$potting the…


“Gambling has more of a history of corruption than any other industry.”

Former Illinois Sen. Paul Simon – June 1997


Sightings from The Catbird Seat

~ o ~

December 08, 2002

Dirty Dealing

Indian casinos are making millions for their investors
and providing little to the poor


Imagine, if you will, Congress passing a bill to make Indian tribes more self-sufficient that gives billions of dollars to the white backers of Indian businessesand nothing to hundreds of thousands of Native Americans living in poverty.

Or a bill that gives hundreds of millions of dollars to one Indian tribe with a few dozen members – and not a penny to a tribe with hundreds of thousands of members.

Or a bill that allows select Indian tribes to create businesses that reap millions of dollars in profits and pay no federal income tax – at the same time that the tribes collect millions in aid from American taxpayers.

Can’t imagine Congress passing such a bill? It did.

Here’s how it happened – and what it means.

Maryann Martin presides over America’s smallest tribe. Raised in Los Angeles in an African-American family, she knew little of her Indian ancestry until 1986, when at age 22 she learned that her mother had been the last surviving member of the Augustine Band of Cahuilla Mission Indians.

In 1991, the Bureau of Indian Affairs (BIA) certified Martin and her two younger brothers as members of the tribe. Federal recognition of tribal status opened the door for Martin and her siblings to qualify for certain types of government aid. And with it, a far more lucrative lure beckoned: the right to operate casinos on an Indian reservation.

As Indian casinos popped up like new housing developments across Southern California, Martin moved a trailer onto the long-abandoned Augustine reservation in Coachella, a 500-acre desert tract then littered with garbage, discarded household appliances and junk cars, about 25 miles southeast of Palm Springs. There she lived with her three children and African-American husband William Ray Vance. In 1994, membership in the tiny tribe dwindled from three adults to one when Martin’s two brothers were killed during separate street shootings in Banning, Calif. Police said both men were involved in drug deals and were members of a violent Los Angeles street gang.

Subsequently, Martin negotiated a deal with Paragon Gaming, a Las Vegas company, to develop and manage a casino. Paragon is headed by Diana Bennett, a gaming executive and daughter of Vegas veteran and co-founder of the Circus Circus Casino William Bennett. Martin’s Augustine Casino opened last July. With 349 slot machines and 10 gaming tables, it’s the fifth and by far the most modest casino in the Palm Springs area.

But it stands to make a lot of non-Indian investors – and one Indian adultrich.

And get this: Martin still qualifies for federal aid, in amounts far greater than what many needy Native Americans could even dream of getting. In 1999 and 2000 alone, government audit reports show, she pulled in more than $1 million from Washington – $476,000 for housing, $400,000 for trribal government and $146,000 for environmental programs.

It wasn’t supposed to be this way.

At the end of the 1980s, in a frenzy of cost cutting and privatization, Washington perceived gaming on reservations as a cheap way to wean tribes from government handouts, encourage economic development and promote tribal self-sufficiency. After policy initiatives by the Reagan Administration and two U.S. Supreme Court rulings that approved gambling on Indian reservations, Congress enacted the Indian Gaming Regulatory Act in 1988. It was so riddled with loopholes, so poorly written, so discriminatory and subject to such conflicting interpretations that 14 years later, armies of high-priced lawyers are still debating the definition of a slot machine.

Instead of regulating Indian gambling, the act has created chaos and a system tailor-made for abuse. It set up a powerless and underfunded watchdog and dispersed oversight responsibilities among a hopelessly conflicting hierarchy of local, state and federal agencies. It created a system so skewed, only a few small tribes and their backers are getting rich, that it has changed the face of Indian country. Some long-dispersed tribes, aided by new, non-Indian financial godfathers, are regrouping to benefit from the gaming windfall. Others are seeking new reservations, some in areas where they never lived, occasionally even in other states, solely to build a casino. And leaders of small, newly wealthy tribes now have so much unregulated cash and political clout that they can ride roughshod over neighboring communities, poorer tribes and even their own members.

The amount of money involved is staggering. Last year 290 Indian casinos in 28 states pulled in at least $12.7 billion in revenue. Of that sum, TIME estimates, the casinos kept more than $5 billion as profit. That would place overall Indian gaming among Fortune magazine’s 20 most profitable U.S. corporations, with earnings exceeding those of J.P. Morgan Chase & Co., Merrill Lynch, American Express and Lehman Bros. Holdings combined.

But who, exactly, is benefiting?

Certainly Indians in a few tribes have prospered. In California, Christmas came early this year for the 100 members of the Table Mountain Rancheria, who over Thanksgiving picked up bonus checks of $200,000 each as their share of the Table Mountain Casino’s profits. That was in addition to the monthly stipend of $15,000 each member receives. But even those amounts pale beside the fortunes made by the behind-the-scenes investors who bankroll the gaming palaces. They walk away with up to hundreds of millions of dollars.

Meanwhile, the overwhelming majority of Indians get nothing. Only half of all tribes, which have a total of 1.8 million members, have casinos. Some large tribes like the Navajo oppose gambling for religious reasons. Dozens of casinos do little better than break even because they are too small or located too far from population centers.

The upshot is that a small number of gaming operations are making most of the money. Last year just 39 casinos generated $8.4 billion. In short, 13% of the casinos accounted for 66% of the take. All of which helps explain why Indian gaming has failed to raise most Native Americans out of poverty. What has happened instead is this:


Revenue from gaming is so lopsided that Indian casinos in five states with almost half the Native American population-Montana, Nevada, North Dakota, Oklahoma and South Dakota-account for less than 3% of all casino proceeds. On average, they produce the equivalent of about $400 in revenue per Indian.

Meanwhile, casinos in California, Connecticut and Florida, states with only 3% of the Indian population, haul in 44% of all revenue, an average of $100,000 per Indian. In California, the casino run by the San Manuel Band of Mission Indians pulls in well over $100 million a year. That’s about $900,000 per member.


While federal recognition entitles tribes to a broad range of government benefits, there is no means testing. In 2001, aid to Indians amounted to $9.4 billion, but in many cases more money went to wealthy members of tribes with lucrative casinos than to destitute Indians. From 1995 to 2001, the Indian Health Service, the agency responsible for looking after the medical needs of Native Americans, spent an average of $2,100 a year on each of the 2,800 members of the Seminole tribe in Florida. The Seminoles’ multiple casinos generated $216 million in profits last year, and each tribe member collected $35,000 in casino dividends. During the same six years, the health service spent an annual average of just $470 on each of the 52,000 members of the Muscogee (Creek) Nation in Oklahoma, whose tiny casinos do little more than break even.


Wealthy Indian gaming tribes suddenly are pouring millions of dollars into political campaigns at both state and federal levels. They are also influencing gaming and other policies affecting Native Americans by handing out large sums to influential lobbying firms. In 2000 alone, tribes spent $9.5 million on Washington lobbying. Altogether they spend more to influence legislation than such longtime heavyweights as General Motors, Boeing, AT&T, or even Enron in its heyday.


Tribal leaders are free to set their own whimsical rules for admission, without regard to Indian heritage. They may exclude rivals, potential whistle-blowers and other legitimate claimants. The fewer tribe members, the larger the cut for the rest. Some tribes are booting out members, while others are limiting membership. Among them: the Pechanga Band of Mission Indians in Riverside County, Calif., whose new Las Vegas-style gaming palace, the Pechanga Resort & Casino, is expected to produce well over $100 million in revenue.


Since only a federally recognized tribe can open a casino, scores of groups-including long-defunct tribes and extended families-have flocked to the BIA or Congress seeking certification. Since 1979, as gambling has boomed, the number of recognized tribes on the U.S. mainland has spiked 23%, to a total of 337. About 200 additional groups have petitioned the bureau for recognition.

Perhaps the most notorious example of tribal resurrection: the Mashantucket Pequots of Connecticut, proud owners of the world’s largest casino, Foxwoods. The now billion-dollar tribe had ceased to exist until Congress re-created it in 1983. The current tribe members had never lived together on a reservation. Many of them would not even qualify for government assistance as Indians.


Congress created the National Indian Gaming Commission (NIGC) to be the Federal Government’s principal oversight-and-enforcement agency for Indian gaming?and then guaranteed that it could do neither. With a budget capped at $8 million, the agency has 63 employees to monitor the $12.7 billion all-cash business in more than 300 casinos and small gaming establishments nationwide.

The New Jersey Casino Control Commission, by contrast, has a $59 million budget and a staff of 720 to monitor 12 casinos in Atlantic City that produce one-third the revenue. The NIGC has yet to discover a single major case of corruption-despite numerous complaints from tribe members.


While most Indians continue to live in poverty, many non-Indian investors are extracting hundreds of millions of dollars-sometimes in violation of legal limits-from casinos they helped establish, either by taking advantage of regulatory loopholes or cutting backroom deals. More than 90% of the contracts between tribes and outside gaming-management companies operate with no oversight. That means investors’ identities are often secret, as are their financial arrangements and their share of the revenue.

Whatever else Congress had in mind when it passed the regulatory act, presumably the idea was not to line the pockets of a Malaysian gambling magnate, a South African millionaire or a Minnesota leather-apparel king.


The tribes’ secrecy about financial affairs-and the complicity of government oversight agencies-has guaranteed that abuses in Indian country growing out of the surge in gaming riches go undetected, unreported and unprosecuted. Tribal leaders sometimes rule with an iron fist. Dissent is crushed. Cronyism flourishes.

Those who question how much the casinos really make, where the money goes or even tribal operations in general may be banished. Indians who challenge the system are often intimidated, harassed and threatened with reprisals or physical harm. They risk the loss of their jobs, homes and income.

Margarite Faras, a member of the San Carlos Apache tribe, which owns the Apache Gold Casino in San Carlos, Ariz., was ousted from the tribal council after exposing corruption that led to the imprisonment of a former tribal leader. For three years, Faras says, those in control mounted nighttime demonstrations at her home, complete with loudspeakers. They initiated a boycott of her taco business, telling everyone she used cat meat. They telephoned her with death threats. Says Faras: “I don’t know what else to say, other than it’s been a nightmare.”

Copyright © 2002 Time Inc. All rights reserved

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December 15, 2002

TIME Special Investigation:


TIME Discloses ‘Staggering’ Expenditures
by Tribes Seeking Political Favors

TIME’s DONALD BARLETT and JAMES STEELE have uncovered ‘a financial-political scandal of stunning proportions,’ Columnist William Safire Wrote in The New York Times

New York – Washington often ignores the needs of poor Native Americans while assisting newly-wealthy tribes who dump staggering amounts of money into political campaigns, lobbying and state ballot initiatives, TIME charges in a major investigation of Indian casinos.

This week, TIME publishes the second and final report after a year-long investigation by the Pulitzer prize winning team of TIME Editors-at-Large Donald Barlett and James Steele.

Indian political power is greatest in California, where Indian gaming revenue-$4 billion and growing – is set to surpass all the casinos in Las Vegas, TIME reports. “As the profitability and size of Indian casinos has grown, so has friction between the gaming ventures and surrounding communities,” Barlett and Steele conclude. Also, “Washington often rewards rich tribes and penalizes poor ones by distributing funds based on historical practices rather than need. A tribe with a profitable casino often gets more money per capita than a tribe without one.”

TIME discloses “staggering” expenditures to secure political favors, while Congress has slashed the Bureau of Indian Affairs to the point that the General Accounting Office calls it understaffed without coherent guidelines. TIME reports:

-Federal funding of Native American programs climbed from $5.3 billion to $9.4 billion, a 77% increase, from 1993-2001, according to an Office of Management and Budget report.

–Indian tribes have contributed $8.6 million to federal candidates since 1993.

–In 1996, during President Clinton’s second run for office, 86% of $1.9 million went to Democrats.

–In 2002, with President George W. Bush in the White House, 56% of $1.4 million has gone to Republicans.

–In 2000-2001, tribes spent $20 million lobbying Congress on such issues as preserving the tax-free status of casinos. Sovereign tribes pay no state or local taxes.

TIME’s cover story last week, “Wheel of Misfortune: Look Who’s Cashing In at Indian Casinos,” presented part one. William Safire devoted his Thursday column in The New York Times to TIME’s investigation: “The poorest of our aboriginal Americans are getting poorer, while non-Indians get rich hiring lobbyists to get federal recognition of a tribal front for the sole purpose of buying land to build a casino,” Safire wrote.

“It is a financial-political scandal of stunning proportions,” Safire concluded.

“Under the cover of helping the 28% of Indians now mired in poverty, financial vultures and highly paid, revolving-door lobbyists are ripping off the U.S. taxpayer.”

In part two, TIME focuses on tribes wielding political influence. “At the state level small Indian tribes with immensely profitable casinos are exerting an even more disproportionate clout” than in Washington, report Barlett and Steele. TIME’s examples include:

–CALIFORNIA’s Casinos Contribute Less Towards the Cost of Local Government Services Than in Connecticut: In this year’s re-election campaign, Gov. Gray Davis picked up more than $1.8 million from California tribes, which operate 48 casinos in the state — with perhaps two-dozen more on the way. Davis has negotiated compacts that provide for voluntary tribal contributions to a fund to help local communities defray the cost of government services near casinos. California officials estimate the tribes will pay about $100 million a year into the fund. By contrast, Connecticut collected $332 million last year from its two Indian casinos, Foxwoods and the Monhegan Sun. If California tribes were paying at the same rate-25% of slot revenue-the state would collect between $800 million and $1 billion.

TIME’s story also covers casinos operated in California by tribes such as the Rumsey Band of Wintun Indians and its Cache Creek Indian Bingo & Casino. While the casino will take in an estimated $150 million this year, the 44-member tribe also will receive approximately $4,457 from the BIA’s tribal priority allocations (TPA).

–CONNECTICUT’s Eastern Pequots Used a Lobbyist Related to the White House Chief of Staff: Last June, Bush appointees in the Bureau of Indian Affairs recognized the Eastern Pequots, a southeastern Connecticut tribe with casino hopes. The tribe and its investors paid $525,000 to Ronald Kaufman, a Republican lobbyist who is the brother-in-law of White House chief of staff Andrew Card. “The BIA’s recognition came amid widespread opposition,” TIME reports, and questions about the tribe’s authenticity.

–FLORIDA’s Chief of the Seminoles Was Suspended Last Year: The Seminoles won Supreme Court approval for gaming everywhere, TIME reports. Last year individual members received gaming dividends of $36,000; two casinos in Hollywood and Tampa made a combined profit of $216 million, a return of 85%. In 2000, the tribe doled out $275,000 to Democrats. The Seminoles have broken ground for a new complex with Hard Rock Cafe International. Seminole Chief James E. Billie was suspended last year pending an audit of questionable tribal financial dealings, which is still ongoing. His $330,000 salary was the highest of any elected official in Florida. He was responsible as tribal head for the purchase of a corporate jet and a minifleet of helicopters.

Four-hundred members of the Miccosukee Tribe in Florida, whose Miccosukee Resort and Gaming Center rakes in an estimated $75 million a year, will collect $2,858 in BIA TPA’s (funds given to tribe members). In the 2003 budget, by contrast, North Dakota’s Turtle Mountain Chippewas (28,000 members) will receive on average $154 each.

TIME’s investigation shows that while the federal Department of Housing and Urban Development (HUD) over the past four years handed out housing funds to Florida Seminoles averaging $2,800 a member – while the tribe’s five casinos generated nearly $1 billion in revenue.

–MISSISSIPPI’s Choctaws Spend the Most on D.C. Lobbyists: Mississippi’s Choctaw (8,800 members) are the biggest spenders: $11 million distributed to Washington lobbying firms since 1997, most to Jack Abramoff, a top Republican Party fundraiser. The Choctaw Tribe’s Silver Star Hotel & Casino rakes in profits of about $100 million a year with a return on revenue of 41%, according to TIME. Over the past five years, “federal agencies have lavished $245 million on the Choctaw,” TIME reports. In 2001, the Choctaw collected $50.4 million, or $5,700 a member, while the Navajos (with no casinos) averaged $900 for each it their 260,000 members. TIME reports that HUD gave the Choctaws an average of $5,900 per member, while the country’s largest tribe, the Navajo, with no casinos and a 52% unemployment rate, got much less– $1,500 per member.

–TEXAS’s Kickapoo Ousted Their Casino Head This Fall: The Kickapoo Traditional Tribe of Texas ousted Isidro Garza Jr. — who ran the Lucky Eagle Casino – this fall. The casino’s beneficiaries, tribe members charge, were primarily Garza’s immediate family and tribal allies, including his friend, chief Makateonenodua, according to TIME.

Although neither the Eagle Pass, TX casino nor the Indian Gaming Commission will release data, TIME estimates the casino’s gross revenue at more than $25 million a year.

“Not a penny has trickled down to the tribe’s 470 adult members,” according to TIME. Garza’s salary was rumored to be at least $500,000. (Federal aid to the tribe has amounted to $10.6 million in recent years.)

Tribal members over the past several years tried to enlist government support, making a litany of charges that money was being skimmed. The Bureau of Indian Affairs passed the buck, TIME reports, saying it wasn’t an “investigative arm” of the government.

Garza denies all the charges, and insists he only spent personal funds, his cut of casino profits. “I have a contract with the tribal council,” Garza tells TIME, “that compensates me for a percent of the profit of the casino.” He would not tell TIME how much: “I think that’s between the council and us.”

