Is Wampanoag Tribe’s compact “bond deal” with City of Taunton an end run around rules prohibiting tribes from using tax-exempt bonds to finance casinos?

The taxpayers in Taunton, Massachusetts are trying to understand why their Mayor Tom Hoye allowed a provision in the recently negotiated intergovernmental agreement (IGA) with the Mashpee Wampanoag which allows the Tribe to use theCity’s bonding authority to allow the them access to tax-exempt financing for their proposed reservation casino resort complex.  

The IRS allowsIndian Tribes, as sovereign governments, to issue their own tax-exempt bonds for those things which other governments (like Taunton) are allowed to issue bonds for – but not for casino developments.   It seems even the IRS knows casino financing would not be a good use of taxpayer supported debt.

The deal with Mayor Hoye and Taunton, however, appears to allow the Mashpee Wampanoag access to tax-exempt financing by laundering that debt through City-issued municipal bonds.  The Wampanoag will be circumventing the bean counters at the IRS who would rule against a tribe seeking to finance casino building using their own tax-exempt bonds.

Taunton currently enjoys a high tax-free bond rating providing the developers very cheap financing of the reservation gaming complex build out – which is currently pegged at $500 million.  The Malaysian-based casino conglomerate Genting, which is the financial backer behind the Mashpee Wampanoag project, has spent tens of millions in lobbying and campaign contributions to move the project forward and they would benefit significantly from cheaper bond financing guaranteed by the City.

Genting’s commercial bond rating from Moody’s is a Baaa1, while Taunton gets an A1.  Interest paid on Genting-issued commercial bonds are taxed, interest paid on Taunton municipal bonds are not.  All of this means tens of millions in savings for any portion of the casino development Genting and the Tribe can finance via Taunton municipal bonds.  Further, it removes both Genting and the Tribe from any repayment liability or risk if payments are not made.  The City of Taunton, as the bond issuer, will be 100 percent responsible for paying back bond holders. 

What’s the likelihood of some problem involving debt repayment by the Wampanoag happening?  Well, Indian tribes in general have been running into trouble paying off their debts with investors a lot lately – including those who have the backing of Genting:

• The New York Times reports that Foxwoods Indian Casino (also financed by Genting) is paying creditors $0.05 (five cents) on the dollar on their debts and was recently forced to restructure their existing $2.3 billion debt forcing creditors to write down more than $500,000,000 (half-a-billion) as losses.

•  According to the Wall Street Journal, federal courts allowed the Lac du Flambeau Band of Lake Superior Chippewa Indians, which operates a casino in Wisconsin, to default on a $50 million bond to their investors.  

•  Last month the Mohegan Sun Indian Casino renegotiatednearly a billion dollars in debt paying creditors about ten cents on the dollar for money owed now and extending the timeline for repayment of the balance by another five years.   

And the list goes on… But let’s just look at the Wampanoag Tribe and their record on financial management.  Glenn Marshall, a recent former Tribal Council Chairman is just finishing up a prison sentence for multiple financial-related felonies using Tribe money.  Current Chairman Cedric Cromwell, who was a Council Member and part of the Tribe's leadership under Marshall when these felonies occurred, would have challenges simply passing the basic credit check required to work in most casinos.  Just last year (2011) Cedric Cromwell defaulted on his home mortgage requiring the Bristol County Sheriff to issue a court order to seize his property.  And in 2009 Cedric Cromwell’s property was on a list to be seized by the City of Attleboro for failure to pay more than $13,000 inreal estate taxes and utility bills sent to collection.    Current tribe members continually criticizeCromwell for financial mismanagement and failure to follow Tribe rules for disclosing spending. 

How will Moody’s, S&P and other municipal bond raters treat Taunton when it starts issuing bonds on behalf of the Mashpee Wampanaog Tribe’s casino development?  You don’t have to be Alan Greenspan to accurately predict the impending downgrades.  That will cost Taunton taxpayers more to borrow money for real city infrastructure needs whether the tribe defaults on their debts incurred and now guaranteed by City taxpayers or not.  Mayor Hoye must have some sweet deal cut with Genting and the Wampanoag to be willing to sell out his City in this manner.

Is Cedric Cromwell being truthful about even having an active application for lands-in-trust?

