Cheryle Kennedy has helped her Confederated Tribes of the Grande Ronde through a remarkable transfiguration over the past two decades. First, they got back 9,800 acres of timberland -- part of their original Yamhill County reservation that was abolished by the U.S. government in the 1950s. Then a brick house along Highway 18 was turned into a casino, and the casino became the single most-visited tourist attraction in Oregon. Tribal health centers, schools and offices rose out of the hilly ground in the shadows of the Coastal Range. The size of the tribe quintupled as members rejoined the tribal rolls and some even moved back to new tribal housing developments in the Grand Ronde community.

It's for a prosperous future that Kennedy, the Grande Ronde tribal chair, now prays.

"I pray a lot," says Kennedy. "A lot of people say you're not supposed to talk that way in business terms. Like any good business person you weigh your risks. We also need to remember that we're not here by ourselves and stay tapped into the Creator who made us."

Kennedy and other Grand Ronde officials are about to lead their tribe on another quest for recognition. Having established a $75 million-a-year gaming business at Spirit Mountain Casino, diversified their business portfolio and become big players in state philanthropy and politics, Grand Ronde is now trying to assume an even larger profile on Oregon's economic landscape. The tribe is maneuvering to land an Indian casino in the heart of Portland, offering money, jobs and economic development in exchange for a chance to cash in on the biggest gambling market between San Francisco and Seattle.

So far, gaming has served well the Grande Ronde and other Oregon tribes -- among them, the Warm Springs, Cow Creek and Umatilla. And they've spread their wealth around, helping to create jobs, attract visitors and boost rural economies devastated by the loss of timber jobs over the past several decades.

But to succeed in the long term the tribes will have to figure out how to sustain the social welfare programs their newfound wealth has allowed them to create for members, who are still among the poorest and most underemployed Oregonians. And their economic viability will be at risk, exposed to the fickle fortunes of gaming -- an increasingly crowded industry that is subject to political whims and shifting societal attitudes. Economic diversification -- the best guarantee of sustaining tribal prosperity and building regional economies -- is still far off for Oregon's tribes.

In a quiet but intense flurry of activity recently, the Grand Ronde tribe has been pursuing a plan to build a casino and hotel complex across Martin Luther King Jr. Boulevard from the newly renovated Oregon Convention Center in Portland. According to tribal leaders, the Portland Development Commission supported the inquiry, which involved a feasibility study by The Innovation Group, a New Orleans gaming consulting firm. PDC officials did not respond to requests to talk about the issue. But according to tribal leaders, PDC is working to raise the profile of the expanded convention center.

The latest positioning follows the Grand Ronde's offer earlier this year to provide funding for a new major league baseball stadium or public needs such as education in exchange for permission to build a casino in Portland. Grande Ronde's attempt to dominate Oregon's biggest gaming market follows close on the heels of heavy lobbying by the Confederated Tribes of the Warm Springs to put a casino in the Columbia River Gorge town of Cascade Locks, just 40 miles east of Portland.

Both off-reservation casinos would have to get the blessings of U.S. Interior Secretary Gale Norton and Gov. Ted Kulongoski, whose aides say he prefers to limit tribes to one casino on existing tribal lands. And though Portland leaders welcomed Grande Ronde's offer during the baseball stadium funding debate, a casino in the heart of the Rose City would be a giant pill to swallow for many Portland residents and community leaders opposed to gambling in their own backyard.

Grand Ronde leaders are portraying their proposed casino as a major economic development project: 4,000 jobs in the initial construction phase and some 30,000 direct and indirect jobs once the hotel and casino are opened.

"If [the governor] doesn't want it, fine; we'll stay here and do our thing," says Larry Kovach, the Grand Ronde finance officer. "But something has got to happen to fire up this economy. The rest of the country is in a recovery, and we're not."

"Oregon needs a shot in the arm," adds Cheryle Kennedy.

