Foxwoods in Wall Street Journal
tenseven
Casino Royale:
The Foxwoods Story
By Micah Morrison. Mr. Morrison is a senior Journal editorial page
writer.
MASHANTUCKET PEQUOT RESERVATION, Conn. -- The Foxwoods Resort Casino
here in a rural corner of southest Connecticut is almost a wholesome
place, with a no-smoking casino and children wandering a vast pastel
mall of shops and video arcades, restaurants and theaters. But the
heart of Foxwoods, of course, is gambling: a torrent of cash pouring
through 5,800 slot machines, a 3,200-seat high-stakes bingo hall, and
over 300 gaming tables -- blackjack, roulette, craps, baccarat, keno,
poker. Every day, some 40,000 visitors make their way to Foxwoods, the
full range of the human comedy, from retirees bused in for a lark to
vacationing families to hard-eyed high rollers looking for the big
score.
The economic picture appears rosy too. Opened in 1992 by the
Mashantucket Pequot Indian tribe, Foxwoods last year generated over $1
billion in revenues and provided 11,000 jobs. In 1998, the tribe
opened the Mashantucket Pequot Museum and Research Center, a $135
million facility that has hosted more than 500,000 visitors and won
several awards for architectural merit. Promoting economic
self-sufficiency is a central goal of federal Indian policy and the
1988 Indian Gaming Regulatory Act, which grants any Indian group
recognized as a "tribe" the right to open a casino. Proponents of
Indian casino gambling point to Foxwoods as a shining example of
Native American economic success.
Behind the wholesome facade, however, the Foxwoods story shows that
even the most successful gaming operations rest on beds of intrigue.
How Foxwoods became king of Indian casinos is largely a tale of four
men: Richard "Skip" Hayward, a former pipefitter, "one-sixteenth
Indian, at most," according to a well-received study of the Pequots;
Tom Tureen, an activist lawyer specializing in Indian claims; Michael
"Mickey" Brown, a mob prosecutor turned casino consultant; and Lim Goh
Tong, a Malaysian gambling billionaire whose efforts to tap the U.S.
market were frustrated until he struck up an alliance with the Pequot.
Battles and Controversy
Mr. Hayward was ousted as tribal chairman in 1998 by Kenneth Reels,
leader of a predominantly black group claiming Pequot descent. Mr.
Reels was formerly a member of the Narragansett tribe -- historical
rivals of the Pequot -- but switched his affiliation at Mr. Hayward's
invitation. The expansion of Foxwoods, along with the neighboring
Mohegan Sun Casino, has become highly controversial in Connecticut,
triggering legal battles and questions about the legitimacy of
Mashantucket Pequot status as an authentic Indian tribe.
At one time Mr. Hayward's grandmother, Elizabeth George, was the sole
inhabitant of the neglected 200-acre state reservation in Ledyard,
Conn. Mr. Hayward, sporadically employed as a pipefitter at defense
contractor Electric Boat in the early 1970s, wandered from job to job.
Mrs. George died in 1973; Mr. Hayward moved onto the reservation soon
after.
Mrs. George was Mr. Hayward's only link to the Pequot past -- a link
that would meet sharp challenges in later years. The "one-sixteenth
Indian" estimate was reported by Kim Isaac Eisler in his study of
Foxwoods, "Revenge of the Pequots: How a Small Native American Tribe
Created the World's Most Profitable Casino," published earlier this
year.
Through the 1970s, Mr. Hayward tried various enterprises on the
reservation -- a swine farm, maple syrup production, sale of firewood.
All failed. A $1 million Housing and Urban Development grant enabled
him to move housing trailers onto the land and gather in his
relatives, expanding the tribal register.
Mr. Tureen, the activist lawyer specializing in Indian claims, became
closely involved with Mr. Hayward in 1980, as the quest for federal
recognition and gambling riches accelerated.
Mr. Tureen established what became the legal foundation of Foxwoods
with a pivotal court victory. As a young lawyer in a federally funded
legal services job with the Passamaquoddy and Penobscot tribes of
Maine, Mr. Tureen stumbled across an 18th-century law that would
transform Indian land claims. The Indian Non-Intercourse Act of 1790
directed that no sale of Indian land would be valid unless approved by
Congress.
Although the Non-Intercourse Act was created to give federal
protection from land scams to Indian tribes on the expanding American
frontier, Mr. Tureen argued it meant that transactions involving
Indian land under state treaties in the East after 1790 were invalid.
The Maine tribes had ceded vast tracks of land in 1794 and 1796 under
state treaties.
