According to the Enterprise, this brings the current tribal debt owed to Genting in the neighborhood of $40 million (not including interest). This latest loan was taken out with a near usury rate of 15 percent and increases to 20 percent once Cedric starts borrowing more money (senior debt) to actually build his casino. While Cedric has kept secret all the financial documents of the tribe - even refusing to share them with his own tribal members on whose behalf he's accumulated these debts - this latest leak of documents gives insight into the mess the Tribe's gotten into under the Cromwell administration.
Now these financial details are all supposed to be fully disclosed to the Massachusetts State Gaming Commission as part of the tribe's compact and casino license agreement under the state law approved by our legislators. But, like their federal LIT application, the financial details of the tribe are less than transparent and glaringly missing. And, diligence on the part of the Commission in complying with legislative intent when it comes to the Mashpee Wampanoag appears to be considered an unnecessary distraction from moving forward with this ill-gotten casino scheme.
Since the first $25 million borrowed by Cedric on behalf of the Tribe in 2009 council members, elders and other rank and file have asked what's happened to that money? The budget for running the tribe has apparently skyrocketed to nearly $5 million per year - although by all accounts what minimal tribal services do exist have gotten worse and allegations of rampant malfeasance with federal grants and funds continues unabated. This latest leak of documents suggests Cedric spent millions more on the Taunton ballot initiative than reported - nearly $2.6 million - and that money is flowing to Cromwell, lawyers and lobbyists at an unprecedented rate.
If the first $25 million loan has similar terms to the current $13 million, the tribe's debt with compounded interest before taking out the new loan would be $50.3 million. If a casino is ever built - a big IF given the federal government has now twice rejected Cromwell applications for land in trust (LIT) - the very best possible time frame for even breaking ground (when Cedric has to start borrowing more money) is three more years. Now we've frequently noted that getting LIT approvals from BIA for unconventional applications seeking exemptions from the Carcieri Rule IF successful (the majority are not) take a minimum of seven years, but let's say we (again) give Cedric the benefit of the doubt and say he can get this approved and ready to go within three years. By the time he breaks ground (and has to borrow another estimated $100 million to build his casino) we'll already owe Genting $96.3 million in principal and interest. At which point, interest goes up to 20% on that loan.
Let's assume the miraculous again happens and the casino is built in record time without delays and it opens two years after groundbreaking (mind you we're already in 2017), the Genting loan debt will be at $139 million plus the $100 million construction loan (which should cost us about $108 million if we negotiate reasonable construction loan rates) - bringing the tribal debt to almost $250 million BEFORE we open the doors and start cashing in senior citizen's social security checks for chips.
The chances of the tribe EVER being able to catch up to these loans from Genting at 20 percent a year when they have accumulated to the hundreds of millions is NIL. Each year the balances will grow, and like the casino tribes in Connecticut we'll quickly be in debt in the billions and beyond bankruptcy. All the while hundreds of millions of Massachusetts casino money - not taxed - will be flowing to the Malaysian bank accounts of Genting. Again, we must ask how this is possibly in the interest of the Commonwealth, the people and taxpayers of Southeastern Massachusetts or the Mashpee Wampanoag People?
As for Taunton - if a compact deal is ever reached - Mayor Hoye will be waiting forever for his share of profits which will be non-existent under the usurious debt burden accumulated under Cedric's casino scheme. Cromwell will continue to collect his salary as casino commander in chief (until such time as the feds catch up with him and he takes over Glenn Marshall's old room) and the Tribe and community will be sucked dry by this mess.
Don't say we didn't tell you so - over, and over, and over...