If it sounds like Kennedy and Kovach are trying to grab some of the leadership spotlight, it's because they are. They see themselves as the new captains of industry in their neck of the woods -- providing 1,500 jobs at Spirit Mountain Casino and Lodge, which purchases $23 million worth of Oregon goods and services every year. Grand Ronde also sells around 5.7 million board-feet of timber each year and has a hand in commercial and residential real estate development. The tribe's business activities help support local social services, schools and government.

And the tribe is not alone in its sense of growing economic importance to Oregon.

Near Roseburg, the Cow Creek Band of the Umpqua Tribe now has 1,200 employees across an array of businesses -- from a truck stop to a printing design venture -- which has helped fill the gap left by Douglas County's declining forest products industry and the closure of Riddle's nickel mine. At least one new retirement development is using its proximity to the Cow Creek's Seven Feathers Casino as a selling point.

In Coos Bay, a town that's still struggling after a spate of mill closures, Brady Scott, the Coquille Tribe's CEO of economic development, says the tribe will likely invest $20 million to $30 million in new business ventures over the next decade. Scott's hoping to build out from the tribe's current portfolio of a casino, assisted living facility, organic cranberry farm and broadband provider service. "The community comes to us to do things," he says.

Warm Springs Ventures CEO Thomas Henderson, a former Gap, Inc. executive, is working to bring a New York Stock Exchange-listed company to the Confederated Tribes' Central Oregon reservation, possibly within the next few months. Warm Springs Ventures purchased Bend software firm Cort Directions earlier this year to add to its portfolio of five regional companies. The tribe has expanded its Kah-Nee-Ta High Desert Resort and Casino but is also aggressively pursuing economic diversification that would reduce its dependence on gaming and hospitality.

Tribes are earning money through power generation, timber operations, real estate and manufacturing.

Growing economic prowess has earned some tribes increasing influence in Salem. Topping the political donor list is Grand Ronde, which gave $120,000 to candidates in 2002, including $20,000 to Gov. Kulongoski. And it maintains several lobbyists in Salem.

Oregon Senate Democratic leader Kate Brown, a longtime member of the state commission on Indian affairs, says it's only a matter of time before Oregon has tribal members in the legislature and in Congress.

"They have growing political clout," says Brown.

Tribes are also funneling money into community causes, as part of their gaming compacts with the state. The Grande Ronde's Spirit Mountain Community Fund has so far ploughed $20 million into everything from rural schools to fire departments and the Yamhill County Visitor's Center. The tribe even took a local baseball team under its wing recently by sponsoring the minor league Salem-Keizer Volcanoes.

"You can always get them to sponsor anything," says Tom Fox, a state economic development officer in Salem.

"I don't think they turn down grants locally, and I would guess 25% to 30% of their grants stay local."

Tribes may eventually pump up to $50 million a year into new business ventures, according to Bob Whelan, an economist at ECONorthwest who has consulted for several Oregon tribes. That's on top of $400 million that casinos generate.

And tribal investment comes with some added value. Tribes tend to take a long-term approach to investment because they intend to stay in Oregon, Fox says. That means they're less likely to buy a company and carve up its assets or move operations out of state searching for the cheapest labor markets and business-friendly tax breaks.

"They're not like an AgriPac or Chiquita that come and go," he says, referring to the food packing conglomerates that've recently left the Willamette Valley. "Any decision they make, their grandkids will have to live with. It's the seven generations thing."

The seven generations tenet demands that tribal leaders gauge the effects of their decisions on their grandchildren's grandchildren's grandchildren. Several Oregon tribes have made concerted efforts to put money toward responsibly managing natural resources such as timber and fish, and tribal standards for habitat protection are generally higher than federal or state laws. The Warm Springs tribe is now jointly operating hydroelectric dams on the Deschutes River with PGE to enhance fish habitat. And the U.S. Forest Service recently entrusted the Grand Rondes' natural resource division with 10,000 acres of Forest Service land near the Grand Ronde reservation.