Two years ago, tribe member Jususita Salazar moved from her two-room house, which was in the path of the planned expansion of the Lucky Eagle Casino seven miles southeast of Eagle Pass. Makateonenodua promised to build a new house for the elderly grandmother. But the 100,000 square-foot project ran out of money; tribe members charge it was siphoned off by Kickapoo leaders, according to TIME.

Salazar has left her two-bedroom with electricity and plumbing for a one room hut. “I never got the reimbursement for my home…I am now worried that one day I will be homeless,” Salazar tells TIME.

TIME also reports how George W. Bush’s efforts as governor helped lead to the shutting down earlier this year of the Speaking Rock Casino & Entertainment Center near El Paso, on the reservation of the Tigua, also known as the Ysleta del Sur Pueblo tribe.

At the time he launched the campaign, Bush said, “There ought not to be casino gambling in the state of Texas, any shape or form of it.”

Online, go to: http://www.time.com/time/magazine/article/0,9171,1101021223-399923,00.html

Copyright © 2002 Time Inc. All rights reserved.

For more Dirty Deals for Indians, GO TO > > > The U.S. Bureau of Indian Affairs

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April 4, 2002

Advocates Of Casinos
Spent Big On Lobbying


Mainland investors who want to open two casinos on O’ahu spent more money touting their agenda before lawmakers at the start of this legislative session than any other group, state Ethics Commission records show.

Marketing Resource Group, of Lansing, Mich., reported spending $108,679 on lobbying through January and February, the period covered by lobbyist expenditure reports due at the commission yesterday.

The company is a public relations firm employed by investors in a Detroit casino called MotorCity, and last year set up an organization of supporters here called Holomua Hawai’i, named after the Hawaiian word for progress.

The casino investors include Marian Illitch, whose family owns the Detroit Tigers baseball team and Little Caesars pizza chain. They want to build casinos in Waikiki and Leeward O’ahu, and Holomua Hawai’i collected petition signatures from 25,000 Hawai’i residents who support gambling.

The group also produced a video in which economists and others argue that gambling would create jobs, provide more government revenue, and boost the state economy.

But others said they fear gambling could increase crime and corruption, and lawmakers roundly rejected a bill that would authorize the casinos, leaving it very unlikely that the state will legalize gambling this year.

Marketing Resource Group could also be fined for failing to disclose its lobbying activities to the Ethics Commission for the previous reporting period, from May to December.

Commission executive director Dan Mollway said organizations that employ lobbyists and refuse to file reports could be fined up to $500, but most comply voluntarily. [Catbird: Guess that’s the high cost of doing business in Hawaii!]

Marketing Resource Group could not be reached for comment yesterday. The firm’s Hawai’i lobbyist, John Radcliffe, said he did not know why the report was missing, but that it had been lost in a Michigan snow storm when it was first mailed. The report was due at the commission by the end of January.

Another group that wants to legalize gambling, the Coalition for Economic Diversity, reported spending $9,832 lobbying during the previous period and said it spent less than $10,000 in January and February.

The group is backed by Sun International Hotels Ltd., which wants to build a $1 billion resort and casino at Ko Olina in Leeward O’ahu.

Hawaiian Airlines reported spending $8,300 on lobbying during January and February. Hawaiian, which sought to merge with rival Aloha Airlines, had reported spending more than $140,000 on lobbying during the previous period.

But Hawaiian later said it had mistakenly inflated that figure by including payments for work other than lobbying. In an amended report, Hawaiian said it really spent only $8,250 on lobbying during the May-December period.

The company had initially reported paying more than $83,000 to lobbyist Lyn Anzai, wife of state Attorney General Earl Anzai, whose office was investigating whether the merger would be legal.

The amended report reflects no lobbyist payments between May and December to Lyn Anzai, who is also Hawaiian’s general counsel. The report for January and February said Anzai was paid $2,043 for lobbying during that period.

See also: Sun International Hotels

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January 10, 2002

Churchill Downs Names 25 Lawmakers
to Whom It Sent Donations

By Joseph Gerth and Haukebo, The Courier-Journal

FRANKFORT, KY – Churchill Downs yesterday released a list of 25 lawmakers to whom the horse-racing company’s political action committee gave large contributions in the days immediately before the 2002 General Assembly.

That list includes most Jefferson County legislators and several legislative leaders from around the state who sit on key committees that could consider racing-related bills. The track, however, did not disclose the names of legislators to whom Churchill Downs, Inc. president Thomas Meeker, chairman Carl Pollard or other Churchill Downs officials gave donations in recent days.

Checks sent to legislators last week totaled $15,500. In the past three months, Churchill Downs has donated nearly $50,000 to legislators.

House Speaker Pro Tem Larry Clark said yesterday that he thought that the last-minute contributions came too late. He returned a $1,000 campaign gift from Meeker. . . .

Churchill Downs would like the General Assembly to allow race tracks around the state to install slot machines. It is also seeking approval of a tax increment financing plan that would help pay for multimillion-improvements at the track.

Churchill Downs released the list after a story in yesterday’s Courier-Journal that said the company’s political action committee had increased its spending dramatically on political campaigns in recent months.

The newspaper reported that the political action committee used Federal Express to rush contributions to legislators last week so they could deposit the checks in campaign accounts before the session began. . . .

Since September, Churchill Downs has given $48,500 to legislators and the state Democratic and Republican parties. In all, 45 of the 138 legislators received contributions ranging from $500 to $1,000. Some of them also received $1,000 gifts from Churchill Downs board members….

Rep. Perry Clark, D-Louisville, said he would certainly keep the $500 the track sent him. “Think it will influence my vote?” he asked. “Absolutely not.”

Perry Clark said that accepting the money now is no more corrupting that accepting on a month or a year before the legislative session began. “If you’re not going to accept this, maybe you shouldn’t accept any contributions,” he said.

BUT OTHERS said accepting the money just didn’t feel right.

Sen. Bob Leeper, R-Paducah, said he sent back the $1,000 from Churchill Downs’ PAC.

House Minority Floor Leader, Jeff Hoover, of Jamestown, said he received a check from Churchill Downs chairman Pollard on Monday – the day before the session began – and returned it because it came too close to the beginning of the session. Pollard also is chairman of Churchill Downs’ PAC….

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How soon we forget…

From The Washington Post, Online:



An FBI investigation into corruption in the Kentucky Legislature nets more than a dozen lawmakers beginning in 1992. The sting, dubbed Operation BopTrot, involves legislators who accepted bribes and other illegal inducements to support horse-racing legislation.

They include:

House Speaker Don Blanford pleads guilty after 1992 indictment on charges of extortion, racketeering and lying. He is sentenced to 64 months in prison and fined $10,000.

Sen. John Hall pleads guilty to conspiracy and other charges stemming from 1992 indictment in Operation BopTrot.

Rep. Clay Crupper pleads guilty after 1992 indictment and is fined $10,000 on charges of interstate travel in aide of racketeering.

Rep. Ronny Layman is indicted in 1992 on charges of conspiracy to commit extortion and lying to the FBI. He pleads guilty and is sentenced to three months of home detention and community service.

Rep. Bill McBee is sentenced to a 15-month prison term for his role in Operation BopTrot.

Rep. Jerry Bronger is indicted in 1992 and later pleads guilty to charges that he accepted $2,000 in exchange for blocking legislation that would hurt harness race tracks. He is sentenced to 10 months in prison.

Sen. Helen Garrett is charged in 1992 with taking a $2,000 bribe from a track in exchange for helping pass legislation. She pleads guilty and receives four years probation.

Sen. David LeMaster is indicted in 1993, and is acquitted of extortion and racketeering, but convicted of lying. He is sentenced to a year in prison and fined $30,000.

Sen. Art Schmidt pleads guilty after 1993 indictment for withholding fact that he took a $20 cash payment from another senator tied to Operation BopTrot. He is sentenced to probation and fined $2,500.

Sen. Patti Weaver pleads guilty after 1993 indictment charging that she promised to help another lawmaker find a job in exchange for support of legislation. She is sentenced to weekend incarceration, probation and community service and is fined $10,000.

Sen. Virgil Pearman pleads guilty after 1993 indictment charging that he took an illegal $3,000 campaign contribution. He is sentenced to three months in a halfway house and probation and is fined $5,000.

Rep. Bill Strong pleads guilty after 1993 indictment charges that he took an illegal $3,000 campaign contribution and did not deposit the money into his campaign fund. He is sentenced to three months in a halfway house and probation and is fined $3,000.

Sen. Landon Sexton pleads guilty after 1994 indictment charging that he took an illegal $5,000 cash campaign contribution. He is sentenced to 15 consecutive weekends in jail, home detention for two months and probation for two years. He is also fined $5,000.

Rep. Richard Turner pleads guilty to a 1993 charge that he filed a false campaign finance report. Charges that he took an illegal $3,000 cash campaign contribution are dropped.

Sen. John Rogers is sentenced in 1994 to 42 months in prison after conviction on charges of extortion, conspiracy, attempted extortion, mail fraud and lying to the FBI.

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January 22, 2002

Moderate chance for gambling
in isles, study finds

Deutsche Bank says 9 states are debating gambling this year

By Richard Borreca, Honolulu Star-Bulletin

Hawaii, Maryland and Ohio are all rated as having a “moderate” chance of expanded gambling in 2002, according to a Deutsche Bank study. Florida, which has a highly successful lottery, Kansas and New Hampshire are ranked as “low.”

New York, Kentucky and Pennsylvania are all rated as having a “high” chance, the study says.

Hawaii is the only one of the nine that does not now allow gambling, casinos or lotteries.

Meanwhile, the Michigan-based Ilitch group has been lobbying local community and labor groups, saying two casinos on Oahu would generate an additional $43 million in state taxes annually.

John Radcliffe, lobbyist for the Michigan group, has been showing a video presentation to the Building Trades Council, Hotel Workers, AFL-CIO and the Hawaii Government Employees Association but so far has been unable to secure any public commitments of support.

“The interest is high, but the willingness to take the risk and say OK is not nearly as high,” he said.

He estimates that if the state permitted two casinos to operate on Oahu, they would generate $435 million, and the owners would be willing to give the state a minimum of 10 percent of the net earnings in tax payments.

Sun International Resorts, which is pitching a $1 billion development at Ko Olina, has also been meeting with community groups and tourism officials, according to a spokesman for the group.

Jim Boersema said Sun calculates the Ko Olina development would bring in new taxes of $85 million a year, including general excise, property, income and a special casino revenue tax.

“We are projecting a minimum 5,000 direct jobs at the resort and another (9,000) to 10,000 indirect jobs,” Boersema said.

Both gambling proposals, however, have lacked a strong show of support in the Legislature and were hurt earlier this month when U.S. Sen. Daniel Inouye came out against any form of legalized gambling in Hawaii.

Deutsche Bank researchers Mark Mutkoski, Joel Simkins and Joshua Attie note there is wide acceptance of gambling in Hawaii, as long as it happens somewhere else. . . .

The report concludes that Hawaii is suffering from the post-Sept. 11 recession but still may not want to be drawn into a quick-fix solution such as gambling.

“Despite the perversely favorable backdrop for approval in 2002,” the report said, “we believe that Hawaiians hold a NIMBY (not in my back yard) attitude and are still more comfortable flying to Las Vegas to gamble, rather than having casinos in their own state.

“We believe that politicians may not be willing to take a knee-jerk approach towards gaming in an election year,” the report concluded.

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January 9, 2002

The developer of a proposed Hawaii casino says
he wouldn’t mind if residents were excluded

By Richard Borreca, Honolulu Star-Bulletin

The gambling debate is heating up as the opening of the state legislative session approaches, with a developer who wants to build a $1 billion casino-resort saying he would not mind if local gamblers were excluded from his project.

Gov. Ben Cayetano, meanwhile, reiterated his support for a single casino in Hawaii but also repeated his belief that the issue of gambling should be decided by voters in a ballot question in the November election.

“This is one of those issues which is very, very big,” Cayetano said yesterday. “There’s no question that if gambling is approved in Hawaii, whether it be a single casino or multiple casinos, that it will have some impact, not only on our growth but perhaps our way of life.”

Sun International Hotels president Butch Kerzner is proposing a $1 billion development for Oahu at Ko Olina. The company has developed massive resorts in the Bahamas and South Africa. The Bahamas development, Atlantis, has revitalized the entire tourism industry there, Kerzner said.

Bahamian residents are not allowed to gamble in the casinos and, in an interview yesterday, Kerzner said he would have no objection to keeping the Ko Olina casino for non-Hawaii residents only. “That sort of decision should be a local decision,” he said. “Our model is to go after the resort market — that is a big enough market and we believe we can make it a bigger market.”

Cayetano said he thought it would be best to put the gambling issue before voters by asking for a constitutional amendment that either approved or forbade gambling in Hawaii.

“I’ve always favored a referendum, you know, but we don’t have one except for the calling of the constitutional … question,” he said.

Asked if he would vote in favor of allowing gambling, Cayetano said: “Yes, I would.”

The long-debated issue of legalizing gambling in Hawaii continues to divide people.

While Cayetano supports it, fellow Democrat U.S. Sen. Daniel Inouye called gambling “one of the worst things we can do for the state of Hawaii.”

“Saying that gaming would save us and bring about the funds we need for education and for economic development, I see that as a cop out,” he said, adding that it ignores the crime and poverty that results from gambling.

Going into the 2002 legislative session that begins next Wednesday, some leaders are doubtful any gambling measure will be approved.

House Speaker Calvin Say (D, Palolo Valley-Kaimuki) pointed to the membership of the Judiciary Committee, which would have to approve any gambling measure, noting well over half of the 17 members are on the record as opposing legalized gambling. “I asked chair (Rep. Eric) Hamakawa to schedule any gambling bill he wants for a hearing, just to get it out of the way. If the votes are not there in passing it, it’s pau.”

Senate President Robert Bunda (D, Wahiawa-Haleiwa-North Shore) said his proposed resolution for a study of gambling’s social and economic impact failed to win approval last year. “It didn’t make it, so we’ll just wait until the House comes over with their proposal, if any,” said Bunda, who supports putting the issue before the voters.

The Associated Press contributed to this report.

For more, GO TO > > > Sun International Hotels

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From CITIZENLink, by Ronald A. Reno:

Gambling and Political Corruption

Gambling “has more of a history of corruption than any other industry,” former Illinois Senator Paul Simon testified at the opening meeting of the National Gambling Impact Study Commission in June 1997.

Indeed, Simon’s statement has abundant basis in fact. Gambling-related political corruption became so widespread in the 1800s that every state in the union eventually outlawed lotteries and all other forms of gambling. Today, history appears to be repeating itself. The recent wave of gambling expansion in the United States has spawned another epidemic of political corruption.

Two former West Virginia Senate Presidents were sentenced to prison for taking money from gambling interests. One was charged with soliciting $15,000 from a casino company to help pass a bill that would have allowed casinos in the state. The other was convicted for accepting an illegal $10,000 payment from gambling interests.

 Nineteen Arizona legislators and lobbyists were caught on videotape taking money after agreeing to vote for legalized gambling. Six lawmakers eventually accepted plea bargains; another was convicted of conspiracy for taking $25,000 from an undercover agent.

 Three Hilton Hotels executives —- one a board member —- resigned in the wake of an investigation regarding the corporation’s attempts to obtain a riverboat license in Kansas City, Missouri. Hilton allegedly paid $250,000 to a business headed by the former chairman of the Kansas City Port Authority, whose approval Hilton needed to lease city property for the casino. The former chairman later cast the deciding vote awarding Hilton the lease.

 Missouri’s House Speaker of 15 years resigned in 1996 in the wake of a federal investigation induced by charges of gambling-related dealings. According to media reports, the ex-speaker demanded that a gambling company direct payments of $16 million toward the ex-speaker”s friends and business associates in order to secure a casino license in the state.

 In Kentucky, 15 state legislators were eventually convicted or pled guilty to charges stemming from Operation Boptrot, an FBI investigation centering on influence peddling and bribery involving the state’s horse racing industry.

 The FBI launched a two-year investigation into the activities of more than a dozen Louisiana legislators suspected of accepting bribes from gambling interests. One former state senator, who chaired the senate committee overseeing gambling matters, has been convicted of racketeering-related charges in the investigation. A representative who sat on a similar committee in the Louisiana House resigned after admitting to using his influence to help two organized-crime-controlled video poker companies in exchange for gifts.

 Seventeen South Carolina lawmakers were convicted of or pled guilty to charges related to a federal sting operation labeled “Operation Lost Trust.” The investigation centered around allegations that legislators accepted gambling money in exchange for pro-gambling votes on horse racing legislation.

 In 1997, the former chairman of the Indiana House Ways and Means Committee was indicted on charges of bribery, perjury and filing false finance reports. The charges stemmed from allegations that the former chairman took bribes from the lead engineering firm in a riverboat casino project in the state.

 Four of Atlantic City’s last seven mayors have been found guilty of or pleaded guilty to corruption charges.

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From CITIZEN.link: http://www.family.orgcforum/

Last Updated May 29, 1998

Gambling in the Heartland

An Overview of Some of the Consequences
Associated with Casino Gambling in
Illinois, Indiana, Iowa, and Missouri

Addiction — The number of Gamblers Anonymous meetings in Illinois has more than doubled since the advent of casinos, to more than 50. In St. Louis, the number of GA meetings has increased from 2 to 19 in the last few years, while a GA telephone hotline in the area now handles 600 calls per month. In Iowa, the percentage of Iowa adults who had experienced a gambling problem more than tripled after the introduction of riverboat casinos.

ATMs — Eight of the 10 busiest ATMs in Iowa are located inside casinos. The casino machines dispense twice as much per transaction ($80 to $90) as machines at other locations ($40-$50).