In 1972, Mr. Tureen sued Maine on behalf of the tribes for $25 billion
and 12.5 million acres, two-thirds of the state. The case electrified
the American Indian community and support poured in. In 1975, the U.S.
Court of Appeals for the First Circuit upheld Mr. Tureen's
interpretation of the Non-Intercourse Act. In 1980, the Maine case was
settled with a payment of $81.5 million and federal recognition of the
tribes.
As the Maine case unfolded, Mr. Tureen searched for other Indian
groups with similar histories. One promising prospect was Skip Hayward
and his extended family, living on the state reservation in
Connecticut. At Mr. Tureen's prompting, Mr. Hayward filed suit against
local landowners, seeking 800 acres ceded to the Pequot in 1667 and
sold by the state in 1855. Mr. Tureen negotiated a deal with state and
federal officials granting Mr. Hayward's group the right to purchase
land within a 2,000-acre tract to be taken into trust as reservation
property, $900,000 to buy the land from local owners willing to sell,
and federal recognition as a tribe.
President Reagan vetoed the legislation. Mr. Reagan "suspected the
recognition bill was a scam and doubted that the Pequots were really
Indians," Mr. Eisler notes in his book. Mr. Tureen enlisted the help
of Lowell Weicker, then a maverick Republican senator, and the White
House backed down. The legislation became law.
Mr. Tureen and the Pequots seemed to have the golden touch, moving
from victory to victory. When the Maine tribes' right to conduct
lucrative high-stakes bingo games was interrupted due to legal action,
Mr. Tureen brought the game to the Pequot reservation, securing a $5
million loan from United Arab Bank to build a bingo hall. Connecticut
challenged in federal court and lost. By the mid-1980s, the Pequot
bingo hall's annual gross was climbing past $20 million, with over
1000 visitors per day.
Mr. Tureen says he is pleased that "justice got done" in the Pequot
and Maine cases. It's an "incredible tribute to the strength of our
legal system. This is one place in our history where we've provided
meaningful restitution to at least some tribes."
Legitimacy Challenges
The 1983 federal legislation cementing tribal land claims shocked
residents of the small towns near the reservation. The Mashantuckets
continued to expand, seeking federal land-acquisition action and
pressing private purchases in the area. Mr. Hayward envisioned
grandiose projects--a monorail cutting across the Connecticut hills,
golf courses, a heliport, a gigantic "Great Wall of China" theme park.
"We have tried diligently to work with the Mashantucket on land
issues," North Stonington First Selectman Nicholas Mullane told the
Journal recently. "But their agenda is different from ours. We would
like to continue as quiet rural towns. But they just want to expand."
Mr. Mullane notes that drunk driving, drug arrests, prostitution and
pornography are on the rise. Traffic on the small country roads has
tripled, to 25,000 vehicles per day. "Foxwoods places an enormous
burden on the small towns in the area," he says. He wishes the towns
and the tribe could work more closely together. "But the Mashantucket
are evasive and difficult."
The Pequot view local concerns with ambivalence. "We certainly
understand what it's like to watch your jurisdiction disappear,"
Pequot treasurer Michael Thomas told the Journal. Mr. Thomas is a
member of the seven-member governing tribal council. "But our
priorities are to bring our people back to our land and solidify our
economic base." The current Pequot tribal population is about 650.
"We want folks in the surrounding communities to know we don't want to
hurt then fiscally or degrade their standard of living," Mr. Thomas
says. "They're looking for some degree of finality" to land purchases,
"but we're hesitant to waive opportunities for future generations." As
to crime questions, Mr. Thomas says that the majority of crimes occur
on Pequot property and that the tribe works closely with the
Connecticut state police.
Mr. Mullane ruefully notes that the region did not "wake up in time"
to the Pequot challenge. During the 1990s, Mr. Hayward and his allies
poured millions into the Democratic Party. Flush with casino cash, the
political dynamic in Washington over Indian issues was changing.
As Mr. Eisler recounts, while governor of Arkansas, Bill Clinton was
against Indian gaming. "Gambling is a lousy basis for an economy" he
told a town hall meeting in San Diego in May 1992. By January 1993, a
memo from the Democratic National Committee listed Mr. Hayward as one
of the party's "top ten supporters." In August 1993, President Clinton
told the publication Indian Country Today that "gaming is a positive
economic tool for Indian tribes."