"When I look at the last hundred years, I think we've failed [with environmental stewardship]. Just look at the Willamette River," say Kennedy. "We need to look at what we can do that goes hand-in-hand with the environment."

Keeping the landscape healthy is one part of restoring the community at Grand Ronde, says Kennedy. Another is boosting social welfare among a population that still has a higher unemployment rate (14%) than Oregon as a whole, and faces lingering problems with substance abuse and poor health. "The focus is meeting our membership's needs," she says.

Under the federal Indian Gaming Regulatory Act of 1988, Grand Ronde's nine-member council, headed by Kennedy and elected to three-year terms, must spend gaming money on tribal welfare, in addition to economic development and community outreach. Spirit Mountain Casino money has gone to such things as a Head Start and nursery school program, college tuition funding of up to $14,000 a year for tribal members, and a health and wellness center.

"We've been using it to catch up," says finance officer Kovach. "Casino money is kind of like reparations," he says.

But the tribe's fast growth brings with it a new set of challenges. The spiralling cost of basic health care, provided free to all 4,800 of the tribe's members spread out across the country, "could hit us in a huge way," says Kovach. And a new influx of people who will live in the brand new 36-unit low- income housing complex in Grand Ronde will add a further drag on social services. "Some people forget to see that," says social service director Dave Fullerton.

And some tribal members are not pleased with Grand Ronde's new identity, particularly its marriage with Spirit Mountain Casino. The facility is named after a mountain a few miles from the tribal headquarters, where Kalapuya Indians used to go on spiritual quests after they were removed to the reservation.

Cultural services director June Olson, who works with tribal craftspeople and spiritual leaders and has dreams of building a museum in Grand Ronde, is one who's against being known as "the Spirit Mountain Casino tribe." She declined to speak further about her sentiments on principle, saying she didn't want the tribe's business ventures to be commingled with an exploration of its cultural life.

With its portland casino proposal in play, the Grand Ronde tribe's economic vitality is likely to be even more tied to gaming in coming years. The same is true of other tribes that are working to significantly expand their gaming footprints, such as the Warm Springs.

But the future of gaming is murky.

Tribal leaders live with the fear that gaming could go away altogether. They connect a past of broken treaties and promises with the resentment they sense today toward tribes' sudden growth in income and economic power. And Indian leaders across the country have been on heightened alert as state governors, including Gray Davis of California, call for Indians to hand over a bigger cut of their gaming profits to offset state budget deficits.

"You have to take care of what you've got because there's always some congressman out there who's thinking about taking it away," says Kathryn Harrison, who was among the core group that worked to re-establish the Grande Ronde reservation in the 1970s.

Indian gaming also has to cope with cyclical intolerance for gambling across American society, says Lewis and Clark College history professor and Native American law expert Steve Beckham. Beckham remembers when Oregon State Police smashed pinball and punchboard games in Oregon after they were deemed to be illegal. "The prudent tribe takes a look at the ebb and flow of tolerance for gaming in this country," he says.

Gaming's future as an economic engine is also subject to a shifting marketplace.

Bob Whelan, the ECONorthwest consultant, notes that consumer spending on gaming in Oregon is flattening out. And new casinos will put pressure on limited discretionary dollars. The Cowlitz Tribe in Southwest Washington recently announced plans to seek federal approval for a casino in La Center, just 20 minutes from Portland. Meanwhile, the Confederated Tribes of the Coos, Lower Umpqua and Siuslaw have already received the go-ahead to build a casino near Florence.

Casinos are also in competition with the state lottery, which has nearly twice as many video poker and other gambling machines as Indian casinos do. Gov. Kulongoski has said he's willing to expand state lottery gaming machines as a way to shore up the state budget.

"We don't know exactly what the effect [of lottery expansion] will be on tribal casinos," says Grand Ronde government relations coordinator Justin Martin. "But there will no doubt be some effect."