Bankruptcy — The Des Moines Register reported that Iowa counties with casinos or racetracks had a bankruptcy rate 21% higher than the state average. Bankruptcies in Iowa increased by nearly 100% between 1991 and 1997, despite a robust economy. Further, nine of the 12 Iowa counties with the highest per-capita bankruptcy rates have a gambling facility within their borders or in an adjacent county.

The St. Louis Post-Dispatch noted the connection between casinos and record rates of bankruptcy in that area: “(Bankruptcy attorneys) are seeing more people gamble their way into bankruptcy … T.J. Mullin, who has handled more personal bankruptcy cases than any other lawyer here, says he has counted $1.5 million in gambling debts among his clients between January and (October, 1996).”

The paper quotes a St. Louis bankruptcy trustee who said that at least five of the 45 debtors she sees on an average day will admit to having significant gambling debts. She added, “When I started in 1991, there was almost no gambling debt.”

A 1997 study of bankruptcies in northwestern Indiana found that 18 percent were attributable to gambling. Twenty-one percent of Gamblers Anonymous members surveyed in Illinois reported having filed bankruptcy.

Credit — More than 20% of casino revenues in Illinois come from in-house credit extended by casinos. The average casino player using credit from Illinois casinos borrows more than $5,600 per month to bet. Further, overdue payments to Illinois casinos now account for 6% of total casino winnings.

Also, Illinois casinos have begun to go after spouses’ assets for gambling debts incurred by their partners, according to the Chairman of the Illinois Gaming Board.

A survey of gamblers and non-gamblers in Iowa found that 43% of gamblers had at least three credit cards, versus 19% of non-gamblers. Thirty-four percent of gamblers had credit card debt in excess of $5,000, versus 14% of non-gamblers.

Crime — The U.S. Attorney’s office for Iowa’s southern district reported eight cases in 1996 in which suspects said they used stolen credit cards or embezzled from their employer to gamble. Each of the thefts involved more than $25,000, and almost all involved thefts from government-insured financial institutions. Prior to 1996, the office handled about one gambling-related case per year.

“Several armed robberies have been reported in the parking lots of (Kansas City, Mo.) casinos since they first opened in 1994,” according to the Kansas City Star. Other violent crimes in Kansas City related to the casinos include a restaurant owner who was trailed home, robbed, and murdered after winning $3,000 at a casino, and a woman convicted of killing her husband to obtain life insurance money to cover her gambling debts.

Expansion — Iowa became the first state to allow riverboat casinos in 1991, with loss limits of $5 per bet and $200 per riverboat excursion. Three years later, under heavy pressure from casino interests, the legislature voted to drop the betting limits and also to permit slot machine gambling at race tracks.

Illinois legislators agreed to permit riverboat casinos with the stipulation that there be a $500 loss limit. However, at the last minute the loss limitation was dropped “accidentally,” according to the bill’s sponsor, though legislators were still under the impression that it existed when they voted for passage. Since passage of the riverboat casino bill, gambling interests in Illinois have pushed for dockside gambling, land-based casinos and slot machines at race tracks.

Gambling interests enticed Missouri voters in 1992 to allow betting on card games aboard riverboats that cruised on the Missouri and Mississippi Rivers, with numerous limiting stipulations. Among those were requirements that the riverboats devote 50% of their floor space to non-gambling, family-oriented activities and that the boats must conduct cruises.

In 1994, gambling proponents unleashed a $15-million public relations campaign to win another referendum legalizing slot machine gambling on board the boats. Gambling proponents have succeeded in effectively abolishing many of the initial regulations, including the floor-space requirement, the requirement that boats actually cruise, and even the requirement that boats be located on the rivers. They have continued to push for even further concessions, including a lifting of betting limits and an elimination of the requirement that trained maritime crews be on board the gambling boats.

Licensing Efforts — Two well-connected Republic party insiders were promised $20 million if they were successful in securing an Illinois casino riverboat license for a Nevada company.

Lobbying — Gambling lobbyists in Illinois have included a former governor, former director of state police, former state attorney general, two former U.S. attorneys, former Chicago mayor, and dozens of former state legislators–including a Senate president and House majority leader.

The 23 gambling lobbyists working the Iowa legislature in 1998 included four past legislative leaders and three former governor’s aides.

Local Businesses — Iowa State University researchers surveyed businesses in Clinton, Iowa, to determine how they had been affected by the presence of a riverboat casino. Twelve percent reported business had increased, while 29% reported a decrease. Sixty percent said they had witnessed no change.

More than half of business owners in Illinois riverboat casino towns reported either a negative effect or no effect on their businesses from the presence of casinos. Only 3% of respondents reported that their businesses had been “helped a lot” by the casinos.

Political Contributions — Gambling interests and industry lobbyists in Illinois gave nearly $2.5 million to elected officials and state party organizations in 1995 and 1996. Gambling industry political contributions far exceeded those of any other industry in Illinois during that period.

Political Corruption — Missouri’s House Speaker of 15 years resigned in 1996 in the wake of a federal investigation induced by charges of gambling-related dealings. According to media reports, the ex-speaker demanded that a gambling company direct payments of $16 million toward the ex-speaker’s friends and business associates in order to secure a casino license in the state.

Also in 1996, three Hilton Hotel executives resigned in the wake of an investigation into the corporation’s attempts to obtain a riverboat license in Kansas City, Mo. Hilton allegedly paid $250,000 to a business headed by the former chairman of the Kansas City Port Authority, whose approval Hilton needed to lease city property for the casino. The former chairman later cast the deciding vote awarding Hilton the lease.

In 1997 the former chairman of the Indiana House Ways and Means Committee was indicted on charges of bribery, perjury and filing false finance reports. The charges stemmed from allegations that the former chairman took bribes from the lead engineering firm in a riverboat casino project in the state.

Poor — Seven percent of Illinois casino gamblers surveyed reported annual incomes of less than $10,000. Those gamblers on average lost 4.5% of their total income to the casinos.

Profits– Illinois riverboat casino owners have made extraordinary profits on their investments. For instance, in the first three years of operation, the 11 owners of the Empress River Casino in Joliet netted $178 million. Their initial investment was less than $12 million.

Referenda Spending — Missouri casino interests spent nearly $15 million on two 1994 referenda–one failed, one successful–to allow full-scale casino gambling on riverboats. Opponents spent $395,000.

Regulation — Numerous gambling regulators in the Midwest have left their posts to work for the gambling industry. In Iowa, the former chief administrator for the Iowa State Racing and Gaming Commission left to become an executive for President Riverboat Casinos.

The former top administrator of the Illinois Gaming Board became an executive with a company that manages an Illinois casino. At least three other former Illinois Gaming Board employees, including the board”s former chairman and a former chief legal counsel, have since represented gambling companies with interests in the state.

Also, the executive director of the Illinois Gaming Board used his position to link a Nevada casino operator with a state group seeking a casino license. The two parties formed a partnership, which now operates one of the most profitable gambling boats in the state.

Retirees — Retired individuals account for 31% of Illinois riverboat casino visits, according to a survey of 13,000 riverboat patrons.

“Slot Club” Members — “Slot club” members comprise one-third of Illinois casino patrons, yet account for nearly 59% of total casino visits. Thus “”slot club”” members patronize casinos nearly three times as often as other casino gamblers.

Suicide– The Illinois Council on Compulsive Gambling reports that it is aware of more than 20 suicides related to gambling in Illinois.

A survey of nearly 200 Gamblers Anonymous members in Illinois found that 66% had contemplated suicide; 16% had attempted to kill themselves.

Recent gambling-related suicide victims in the Midwest have included a 19-year-old Iowa college student, a retired couple in Illinois, a former St. Louis police officer, and two St. Louis-area mothers in their early 40s.

Tourism — A survey of Illinois riverboat gamblers found that 85% lived within 50 miles of the floating casino at which they were gambling.

A study by Iowa State University reported that 94% of gamblers at the Prairie Meadows and Casino in Des Moines came from within the state; nearly two-thirds came from the county in which the racetrack is located.

A survey of gamblers at a Kansas City, Mo., casino found that 88% lived within 45 minutes of the casino.

Violations — A St. Louis area casino was fined $250,000 in 1997 for allowing a 12-year-old girl to gamble on a slot machines. 43

In March a Gary, Indiana, riverboat agreed to pay a $120,000 fine after acknowledging that the casino tried to cover up an employee theft of $300,000 worth of casino chips in order to avoid taxes.

An Aurora, Illinois, riverboat casino was fined $150,000 after allowing a 12-year-old boy to play craps for three hours.

Last year, the Iowa Racing and Gaming Commission levied a $250,000 fine against a southeast Iowa casino for surveillance violations, including giving false information to state agents. The case stemmed from the investigation of a casino patron who committed suicide outside of the casino. The victim, who had a blood alcohol level of .24 at the time of his death, was allowed to continue gambling–eventually losing about $10,000–despite showing signs of intoxication….

Copyright © 1998 Focus on the Family.
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By the United People Against Crime. 40 Solar St.,
Bel-Air Village,
Makati, Philippines, Aug. 21, 2000


There is a very strong connection between organized gambling — whether legal or illegal — and organized crime. In fact, some criminologists believe that organized gambling has its roots in organized crime.

Secondly, there is a strong connection between gambling and street crime. There is abundant statistical data to support the assertion that the crime rate rises almost immediately in areas where new gambling outlets have been established.

Finally, there is a strong connection between gambling and political corruption. Pervasive political corruption is often a manifestation of sub rosa collusion between politicians and organized crime. Our conclusion is that the Philippines should tread cautiously in considering whether to legalize additional forms of gambling, lest its underdeveloped democratic institutions be overwhelmed by crime and corruption.

UPAC’s first assertion is that there is a strong connection between gambling and organized crime. Gambling is a magnet for organized crime. And there is no way to keep crime syndicates out of gambling operations.

Take the example of Las Vegas, Nevada which was built primarily with Mafia money. During World War II, Las Vegas was a jerkwater town in the middle of the desert. It was Meyer Lansky, the financial genius of Charlie “Lucky” Luciano’s New York-based Mafia family, who conceived of transforming Las Vegas into a gambling mecca controlled by the mob. Lansky realized that an area with legalized gambling offered the Mafia far more profits and far less crooked overhead than its illegal gambling operations elsewhere.

The Mafia had learned how lucrative legalized gambling could be from their experience in Havana. In 1938, Lansky had set up a deal with Cuban President Fulgencio Batista to transform Havana into a gambling mecca through mob control of its casinos. Batista, whose ascent to the presidency had been financed by the mob, was preoccupied with amassing riches, so he was pliable to the demands of his Mafia cronies……as long as there was something in it for him. He transferred control of Havana’s casinos from the Cuban military to the American La Cosa Nostra.

Thus, the Mafia cashed in on its investment in Batista and financed its Las Vegas expansion with the profits from the Havana casinos.

In 1941, Lansky persuaded the flamboyant mobster Ben “Bugsy” Siegel to be the mob’s point man in Las Vegas. Through the Mafia’s influence, Nevada became the first state in modern US history to legalize casino gambling, and the only state to legalize prostitution.

After World War II had ended, Lansky bankrolled Bugsy Siegel with $6 million in mob money to build the Flamingo hotel and casino. When the Flamingo proved to be profitable after one year, the Mafia went full scale into Las Vegas hotel-casino operations.

Nevada state officials set up strict rules to keep the mob out of Las Vegas, but to no avail. The Mafia simply used fronts to exercise ownership and control from behind the scenes. Lansky and the New York families controlled the Flamingo, the Thunderbird and the Sands. Moe Dalitz and the Cleveland mob set up the Desert Inn. The Sahara and the Riviera were controlled by the Chicago mob. The Dunes was controlled by Raymond Patriarca, New England’s top Mafia boss. Caesar”s Palace had a Roman legion of Mafia investors, including Jimmy Hoffa and the Teamsters Union.

Las Vegas gambling operations provided the Mafia with a mother-lode which they used to bankroll criminal operations and acquire strategic investments in other parts of America and the world.

The FBI’s persistent efforts subsequently broke the mob’s grip on Las Vegas. However, astute law enforcers caution that it is naïïve to believe that the ties between the casinos and the mob have been “cleaned up.” Lt. Loren Stevens, head of the Intelligence Bureau of the Las Vegas Metropolitan Police Department, says “cleaned up is a matter of definition. You’re always going to have politicians involved, and you’re always going to have mob involvement in gambling. There’s just too much money.”

It is important to note that the premise that legalizing gambling would undercut illegal gambling has been proven false. This lesson has been born out in US congressional investigations of Mafia involvement in gambling.

For example, William Jahoda, a gambling director for the Chicago mob who turned state witness, testified that legalized gambling was a boon to Mafia gambling operations: “Any new form or expansion of state-controlled licensed gambling always increased our market share.”

When the state abandons its role as a regulator and instead becomes an aggressive promoter of gambling, the whole pie becomes bigger, and so does the mob’s slice of the pie. No wonder that, according to newspaper reports on the “Jueteng Summit,” the local jueteng lords appeared to be just as eager as their government buddies to have jueteng-like gambling operations legalized.

In East Asia, the closest equivalent to Las Vegas is the former Portuguese colony of Macau. The legalization of gambling and prostitution (as in Las Vegas), combined with the awarding of monopoly control over gambling to a group of businessmen alleged by international security experts to have been high-ranking members of the 14-K, Sun Yee On, and Luen Kung Lok triads, resulted in Macau becoming a haven for world-class criminals, terrorists, counterfeiters and spies.

Martin Booth, an internationally recognized expert on triads (Chinese mafia) writes: “Macau is in essence a triad city.” The conservative British magazine, the Economist, labels Macau as “Gangsterland.”

Time Magazine’s April 20, 1998 article Tales from the Dragonhead reads, “Today Macau has become the Casablanca of the 1990s, a crossroads of international criminals and the money laundering capital of Asia.” Hong Kong’s Next Magazine estimates that 70% of all Macau policemen are triad associates. Martin Booth writes that Macau’s casinos are ideal laundromats for the illicit proceeds of criminal activity: every month, as much as $2 billion may be laundered through Macau’s casinos.

The Connection Between Gambling and Street Crime

UPAC’s second assertion is that there is a strong connection between gambling and street crime. There is abundant statistical data to support this premise. A 1996 US News & World Report analysis revealed that crime rates in US casino communities were 84% higher than the national average. (1)

University researchers concluded that the state of Wisconsin experiences an average of 5,300 additional major crimes and 17,100 minor crimes per year due to the presence of casinos in Wisconsin. (2)

The San Jose, California police department reported a significant increase in crime in the area surrounding a new cardroom within a 1-year period after its opening: narcotics offenses rose by 200%, property crimes increased by 83%, auto thefts by 21%. Before casinos were introduced in Black Hawk, Colorado, police were receiving an average of 25 calls for assistance per year. After casinos opened in Black Hawk, calls for police assistance skyrocketed to 15,000 to 20,000 per year. A study published by The American Journal of Economics and Sociology found that crimes against property rise by 112% when a state operates a lottery.

How do we explain that statistical evidence consistently shows a rise in crime in locales where new gambling operations are established? It’s not just because gambling is a magnet for organized crime. Many people become seriously addicted to gambling; and many of these “pathological gamblers” turn to crime to finance their gambling habit. Also, gambling also creates a “something for nothing” mentality which fosters crime.

The Connection between Gambling and Political Corruption

UPAC’s third assertion is that there is a strong connection between gambling and political corruption. In the 1800s, gambling-related political corruption had become so pervasive in America that every state eventually outlawed lotteries and all other forms of gambling. Alas, the lessons of history are often forgotten by succeeding generations. The latter 1990s witnessed a wave of gambling expansion, which fueled another epidemic of political corruption in the US.

For example, 19 Arizona legislators and lobbyists were caught on videotape taking money after agreeing to vote for legalized gambling.

Four of Atlantic City, New Jersey’s last seven mayors were found guilty of gambling-related corruption.

In Kentucky, the FBI’s Operation BOPTROT led to the conviction of 15 state legislators on gambling-related corruption charges.

Two former West Virginia Senate Presidents were sentenced to prison for receiving bribes from gambling personalities.

There are numerous other examples of gambling-related political corruption—-not mere rumors, but bona fide cases resulting in convictions.

Joseph Yablonsky, the former agent-in-charge for the FBI’s Las Vegas, Nevada district office, stated that the relationship between politicians and the Mafia in Las Vegas was “incestuous.”

He revealed that powerful Nevada Senators Pat McCarran and Paul Laxalt had attempted to intervene to halt the FBI’s investigations, on the grounds that they were damaging Nevada’s economy.

Yablonsky complained, “In other words, we let the wiseguys take over, as long as it’s good for our economy, right? We get a piece and they get a piece.”

Yablonsky gave valuable insights into the relationship between gambling and political corruption. In America, before it was legalized in Nevada, the casino business was always based on bribery of public officials. Only through large-scale bribery of officials could large-scale illegal gambling operations exist in the first place. When casino operations were legalized, the same sub rosa relationship continued to exist between mobsters and corrupt politicians.


The Philippines, which does not yet have mature democratic institutions to check gambling-related organized crime and corruption, should be very cautious in considering whether to allow a similar expansion of gambling activities here. America has survived and flourished in spite of its serious problems. But it has mature democratic institutions to check the power of organized crime and corruption. Philippine institutions, at this stage of their evolution, may be overwhelmed by the sheer power of organized crime and corruption….