If an elusive Act of Congress materializes to changes current laws which prohibit the Mashpee Wampanaog tribe from opening a casino in Taunton, then the tribe still needs U.S. Department of Interior, Bureau for Indian Affairs approval.  This approval involves submitting a formal application and defining under what specific criteria the tribe qualifies for land in trust.  Details can be found on the Indian Affairs Bureau website here: http://www.bia.gov/WhatWeDo/ServiceOverview/Gaming/index.htm


Mashpee Wampanoag tribal council chair Cedric Cromwell’s last application for land in trust was rejected for being “incomplete” although the good chairman failed to disclose this rejection to his current “partners” in Taunton, former “partners” in Middleboro or even to members of his own tribe.  Tribe members, Taunton and Middleboro officials only learned in news reports this March, three months after the Department of the Interior informed the tribe that their application had been rejected.  When confronted this past March by local reporters Cromwell dismissed concerns about the failed application and simply said he intended to re-file the tribe’s application and update it with their new plans for the Tribe’s reservation casino resort complex in Taunton.    Cromwell told Indian Country Today’s Gale Courey Toensing this April that the tribe had filed that application and that it was “pending with the Interior Department.”  Further, Cromwell claims the tribe is seeking an exception to the current prohibition preventing his tribe from taking land into trust for gaming purposes. ICT reported:



The Indian Gaming Regulatory Act (IGRA) generally prohibits the federal government from taking land into trust for gaming after IGRA’s passage in 1988, but provides for “equal footing” exceptions to allow tribes to build their nations. Interior Secretary Ken Salazar delineated the exceptions in a June 2010 memo to Assistant Secretary-Indian Affairs Larry Echo Hawk. They include “[l]ands that are taken into trust for settlement of a land claim, as part of an initial reservation, or as restoration of lands for a tribe that is restored to federal recognition . . . in order to place certain tribes on equal footing.”
 

Cromwell said the tribe’s land into trust application had been updated and that an Environmental Impact Statement—a requirement for trust land under the National Environmental Policy Act—is underway. Further, Cromwell claimed, “We know we don’t have to have the land into trust by August 1 [a day after the deadline for the tribal-state compact]. We’re moving down that path very well and we’re confident about the outcome.”

How does Cromwell know he doesn't need his LIT in place?  Did Stan McGee, the state's Indian gaming negotiator in chief, tell him not to worry?  State legislators who voted last year to put in place the July 31, 2012 deadline were certainly led to believe a LIT application approval would be a sure-thing or else the Gaming Commission would have to open up the application process in Southeastern Massachusetts to commercial, non-Indian, applicants.

All the claims aside, Cromwell has declined to make this supposed updated application, environmental impact study plans or any corresponding evidence of their proper and timely filings available for public inspection.  The Bureau of Indian Affairs website, where other tribes’ applications are posted and available for public review, makes no mention of a new Mashpee Wampanoag filing.  The Massachusetts Gaming Commission is supposed to make a determination whether or not to move forward with the Mashpee Tribe in fewer than 50 work days based on their assessment and determination that the application will be successful.  Given the Commissions current record and delays a full review and honest vetting of a document they have not even seen is suspect at best.

Without public review of this supposedly renewed and refiled Mashpee Wampanoag land in trust application, the people of Taunton will not see what claims for their City the Tribe has before being asked to vote for or against allowing an Indian reservation casino as their neighbor.  The people of Taunton will have little recourse by which they can remedy future concerns – and good reasons to believe that concerns will arise.  When the Wampanoag filed their last application for land in trust, the Town of Mashpee was compelled to file formal complaints opposing the application as the Tribe had made multiple misrepresentations with regards to their agreements with the town in their filing.

As reported here in April:

Even the tribe’s own hometown of Mashpee has had to enlist and pay lawyers to prevent this reservation casino-bent gang from violating agreements with them.  The Town of Mashpee had to have their lawyers write to the U.S. Bureau for Indian Affairs (BIA) on January 25, 2008 to oppose the Tribe’s application for land in trust claiming the Tribe misrepresented and made false claims about agreements with the town in their federal filings.  The town wrote:

“Contrary to the Tribe’s assertions in its application, the Town has not yet agreed to transfer to the Tribe any of the Town’s right, title, or interest in and to any of these parcels….” Adding, “The relationship between the Tribe and the Town with respect to land and development has been controversial… while many residents of the Town have expressed concerns to Town officials regarding the Tribe’s proposed and potential future acquisitions of trust land and how the Tribe’s proposed development may affect the region…”

