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U.S. joins lawsuit asserting that N.Y. got Indian land illegally; Oneidas' 270,000 acres reduced to 32-acre plot 200 years ago; Approval of Congress lacking; 'They basically sided with a foreign nation against us,' one landowner says

THE BALTIMORE SUN

NEW YORK - The federal government has joined the Oneida Indians in a lawsuit that contends the state and local governments unlawfully acquired 270,000 acres of land in central New York from the Indians nearly 200 years ago, whittling down what had been a sprawling reservation into a 32-acre plot.

Though the Oneidas' land claim has been wending its way through federal courts since 1970, the victim of fruitless settlement negotiations between the Indians and three New York governors, the intervention of the Justice Department has focused the attention of state and local officials on the case.

Widespread anxiety

In particular, lawyers for the Justice Department and the Oneidas have provoked widespread anxiety and anger among private landowners by seeking to expand the suit to name not just the state, but also some 20,000 property owners in central New York as defendants.

The Justice Department and the Oneidas adamantly maintain that they have no interest in evicting people from their homes or forcing them to pay rent to the tribe and say the suit really is intended to pressure the state into reaching a settlement. But such assurances have not stopped people from believing that their homes and farms are in danger, that they will be unable to buy or sell property or that banks will stop making loans.

"This is very emotional issue and no amount of assurances are going to completely allay people's anxieties," said state Sen. Raymond Meier, a Republican from Oneida County. "The only way to do that is to bring this to a rapid and complete conclusion."

The expansion of the suit to include individual land owners, which would have to be approved by U.S. District Judge Neal McCurn in Syracuse, comes at a time of simmering tensions between the Oneidas and some business owners, who contend the Oneidas' tax-free status is putting them out of business.

The Oneidas, who have become one of the region's largest employers, run a casino and hotel as well as several stores, restaurants and gas stations where customers do not pay sales tax.

"Ten or twelve family-owned businesses are now gone because the Indian businesses have an unfair advantage," said Assemblyman David Townsend, a Republican from Oriskany. "And they flaunt it in people's faces by advertising tax-free goods."

But the Justice Department's involvement has now made the federal goverment a target of the anger. "It's amazing that they basically sided with a foreign nation against us," said Lisa Jensen, a 31-year-old landowner. "You hit yourself on the head and you ask where do my tax dollars go? Against me?"

Oneidas' contention

The Oneidas contend that New York state violated the federal Trade and Intercourse Act of 1790, which prohibited states from acquiring land from Indians without federal approval.

The Oneidas argue that between 1795 and 1840, the state and local governments entered into 26 treaties and several purchase agreements with the Oneidas to acquire all but 32 of the 270,000 acres now in dispute.

Almost none of those transactions were approved by Congress, lawyers for the Justice Department and the Oneidas say, making the sales invalid.

In 1985, the Supreme Court upheld that argument in a "test case" filed by the Oneidas that named Oneida and Madison counties as defendants and claimed just 900 acres. At that point, the state opened negotiations with the Oneidas and the litigation was put on hold for the next 13 years, until the Oneidas and the Justice Department moved to expand the case last month.

The Justice Department's actions have prompted finger-pointing between the administration of Gov. George Pataki and the Oneidas, with each side blaming the other for stonewalling the talks.

Governor's view

The governor's office contends that negotiations have stalled largely because there are three groups of Oneidas who are parties to the lawsuit - one in New York, one in Wisconsin and one in Ontario, Canada - and that they have often feuded over strategy and goals. But aides to the governor contend that even fractured talks with the Oneidas are preferable to the new legal tack chosen by the Justice Department.

"We think the federal government has turned its back on the people of central New York," said Michael McKeon, a spokesman for Pataki. "We think it would be much more productive if they played a helpful role in negotiations rather than taking sides."

But Raymond Halbritter, the elected leader of the Oneida Indian Nation of New York, asserted that Pataki had been poorly served by his legal advisers, who did not recognize the Oneidas' frustration with the turtle-paced negotiations.

'We really had no choice'

"We regret that we have to litigate," said Halbritter, whose grandmother, Mary Cornelius Winder, began advocating the land claim more than 70 years ago. "These are our neighbors and friends; we would like a future here. We know they are angry. But we think that most reasonable people, once they know the history, know we didn't want to sue so many property owners. But we really had no choice."

In the past 25 years, the federal government has resolved at least 10 such Indian land claims in Connecticut, Maine and other states, usually by creating funds with state and federal money that allow tribes to purchase land in proscribed areas from willing sellers, Justice Department officials said.

The lands acquired that way have then become part of their federally recognized reservations, exempt from local sales and property taxes and eligible for a variety of federal services.

Officials said they knew of no cases in which people who have purchased land in disputed areas have been forced to give it back to the Indians.

Officials in Oneida and Madison counties, which contain the 270,000 acres, said there was no evidence that the suit had caused title insurance companies to stop issuing policies or banks to withhold mortgages. They also said there was no indication that property values had been affected by the suit or that people were having trouble selling land.

'Uncertainty ... doing damage'

But Ralph J. Eannace, the Oneida County executive, said he had heard of numerous cases of property owners canceling contracts to expand or improve their homes or commercial buildings.

"There is no question that the uncertainty raised by the possession claim is doing damage," Eannace said. "It has worried people, caused a great deal of anxiety and had a chilling affect on our economy."

Oneida officials have asserted that the land claimed has an assessed value of more than $1 billion. But they have signaled a willingness to accept less money than that in exchange for other concessions from the state. For instance, Halbritter has floated the idea of creating a large economic development zone, where the Oneidas could use an array of tax incentives to attract large manufacturers to the region.

Last year, Halbritter also suggested that the suit could be resolved if the state allowed the Oneidas to open a casino at the Monticello racetrack in Orange County. But Halbritter said the Pataki administration demanded that 90 percent of the profits go to the state, which the Oneidas rejected.

State and Indian officials have also said privately that a land claims settlement could be used to resolve several longstanding issues between the Oneidas and the state. For instance, the Oneidas have sought state approval to install slot machines and sell alcohol in their Turning Stone casino in Verona. And the state has been seeking Oneida approval for a system to collect sales taxes on gasoline and other products sold on Oneida land to non-Indians.

Indians' new affluence

What is engendering some of the bitterness among property owners toward the Oneidas now is the Indians' new affluence. When the suit was first filed, the Oneidas had dwindled to a few hundred families, many of them living in trailer homes on the nation's 32-acre plot.

Today, the nation operates a successful casino, two hotels, a convention center, a T-shirt printing plant, five gasoline stations and eight restaurants. It employs 3,000 people.

But several local officials praised the Indians for bringing jobs to the economically struggling region. And they said the Oneida's latest legal maneuver had at least forced public officials to focus on the problem.

"I was very unhappy with the suit the Oneidas filed," Rep. Sherwood Boehlert, a Republican from Utica, said. "But the silver lining is that it has prompted everyone to pay attention."

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