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Owners in trouble often sell problems
for profits, critics say

CHICAGO (AP), 08/01/01- When state regulators found gambling mogul Jack Binion unfit to run a riverboat casino in Illinois, he left – after selling the casino for $465 million.

He’s not alone. Across the country, riverboat casino owners in trouble with state regulators have found profit in their problems. Faced with heavy fines or the loss of their licenses, they’ve simply sold their operations to other, less-troubled companies.

“It’s a pattern that is disturbing,” said the Rev. Tom Grey, executive director of the National Coalition Against Legalized Gambling.

“Now we’ve got regulatory bodies that are acting as Laundromats.”

Players International, tainted in a scandal involving former Gov. Edwin Edwards in Louisiana, got out of its jam with a $425 million sale to Harrah’s Entertainment.

And Station Casinos, in hot water with Missouri regulators over allegations against a former company lawyer, left the state after selling to Ameristar Casinos for $488 million.

The buyouts are not illegal, and no authorities other than state regulators have investigated the deals. Casino operators say it’s only fair that they walk away with a fair price for their investment.

“We still live in a country where government cannot take away people’s property without due process,” said Frank Fahrenkopf, president and CEO of the American Gaming Association. . . .

But Grey and other critics say allowing casino operators to sell their problems sends a dangerous message.

“It says you can screw up, sell at a profit and keep in the gambling business,” Grey said. . . .

Casino companies aren’t escaping allegations entirely – Players was fined $10.2 million after federal prosecutors claimed executives funneled money to Edwards and his son to get a Louisiana gambling license. The former governor was found guilty of extortion.

Players agreed to leave the state and pay the fine. In return, regulators approved the buyout.

Station Casinos paid a $1 million fine and sold its riverboats in Missouri after a former lawyer was accused of trying to influence the regulatory board’s former chairman.

Station and Horseshoe still own casinos outside the states where they ran into trouble.

On the Web: National Coalition Against Legalized Gambling : ( http://www.ncalg.org/ )

* * *

From The Buying of the President 2000, by Charles Lewis and the Center for Public Integrity . . .

GAMBLING is another issue on which Republicans do not exactly practice what they preach. When he was the RNC’s chairman, Haley Barbour declared, “It is not my place to be judgmental about issues when it comes to allowing people to support us.”

Little wonder: Barbour, according to an account in the Washington Post, owned shares in a firm that received $15,000 a month in consulting fees from Video Lottery Technologies, Inc., a Montana-based lottery and gaming machine company that later changed its name to Powerhouse Technologies, Inc.

Barbour’s successor apparently prefers not to be “judgmental” either. “It is not talked about very much as I go around the country,” Jim Nicholson told the Center. “Again, it is a legal business.”

Last year, the National Gambling Impact Study Commission, authorized by Congress in 1996 to study gambling and its effects, reported that more than 125 million Americans gamble. Of that number, the commission found, an estimated 7.5 million adults are either problem gamblers or pathologically addicted to gambling.

And children are becoming addicted to gambling at a greater rate than adults: Last year, 1.1 million adolescents from twelve to eighteen years old were pathological gamblers.

The industry, meanwhile, is booming as never before, with Internet gambling, convenience-store gambling, video poker, and the proliferation of more than two hundred fifty casinos on Indian reservations nationwide.

Twenty-five years ago, gambling was legal in only a handful of states; today, some form of it is permitted in forty-seven states. The gambling industry employs more than 600,000 people nationwide and generates revenues of more than $50 billion annually.

Casinos rake in four times as much as the motion pictures, four times as much as spectator sports, and twice as much as the music industry.

In the early 1990s the gambling industry reacted to the threat of higher taxes and greater federal regulation by becoming a major force in the Republican Party. In 1995 the industry created a Washington presence, the American Gaming Association, and picked Frank Fahrenkopf, a former chairman of the RNC, to run it at a salary of $800,000 a year.

“I don’t think the vast majority of the American people share that view if you’re a candidate for the office and you take [gambling money] that you’re doing something inherently wrong,” Fahrenkopf told the Center in 1996. “Let’s face it, everyone has the right to have their own view of what’s moral and what’s not moral.”

One of the American Gaming Association’s hired-gun lobbyists is Donald Fierce, a former business partner and colleague of Haley Barbour’s at the RNC.

The industry has also dramatically increased its political contributions to both parties and candidates. Since 1995 to 1998 gambling interests have contributed more than $5.2 million in soft money to the Republican Party and more than $4.9 million in soft money to the Democratic Party.

The industry’s investment has paid off. To cite just one case in point, in 1998 two Senators who enjoy substantial financial support from gambling interests– Majority Leader Trent Lott and Minority Leader Tom Daschelestopped legislation that would have eliminated federal tax deductions on all gambling losses from reaching the Senate floor.

Gambling interests also have been generously “comping” politicians. Stephen Wynn, the chairman of Mirage Resorts, Inc., is perhaps the most powerful figure in the gambling industry. The Mirage houses a mini-campaign headquarters, with telephone banks used for polling and get-out-the-vote drives.

Since 1991, Wynn and his companies have contributed more than $1 million in soft money (including $250,000 in July 1999) to the Republican Party. He’s hosted political fund-raising events at the Mirage with such leading Republicans as Barbour, Dole, Gingrich, and McConnell, sometimes flying them to Las Vegas in his corporate jet.

Gingrich, on one trip to Las Vegas, dined with Wynn privately and attended a breakfast fund-raiser the next morning. The House had already passed the legislation that created the National Gambling Impact Study Commission and would have given it the power to subpoena gambling-industry executives. In front of Las Vegas contributors, though, Gingrich publicly promised that he would try to take away the commission’s subpoena power, and, with a helping hand in the Senate from Trent Lott, he did.

Some Republicans are troubled that their party is so eagerly rolling its dice on the gambling industry. “I start to see all these guys, people whom I had known, many who were out giving- quote ‘the pro-family speeches,’ that ‘we are the Republican Party, we’re pro-family,’ [and now] we’re working for the gambling interests,” Representative Frank Wolf, a Republican from Virginia told the Center.

“They have attempted to corrupt the process up here. There’s a gambling caucus on Capitol Hill. Twenty years ago a Member of Congress wouldn’t have had a gambling caucus. Twenty years ago a Member of Congress wouldn’t have taken [gambling-industry money], wouldn’t have wanted to be in the room with a gambler, and now there’s a gambler caucus. Now, they don’t call it gambling; they call it gaming. But gaming is kind of the respectable name for it. It’s gambling.”

Wolf is so disheartened by his party’s coziness with gambling interests that he’s spoken with party officials about it.

“Congressman Wolf has a very strong view … ,” Nicholson told the Center.

“I respect him, and I respect his views. But the rank-and-file people around the country, or even the activists and the members of my RNC, rarely ever bring up the subject.” . . .

* * *

McCain Grills Officials on Mohegan Deal

By Sean P. Murphy, Boston Globe Staff, 7/26/2001

WASHINGTON – Focusing on the huge profits some investors now take from Indian-owned casinos, an angry Senator John McCain yesterday grilled two government officials on the deal-making behind the Mohegan Sun casino in Connecticut and on the Clinton administration’s last-minute recognition of the Nipmuc tribe of Central Massachusetts.

In his questioning, McCain made clear his concern that non-Indian investors at the Mohegan Sun casino dodged federal law to get hundreds of millions of dollars in extra profits that rightfully belonged to the tribe.

”Do you find that disturbing? Outrageous, even?” McCain asked Montie Deer, the chairman of the National Indian Gaming Commission, a panel established to enforce a strict limit on casino profits for non-Indian investors.

Deer responded that he was not in office when the Mohegan deal was approved by the commission.

Later, under questioning from Senator Daniel Inouye, Deer acknowledged legal ”loopholes” in the Indian Gaming Regulatory Act of 1988, which have been exploited by ”innovative” lawyers working on behalf of investors.

”So it could be that tribes are paying more [to investors] than they should?” asked Inouye, the chairman of the Senate Indian Affairs Committee.

”Under the act, yes,” Deer answered.

”Are there measures to be taken so Indian Nations are not snookered?” Inouye asked.

Deer answered that he hoped tribes would have lawyers astute enough to avoid such pitfalls. It was up to Congress to close the loopholes, Deer said, possibly through an amendment to the law.

McCain pinpointed the Mohegan tribe’s relationship with a group of investors known as Trading Cove Associates, a syndicate headed by international gambling mogul Sol Kerzner, creator of Sun City in South Africa.

In 1988, Congress recognized that some tribes were so poor that they might agree to give as much as 90 percent of any profits to their non-Indian investors.

Congress set 30 percent as the maximum profit margin for those investors, though in exceptional circumstances the tribes could grant up to 40 percent. The Indian Gaming Commission was charged with enforcing that limit by approving contracts between tribes and investors who would also act as casino general managers.

The Mohegan tribe made its deal with Trading Cove Associates, which originally proposed to develop both a casino and an on-site hotel in exchange for the development rights.

But before submitting the proposal to the National Indian Gaming Commission, Trading Cove withdrew the hotel component. The commission approved maximum compensation for Trading Cove in 1995 anyway – an arrangement worth close to $500 million, to be paid over seven years.

After the casino opened, Trading Cove and the tribal leadership agreed on a ”buyout” whereby the tribe would take over direct management of the casino. Nevertheless, the tribe promised to pay Trading Cove in full, as if Trading Cove had continued as general manager.

But with Trading Cove no longer managing the casino, the National Indian Gaming Commission lost authority to enforce restrictions on Trading Cove’s share of profits.

That was the ruling of the commission’s general counsel in 1998.

As a result, Trading Cove could then negotiate for profits above the maximum set by Congress. And it did so by selling the hotel rights back to the tribe for as much as $450 million, according to interviews and documents reviewed by the Globe.

Trading Cove, in all, will receive an estimated $1 billion from the tribe. Trading Cove lawyers and Mohegan tribal leaders declined comment yesterday, but they have said their deal complied with all laws and that Trading Cove’s compensation was fair.

Yesterday, after setting out the details of that deal, McCain asked Deer if such an arrangement was normal. ”No, it is not normal,” Deer said.

McCain, becoming more animated, wanted to know if Deer thought it was ”disturbing” or ”outrageous.”

”You know, hindsight is a great thing,” Deer replied. ”I wasn’t there when this happened. I think the law was followed as written in the act.”

Deer began to cite a section of the law concerning the Gaming Commission’s limited authority over the termination of contracts. But the senator cut him off, saying he was concerned the deal violated the spirit of the law. Deer answered that the Mohegan’s leader approved the deal and was well represented by lawyers.

Tribal sources, meanwhile, told the Globe that Trading Cove got more money because the leadership calculated that the matter was too expensive to litigate and could delay expansion of the casino and construction of the hotel.

McCain then pressed for details concerning the Clinton administration’s recognition of the Nipmucs and two other tribes just before the president left office.

On his final day in office, Kevin Gover, Clinton’s head of the Bureau of Indian Affairs, reversed the findings of the bureau’s staff to recognize the Chinook tribe of Oregon. The staff had determined that the Chinook did not meet the criteria for recognition as a tribe.

Similarly, Michael Anderson, while serving as acting head of the Bureau of Indian Affairs on Clinton’s last day, overruled staff findings and recognized the Duwarmish tribe of Washington state. He also gave preliminary recognition to one band of the Nipmucs of central Massachusetts.

The Nipmucs have signed a contract with an investor to build a casino, possibly along the Massachusetts-Connecticut border.

Questioned by McCain, Sharon Blackwell, deputy commissioner of the Bureau of Indian Affairs, noted that tribal recognition is granted at the discretion of the bureau’s director, but said she was not prepared to give details on the Chinook and Nipmuc decisions.

McCain shot back that he intended to get such answers. . . .

* * *

This is my unofficial effort to provide basic information about the Oneida Nation of Wisconsin, a Native American group near my town of Appleton, Wisconsin. I’m white, but have been very impressed with members of the Oneida Tribe in Wisconsin that I know personally and offer this page in tribute. This work is very early in its development; more will be added later as I obtain additional information. Please send comments to http://jeff@jefflindsay.com/.

~ ~ ~


While the introduction of gambling on the reservation has been hailed as a great economic blessing to the Tribe, I have had comments from several Oneida members indicating that legalized gambling may have been an even greater curse. With millions of dollars now being controlled by leaders of the Tribe, there are many opportunities for corruption, abuse, and contention.

Some members wonder where all the money is going, while others are dismayed at the divisiveness that has been created. Apparently there have been some significant intra-tribal conflicts over use of the money. (In my opinion, any source of funds that relies on human greed and stupidity is not going to strengthen its recipients.)

Here is an example of one comment:

“I have seen the Casino literally divide the clans and set friends and relatives against each other in bitter never-ending battles over money. The fact of the matter is that there is very little distribution of the money to the people. It does not trickle down to the little people. Furthermore the Casino created more jobs for white people than it did for Oneidas.”

Legalized gambling on the Oneida reservation, which has meant millions of dollars for the Oneida Tribe, received the support of the State because of the tax money it is supposed to bring to Wisconsin State coffers.

There’s just one problem: the Oneida casino isn’t paying taxes on their take. Nearly $5 million are still owed, and the Oneida Tribe is expected to miss a “final” deadline on Jan. 5, 2001. With the State of Wisconsin threatening to shut down the casino, the Tribe now claims that they are willing to pay as long as they can direct how the money is spent.

Sure wish I could do the same with my taxes!

Native American gambling establishments can be viewed as a pretty clever way of taking revenge on the white man. How else can you get busloads of people descended from former enemies to come willingly to your door and drop thousands of dollars over and over – and even think they are having fun?

It’s sad to see so many lives and marriages wrecked by gambling – I know of quite a few in Appleton – but can I blame the Oneidas for taking advantage of American stupidity?

~ ~ ~







Ash Resnick Former Director of Operations at the Aladdin Hotel.

From Land and Power in Hawaii, by George Cooper and Gavan Daws:


On Maui, two men who allegedly ran large-scale illegal gambling and were reputed syndicate leaders – Yujiro “Tani” Matsuoka and Takeo Yamauchi – and one who helped run gambling – Stanley T. “Banjo” Tamura – invested in real estate, sometimes in association with high government officials.

The evidence for this involvement comes mainly from the court probate files of Matsuoka and Tamura, who were murdered in the mid-1970s.

Tamura, a Maui County employee since 1951, was for many years chief teller for the Maui County Finance Department. He was reputed to have simultaneously been one of the island’s chief organizers of illegal sports betting. Reportedly he ran betting operations from his county office….

Tamura was murdered in 1975. He was found in his home in Wailuku, dead from multiple stab wounds. As of the mid-1980s the crime remained officially unsolved.

Police believed the killing was syndicate-related, possibly an execution for not paying off sufficiently to an Oahu syndicate group or not meeting some other kind of obligation….

Matsuoka, a former tailor who became a professional gambler, was referred to in various criminal proceedings in the 1970s as either the number one or the number two man in running organized crime on Maui. When Nappy Pulawa was being tried in 1974, he called Matsuoka “the Maui boss” for the syndicate, who served as a receiver of gambling and protection money.

Matsuoka was found shot to death in a canefield in 1978. This crime also remained officially unsolved as of the mid-1980s….

After Matsuoka’s death, FBI agents interviewed Takeo Yamauchi. He reportedly told them Matsuoka had been the “boss” of gambling on Maui. But the better estimate, according to law enforcement authorities, was that in fact Yamauchi was the boss….

In 1978, in a Las Vegas gaming authority proceeding, a similar appraisal of Yamauchi was made. At issue was the application of Irving “Ash” Resnick to direct casino operations in the Aladdin Hotel. The Nevada Gaming Board turned Resnick down.

According to United Press International the decision was based in part on allegations that Resnick “associated with undesirables in organized labor and with Hawaii underworld figures, including Takeo Yamauchi, described by authorities here [Las Vegas] as Maui’s most powerful organized crime figure.”

(Resnick’s application was later granted by a higher commission. Included in testimony on this occasion were favorable letters about Resnick from Hawaii State Sen. Duke T. Kawasaki, Honolulu Mayor Frank F. Fasi, and Gov. George R. Ariyoshi.)

* * *


January 23, 1989


LAS VEGAS (AP) – Irving (Ash) Resnick, a longtime gaming figure credited with luring high rollers to the Las Vegas Strip, died Wednesday. He was 72.

Resnick died of heart failure at Humana Hospital Sunrise after being hospitalized after a long bout with cancer.

His forte was bringing gamblers to Las Vegas casinos for high-stakes gambling, and he organized the first junkets that later became a fixture of the casinos.

Resnick’s Las Vegas career spanned four decades and included stints at Caesars Palace, the Aladdin, the Dunes, the Tropicana, the old El Rancho and Thunderbird hotels and most recently the Maxim Hotel.

He was credited with starting the first baccarat game at the Dunes. Baccarat is now featured at most Strip hotels.

In 1974, Resnick was convicted of income tax evasion while employed at Caesars Palace. The government alleged that Resnick skimmed more than $300,000 from Caesars and failed to pay taxes on it.

The decision was later overturned.

See also: Ken Mizuno


Ben Cayetano – (D) Governor of Hawaii.

January 25, 2001


by Kevin Dayton and Tanya Bricking, The Honolulu Advertiser

When Gov. Ben Cayetano traveled to the Bahamas last year, he met with executives from an international hotel and casino company that is now proposing a new 1,500-room resort at Ko `Olina that would include gambling.

The gambling proposal by Sun International Hotels Ltd. appears to have little hope of approval by the state Legislature this year. Although Cayetano said yesterday he is willing to listen to the plan, he has long opposed casinos in Hawai`i and isn’t promising to support Sun’s proposal.

