Thursday, December 20, 2007

Casino Corruption: Mohegan Sun's Worse Than We Thought

At Tuesday's casino hearing on Beacon Hill, Senator Montigney, co-chair of the committee, kept grilling the Mohegan Sun representatives, as well as several others, on the fact that Connecticutt's Mohegan Sun, one of the largest and most successful casinos in the world, has paid out more money toward a few executives at the top than the entire 1,700-person tribe.

It is the kind of bonanza that was supposed to be prohibited by the federal
Indian Gaming Act when it was passed 20 years ago, say some US senators and federal regulators.

But the Mohegan Sun investors - led by Sol Kerzner and Len Wolman - found legal ways around provisions intended to make sure most casino benefits went primarily to tribes. And those loopholes remain open after a massive lobbying blitz by the $25 billion Indian gaming industry.

Worse yet, many of the Wampanoags in the tribe persuing the Middleborough location have raised concerns that Mohegan Sun's problems would only continue in Massachusetts.

And some Mashpee Wampanoag tribal members say they are suspicious about the deal their leaders have struck with the same investors in Middleborough - a deal they have not been shown. Documents filed with the tribe's pending federal application for reservation status at the site do not disclose financial terms.

"They don't let us see anything," said Michelle Fernandes, a member of the tribe. "It's a big secret."

Of course, this is only a new ingredient added to the corruption already brewing in Massachusetts over the Wampanoag casino - something the FBI has already been investigating, years before a shovel will ever hit the ground.

It also fits right in with Mohegan's efforts in Wisconsin, which have resulted in at least one top executive, Dennis Troha, being charged by the FBI for circumventing campaign finance law.

The former developer of Kenosha's proposed $808 million casino project was indicted Thursday on federal charges for allegedly funneling $100,000 in improper campaign contributions to Wisconsin Gov. Jim Doyle, who has final approval over Indian gaming in the state.

Dennis Troha, 60, of Kenosha, Wis., was charged with one count of fraud and one count of making false statements to the Federal Bureau of Investigation, the U.S. Attorney's office in Milwaukee said.

If convicted, he could face up to 25 years in prison and a $500,000 fine. The indictment alleges Troha used family members and businesses he controlled to send money to Doyle's campaign during the 2002 and 2006 campaigns. Troha would lend money to the family members, who would then write checks to Doyle's campaign, allowing Troha to circumvent the $10,000 cap on political donations by individuals. The money was only repaid early this year after federal investigators began looking into the case, the indictment said. (Dan Gibbard, "U.S. Indicts Wisonsin Casino Figure, Chicago Tribune, 3/01/07.)

Transparency was Senator Montigney's chief concern and reason for skepticism over casinos. He wasn't interested in supporting any casino proposal if there's room for corruption. However, no matter how anyone slices it, there's absolutely, positively no way to regulate tribal casinos at the state level: we'd be dependent on the federal government to protect the Bay State's interests - and given the powerful casino lobby at D.C., the saying "fat chance," comes to mind.

Given that the only leverage this state has over the casino lobby is the fact that we ban all Class-Three types of gambling, Massachusetts lawmakers should be even more skeptical than Senator Montigney when it comes to casinos and preventing corruption. Simply put, this state will have no way of regulating a tribal casino if we allow the construction of a single, legal and traditional slot machine, as that would open up the process for the Wampanoags to put their Middleborough land in federal trust to garner approval for a Class Three, Mega-Resort facility.

As reported in the second link on this blog, at the Boston Globe, the Wampanoags have already came to an agreement with these very same Mohegan Sun developers, the slimiest of the slimeballs around. When it comes to casinos and corruption, the two, unfortunately, go hand in hand. The question posed to Massachusetts residents should be if these are the kinds of headlines people here want to read for the rest of their lives. Not only will casinos be bad for the economy and bad for communities, but they're going to set a terrible trend for corruption at Beacon Hill, the likes of which have never been seen before.

Extra Credit Reading Assignment: Casinos clearly haven't done anything to improve the efficacy of Atlantic City's government, where five of the last nine mayors have been indicted and the city is now hiring an "Integrity Officer." Anyone know if Governor Patrick is going to hire any of them as part of his mitigation plans?


massmarrier said...

This smells like the nuke power plants. I recall all the government expenses, including subsidies. Then there were guarantees for the private investors -- no downside. When it came to clean up or decommission the plants, the investors walked and paid nothing toward those costs. Are we about to do the same?

CTtraveler said...

Your presentation of the facts about the Mohegan Tribe and Sun International's partnerships is incorrect. Your headline leads readers to believe it is casino corruption when in fact they are not casino executives. The Mohegan Tribe made an agreement for funding from Sun International and due to Mohegan Sun's huge success the percentage they receive per the agreement has been fruitful for Sun International. Mohegan Sun and the executive team are not involved in any scandals or corruption as you write.

Anonymous said...

ANYONE who followed the unravelling story of Abramoff knows that the worst thing congress ever did to Native Americans was Indian Gaming. It wasn't done for Native Americans, but for casino investors. It's unregulated, unsupervised, uncontrolled and totally corrupt.
Bought and paid for politicians continue to be investigated by federal grand juries. Does the Commonwealth need this kind of corruption?

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