What if a new casino in La Center and later a Warm Springs facility in the Columbia Gorge were to cause a significant dip in Spirit Mountain's profits? The effect could be severe for employees and for tribal members who depend on casino revenue for housing, education and health care. Construction and tourism businesses in Yamhill and Polk counties would feel the impact as well. The scenario isn't so different from the crash of the forest products industry -- a main engine of rural economic development that Indian gaming has replaced in some areas over the past few decades.

Gaming is a boon to a people who desperately need it. But if the tribes are to have a seven-generation run of economic success and leadership in Oregon, they'll have to invest in ventures that will last, businesses that don't depend on Lady Luck to keep the cash flowing.

Nobody is more aware of this than Brady Scott of the Coquille Tribe. The tribe gets more than 90% of its revenue from the Mill Casino. Scott figures if he can manage to generate at least 50% of tribal revenues from ventures other than the casino, the Coquilles could withstand "the rug being jerked out from under" Indian gaming.

So he's laying his plans. In addition to its current business enterprises, the tribe hopes to establish a mix of retail operations and possibly an RV park on 60 acres of property it's working to purchase along the Coos Bay waterfront. Developing the parcel will require the cooperation of the city of Coos Bay, which owns land next door, and of ODOT, which has jurisdiction over Highway 101 nearby.

But the importance of starting something that will last -- for a generation, if not seven -- couldn't be more clear: The property in question used to have a mill that was shut down by timber giant Weyerhaeuser.

In the mid-1850s, as white settlers arrived on the Oregon Trail and filled the fertile Willamette Valley, surviving members of 28 tribes from the region were marched up to a plot of land near "Grand Ronde," French trappers' name for the valley formed by the South Yamhill River.

Life on the reservation was poor, but it arguably got much worse with the Termination Act of 1954, which ended federal recognition of tribes west of the Valley, as well as Southern Oregon's Klamath Tribe. The act was part of an effort by Interior Secretary Douglas McKay, a former Oregon governor, to integrate Indians into mainstream society. It left the Grande Ronde tribes without any substantial land base and disqualified them for federal benefits for Native Americans.

What Grand Ronde descendants did retain was a small toolshed on a two-acre cemetery where their 19th and early 20th century ancestors were buried. Many left to seek work elsewhere. "In some ways [termination] was an advantage if you wanted to go out and do something for yourself and not wait for someone to come and bring it to you," says Leon Tom, a tribal member who traveled as far as Alaska to work in docks and mills. Meanwhile, an honorary council continued to meet in churches and community halls around Grand Ronde. And in the late 1970s, a group of tribal leaders began to lobby Congressman Les AuCoin for federal reinstatement. They worked from the toolshed.

"We had to fight over who would bring the toilet paper for the outhouses," says Kathryn Harrison, who worked on the reinstatement effort. Harrison's infectious smile is framed by turquoise jewelry as she looks through the old shed. "The desks didn't match, but my God they worked."

In 1983, AuCoin's legislation passed, re-establishing the Grand Rondes (then a confederation of five tribes from scattered parts of Oregon -- the Umpqua, Molalla, Rogue River, Kalapuya and Chasta). Similar bills passed for other Western Oregon tribes in the late 1970s and early 1980s.

Timber from the 9,800 acres that made up the new Grande Ronde reservation provided the first real revenue for the tribe. But when timber prices began to fall in the early 1990s, even tribal councilors who had opposed gaming warmed to the idea of a casino. The tribe built on a small piece of residential property they bought along Highway 18, a main thoroughfare from the Valley to the Coast.

"People said we paid too much for that house," says Harrison. "The property has paid for itself many times over."

Consultants said that the tribe might eventually reap $25 million a year from its new casino, which opened in 1995. Tribal leaders now say they make $75 million net income from Spirit Mountain Casino.

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