Cayetano was in the Bahamas Dec 9-13 visiting the Atlantis Resort, a facility owned by Sun International that boasts the largest aquarium in the world. Kim Murakawa, Cayetano’s press secretary, said the governor’s main purpose for the trip was to visit the aquarium, but Cayetano was informed at the time that Sun would propose a development in Hawai’i.

Cayetano was accompanied on the taxpayer-financed trip by his former chief of staff, Charles Toguchi, who is now a lobbyist for Sun, and by public relations executive Jim Boersma, who has represented Sun for about a year.

Boersma said the governor, Toguchi and he had dinner with Sun executives, but that as far as Boersma knows, Cayetano did not discuss gambling with the executives.

Sun is proposing two bills that would allow developers to compete for a license for a single casino in West O’ahu. The operations would be overseen by a gaming commission and pay a wagering tax of 12% to the state.

Under the bills, the state would be guaranteed a minimum take of $32 million to $42 million a year for the first three years, with $30 to $40 million going into a scholarship program for college-bound students who maintain grades of a B-minus or better, Boersma said.

The proposal will be introduced in the Senate by Senate President Robert Bunda, D-22nd (Wahiawa, Waialua, Sunset Beach), and in the House by Rep. Nathan Suzuki, D-31st (Salt Lake, Moanalua).

State lawmakers have rejected one gambling proposal after another in the last decade, most recently killing a measure last February that would have legalized shipboard gambling.

Most lawmakers said they remain opposed to all forms of gambling. . . . Only two of the state’s 76 representatives and senators said they would vote to legalize casino gambling. One is Suzuki, and the other is House Tourism Committee Chairman Jerry Chang, D-2nd (S. Hilo), who has agreed to hold a hearing to consider Suzuki’s bill….

Boersma said a media campaign will kick off with newspaper advertisements at the end of this week to make a case for the gambling proposal.

Ko `Olina denies involvement

No one at Ko `Olina has talked to anyone about a casino at the resort, said Sheila Donnelly-Theroux, whose Sheila Donnelly & Associates company speaks for Ko `Olina.

Ko `Olina originally was conceived as a $3 billion resort project with condominiums, single-family homes, hotels and stores fronting manmade lagoons.

Financing for Ko `Olina collapsed in the early 1990s as Japanese backers of the project ran into difficulty, and only a fraction of the project was completed.

“Nobody at Ko `Olina is part of any group or has talked to anybody about a casino,” she said….

Dorothy Bobilin, president of Hawaii’s Coalition Against Legalized Gambling, said a casino would “open the floodgates” for other forms of gambling. She said her opposition is based on more than moral ground, that it focuses on social and economic problems she said gambling could bring.

“Look at the ripple effect of the Kahapeas and Sias in the world,” she said of former Honolulu housing official, Michael Kahapea, a high-stakes gambler who stole nearly $6 million in city money for his Las Vegas gambling adventures, and bankrupt local financier Sukamto Sia, who left millions of dollars in gambling debts….

‘There is no free lunch’

The problem for the anti-gambling group is that lobbyists have a lot more money to develop a public relations campaign to sell people on the idea of a casino, said Ira Rohter, associate professor of political science at the University of Hawaii as well as a Green Party member and gambling opponent.

“It’s one of those things based on the myth of revenues coming in,” he said.

“It looks like free money. It turns out there are a lot of social costs. There is no free lunch, you know?”

* * *

See also: Sun International Hotels


Bob Miller – Ex-Governor of Nevada; Director, Zenith National Insurance Corp.

From The Conspirators: Secrets of an Iran-Contra Insider, by Al Martin:


Another interesting Iran-Contra/CIA narcotics trafficking connection … was the trafficking points in Nevada and Arizona….

In the Nevada connection, Governor Miller was dogged with allegations for years about Iran-Contra profiteering.

Eventually, it got to the point that Miller decided not to run again for Governor of Nevada.

An interesting connection into all this is that Nevada is a place similar to Florida – but on a smaller scale. It’s a place where government-sponsored cocaine trafficking and government-sponsored fraud meet because of Nevada corporation laws.

It’s where a lot of shell corporations were formed. In order to do this, George Bush had to have control of the Nevada Secretary of State’s office….

Before becoming governor of the state, Miller was the Secretary of State of Nevada. He was dogged with allegations about missing corporate documents when Congress tried to subpoena them.

When Miller moved into the Governorship, look who becomes the new Secretary of State of Nevada.

The infamous, sinister, dreaded Frankie Sue DelPapa, a longtime minion of George Bush. One of George’s personal secretaries in the past, DelPapa, who was considering running for Governor, was then forced to withdraw from the race under renewed allegations of Iran-Contra involvement vis-a-vis certain fraudulent entities in Nevada – the substitution of corporations.

She personally substituted corporate records and actually substituted officers, principals and directors in the Hellenic Seafood case and the Cosmos Investment Group case.

The fraud was egregious. The problem is that it was regarded as a regional issue. Some of the alternative papers like the Contact newspaper did an extensive expose’ of this and documented how Miller linked to DelPapa, and DelPapa’s linked to the Republican National Committee and to George Bush.

Also there were the underlying links of the corporations in question to George, Jr., Jeb, and Neil. They did a wonderful expose’ of it.

But nobody in the mainstream media would pick it up, since it was considered as a minor regional issue within the greater Iran-Contra picture….

* * *

From The Money and The Power: The Making of Las Vegas and Its Hold on America, by Sally Denton and Roger Morris:

. . . It was in Binion’s Horseshoe in the 1970s that Texas narcotics dealer Jimmy Chagra laundered tens of millions of dollars in drug profits at the tables – money, as A. Alverez put it, “black as pitch.”

It was there too, in 1979, that a deal was cut for hit man Charles Harrelson to assassinate U.S. District Judge John Wood as Wood prepared to preside over Chagra’s drug trafficking trial in San Antonio.

That same year, a customer in the Horseshoe, having lost all his money, turned rowdy and claimed to have been cheated; he was hustled out of the casino and shot in the head point-blank with a 9 mm revolver – a weapon found that night in the casino vault. When the FBI opened a bribery probe of city detectives on the scene and of officials in the office of Clark County district attorney Bob Miller, and ultimately a murder investigation of Binion, they could find no witness willing to testify.

Miller, son of a Chicago mobster and strip-joint owner, would go on to become governor of Nevada in 1989. . . .

As always, the lights of the Strip – and now its well-paid corporate publicists – seemed to dazzle the rest of the country, many visiting journalists oblivious to the reality behind the neon. In 1994, in a cover story typical of much of the coverage of the moment, Time declared Las Vegas “an All-American city,” what it called “the new American hometown.”

The toll hardly stopped at the edge of the valley. The Nevada that Las Vegas casinos now dominated cheated still had one of the highest per capita and median incomes in the nation, statistics that reflected the vast wealth of Las Vegas but said nothing about the actual distribution of income, much less power. Thus it also had one of the highest proportions of bankruptcy in the United States, as well as one of the worst high school dropout rates. Despite graduate schools, buildings, and other monuments named after some of the city’s most infamous predators, its system of higher education remained relatively starved and neglected, as always by the ruling mega-resorts, which drew the preponderance of employees from the ranks of those with a high school education or less, and most of their top executives from out of state.

Even beyond gambling’s stranglehold, there might have been other sources of revenue to address the state’s needs. By the nineties, in an ironic reprise of the Comstock boom, Nevada led all states in gold and silver production, though with the same piracy and colonial exploitation in public policy. A “sort of informal agreement since 1989” had existed “between the casino and mining industries to respect each other’s interests regarding tax policy,” as Nevada historian Eugene Moering recorded in 1999. “Nevada has once again served as a bank where mining companies have used their under-taxed profits … to fund mining operations in other states and nations.”

Not surprisingly, the governor presiding over the mining-gambling collusion and much else was Bob Miller, the son of Riviera mobster. With the rise of the former Clark County district attorney to the Governor’s Mansion in 1988, the last figment of any ostensible separation between politicians and gamblers was erased. The man who had been in a blind-trust casino partnership with Allen Dorfman and others, who had been less than zealous to prosecute the depredations at Binion’s Horseshoe, was the Strip’s own – enjoying “political support from nearly every major casino owner in the state,” as Moehring noted, and on any issue of importance doing their bidding.” . . .

~ ~ ~

In the last presidential election of the twentieth century, the national political power of the city – long wielded for the most part discreetly, if not covertly – came dramatically into the open. Unlike the millions of gamblers who went to Las Vegas seeking a windfall, the 1996 candidates, Clinton and Bob Dole, seemed to beat the proverbial Las Vegas odds. Both parties, in equal measure, raked in gambling money as never before, gratefully taking official record contributions of more than $5 million and millions more generated from its collateral business and influence. But much of the real game remained hidden, and the house would be the only winner in the end.

If the Strip had once quietly given Jack Kennedy a valise with a million dollars at one of the Rat Pack parties at the Sands, if Marcello had made his secret payoffs to Lyndon Johnson and Hughes to Richard Nixon through poker-faced middlemen, if Reagan had taken their campaign backing by way of Sunbelt and Teamster proxies, if Laxalt only a few years before had given up a run for the White House because of the city’s taint, now the passing of the cash was one more public show.

In June 1995, with some fanfare, Senator Dole went to Shadow Creek – Wynn’s 320-acre, $48 million private golf course, a guarded preserve where the staff was sworn to secrecy and the few guest players, required to have a minimum credit line of $100,000 at one of the Wynn casinos, were served caviar of the fairway. But Dole had no trouble getting in. At a $5,000-a-plate luncheon, where the guests included Frank Fertitta and Blake Sartini of the Station Casinos, Binion’s son Jack, and other wealthy Las Vegans, Dole raised a half-million dollars. In 1994, Wynn had hosted a breakfast that gave the GOP another $540,000 at one sitting, though the cash from both events was only a fraction of the more than $7 million Las Vegas interests put into local races throughout the country, as well as “soft money” coffers of both parties over the early nineties.

After the Shadow Creek golf outing, Wynn personally would go on to raise more than another $1 million for Dole, including some $90,000 from his family and Mirage, Inc. employees, and Wynn’s close friend and associate John A. Moran became Dole’s finance chairman. . . .

In a long-standing tradition going back to the Syndicate’s support of Nixon as well as Kennedy in 1960, and of both presidential candidates in almost every subsequent race, Wynn’s presence and money in support of the Democrat as well as his earlier backing of the Republican surprised no Strip insiders. Within weeks of addressing Nevada Republicans and extolling Dole as a “good, solid-thinking man,” Wynn was also promising to raise six-figure donations for Clinton.

The bipartisanship coincided not simply with Clinton’s early lead in the polls, but apparently with a golf game in May 1996 when Governor Miller arranged for the president and Wynn to play together at the Congressional Country Club in Washington. “I’m just one of those fence-jumpers,” the owner of the Mirage joked with a local reporter afterward. “I just see which way the wind’s blowing.”

True to form, within days of the Green Valley luncheon there were reports from Wynn’s corporate spokesman that the casino executive was still supporting Dole as well. . . .

For more, GO TO > > > The Catbird Seat, Part II: Riscorp ; Zenith National Insurance Corp


Chris Hemmeter From Honolulu Star-Bulletin, 11/1/99, by Richard Borreca:

Hawaii Land: The Source of Power,
the Pot of Gold at Rainbow’s End

At the time of statehood, ownership was concentrated,
with fewer than 100 owners holding half of all the land

Hawaii’s dream and nightmare dovetailed into one: develop the land, make every parcel as valuable as possible.

“Ten years from now I envision Honolulu to be largely concrete and steel, with some coconut trees sprinkled throughout,” boasted Lowell Dillingham, developer of the Ala Moana Center, in 1961. . . .

While commercial real estate was valuable, it was the tourism boom that echoed through the new high-rise canyons of Waikiki. Jumbo hotels- built to match the lumbering jumbo jets which began coming regularly in 1970.

Between 1968 and 1971, 17,140 hotel rooms were created in Waikiki . . .

The Kalakaua Avenue view of Diamond Head was first blocked by the 1970 Holiday Inn, with its 650 rooms rising 25 stories high. Today, the hotel is called the Hawaiian Waikiki Beach Hotel.

But perhaps the building boom’s crescendo sounded in 1974, when young developer Chris Hemmeter blew up the Biltmore Hotel to build the first super-block, the Hemmeter Center and the adjacent King’s Alley.

The hotel was the Hyatt Regency . . .

* * *

Honolulu Star-Bulletin, 10/9/99, by Peter Wagner: Grand Developer Down But Not Out He blew into town, built an empire and lost it in New Orleans. Somewhere along the way, Chris Bagwell Hemmeter became an icon among Hawaii developers and set a new standard for lavish “fantasy” resorts.

His legacy in Hawaii, a mixed bag of opulence and elegance, includes the Hyatt Regency Waikiki, Hyatt Regency Waikoloa, Hyatt Regency Maui, Westin Maui, Westin Kauai, King’s Alley in Waikiki and Hemmeter Corporation Center in downtown Honolulu.

Hemmeter was 22 and just out of Cornell University when he arrived in Hawaii in 1962 to become assistant manager at the Royal Hawaiian Hotel.(which sits on land leased from Bishop Estate). … He parlayed a $10,000 loan from his parents first into retail stores, then restaurants, before turning his energy to resort developments.

Hemmeter’s high-flying fortunes began to plunge in 1995 with two Chapter 11 bankruptcies and a Chapter 7 personal bankruptcy filed in 1997, brought on by the failure of Mississippi gambling boats and an $800 million casino in New Orleans.

The personal bankruptcy, a liquidation now being closed in Los Angeles, showed $847,000 in assets and $87 million in debts.

“We bet the whole company on our project in New Orleans, based on the advice and counsel of the investment community and everybody else involved, and it didn’t work out,” he said Thursday from his Los Angeles home. “I guess that’s what risk-takers do.”

But Hemmeter, who turns 60 Monday, is hard to keep down. He and his son, Mark Hemmeter, are developing a $225 million hotel, lodge and casino in Black Hawk, Colo. “Jackpot Springs” is due to open in two years.

For more, GO TO > > > Broken Trust


Dan Inouye – U.S. Senator (D) from Hawaii, called by some Hawaii’s “Political Godfather”.

FISCAL 1997 PORK TOTALS: Per Capita, Per State
, June 9, 1997:

Rank: #1Hawaii

Population: 1,183,723

Pork/per Capita: $131.01

Pork Dollars: $155,078,000

(For comparison: Michigan ranked at the bottom of the pork barrel with a Population of 9,594,350, with Pork/per Capita of $0.96, for total Pork Dollars of $9,594,350.)

* * *

ABC News, 2/2/97, by James Walker: The King of Pork . . . Dan Inouye is the second largest industry in the state of Hawaii,” says Richard Borreca of the Honolulu Star-Bulletin.

That’s because in just the last five years, Inouye has brought home almost half a billion in federal tax dollars. The senator has mastered the recipe for pork: one part seniority, mixed with a choice assignment on a powerful spending committee….

Pork Barrels at Sea

When local historians wanted to build a replica of a Polynesian canoe, they went to Sen. Inouye and he delivered.

Two million dollars in federal funds and the Hawaii`iloa was built- all 57 feet, 17 thousand pounds of it. The goal was to show how the first Hawaiians sailed to their new home.

Donald Duckworth of Bishop Museum is an admirer of Inouye’s ways. “Certainly out here, we admire and respect Senator Inouye’s translation of our needs.”

But what some call need, others call waste.

How does a boondoggle like this get funded anyway?

Read Between the Lines

Sen. John McCain, R-Ariz, says it’s because some lawmakers slip requests for special projects into huge appropriations bills that no one is likely to scrutinize.

McCain claimed he knew nothing of the Polynesian canoe. “Many times we don’t know what’s in these bills until after they’re signed into law.”

Inouye also used a 203-page military-appropriations bill to get a company a 30-year monopoly on the cruise business in Hawaii.

“You give one company a monopoly to cruise the very beautiful islands of Hawaii, the consumers are going to pay, and clearly, far in excess of what they otherwise would if there was competition,” said Sen. McCain.

Senator Inouye declined ABC News’ request for an interview.

Meanwhile, the pork projects keep flowing into Hawaii.

And Senator Inouye keeps spending your money.

* * *

Honolulu Star-Bulletin, 10/28/96, by Ian Y. Lind: Isle Woman Part of Campaign Probe – Former resident Nora Lum figures in congressional investigation into ’92 finances. Congressional investigators have renewed a probe of former Hawaii resident Nora T. Lum, and a 1992 campaign project which she headed, because of their links to Democratic National Committee fund-raiser John Huang and former DNC official Melinda Yee.

David Bossie, staff investigator for Rep. Dan Burton, said last week that investigators are “extremely interested” in Lum’s association with Huang and Yee in the Asian Pacific Advisory Council (APAC-Vote), a DNC project that operated out of offices in Torrance, Calif, during the fall of 1992.

Bossie said APAC-Vote is drawing new scrutiny because its “cast of characters” included Huang, then an officer of the Indonesian-owned Lippo Bank in Los Angeles; the late Secretary of Commerce, Ron Brown, then chairman of the DNC; and Melinda Yee, an assistant to Brown at the DNC and national director of Asian Pacific American affairs for the 1992 Clinton-Gore campaign.

Following the 1992 elections, Brown was appointed secretary of commerce and named Huang and Yee to key positions in the department. . . .

