| People Against a Casino Town |
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Special Investigation by Donald
L. Barlett and
James B. Steele |
| Part 1 - Look
Who's
Cashing In At
Indian Casinos - Hint: It's not the people who are
supposed to benefit Wheel of Misfortune
Who Gets the Money The Moneymen The Great Land Rush Whose Tribe Is It, Anyway? Part 2 - Playing the Political Slots - How Indian casino interests have learned the art of buying influence in Washington Money Talks
Tax Dollars at Work California Scheming Nightmare Neighbors A Tale of Two Tribes Short
Articles Facts |
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When gambling was first proposed as a tool for Indian economic development, it was expected that casinos would be confined largely to rural reservations where impoverished tribes had lived for generations. But as with any transaction involving real estate, it's all about location, location, location. Casinos on reservations near urban areas, with a ready supply of would-be gamblers, have tended to do well. The more remote ones, not surprisingly, have foundered. The result: a mad scramble by tribes and their non-Indian financial partners to find prime real estate that they can claim as "reservation" land - and then build on it a gleaming new casino. The choicest spots are near big cities and along major highways. It doesn't matter of the tribes have ever lived there. With the blessing of the BIA, these instant reservations are cropping up all over the country. The United Auburn Indian community's new reservation is in an industrial park in Roseville, Calif., just minutes from I-80, one of California's busiest highways. The heretofore landless match-e-be-nash-she-wish Band - otherwise known as the Gun Lake Band of Potawatomi Indians - now has a reservation of 50 acres along busy U.S. 131 south of Grand Rapids, Mich. Further west, in Washington State, the BIA has set aside 56 acres along I-90 east of Seattle for the Snoqualmie tribe to develop a casino. In Trust We Trust.
But the tribe does have friends with clout and deep pockets. A group of wealthy investors headed by Roy Palmer, a feisty onetime Chicago lawyer, has optioned the 67-acre tract in West Sacramento on behalf of the tribe and is footing the bill for trying to secure government approval for a reservation and casino. Palmer and two fellow Floridians, Robert Roskamp and Philip Kaltenbacher, onetime chairman of the New Jersey State Republican Party, formed a company called SRQ Inc. to develop and manage the casino. They envision it as a glitzy las Vegas-style resort complex designed to replicate the state capitol building. If the BIA approves the plan and takes the land into trust, Palmer's group would convey the property to the Upper lake Band. In return, SRQ would manage the casino for seven years and take 30% of its annual net profits. For Palmer, who favors bow ties and loud sport coats, it could mean a replay of one of the most profitable chapters in his career. In the early 1990s, when Indian gaming was in its infancy, Palmer and a partner formed Buffalo Brothers Management Inc. to develop and manage two casinos for the St. Croix Chippeqwa Indians in Wisconsin. The company negotiated an agreement to collect 40% of the casinos' total net revenue for running the operations. Then it recommended that the tribe lease slot machines from Interstate Gaming Services Inc., a company that Palmer and his associate happened to own. The fee: 30% of the gross take from each machine. Since slots account for most of the gaming revenue in Indian casinos, Buffalo Brothers was poised to take 70% of the profits - far in excess of the 40% maximum permitted by law. In one year alone, 1992, the two companies collected $14 million. Although the BIA had approved the St. Croix arrangements, some tribe members felt they were being gouged. Following an investigation, Michael Liethen, the director of the Office of Indian Gaming for the Wisconsin Gaming Commission, recommended in 1993 that the state revoke Buffalo Brothers' license. Instead, the state fired the director. (Some years later, the state paid him $290,000 to settle a lawsuit over the dismissal.) The disgruntled tribe members sued Buffalo Brothers, and by 1994, amid the rancor, the St. Croix Band bought out its contract, reportedly for more than $30 million. Palmer and his partner exited the state very wealthy men. "I was in the right place at the right time," he later told Sarasota magazine. Palmer disputes the notion that he took advantage of the tribe and says he was the victim of tribal politics: "We did not do one thing wrong. They lost the case at every level, in every jurisdiction. It was just a smear job." As for the 30% his company received for supplying the slots, he says, "We used all that to pay for the slot machines." Even in California, where tribes don't hesitate to make claims to land that was never theirs, the West Sacramento casino proposal is in a class by itself. Not only is a citizens' group in West Sacramento fighting it, but eight other tribes in Northern California are also opposed. In a joint letter written in April of this year, the tribes said that if Upper Lake were allowed to "move its land base to any area it wanted, [it] would make a mockery of our own California Indian history and demographics and damage the credibility and legitimacy of tribes across the state." In Your Face. Because the tribe's ancestors lived in Kansas in the 19th century, it had little trouble persuading the BIA to place in trust an abandoned Masonic temple next to an indian cemetery in downtown Kansas City, Kans., just across the street from city hall. That makes the old lodge and the small parcel around it eligible for Indian gaming. Not that the Wyandottes and Ginsburg wanted to build a casino there. But they certainly got the authorities' attention. What they really wanted was a large tract somewhere in the metropolitan area. When negotiations stalled, the tribe moved temporary buildings onto the downtown property and threatened to open a mini-casino. They also filed a lawsuit against 1,300 property owners in a nearby industrial district, charging that they are occupying land improperly taken from the tribe 200 years ago. The Wyandottes' not-so-subtle pressure apparently worked. Local officials agreed to let the tribe build a casino and hotel on a 52-acre parcel on Wyandotte County's western edge. U.S. Representative Dennis Moore, the area's Democratic Congressman, has introduced legislation to bless the deal and Congress, thus bypassing the BIA. If approved, the tribe would then have three reservations - in two states. |
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Time Magazine,Special Investigation by Donald L. Barlett and James B. Steele, December 16, 2002 Also See: 12/00/02 - Tribes of Gamblers, by William Saffire |
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