The Mashpee lawyers added, “Although the Tribe has stated that it does not intend to develop any of the Mashpee lands for gaming purposes, it has nonetheless requested on page 2 of the trust land request a determination by the Secretary that all the lands identified in the application constitute the initial reservation of a newly-recognized tribe on which gaming may be conducted… The Tribe’s application indicates that the Town will transfer its title to certain parcels of land…   This is an inaccurate and presumptive assertion by the Tribe…” 

If the tribe made inaccurate claims and mis-characterizations in their last application about the town in which they live, it should be a requirement that they allow the people of Taunton time to review their new application – which Chairman Cedric Cromwell has publicly claimed has been filed with BIA – well before being asked to vote on these reservation casino resort plans on June 9^th.  It appears the tribe's deal with the State precludes any inconvenient requirements that the Massachusetts Gaming Commission actually review the LIT according to Mr. Cromwell, which leaves only the people of Taunton to do so.

Inconvenient “distractions” for the Massachusetts Gaming Commission

The Gaming Commission has come out of the integrity gate very badly in what news reports characterize as a “PR nightmare” and child advocacy groups with legislators cite as “serious concerns,” but which the Commission’s 48 hour-tenure director Stan McGee and chair Stephen Crosby relegate to a “distraction.”

Integrity and transparency to ensure the public good in positions of absolute authority over who will be operating and running multi-billion dollar casino operations in the Commonwealth should be more than an inconvenient distraction.  

Chairman Crosby’s stance sent a clear message that Stan McGee’s expertise apparently trumped concerns raised by elected officials, child advocacy groups, news reports and law enforcement officials over whether or not the person he selected to run the Commission had sexually molested a young boy in Florida and then used his political influence to get those charges against him dropped.

At the time of his arrest Carl Stanley McGee was Governor Deval Patrick’s identified Indian gaming expert and point man on crafting legislation enabling casino gambling in Massachusetts.  Legislation that included a special regional carve-out for an Indian tribe – which later turned out to be a de facto set-aside specifically for the Mashpee Wampanoag.   Since passing the Governor’s gaming bill, McGee has been leading the Commonwealth’s negotiations for an inter-governmental agreement (IGA) and crafting the "casino compact" by with the Mashpee tribe would be allowed to open an Indian reservation casino complex in Taunton, MA.    A role McGee stated he wanted to keep when moving over to the Gaming Commission.

Apparently now, McGee – not willing to simply answer the questions about his past behavior – has returned to that senior administration post and responsibilities negotiating a casino deal for the Wampanoag.  When McGee was first charged four years ago he plead the 5^th and refused to answer the arresting officers’ questions.  That’s his right, but when asked if he molested the child, McGee has never told investigators he didn't do it.  When asked by reporters whether or not he molested the child, he has only said “no comment.” 

It seems that making sure senior officials meet reasonable standards of non-criminal conduct was also an inconvenient “distraction” for the Governor as well.  While Steve Crosby first claimed the Governor's office cleared McGee, it was later reported they did not investigate or even ask questions of McGee.   After his widely reported arrest nobody in the Patrick administration investigated or bothered to even ask McGee if he was innocent before they reinstated him to his senior position overseeing gaming legislation and negotiating casino agreements with Indian tribes.  Stephen Crosby who came to McGee’s ardent defense stating he had been fully investigated, exonerated of all charges (when in fact neither was true) and found to be “pristine” (really, pristine?) by the board also never bothered to ask McGee if he did it or not.

We are left wondering, since he never denied the crime, how McGee got the charges dropped and why he still declines today to simply state his innocence.  Did McGee use his political influence and did anyone in the Patrick Administration weigh in to help him get the Florida prosecutor to go against the testimony of arresting officers, investigative findings of the Florida State Child Sex Crimes unit and the victim’s family?  That’s not an unreasonable question to ask. 

Or, possibly a more likely scenario, did McGee use his State-gained connections and “expertise” with the Indian gaming community and their well-heeled investors to help him in Florida?  Indian gaming is huge business and highly influential with Florida officials – even those in Lee County where casino interests have been heavily lobbying for years to open up gaming there.    The Genting Group, the financial backers of the Mashpee Wampanoag tribe who have benefited significantly from McGee’s legislative carve-out and subsequent compact negotiations, is one of the largest political contributors and lobbyist funders in Florida – giving more than $680,000 to Florida politicians and hiring a dozen-plus lobbying firms in that state.  Further, the Mashpee Tribe conveniently shared the same law firm with the Florida Seminole Tribe at the time.  Did Genting or one of the Wampanoag’s influential Florida tribe connections do McGee any favors? 