Huang and Yee have been ordered to testify in a lawsuit by the conservative organization, Judicial Watch, which wants to know whether Commerce Dept trade missions were used to raise funds for the Democratic Party. . . .

APAC-Vote officially opened its office on Sept 9, 1992, the same day then-candidate Bill Clinton announced the formation of the Asian Pacific American Committee for Clinton-Gore, whose roster included Sen. DAN INOUYE, Sen. DAN AKAKA, Rep. PATSY MINK, and then-Gov. JOHN WAIHEE. . . .


Dan Lasater – From: The Secret Life of Bill Clinton: . . . Dan Lasater — the Dixie Godfather, and the friend of and provider for the Clinton brothers. . . .

PATTY-ANNE SMITH was sixteen years old when she fell under the ruinous influence of Dan Lasater, friend and patron of the Clinton brothers. … Her nicknames were Muffin and Precious. She was still a child, but not for long.

“I was a virgin until two months after I met Dan Lasater. He plied me with cocaine and gifts for sexual favors and I finally gave in and slept with him,” she said in a police statement . . . At the time Lasater was 40 . . . Under his tutelage she soon became addicted to hard drugs. . . .

Lasater arranged for a corrupt doctor to give her “a pelvic examination and prescribe birth control pills.” Once on contraceptives, she was made available to Lasater’s business colleagues, including Arkansas State Senator George Locke. In the end Patty-Anne fled Arkansas after it was explained to her that he planned to use her as a semi-prostitute to “entertain.”…

~ ~ ~

Dan Lasater is a talented entrepreneur. . . . By the time he was 30 he was the owner of the Ponderosa steakhouse chain in Ohio and Indiana, with annual sales of more than $300 million. Cashing in his equity for around $15 million, he turned to horse racing and soon became the most successful breeder and racer of thoroughbreds in the world.

With stables of 80 horses in Florida and Kentucky, he was the leading money winner three years in succession — 1974, 1975, and 1976 — netting a total of $10 million in prizes . . . But according to a police statement by one of his employees, Lasater’s success with the horses was achieved by “putting in the boot”fixing the races.

It was at the Oaklawn Race Track in Hot Springs that Lasater first befriended Virginia Kelley, the mother of Governor Clinton, and began to close his vice around the First Family of Arkansas.

Collecting governors was one of his business specialties. In early 1983 he bailed out Governor John Y. Brown of Kentucky with $300,000 cash in a paper sack at the Lexington airport. At the time Brown was desperately trying to stay one step ahead of the IRS. He had withdrawn $1 million out of a Florida bank without a “cash transient” report.

“I just took care of John Y.’s money problems,” Lasater told his colleague Michael Drake. . . .

~ ~ ~

Lasater moved into the bond business in 1980. A brief business partnership with Senator George Locke was dissolved, because of enveloping SEC violations, before Lasater embarked on his own as Lasater & Company. One former broker told me that he never witnessed enough authentic business to justify the existence of Lasater’s office . . .

He suspected that Lasater was “shuffling money.” By the mid-1980s, Little Rock was a hub of petty racketeering and fly-by-night securities trading. The target: small, deregulated thrifts that had been neglected by the big firms on Wall Street. “You have no idea how crazy it was here in the mid-eighties,” said Ron Davis, a former Lasater broker.

“At one point there were 54 investment houses in Little Rock. There were 4,000 brokers working in this city. In 1987 we did more institutional sales than any other city in the world, and that includes New York, London, and Tokyo. You had used car dealers signing up making a $1 million a year in commissions.”

For investigators attuned to the methods of organized crime, the Lasater empire looked suspiciously like a laundromat for tens of millions of dollars of drug profits. Nor was this an idle hunch. In 1977 Lasater had lost a Lear jet in Santa Marta, Columbia, after it was confiscated by the Colombian authorities on suspicion of narcotics trafficking. . . .

Among the passengers on the jet was Jamiel “Jimmy” Chagra, viewed as one of the most dangerous mob bosses in the United States. . . .


Edwin Edwards – Former Governor of Louisiana who was convicted in May, 2000, on charges he rigged the state’s riverboat gambling licensing process. His son Stephen and three other men also were convicted.


Frank J. Fahrenkopf, Jr. – Frahrenkopf served as Chairman of the Republican Party during Ronald Reagan’s presidency. He is currently the President and CEO of the American Gaming Association, and co-chairs the Commission on Presidential Debates.

From PBS Frontline:


An Interview with Frank Fahrenkopf

Frontline: Tell me about the Arthur Anderson Job Study. What did it tell you?

Fahrenkopf: One of the arguments that anti-gaming activists have made for years, is that gambling tends to be … cannibalistic. That when it comes into a community, it doesn’t create any new wealth … it just takes money away from other business. … Arthur Anderson did a macro economic study of the United States … and found that is not the case. … the disposable of the income of the American people has gone up dramatically, and gaming is only taking a very, very small part of that. … And, in fact, what it has done … it has actually helped other businesses. Now, that’s not to say, that if a casino comes into a community and opens up and it has wonderful restaurants that, you know, some guy who’s had a family restaurant down the road for a hundred years, hasn’t been able to compete. … But that’s no different than if a new mall comes into a community. … When that new mall comes into a community, that old theater that was once there; the old shoe store; the old restaurant are likewise going to suffer. I mean, it happens to be a free market, capitalist system. . . .

Frontline: Critics who have looked at that study say, Arthur Andersonthat’s the same firm these guys have been using for years. Those are made-up numbers because they were paid to make the study.”

Fahrenkopf: Of course they’re going to say that. What we say is, fine– take a look at the Arthur Anderson numbers. If you think they’re wrong, show where they’re wrong. … For a long time, the opponents used economic models that were created by a couple of university professors that … led to the conclusion that the social costs of gaming exceeded the economic benefit. You don’t need to rely on economic models anymore. Go to where the rubber meets the road, where we’ve had gaming in some of these jurisdictions. . . .

Frontline: [Las Vegas] was always called Sin City for a reason. They were all the sins that you could do in one single place. . . .

Fahrenkopf: But, you know, I’ve lived in a couple places around the country. There are prostitutes in New York. There are prostitutes in Orlando. There are prostitutes in Miami. There are prostitutes in a lot of places. Ant that’s also an industry that’s been around a long, long time. And, as to whether or not it’s more attractive to places where there’s gambling, inherently, than there where are other– I mean, many military bases there’s not a lot of gambling going on, but you’ll find a lot of prostitutes around military bases where you have large numbers of men. . . .

Frontline: Tom Grey says, “You people are predators. You’re predators.” Are you predatory?

Fahrenkopf: That’s part of the cannibalization argument that he’s constantly making. I always say to Tom, “Tom, it’s easy to say that, but put your money where your mouth is — from the standpoint, what evidence do you have? Let’s put it up. … But, again, the anti-gaming people represented by Frank Wolfe and the Tom Greys of the world … it’s primarily moralistic. Now, they changed their tune. They learned, about three or four years ago, that arguing that it’s unmoral to gamble– that wasn’t selling with the American people.

Most American’s resent other religious leaders or other– trying to tell them what they should or should not do. . . .

I’m a Knight of Malta in the Catholic church. I mean, I don’t need Tom Grey or some other people in religion telling me what’s right or wrong. You know? …


Golden Nugget – From Den of Thieves, by James B. Stewart:

Above the Law

In the spring of 1984, one of Michael Milken’s earliest and most important clients, Golden Nugget, the casino company headed by Milken’s friend Stephen Wynn, secretly had begun accumulating shares of MCA Inc., the owner of Universal Studios. The goal was a possible takeover.

By the end of July, Golden Nugget had acquired well over two million shares, and MCA’s shares rose from about $38 to $43. By August, however, Wynn and Milken had decided the deal wasn’t feasible. Golden Nugget wanted out of its huge position at the highest possible price, but if word leaked out, the share price would quickly plunge. Nevertheless, Wynn told The Wall Street Journal in October that Golden Nugget owned just under 4% of MCA and intended to hold the stock “for now.”

It had been a tricky situation, and Milken had again called on [Ivan] Boesky for help. Boesky bought huge chunks of Golden Nugget’s position at the high market price, and Milken promised to guarantee him against loss. Because of Boesky’s interest, the continued high volume of trading, and the fact that Drexel was handling the accumulation, an MCA takeover seemed more likely than ever to close observers.

As other buyers stepped in in anticipation of a takeover, Boesky began sell his position in smaller trades so as not to attract attention. Boesky did sustain losses, but Golden Nugget got out at a high price, guaranteeing its continued loyalty to Milken.

The scheme worked like a charm. . . .


J. Edgar Hoover – Former F.B.I. Director.

From The Money and the Power: The Making of Las Vegas and Its Hold on America, by Sally Denton and Roger Morris:

An Enemy Too Far Within

As attorney general, Bobby Kennedy immediately began the attack on Hoffa and elements of organized crime left out in the McClellan Hearings – “the insidious rot,” as one account described it, “he’d identified as infesting the nation’s innermost core.”

On entering Justice, he asked advice from the retiring Anslinger, who had quietly aided and influenced the McCellan inquiry just as he had Kefauver’s. While he had peremptorily dismissed Nevada’s requests for similar help only months before, Anslinger now bought Bobby “a thick black book with data on eight hundred hoodlums,” as one witness described it.

The volume, like most of the agency’s files, amounted to a genealogy of the FBN’s old, deeply institutionalized construct of the “Mafia,” generally obscuring with vulgar Italian stereotypes the multi-ethnic character of organized crime and the wider corruption around it, and not incidentally diverting attention from key narcotics traffickers used and protected by the government in covert operations. . . .

From its rogue’s gallery, Bobby and his new staff … quickly designated forty men as investigative priorities. The names included Giancana, Trafficante, Hoffa, and others linked to gambling, Las Vegas, and the Teamsters, though, from the vantage point of the Strip, notably missing was Lansky or any of his major associates.

It would come to be known as the “hit list.”

The substance as well as brash style collided head-on with J. Edgar Hoover, already threatened and flaring at a thirty-five-year-old superior at the Justice Department who was also the president’s brother, campaign manager, and soon principal adviser on foreign as well as domestic issues. As the second most powerful man in the executive branch and arguably the most influential attorney general ever, Bobby posed a challenge to Hoover and his FBI like no other in the director’s more than forty years as a federal bureaucrat.

By 1961, some believed it hardly mattered whether Hoover had been blackmailed for homosexuality, transvestitism, or other personal proclivities. His ties to figures on the fringe and beyond were blatantly open, men like liquor tycoon Lewis Rosenstiel, Joe Kennedy, Del Webb, Rosselli, the Murchisons of Texas, Marcello associate Dub McClanahan, and Pratriarca associate Irving “Ash” Resnick, many of them regular companions at San Diego’s notorious mob hangout, the Hotel Del Charro.

Added to Hoover’s reactionary obsession with leftists, his abuses of bureaucratic power, and his ceaseless self-protection and -promotion, it all led to an institutioonal as well as personal intersection of interests between the FBI and the Syndicate. Like its ugly counterparts around the world, including most notably the Soviet KGB exposed in later revelations after the collapse of the USSR, the FBI was in fact a mediocre political police, intent on repression of dissent, allowing organized crime and public corruption to flourish.

In the bureau’s New York office, which was by the 1950s a parody of Hoover’s multiple manias, he had assigned four hundred agents to communism, ten to organized crime….


Ken Mizuno – Japanese “whale” and Yakuza-connected money-launderer and racketeer.

From The Money and the Power: The Making of Las Vegas and Its Hold on America, by Sally Denton and Roger Morris:

… Outwardly, Ken Mizuno had been one of the more notorious Asian high-rollers along the Strip in the 1980s. When the former baseball star moved to open a gourmet Japanese restaurant and health spa in the Tropicana and applied for a liquor license, even the usual desultory investigation uncovered his long-standing associations with the Yakuza, Japanese organized crime.

Initially, the Clark County commission had denied Mizuno the license; but in a subsequent session a few weeks later – a distant echo of Bugsy’s experience with the same body – the commissioners promptly reversed themselves. For nearly a decade Mizuno would be one of the city’s leading international citizens, attended by his own personal hostess at the Mirage, where he gambled hundreds of millions.

Then, in the 1990s, wealthy Tokyo investors pressured Japanese police to implicate Mizuno in a $853 million golf club pyramid scheme. His fall was mourned by casinos where he had been known as a “whale” for his $100,000-a-hand bets at baccarat, and Mizuno eventually ended up in a Japanese jail. His fall was long in coming.

In 1991, the small U.S. Customs office in Las Vegas received warnings about Mizuno from the Customs attaché at the U.S. Embassy in Tokyo. Las Vegas agents began to trace not the gambler’s links to the Yakuza, or the massive expatriation of funds to foreign organized crime – one of the city’s thriving industries, and to law enforcement a more familiar pattern – but rather than pouring into Las Vegas of hundreds of millions through foreign criminal combines.

At one point following a path from the Federal Reserve Bank in San Francisco to the Las Vegas Strip with bills bound in casino wrappers, the Customs agents traced an enormous traffic. While Mizuno had a locker at Shadow Creek next to Steve Wynn’s, and was a popular high-tipping man-about-town, he was bringing in as much as $220 million through bank channels, wire transfers, and other means that escaped currency reports.

There were additional indicators that he transferred to southern Nevada as well as much of the remainder of his $800 million take from the Tokyo fraud – altogether hundreds of millions more than even he wagered at Las Vegas tables.

As the investigations continued, many of the trails led to the luxury Mirage. Mizuno’s girlfriend turned out to be working in the “international department” of the casino. The high roller himself was “said to have … dropped upwards of $75 million in two years” at the Mirage tables.

Often met by a Mirage limousine at a private landing strip when he returned from trips abroad, and then whisked to the casino behind darkened windows, arrangements that defeated Customs surveillance, Mizuno went on to buy from his close friend Wynn a personal DC-9 jet later seized by Customs authorities and implicated in the massive financial crimes they suspected.

Agents as well as at least one prosecutor familiar with the accumulating evidence came to believe that looming behind Mizuno was the shape of a vast new criminal investment in, and thus control of, the new mega-resorts going up on the Strip, casinos like Treasure Island and others supposedly funded entirely by Wall Street investment in their new corporate proprietors. Even the sums visible in Mizuno’s “gambling” – a minimum of $150 million by one account at a time when Kerkorian had purchased both the Desert Inn and Sands for $167 million – made the Customs calculus only too plausible.

Early in the investigation, the small five-man Customs office in Las Vegas had been overwhelmed by the magnitude of the traffic, the intricacy and sophistication of the means, the network of legitimate institutions around and behind the crimes, and not least by the obdurate secrecy and refusal of casinos to share more than the minimally required information. As agents told their stories later, they could not even enter a casino to observe Mizuno, much less interview employees, without encountering the house’s heavily armed force of security retainers. . . .

But when the beleaguered Las Vegas agents asked their superiors for the obvious support a major investigation required – more personnel, undercover money, and authority to go to the top of what they termed under the federal racketeering statute “the continuing criminal enterprise” they saw in and behind Mizuno – their requests were effectively denied, buried or put off in organizational delays, never openly rejected with any individual liability or record but quietly stifled by bureaucratic device.

Eventually Customs would seize more that $60 million in Mizuno’s assets, including golf courses in the Las Vegas Valley and Palm Springs, real estate and other assets in Clark County. By most measures it might have seem a success – the largest single non-narcotics money-laundering case in American history. But agents on the inside knew, as one described it, that it was only “the tip of an iceberg here in the middle of the desert.”

The agents never knew why they had been called off before following the case to its conclusion. . . .

“We were at the edge of unraveling Las Vegas,” a Customs agent in Nevada would say of the Mizuno case. . . .

For more, GO TO > > > Predators in Paradise; Yakuza Doodle Dandies


Pacific Islands – From Pacific Islands Report, by Pacific Islands Development Program/East-West Center – Center for Pacific Islands Studies/University of Hawai`i at Manoa:


Paris, France (Feb. 14, 1999 – AFP) — Russian organized crime is increasing using the Pacific region as a base for laundering its ill-gotten gains, the Organization of Economic Cooperation and Development (OECD) Financial Action Task Force (FARF) said last week.

“A heavy concentration of financial activity related to Russian organized crime has been observed, specifically in (Western) Samoa, Nauru, Vanuatu and the Cook Islands,” the FATF said in an annual report on money laundering.

It cited “an increasingly common scheme whereby apparently American middlemen are used to open accounts or charter banks in one of the locations” to hide the Russian origin of the money after local authorities became suspicious at the high level of Russian activity in the region.

The Russian mafia are also looking for “potential alliances” with drug traffickers in Central and South America and the Caribbean . . .

There is also concern over the rise in internet gambling, which generates nearly $1.5 million a month in the Pacific region and is seen as “another potential vulnerability for money laundering and financial crime.”

Such electronic casinos offer clients virtual anonymity, making the source of their cash all the harder to trace.

Elsewhere in the Asia-Pacific region, the report said, the principal sources of criminal funds are human trafficking, drug trafficking, gambling and organized crime.

South Asia is a particular focus for money laundering activities as it is home to several major international banks as well as being a transshipment point for drugs from Afghanistan, Iran, Myanmar, Thailand and Laos.

In South Asia, money laundering through gold transactions is particularly popular, either through a gold dealer who provides gold in exchange for cash and checks received by the presenter, or through a cash transaction in one country which is completed by a gold deposit to the owner in another country.

But as elsewhere in the world, electronic payment transactions are also a cause for concern, along with the increasing use of accountants and lawyers to help set up and manage accounts set up to launder the proceeds of criminal activity. . . .