In 1995, the Interior Department ruled in favor of a Pequot
application to take more land into trust near the reservation. Despite
Interior's favorable ruling, the trust dispute is still unresolved,
opposed by the towns and mired in court actions.
Meanwhile, Mohegan Sun, another Indian casino, has opened in the area.
And just over the hill from Foxwoods, two other Indian groups are
petitioning for tribal status and planning to open casinos. The
Connecticut attorney general and local towns have filed suit to stop
the new casinos.
Adding to the distrust on both sides are questions about the Pequot's
legitimacy as a federally recognized Indian tribe. Last year, this
argument received a strong boost with the publication of "Without
Reservation: The Making of America's Most Powerful Indian Tribe and
Foxwoods, the World's Largest Casino," by Jeff Benedict.
The incendiary claim at the heart of "Without Reservation" is that the
Mashantucket Pequot are illegitimate -- that they are not, in fact,
Pequots, and that their rise to power was accomplished through legal
smoke and mirrors. A muckraking polemic, "Without Reservation" touched
a nerve. In a lengthy article for the Hartford Courant, staff writer
Joel Lang noted that "no book in my 30-year recollection of
Connecticut news has had more impact."
"Without Reservation" argues that Mr. Hayward's grandmother, Elizabeth
George -- the now legendary ur-Pequot of the modern era -- was in fact
not a Pequot. Mrs. George's "genealogy offers no proof that she
descended from the Mashantucket Pequot Indians," Mr. Benedict writes.
The only document that directly links Mrs. George to Indian ancestry
is a state enumeration record that lists her grandfather not as a
Pequot, but as a member of the Narragansett tribe, Mr. Benedict says.
Mr. Lang wrote a long article for the Courant questioning Mr.
Benedict's methods and conclusions. Mr. Eisler, the author of the
other recent book on Foxwoods, notes that although Mr. Hayward's
Indian genealogy was thin, "there definitely was a link" to the Pequot
past.
The Pequots are dismissive of the Benedict thesis. "No one was
questioning our genealogy when we were raising pigs and making maple
syrup," says Mr. Thomas, the Pequot treasurer. "This effort is the
result of pure ignorance. We have a unbroken 300-year relationship
with the state of Connecticut that was the basis for full state
support when Congress granted federal recognition."
Mr. Thomas is part of a new tribal leadership under the current
chairman, Kenneth Reels. When Mr. Reels moved to the reservation in
1987, Mr. Eisler writes, he was "part of a vanguard of Rhode Island
Narragansett Indians able to piggyback a distant Pequot relative" into
Pequot tribal membership. Mr. Reels and the others surrendered their
Narragansett tribal membership and joined the Pequots.
Historically, Mr. Eisler notes, the Pequots and Narragansett had a
history of "rivalry and betrayal." Indeed, the Pequots were all but
wiped out in a 1637 war with the combined forces of the English,
Narragansetts and Mohegans. The survivors scattered and were later
granted land by the government of Connecticut.
Mr. Reels brought Narragansett allies in the Pequot fold, including
two cousins, Mr. Thomas and Antonio Beltran. Disputes over tribal
membership, division of assets, and management of the casino mounted.
Mr. Reels' Narragansett group, which is largely black, resented the
Hayward faction, which is mostly white, according to both recent books
on Foxwoods. As resistance to increased Narragansett membership
mounted, charges of racism were hurled at the Hayward faction by the
Reels group.
In 1998, Mr. Hayward was ousted as tribal chairman. Mr. Reels brought
a more confrontational style to tribal leadership, Mr. Eisler notes.
Seeking to pressure the Interior Department to increase its efforts on
behalf of Pequot land annexation, Mr. Reels warned a senior BIA
official that "the Pequots are not by nature a peaceful people."
Mr. Thomas says the accounts of internal racial strife are
"ridiculous. Folks decided it was time for a change. Mr. Hayward's
leadership was remarkable. But the way you achieve your dreams and the
way you maintain them are different." Famously reclusive, Mr. Hayward
did not respond to interview requests. His current post as tribal
vice-chairman is largely ceremonial, sources say.
Mr. Reels Narragansett allies also caused controversy. His cousin Mr.
Beltran, a member of the tribal council until last year, earlier
served four years at San Quentin for aggravated assault; while on
juvenile probation in 1980, Mr. Beltran announced to friends that he
wanted to "kill a white boy" and found a victim, stabbing him and
leaving him paralyzed. Mr. Beltran did not respond to interview
requests.
Mr. Thomas, the tribal treasurer, served three years for cocaine
possession. Mr. Thomas says he was "a stupid kid who made poor choices
as a teenager. I've paid my debt to society."