This latter scenario is most intriguing as it could certainly help explain how the Governor’s office moved from opposing a Wampanoag Indian reservation casino prior to McGee’s arrest in late 2008 to supporting a special set-aside designed into the legislative proposal by McGee for the tribe just two years later.

If these questions cannot be satisfactorily and transparently answered for the public, then the entire gaming legislative crafting and subsequent casino compact deals with the Wampanoag are all tainted and should be thrown out.  

As for McGee - simply moving from one high-paid, high-ranking and influential casino-related job to another where he can operate from behind the scenes makes sense to whom?  

Taunton, MA Casino: Are foreign dollars buying a local election?

What’s the difference between Foxboro and Taunton vis-à-vis casino referenda?   

Foreign money - and lots of it from overseas gaming interests who don’t report political expenditures to Massachusetts or U.S. Federal election officials.  Genting Malaysia, the world’s largest casino syndicate, is the financing behind the Mashpee Wapanoag tribe casino efforts. 

Via the Wampanoag and various lobbyists, tens of millions of dollars in cash from this foreign gambling syndicate has been spent in Massachusetts on lobbying, campaign contributions to local politicians and now direct funding to the City of Taunton for the running of a local election without any of the typically required campaign finance reporting.

In no other circumstance in U.S. elections do we see foreign dollars solely funding both the actual running of and campaigning for a local election.  Why, you ask, would a foreign company make such an investment and how is it possibly allowed?

Why? This election will determine whether or not the City of Taunton and the State of Massachusetts turns over all local control and jurisdiction on land where the Genting-backed Wampanoag will then establish a sovereign reservation from which un-regulated and un-taxed casino dollars will flow freely back to their Malaysian financiers.  According to Time Magazine’s report “Indian Casinos: Who Gets the Money”, these overseas backers funnel billions of dollars in tax-free, unregulated payments annually from Indian casinos located throughout the United States to their foreign bank accounts.  The Taunton Wampanoag Indian casino will yield Genting conservatively $200 - $400 million a year off the top of casino revenues to pay for their financing of the tribe - which is already tens of millions of dollars in debt to them.  Genting has said they are pursuing the creation of mini-Macau like gambling islands in the U.S. – but in this case the islands are Indian reservations.

How? Since Indian tribe and casino books cannot be audited and the foreign based financiers are not under the purview of state or federal tax oversight, the finances and expenditures are not open to any public scrutiny.  In the case of the Mashpee Wampanoag, the Tribal Council won’t even share the books with their own tribe members.  Not exactly the transparent scenario one would hope for either casino gaming operations or elections – both of which have a nasty history of corruption when there is no oversight, checks or balances.

Buying the Taunton election – spending $125 or more per vote 

With about 34,000 registered voters in the City of Taunton, MA - noting that fewer than 4,000 voted in the last major city election (Nov 2011) - the Genting-Wampanoag casino campaign team isn’t taking any chances.  The tribe, 100 percent funded by Genting Malaysia as it has no other income of its own, has budgeted a cool half-million dollars ($500,000) for the Saturday, June 8^th non-binding referendum on whether or not to turn over town jurisdiction for an Indian reservation casino resort complex.  This $500,000 is on top of Genting-Wampanoag paying Taunton $340,000 to run the election and fund negotiations with the tribe and on top of the millions already invested in lobbyists and local political campaign contributions.

The highest possible voter turn-out for a non-binding, single issue ballot held on a Saturday in June is likely to be far less than a typical city election.  So the tribe will be spending more than $125 per vote.  That will easily mark this is as the most expensive per-vote election run in the City of Taunton.  In fact, that level of expenditure exceeds what was spent per vote for the most expensive senate races in the country during the last election.  Compared to Massachusetts elections, Mitt Romney had one of the most expensive per-vote campaigns when he ran for Governor – spending $16 per vote in 2006. Genting will be spending 700 to 1,000 percent more per vote to secure their Indian casino in Taunton. 

Local casino opponents have a budget of zero dollars.  Opposition groups are meeting in backyards and around kitchen tables.  Grassroots efforts, local volunteers and social media can and will help turn-out strong numbers at the Taunton polls.  Whether or not those efforts will be enough to counter the massive Malaysian’s expenditures is a tough call when there are still voters in Taunton who haven't heard the the whole unblemished story.  Why not? You see the Genting-Wampanoag casino support machine has run every public meeting about this measure that has been promoted by City officials to date.  That said, given that Genting paid the City for the this election some may say that it is only fair that they get the results they want (and paid for).

