a look at where tribal casino money goes in this three-part investigation.

Go to http://www.azstarnet.com/ special/casinomoney to read the entire series.

"When you look at the needs of the nation, 14 years later have we accomplished the things we wanted to accomplish? I don't think we've really made a dent."

Tohono O'odham Chairman Ned Norris Jr.

Three levels of regulation

Tribes are sovereign nations, meaning they are self-governed independent of the U.S. Constitution.

Under the 1988 Indian Gaming Regulatory Act, tribes agree to some limitations on their sovereignty — considerable gaming-industry regulations by the state and federal governments — in exchange for an economic development engine.

The tribal casino watchdog is the National Indian Gaming Commission, which has a regional office in Phoenix.

Casinos are regulated by state compacts. The current one took effect in 2003, after voters approved changes in 2002. The Arizona Department of Gaming, which has a Tucson office, is the regulatory agency. It is funded by the gaming tribes, but it conducts independent investigations, audits, background checks and slot-machine inspections.

"We've never had any problems. Tribes are doing what they agreed to do and what they told the public they would do," said Department of Gaming Director Paul A. Bullis.

The tribes self-regulate. Each tribe has a gaming board and internal audit requirements.

Since the beginning, "the regulations were very, very tight," said Eddie Brown, a member of the Tohono O'odham Gaming Authority board, which oversees casino operations. "The tribes now are running very competitive, money-making oeprations. We've come a long way in a very short time."

Some say it's made a difference

"Everything from increasing services to development of roads, the program for the elderly, or the nursing home, the diabetes clinic, the increase in law enforcement. All of those things have literally happened overnight. It's only been the last eight years (that we) really have felt the impact of the revenue that has been generated for the development of the tribe."

— Eddie Brown, an enrolled Yaqui who sits on the Tohono O'odham gaming board.

"When you look at the nations in Arizona, most are developing nursing homes, health centers, infrastructure. So they really are playing catch-up. They've got years to go to catch up."

— Jacob Bernal, head of the Tucson Indian Center.

"(Before gaming) we were one of the poorest tribes in the country. ... When the money started coming in, it was hard for us. ... My mother was on the tribal council and they were trying to figure out how to (spend it). There were so many needs, they didn't know what to do first. ... I got to see the difference casinos can make. Gaming has greatly improved the quality of life for us as tribal members."

— Alma Lopez, Pascua Yaqui Tribe member and former councilwoman

"I think we are doing everything to our potential in capturing the market."

— John Fendenheim, Tohono O'odham businessman who chairs the tribe's Gaming Authority Board of Directors

"Back home (in Eloy) where I'm from, we didn't have the benefits we have here. I'm happy with what they've provided me."

— Lupe Montijo, who moved to the Pascua Yaqui Reservation eight years ago.

"I totally enjoy this job. It's frustrtaing, it's challenging. I love the residents. I love taking care of them. It's a passionate job. There's a lot of opportunities for us here."

— Delia Lopez, staff nutritionist for the Archie Hendricks nursing home on the Tohono O'odham Nation. Her husband is the tribe's vice chairman.

"I come from Old Pascua. I used to come home and knock on my grandma's door and say, 'Do you need firewood? Do you need water?' We had no running water. Everything was hauled in buckets. And (she had) dirt floors. And she had a little pot-bellied stove. She used to tell me to go down to the spigot to go get water and I'd bring it back, and then I'd start chopping wood so she could prepare food. It's changed our life."

— Peter Yucupicio, Pascua Yaqui tribal chairman

"To go to the gym, I would pay $30 a month, plus it was really far. Here it's convenience and they have personal trainers. You pay nothing. It's such a great opportunity to help stay healthy."

— Yaqui Angelica Salcido, 26, who works for the tribe and uses the wellness center gym nearly every day