In 1996, the New London (Conn.) Day published a series of critical
articles about possible corruption at Foxwoods, including one that
accused the tribe of harboring Asian gangs that were laundering drug
money. Tribal officials angrily denied the charges.
The Pequot tribal council serves as a board of directors for the
billion-dollar casino, with day-to-day management in the hands of
gaming industry professionals. Foxwoods CEO William Sherlock, former
president of the Flamingo Hilton in Reno, Nev., says the casino works
closely with law enforcement officials and files Currency Transaction
Reports for all transactions over $10,000. Federal regulations on
money laundering apply to the casino, Mr. Sherlock says. "We are
treated like any financial institution or bank."
With passage of the Indian Gaming Regulatory Act in 1988, Foxwoods
entered a new era. Bingo continued to be a lucrative draw, but
Connecticut resisted expanded gambling. Mr. Tureen went back to court.
In 1990, he won another influential legal victory, establishing that
any state that allowed gaming for charity purposes could not deny
Indian tribes the right to open full-scale casinos. Overcoming a final
obstacle, the Pequots cut a deal with then-Gov. Weicker for exclusive
state rights to slot-machine operations in exchange for 25% of
Foxwoods' slot revenue.
Then Mr. Tureen and Mr. Hayward found someone to help them build a
world-class casino: Mickey Brown.
The Malaysian Connection
As a state prosecutor in New Jersey, Mr. Brown won fame for a 1980
case against members of the Genovese crime family, proving in court
for the first time the existence of the organized criminal conspiracy
known as La Cosa Nostra. Mr. Brown then took over New Jersey's
fledgling Division of Gaming Enforcement for two years. In 1982, he
went into private practice, specializing in international gaming
matters.
One of Mr. Brown's first clients was Lim Goh Tong, the Malaysian
casino kingpin. Mr. Lim left China's Fujian Province in 1937 and made
a fortune in large-scale construction projects throughout Malaysia. In
1969, Malaysia granted its only casino license to Mr. Lim. He opened
the Genting Highlands casino resort in the mountains 25 miles
northeast of Kuala Lampur.
Genting Highlands became a smashing success, raking in hundreds of
millions of dollars every year, despite a prohibition on gambling by
Malaysia's official religion, Islam. Mr. Lim expanded his Genting
Group holdings to include casinos in the Bahamas and Australia, sugar
and rubber plantations, power plants, a cruise line and an e-commerce
division. Like Foxwoods, Genting closely guards its finances. But Mr.
Lim's net worth has been estimated at over $5 billion.
Mr. Lim's dream of a U.S. casino proved elusive until 1990, when Mr.
Brown brought him to Mr. Hayward's bingo hall in rural Connecticut.
More than 20 U.S. financial houses had turned the Pequots down, but
Mr. Lim saw the future. He extended a $58 million construction loan in
1991 and a $175 million line of credit in 1993, according to a
confidential bond prospectus obtained by the Providence Journal.
Foxwoods Resort Casino opened its doors in November 1992 and has never
closed them since. Mr. Hayward named Mr. Brown Foxwoods CEO in 1992;
he was forced out in 1997 by the Reels faction.
Mr. Brown declined to comment on the inter-tribal rivalries at
Foxwoods but said the Pequots were a "once-in-a-century success
story." He still works with the Lims, "a great experience" for nearly
twenty years. Earlier this month, the Buffalo News reported that Mr.
Brown and the Lims are "widely believed to have the inside track" with
the Seneca Indians to develop casinos in Buffalo and Niagara Falls.
Mr. Lim still maintains a close relationship with the Pequots.
Foxwoods deposits its daily casino take into accounts bearing the name
Kien Huat Realty, a holding company controlled by Mr. Lim. Kien Huat
receives 9.9% of the casino's adjusted gross income until 2016, plus
interest payments on the two loans, the Providence Journal reported.
Tribal officials declined to discuss financial arrangements with Mr.
Lim, citing confidentiality agreements, and a Lim representative in
Malaysia also declined comment. But Mr. Thomas, the Pequot treasurer,
says the tribe's dealings with the Lims are largely "a
family-to-family relationship."
"We have very little direct contact with the Lim family," says Mr.
Sherlock, the Foxwoods CEO. "The Lims deal with the tribal council."
John Herbst
At least its only an editorial and was not portrayed as actual journalism.
man...@pipeline.com (tenseven) wrote in message news:<5f3ac994.01082...@posting.google.com>...