For more, GO TO > > > Broken Trust ; What Price Waterhouse?


Red Mafiya – From Red Mafiya : How the Russian Mob Has Invaded America: . . .

Blending financial sophistication with bone-crunching violence, the Russian mob has become the FBI’s most formidable criminal adversary, creating an international criminal colossus that has surpassed the Colombian cartels, the Japanese Yakuzas, the Chinese Triads, and the Italian Mafia in wealth and weaponry. . . .

With activities in countries ranging from Malaysia to Great Britain, Russian mobsters now operate in more than 50 nations. They smuggle heroin from Southeast Asia, traffic in weapons all over the globe, and seem to have a special knack for large-scale extortion. The Russian mob has plundered the fabulously rich gold and diamond mines in war-torn Sierra Leone, built dazzling casinos in Costa Rica with John Gotti Jr., and through its control of more than 80 percent of Russia’s banks, siphoned billions of dollars of Western government loans and aid, thereby exacerbating a global financial crisis that toppled Wall Street’s historic bull market in August 1998. . . .

More ominously, U.S. intelligence officials worry that Russian gangsters will acquire weapons of mass destruction such as fissionable material or deadly, easily concealed pathogens such as the smallpox virus … and sell these deadly wares to any number of terrorist groups or renegade states.

In North America alone, there are now 30 Russian crime syndicates operating in at least 17 U.S. cities, most notably New York, Miami, San Francisco, Los Angeles, and Denver. The Russians have already pulled off the largest jewelry heist and insurance and Medicare frauds in American history, with a net haul exceeding $1 billion. They have invaded North America’s financial markets, orchestrating complex stock scams, allegedly laundering billions of dollars through the Bank of New York, and coolly infiltrating the business and real estate worlds. . . .

“The Russians didn’t come here to enjoy the American dream,” New York State tax agent Roger Berger says glumly.

“They came here to steal it.”


Resorts International, Inc. – From Atlantic City Magazine, May, 1998 by Michael Pollock –

Long before Sun International bought Resorts,
Atlantic City’s pioneer gaming company
painted the town green.

IT WAS THE PERFECT BLENDING: A former paint company in search of a fortune, and a formerly swell seaside resort in search of a paint job. When Resorts International, Inc. married Atlantic City for richer or for poorer, it was the wedding of the century.

The ceremony took place 20 years ago this month, with entertainer Steve Lawrence throwing out the ceremonial first dice. But it all truly began with the checkered history of a paint company. The Mary Carter Paint Co. was a small manufacturer of house paints, with its main plant located in Matawan, New Jersey. For the executives who headed the company, manufacturing paint was about as exciting as watching it dry.

In the 1960s, Mary Carter was searching for a new identity. It bought 3,000 acres in the Bahamas. In 1967, Mary Carter opened the Paradise Island casino, and a year later, the company dripped its last drop of semi-gloss latex.

Resorts International was born in 1968.

The former paint company had a lot going for it, including a thirst for green and a backbone that was anything but canary yellow. Of course, in those days, the white-shoe firms on Wall Street, and the blue-chip members of corporate America had little interest in the casino business. The prevailing view of gaming was that it was sordid and mob-tainted, and in reality, it seemed nearly impossible, anywhere, to enter the casino business without rubbing shoulders with someone who had alleged ties to organized crime. That was apparently the case in the Bahamas, according to the New Jersey Division of Gaming Enforcement.

In 1941, a man named Wallace Groves was convicted of mail fraud. That conviction would never have warranted a footnote to a footnote in history had Groves not sold 3,000 acres of Bahamas real estate to a group of Florida investors in 1961, who in turn sold the land to the Mary Carter Paint Co.

Mary Carter was a partner with Wallace Groves in the operation of the Bahamian Club casino until 1967, when it opened its Paradise Island casino, under the direction of casino manager Edward Cellini, whom the company inherited from its partnership with Groves. Cellini, it turned out, was the brother of a known associate of Meyer Lansky, the infamous mob kingpin.

All these vague charges set the stage for the first regulatory hearings in New Jersey. The state had an arduous task ahead of it 20 years ago. Most of the public and media believed that casinos and “unsavory characters” were interconnected and inseparable. In 1977, then Gov. Brendan Byrne stood on the Boardwalk and sent a message to organized crime: “Stay the hell out of Atlantic City.” It was a message that few took seriously.

A year later, the state had a casino operating on the Boardwalk. Byrne was back in town to cut the ribbon on the new Resorts International. Resorts President I.G. “Jack” Davis predicted that “it will be the busiest casino in the world.” Talk about understatement. Within seven months of its opening, the former Mary Carter Paint Co. reported a 1,600 percent increase in profits over the previous year.

But a casino that was taking in $600,000 a day, that had lines stretching from the Boardwalk to Parsippany, had yet to be licensed. And we’re not talking about a driver’s license. Resorts was in line to be the first casino outside Nevada to hold a plenary license. With names like Cellini, Groves, and others popping up, this would be no easy task. The real rub was that the state Division of Gaming Enforcement was objecting to licensure. Here was an arm of the state Attorney General’s office claiming that this company had no business operating in New Jersey. The division’s case was presented by G. Michael Brown, who would later become director of the agency.

Simplifying such a complex case is risky business, but here is what it boiled down to: “Mickey” Brown argued that Resorts was all too willing to do business with the likes of Groves, Cellini, and others. “You do not have to do business with people like that. You choose to,” he said in his opening statement.

Resorts, represented by famed criminal attorney Raymond Brown, argued that it had improved and upgraded its accounting and internal controls systems, that it had fired or suspended all employees who might be viewed as less-than-reputable. And it produced affidavits from reputed organized crime figures that disputed similar affidavits given to the division.

When all was said and done, the Casino Control Commission voted to license the company. Not all of its executives were allowed to enter the promised land of licensure, and not all the companies that followed fared as well. Top executives at some companies had to sever all ties to the businesses they had built. That was the lesson that regulators imparted in the Resorts matter: that bad apples can be severed from the tree, allowing the tree to live.

The old Resorts International, Inc. is gone. It has been swallowed up, spit out, and swallowed again. Its subsequent owners have included Donald Trump, Merv Griffin, and now Sun International Ltd.

But the company once known as the Mary Carter Paint Co. taught all of us a great deal before it departed for corporate heaven: that casinos can do more than survive in an urban seaside town; they can be wildly successful.

That there is a place for gaming companies within the portfolios of institutional investors.

That even successful properties can make missteps, and seek the protection of bankruptcy court….

* * *

See also: Sun International Hotels Ltd.


Solomon Kerzner – International casino magnate.

From Weekly Mail & Guardian, Johannesburg, South Africa, 11/17/95:

Police Move Closer to Sol

Sol Kerzner has severed his links with his South African business just as a police investigation into alleged corruption draws to a close. . . .

UNTOUCHABLE Sun King Sol Kerzner withdrew from his South African company this week as an eight-year-long criminal investigation into allegations of corruption against him drew to a close.

Kerzner resigned as chairman of Sun International (Bophuthaswana), the main Sun International (SI) operation which runs Sun City, in favour of foreign interests.

SI has 17 resorts in South Africa and 11 more in France, the Caribbean, the United States and Indian Ocean islands.

Since 1987, the Transkei police and later the Port Elizabeth police have been investigating charges against Kerzner in connection with the payment of a R2-million bribe to former Transkei ruler Chief George Matanzima.

The payment, which Kerzner admitted to the Harms Commission, was made to secure sole gambling rights in the Transkei. Some years later, a Supreme Court judgement and a subsequent military government decree overturned these rights, limiting SI to sole rights in only a section of the territory. [Sound familiar, Hawaii Governor Ben Cayetano?]

Kerzner has appeared untouchable in the matter of the criminal investigation. The former Transkei government tried unsuccessfully for years to have him extradited. In December last year, President Nelson Mandela’s office dismissed speculation that a secret deal had been made to help Kerzner avoid prosecution…

Kerzner has retained high-level connections in both the previous and current governments. He was a friend of former Bophuthatswana president Lucas Mangope, in whose territory he made the foundations of his fortune, the Matanzima brothers in the Transkei, and the late Ciskei ruler, Lennox Sebe. He attended Deputy President Thabo Mbeki’s 50th birthday and was an honored guest at Mandela’s inauguration last year. [Sound familiar, Bill Clinton?]

Kerzner’s company appears to have used unorthodox ways of securing gambling rights in the Ciskei and Transkei.

In Feb 1987, military intelligence office Brigadier Marthinus Deyzel and Western Cape businessman Tonie Botha approached then Ciskei president Lennnox Sebe to discuss the carving up of gambling rights in the territory. Around the same time, Botha, Deyzel and the Jalc companies set up a scheme to use Jalc as a front company for military intelligence, using Jalc to gather information in the homeland states and neighboring countries.

Botha, Deyzel and Sebe negotiated a three-way split of gambling rights in the Ciskei between the homeland government, SI and Lenton Investments (Ciskei), in which Jalc had an interest.

Justice Louis Harms later found that Lenton received gambling rights from the then Ciskei government “valued in excess of $20-million in return for something which could not be explained.”

Just two months after Ciskei handed over the gambling rights, SI executives moved into Lenton as directors and by Jan 1988 Lenton was an SI subsidiary. Jalc director Chris van Rensburg was apparently still involved with Lenton years after SI took it over as he signed a Lenton document in July 1991.

The Harms inquiry was later told that those involved in this deal boasted that Sebe had fallen for it “hook, line and sinker”.

Last month it emerged in KwaZulu-Natal that a new gambling consortium, Africa Sun International, in which SI is involved, is linked to people close to the provincial government.

They include Mangosuthu Buthelezi’s son “Zuzi”, Finance MEC Snezele Mhlungu, ANC stalwart Walter Sisulu and former aide to FW de Klerk

* * *

Weekly Mail & Guardian, 8/8/96:

In the Laager of Cover-up

The Kerzner/Holomisa imbroglio gives ground for concern about the this fabric of our still-fragile society. The issue of corruption, while troubling, is not the most worrying factor. It is rather the effect a succession of these sorts of rows is having on the character of the ruling party.

South Africa has much to be grateful for where the African National Congress (ANC) is concerned – liberation, for a start. And it is no detraction from that debt of gratitude to observe that our government is not greatly experienced and deserves time to come to terms with the huge problems it has inherited.

Unfortunately – as is often the case where those new to power are concerned – the ANC has shown itself to be highly sensitive to criticism, which it resents with a bitterness that smacks of vanity. When the flak flies, it retreats into the laager so familiar to the past: taking refuge behind the covered wagons of party “unity”, firing denials and angry denunciations at the circling press. In the course of these heated battles, it is in danger of forgetting the journey on which it embarked.

It needs to be said to the ANC that it still enjoys huge reserves of goodwill in the country. Much can be expected by it in terms of public understanding and forgiveness. If a donation of R-2 million by Sol Kerzner was accepted for party funds, the ANC could expect criticism [sound familiar, DNC?] . . .

If, as Holomisa has suggested, Thabo Mbeki and Nelson Mandela did canvass the possibility of “doing something about” the case pending against Kerzner, we would gulp, but put it down to the extraordinary times we found ourselves in during the build-up to the 1994 elections and the ANC’s transformation from a liberation organisation to a political party.

The ANC is not engaged in a life-or-death struggle in the political arena. Its majority in Parliament and the country is secure. Its task, at this juncture of South African history, is to put the nation on the path of good government.

Central to good government is the cause of openness and transparency. When it begins gagging its members with ministerial sackings, “disciplinary” inquiries, threats of legal action and other exercises in the art of cover-up, the ANC betrays itself and sets precedents which are hugely destructive of the country’s future.

And for that there should be no forgiveness.

* * *

Weekly Mail & Guardian, 3/14/97:

Sol’s Arrest Stopped at 11th Hour

Transkei Atty. General Christo Nel will prosecute casino magnate Sol Kerzner – provided Kerzner’s pre-emptive attempt to stop him fails.

Nel, who has waged an often single-handed campaign to have the R2-million bribery and corruption charges against Kerzner tested in court [sound familiar, Margery Bronster?], was restrained in an 11th-hour interim interdict this week from arresting Kerzner or applying for his extradition. Kerzner lives in London.

Kerzner’s attorney, Sid Spilken, reportedly said Kerzner had sought the Umtata High Court interdict when he discovered that Nel was about to announce a decision about whether to charge Kerzner.

Kerzner argued in the application that his constitutional right to a speedy hearing would be violated. The alleged crime – a R2-million payment to George Matanzima, then prime minister of the Transkei, for exclusive gambling right – happened more than 10 years ago.

Judge Selwy Miller granted the interdict against Nel and his co-respondents – Safety and Security Minister Sydney Mufamadi and Justice Minister Dullah Omar – pending a hearing . . .

But Nel hit back immediately: a day later, he issued a warrant for the arrest of former Cape Town mayor and attorney David Bloomberg, Kerzner’s alleged accomplice. Bloomberg, who was not party to Kerzner’s application, is also resident in the United Kingdom. . . .

Nel tried to have Kerzner extradited from South Africa to the then “independent” Transkei, but was overruled in 1993 by the National Party government. Nel reopened the investigation in early 1995.

Last year Kerzner was the subject of accusations over funding of political parties. After initial denials by the African National Congress, President Nelson Mandela acknowledged Kerzner had participated in a R2-million election donation to his party. The NP allegedly also received a sizable donation.

Nel said at the time that he would decide whether to prosecute as soon as his workload allowed. Clearly, Kerzner sensed that moment had arrived.

* * *

Editorial in Electronic Mail & Guardian, 4/25/97:

And Justice for All?

It’s hard to avoid wondering whether wealth and power smooth the past criminal liability. Sol Kerzner is off the hook, and not for want of trying by the ‘Kei attorney general.

The fact that casino magnate Sol Kerzner will never stand trial on charges of bribery in the Transkei has created the unfortunate impression that if one is wealthy or powerful enough one can evade the possibility of criminal liability.

We accept that the decision not to proceed was not for want of trying by the Transkei Attorney General, Christo Nel. At the end of the day, the inexcusable delay in bringing the matter to court could have cost Nel two key witnesses – one in a motor accident, the other of reasons not adequately explained.

As African National Congress justice representative Willie Hofmeyr pointed out, there is deep public concern that all not well.

Why, people will ask, did Kerzner walk free when he himself admitted to the Harms commission to having been party to the payment of R2-million in exchange for the gambling rights? Hofmeyr said that if it was extortion, George Matanzima should have been charged. If it was bribery, then Kerzner should have been charged. The fact is there was a crooked deal and all parties have gone scot-free.

National Party representative Sheila Camerer claims that her party has been vindicated against accusations of a cover-up by the ANC. But there has never been a convincing explanation of why the then-NP government failed to co-operate with the Transkei government in extraditing Kerzner before elections in 1994.

Kerzner’s casino empire was built largely on peddling influence with the NP and the class of corrupt politicians, like Matanzima, created by the bantustan system. As one can now see by the effects of competition on the financial status of Sun International, the profitability of the company depended on a monopoly ensured by the powers that be. So much for the free market.

In these sad enclaves of poverty, the one-armed bandits and golfing holidays bankrolled the likes of Lucas Mangope and Matanzima. The old apartheid government owed a huge debt of thanks to Kerzner.

All of this would have been ancient history, best forgotten in Kerzner’s rush to build a new American empire, but for the extradition request that until last week was hanging over the casino king’s head.

Now it turns out that his applications for gaming licenses in New Jersey and Connecticut would have been severely compromised had this sword of Damocles not been conveniently removed.

The mystery that remains is who the witness was who either changed his story or opted not to testify. What made him change his mind now, so long after the event and so long after the legal process had begun to grind?

The real pity of it all is that in a country that is struggling to restore law and order, the whole Kerzner saga sends the wrong signals to ordinary people who have access neither to great riches nor networks of power.

* * *

October 31, 1997

How Pik Got Sol Off the Hook

Electronic Mail & Guardian

PIK BOTHA has denied sensational allegations that the National Party government agreed to shield the gambling supremo, Sol Kerzner, from bribery charges in the Transkei in return for a business favour.

The allegations – made in a new biography – Kerzner Unauthorized by Allan Greenblo – are at the centre of a legal battle between Kerzner and the publisher, Jonathan Ball. The book, which was due to be launched this week, has been held back pending a high court decision on Kerzner’s bid to block it. The book also details, for the first time, the allegations and counter-allegations at the centre of the acrimonious divorce case between Kerzner and the former Miss World, Anneline Kriel.

Greenblo – a former financial journalist who now heads BDFM Publicaions – claims that Kerzner was given amnesty for the Transkei corruption charges after agreeing to save Sun International’s hotel operations in the Comores.

Kerzner admitted to the Harms Commission in 1988 that he had paid R2-million to Transkei Chief George Matanzima in return for gambling rights. Despite this admission and an investigation lasting almost 10 years, no action has been taken against him.

The then attorney general of the Transkei, Christo Nel, informed Parliament in April this year that he had decided not to prosecute Kerzner because new information had come to light and because a key state witness had died. Nel never revealed the nature of this new information.

His decision not to prosecute paved the way for the United States gambling authorization to award Kerzner a licence for his Atlantic City resort.

Greenblo says in his new biography that the Spice Islands had allegedly been used by South Africa as a conduit to smuggle arms to Renamo. The South African Defence Force also had hi-tech monitoring equipment on the islands. Pretoria had helped fund the hotels, but they had flopped because of a combination of civil unrest and high transport costs.