Stan McGee! Official arrested for sexually molesting a child appointed to help oversee casinos, outrageous!

(With updates from Boston Globe - 5/3/2012, highlighted)

The corruption of Massachusetts fueled by the gaming industry is now complete.  Governor Deval "I don't count every check" Patrick's Gaming Commission has hired political insider Stan McGee to run the board's operations and steer policy.  The Commission is charged, in part, with ensuring criminals and miscreants don't infiltrate and corrupt the casino industry as it takes its grip over gaming in the Commonwealth.  So why not appoint someone who Florida police charged with sexually molested a boy between the ages of 12-16 while hanging out in $500 per night room resort in Florida.

The Boston Globe reported that Carl Stanley McGee had been placed on unpaid leave in 2008 while serving as one of Patrick's key advisers in developing casino gaming legislation after being arrested in Florida for "masturbating and performing oral sex" on a teenage boy in the steam room of the Gasparilla  Club in Boca Grande, Florida.  While we could ask why or how McGee, an assistant secretary for policy and planning, was lolling around in a swank and dandy Florida beach club at $500 per night on his government salary that seems minor against the backdrop of his arrest.

On May 3, 2012 the Boston Globe provided additional details on McGee's Florida arrest and subsequent dropping of charges against him by Florida prosecutors.  The Globe reported that the victim and his family stood by their claims and that the police investigators protested the dropping of the charges.  Lawyers for the boy who claim he was molested pointed to the confidential cash settlement paid by McGee and an investigator from the Florida state Crimes Against Children's unit assigned to review the prosecutors decision to not pursue McGee recommended the state attorney reconsider the prosecution.


When the Globe questioned the officers who first investigated and asked why prosecutors didn't push the case, they claimed something happened "somewhere between Massachusetts and Florida... above my pay grade."  We may never know, but the police who arrested McGee - who exercised his Fifth Amendment rights and declined to answer their question then - are certainly suggesting political favors above a simple cop's pay level made this problem go away for McGee.  For his part, McGee still won't answer questions about this and hasn't publicly stated that he did not molest the boy.  If political influence from the Patrick Administration was used to prevent McGee from being prosecuted for molesting a child, somebody should find out.   


Perhaps Martha Coakley will put aside the fact that she received those nice campaign contributions from casino lobbyists just this one time and ask a few questions.  Otherwise, the people of the Commonwealth will be left with a very sour taste indeed about the integrity of those making critical decisions for gaming in the state.

If this is the highest standard allowed by Governor Patrick and the Gaming Commission for selecting those charged with gaming oversight what can we expect the crowd running the casinos under their purview will be like?  Conveniently for Patrick, McGee will drive the board's process and decision making during the critical months in which they will decide whether or not to allow the Mashpee Wampanoag tribe to move forward with their plans for an Indian reservation casino.  Wonder how much that cost Genting Malaysia and their lobbyist former Congressman Bill Delahunt?

You see, McGee was the insider who orchestrated the special interest legislative carve out that benefits the Mashpee Wampanoag tribe's casino efforts on the South Shore.  Guess that means the requirements that the Tribe actually prove that they can get Congress to overturn a Supreme Court Decision which bars them from opening a casino AND convince the Department of the Interior to grant them off-reservation land-in-trust by the July 31, 2012 deadline will somehow slip by...   

Perhaps Cedric Cromwell has a special steam room planned for McGee in his Taunton resort complex as pay-off.  Heck, since no Taunton or State Police will be allowed on "the reservation" in Taunton, McGee's risks of any unseemly scrutiny by the Wampanoag tribal police which will be controlled by Cedric seems low.  This is truly a new low for the Commonwealth and another pockmark on the corruption that riddles the Indian gaming industry.

As for those pesky requirements that casino employees pass background checks, including making sure they're not child sex offenders, well since the Gaming Commission feels free to hire someone with such a record, McGee will probably have a nice job waiting for him at Wampa World Taunton when this is all done.  Besides, the Mashpee Wampanoag Indian Casino won't actually have to comply with any state rules or regulations requiring such inconvenient background checks as they will be a sovereign Indian nation operating on a no-rules reservation - where anything goes and Stan will never have to worry about being arrested for having sex with minor boys again.