Greenblo writes that a month after Sun International announced it would pull out of the Indian Ocean islands, in mid-1990, Kerzner struck a deal with Botha in a secret meeting in Pretoria. By then, Kerzner had cut ties with Sun International and shifted his business focus away from South Africa. . . .

Other allegations in the Greenblo book include:

>> Details of Kerzner’s close relationship with Lucas Mangope, former president of Bophuthatswana, which ensured that Sun benefited from very favourable tax regimes and a gaming monopoly in the homeland . . .

>> The charge that management contracts are used prolifically to obscure the companies’ – and by implication Kerzner’s – real earnings . . .

See also: Sun International Hotels


Suharto – Ousted President of Indonesia.

From the internet, by Dr. George J. Aditjondro:


Muslim Brotherhood, Or Pure Business Interests?

The largest single project resulting from the EAGA agreement is a US$120 million tourist resort and casino to be constructed on Samal island, just off the coast of Davao. Financed by the Malaysian conglomerate Ekran Berhad, the resort will boast 1,700 rooms, demanding an increase in international links with Davao….

How will the Suharto oligarchy benefit from this new growth area? The answer is: in numerous ways.

Sempati Airlines, owned by two of Suharto’s sons, Tommy and Sigit Harjojudanto, three charities headed by Suharto, and an Army-owned foundation already flies regularly between Jakarta and Manado, Taipeh, Christmas Island, and Rangoon. So, Sempati could easily flex its political muscle, to obtain the right to fly to Davao and Bandar Seri Begawan as well. . . .

Tourism, is also not a new field for the Suharto clan. All the Suharto siblings, their uncle Sudwikatmono and Suharto’s favorite grandson Ari Haryo Wibowo, dominate Bali’s tourism industry through the luxury hotels, golf courses, travel agencies, and airlines they own. . . . Tutut herself already co-owns the five-starred Nusa Dua Beach Hotel in Bali with the young, rich and flamboyant Sultan of Brunei – Darussalam, Hassanal Bolkiah . . .

In defense of all these business opportunities in the Brunei East ASEAN growth area, following Jakarta’s official rhetoric of Muslim brotherhood, one could argue that it may be beneficial to the Bangsa Moro in Southern Thailand, as well as to other Malay Muslim groups in Brunei-Darussalam, East Malaysia (Sabah and Sarawak), East Kalimantan and Eastern Indonesia.

Unfortunately, Philippines’ history has already shown how the influx of migrants from the North to exploit the natural resources in the South has been one of the decisive factor in marginalising the Moro people on their ancestral land. Will this not be aggravated further with the big push to develop this new growth area?

Apart from that, if Jakarta and Kuala Lumpur really wishes to respect the cultural rights of the Bangsa Moro, why do they support the development of the large tourist resort with its casino on Samal Island, just off the coast of Davao?

The Jakarta and Kuala Lumpur rulers certainly know that gambling is strictly forbidden by Islam.

Or is this huge casino on Samal Island just another case of closing casinos in front of Muslim eyes in the capital city, while reopening an even larger casino behind closed doors in a remote place, where the Muslim children of the ruling elite can lavishly spend their people’s money?

This has been the case of the Copacabana casino in Jakarta, which has been re-opened in a much larger form on Christmas Island by its former owner, Atang Latief.

It is a favourite gambling place of Tommy Suharto whose Sempati Airlines has the exclusive right to fly between Jakarta and the casino island.

This hypocritical policy towards oppressed Muslim groups has also been shown by Jakarta towards the Palestinian people. On one hand, Jakarta does not recognise Israel, and has strongly supported the Palestinian people’s right to self-determination. During his recent visit to Jordan, President Suharto again reiterated Indonesia’s support for an independent Palestinian state.

On the other hand, Indonesia’s military and business elites have maintained a close relation with the military and business elites in Tel Aviv, including Israel’s notorious secret service agency, Mossad.

Various Jakarta-Tel Aviv military links have now been exposed in Western and Indonesian sources. Jakarta under Suharto, had allowed a Mossad agent to operate in Jakarta under a British passport. This has been admitted by former security chief General Soemitro in his biography. He had assigned three generals Sutopo Yuwono, Kharis Suhud, and Nicklany to deal with the Mossad agents. He justified the cooperation with Mossad, because Mossad and the British MI-6 secret service were anti-Communist and much more effective than the US CIA.

Apart from cooperating with Mossad, the Indonesian army special force Kopassus, which is currently commanded by Suharto’s son-in-law, Mayor General Prabowo Subianto, has been equipped with Israeli Uzi guns.

These Uzi machine guns were reportedly used in the massacre of hundreds of Muslim activists in Tanjung Priok, Jakarta, on September 12, 1984, as well as in the assassination of the West Papuan artist and freedom fighter, Arnold Ap, on April 26, 1984.

The Indonesian army special force has not been reluctant in exposing their admiration for the Israeli army. Two years ago, during their 42nd anniversary, the Indonesian army special force distributed their publication for the media, which included a brief history of Kopassus and the translation of a long chapter from a book extolling the virtues of a typical Israeli Army commander.

Meanwhile, the Indonesian air force has also not hesitated from using second-hand US Skyhawk fighters, bought from Israel, which may have been used in the massacre of Palestinian refugees and Hizbullah freedom fighters in the Bekaa Valley in South Lebanon.

Recently, in the military operation to release European and Indonesian hostages taken by an OPM faction in the highlands of West Papua, the Indonesian military was not ashamed to accept the assistance of Israeli anti-guerilla devices again. Israeli-made Mazlat Scout pilotless drones, that had been supplied to Singapore three years ago, were used to locate the hostages. The drones, developed in the 1980s to track Palestinian and Hizbullah guerilla movement in the heavily defended Bekaa Valley, were brought in after the mediation of the International Committee of the Red Cross failed.

And although there are officially no diplomatic ties between Jakarta and Tel Aviv, a number of hi-tech Israeli companies have had business deals with a number of well-known Indonesian companies. The powerful Salim and Tamara Groups and the state-owned telecommunications company PT Telkom are among those which have forged business ties with Israel, albeit indirectly….

Hence, in conclusion I want to say to my fellow ASEAN brothers and sisters, especially to my Bangsa Moro brothers and sisters, please take Jakarta’s pro-Moro rhetorics with a lot of grains of salt. . . .

Dr George Aditjondro is an Indonesian pro-East Timor activist and researcher of the Suharto Oligarchy. He is presently a lecturer in the Department of Sociology and Anthropology at the University of Newcastle, NSW, Australia.

See also: Sukamto Sia


Sukamto Sia – Indonesian multi-millionaire businessman (before declaring bankruptcy). Sia, formerly known as Sukarman Sukamto, also owned a majority share of Bank of Honolulu, The Executive Center building, and the land purchased by the State of Hawaii for Hawaii Convention Center.

* * *

Honolulu Star-Bulletin, 10/15/93: . . . Key Senator Remains Silent in Bribe Probe. . . . The federal and state investigation into whether developer Sukarman Sukamto offered a bribe to Senate President James Aki hinges on what Sen. Bert Kobayashi said at a meeting Oct. 1 in Aki’s office. . . .

Of those who were present at the Oct. 1 meeting, only Senator Rey Graulty and Senator Russell Blair said they clearly recalled Kobayashi making what they described as an allegation involving bribery.

Graulty said that Kobayashi told the group that Sukamto asked Aki to relinquish the Senate presidency to Senate Vice President Milton Holt, “and if he did so, Sukamto would do some development project on Aki family land in Nanakuli to make it worth his while.

Aki and Sukamto, who owns the Waikiki-area site that the state wants to buy for a convention center, deny they were involved in a bribery scheme. . . .

Graulty said Kobayashi told the group that Sukamto was backing Holt because the real estate tycoon saw Holt as a political force who would be around for another six or seven years and eventually be named a trustee of the Bishop Estate, Hawaii’s largest private landowner. . .

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Honolulu Star-Bulletin, 10/30/93: . . . Sukamto Deals a Roll of the Dice. He gambled away more than $4.5 million at Caesars Palace in Las Vegas and yet the young Indonesian developer would still come back for another game of chance.

The high-stakes wagers, which took place between 1988 and 1989, offer a rare glimpse into the personality of Sukarman Sukamto, owner of the Aloha Motors site designated by the Legislature for the state convention center.

The 35-year-old deal-maker, now under investigation by federal and state authorities for allegedly bribing state Senate President James Aki, is a gambler in both life and in business.

Sukamto denied charges that he asked Aki to step aside as Senate president in exchange for developing the lawmaker’s family property . . .

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AsiaWeek, 8/9/96: The ‘Rape’ of Amcol . . . Less that three years ago, Amcol Holdings was one of Singapore’s hottest stocks. Today, the electronics and property group is again the talk of the town– thanks to a boardroom struggle, accusations of wrongdoing and the conglomerate’s near-collapse. According to Price Waterhouse accountants, Amcol, recently valued at $818 million, may now be worthless … Say investigators: “The situation is critical.”…

What went wrong? The troubles first came to light in 1994 when boss and chief dealmaker Kang Hwi Wah, a flamboyant self-made magnate, was jailed for eight months and fined for taking an $800,000 bribe from a Japanese partner in 1990. . . .

After his release, the tycoon still owned about 24% of Amcol, the biggest stake. In early 1995 he sold 17.3% to a firm belonging to Indonesian businessman Henry Pribadi, head of Jakarta’s Napan Group and a close associate of both multi-billionaire Liem Sioe Liong and Sudwikatmono, President Suharto’s half-brother. Last August, Pribadi, whose Indonesian interests span real estate, banking, and petrochemicals, became Amcol’s managing director, with Sudwikatmono as chairman. . . .

But in January this year, Kang sold a 6% stake to a company run by local businessman
Lee Howe Yong and Indonesian-born executive Sukamto Sia, who heads Transmarco, a Singapore-listed telecommunications company. The two have since raised their joint stake to just over 14%.

Sia is said to be allied either with Kang, whose conviction bars him from company boards, or with Bambang Trihatmodjo, Suharto’s second son, whose partner Tommy Winarta earlier bought Amcol stock. . . .

A picture is emerging of gross mismanagement, incredibly bad deals, and dismal accounting. An electronics subsidiary sold goods at a loss to Funai, which resold them to another Amcol firm at a 12% profit. . . . In Indonesia, as associate firm could not adequately document a supposed investment in satellite broadcaster Indostar, for which Amcol advanced $8.5 million. The associate lent a similar amount interest-free to two Indonesians, including Peter Gontha, a top man at Indostar’s maim backer, Bambang’s Bimantara group. Also cited: payments of $300,000 each to Amcol executive Loyd Lochra and two others, made by its partner in questionable racetrack, casino and property projects in Mauritius.

Singapore Finance Minister Richard Hu has said the government will not rescue Amcol. Still battling for control, Pribadi and Sia are discussing with judicial managers how to revive the group once favored by institutional investors and considered safe enough for retirement money….

An insider alleges: “Whoever was on the throne raped the company.” However the saga plays out– criminal charges may be laid– there is already one clear loser: the minority shareholders.

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Honolulu Star-Bulletin, 11/10/98: . . . Sia, 39, who formerly went under the name Sukarman Sukamto, last week resigned as board chairman of the Bank of Honolulu following his arrest in Las Vegas last month. He was charged with passing $8 million in insufficient checks to cover gambling debts at two casinos. Late last week, he filed for bankruptcy protection in Honolulu, listing $161 million in bank loan debts and $27 million in gambling debts.

Sia … listed assets of between $10 million and $50 million in the Chapter 11 filing in U.S. Bankruptcy Court. According to the filing, Sia owes bank loans of $111 million in Singapore, $37 million in Indonesia, $10.5 million in Hong Kong and $3 million in Bangkok. . . . Sia also owes a total of $18 million to four Las Vegas casinos — The Riio Hotel, Caesars Palace, the Mirage Hotel and the Las Vegas Hilton — as well as $9.6 million to casinos in London, Paris and Melbourne, Australia . . . Sia is free on $200,000 bail after pleading innocent to the Las Vegas charges. He is accused of passing five insufficient-fund checks totaling $6 million at the Rio Casino and two checks totaling $2 million at Caesars….

* * *

From Honolulu Advertiser, July 9, 2000, by Frank Cho:

Bankrupt developer Sukamto Sia denies he hid assets

Sukamto Sia, the once high-flying Honolulu developer and banker, is disputing allegations that he hid millions of dollars in the months leading up to his 1998 bankruptcy filing.

Sia said the bankruptcy trustee investigating him is ruining his life by making unsubstantiated allegations suggesting that he’s lying about his insolvency.

“I have nothing to hide,” Sia said in a recent telephone interview with The Advertiser. “But when you ruin my life, you ruin a lot of other people’s lives who work for me.”

SIA denies he is lying about his insolvency. The interview is the first time the publicity-shy Sia, formerly known as Sukarman Sukamto, has commented publicly about his business dealings and the battle over his multimillion-dollar estate since he filed for bankruptcy protection on Nov. 6, 1998.

In that filing, Sia revealed debts of $300 million and claimed assets of just more than $9 million, mostly in property and stock in the Bank of Honolulu. The case was later changed to a Chapter 7 liquidation on June 4, 1999. It is one of the largest trans-national personal bankruptcy cases on record.

“I was not prepared to talk about this a year and a half ago. When you go bankrupt, all you want to do is forget, you don”t want to keep talking about it,” said Sia, who estimates that after the collapse of Asian stocks in 1997 he lost nearly twice as much money as the $300 million creditors claim they’re owed by him.

In more recent developments, Sia, 42, is accused of funneling millions of dollars through family members and business associates months before he filed for bankruptcy protection in an effort to dodge those creditors.

A filing last month in U.S. Bankruptcy Court in Honolulu was the most serious allegation to date about Sia’s pre-bankruptcy activities and about his cooperation with authorities since the filing. Sia said the accusations have taken a personal toll on himself and his family and is making it harder for him to rebuild his business.

In those filings, bankruptcy trustee Guido Giacometti said Sia failed to reveal $10 million in proceeds from the sale of a corporate jet, a secret bank deposit box at the Bank of Honolulu, and hundreds of thousands of dollars in credit card payments Sia made for his wife.

Investigators say some of the transactions involve dealings by little-known offshore corporations in the British Virgin Islands that Sia created and never disclosed.

But in the interview, Sia said he did not reveal the safe deposit box because it was used to keep cash and jewelry and not documents related to his financial dealings, and that he used the British Virgin Islands companies as a cover to acquire stock in Asian businesses he was interested in – not as vehicle to hide money.

“I think it’s pretty common to do this in Asia. I am a high-profile guy, so when I open a BVI (British Virgin Island) company, it means I am buying stock and I don’t want anyone to know it is me,” Sia said.

Many of the BVI companies, Sia said, used loans from brokerage firms to help acquire positions in Asian companies. But like many investors, Sia said he suffered large financial losses during the Asian money crisis and was unable to repay the loans. . . .

Until the 1980s, Sia was virtually unknown here and in Asia. Born in Indonesia, Sia attended business school in London before graduating with a bachelor’s in business from Chaminade University in Honolulu.

Early on, Sia’s father-in-law, Atang Latief, was instrumental in helping launch Sia’s career with the purchase of 16 acres in Salt Lake near the airport for condominium development.

But it was Sia’s $6.8 million purchase of the Bank of Honolulu in 1987 that put him in the spotlight. And as Sia’s fame grew, so did his fortune.

With his penchant for gambling, Sia became one of the world’s biggest high rollers. Sia declined to put a figure on how much he has lost at casino tables, but some estimates put it at around $100 million.

In January 1998, Sia signed $6.6 million worth of markers while gambling at the Rio Hotel in Las Vegas. Markers at Caesars Palace added up to nearly as much. History had shown that Sia was good for it, however, and other casinos still welcomed his business.

Mirage Resorts Inc. Chairman Steve Wynn, who was hoping to land Sia as a regular customer at the new Bellagio casino, had Sia flown to Las Vegas in October 1998 for a stay.

But Caesars and the Rio apparently lost patience, and turned Sia’s debts over to the Clark County district attorney’s office for prosecution. Sia was arrested as he got off a private plane in Las Vegas in late 1998.

At the time, Sia was already under pressure from creditors in Singapore, where banks had filed suit against him for more than $60 million in unpaid debts and were preparing to begin selling his assets there.

Came back to Honolulu

Filing for bankruptcy protection in the United States would stop those sales, Sia said his attorneys told him. Sia returned to Hawai’i to file for bankruptcy protection and step down as chairman of Bank of Honolulu.

So in another roll of the dice, Sia hoped the filing would give him and his business investments time to recover. But when the Asian economy failed to turn around quickly, Sia’s estate was forced from bankruptcy reorganization into liquidation and Sia lost control of his companies.

Facing felony charges

Since then, the Clark County district attorney”s office has dismissed charges against Sia related to the Rio markers. Sia still faces felony charges for unpaid markers at Caesars and a hearing is scheduled for July 26, according to a district attorney”s office spokeswoman.

In Hawai’i, Sia has asked the court to dismiss his bankruptcy case, but the move is being opposed by Giacometti.

“He (Sia) doesn’t like the heat,” Giacometti said. “They want to shut down this investigation and for everybody to go home.”

Giacometti said he is committed to recovering as much as possible for creditors. So far, he has recovered about $1.5 million. Another $500,000 is expected to be recovered soon from a recent settlement with Citibank over its mortgage on Executive Centre in downtown Honolulu, which had been owned by a Sia company.

Expensive recovery

Sia’s largest single asset, 76 percent of the stock in the $95 million Bank of Honolulu, has been put on the market and Giacometti is hoping for a sale by the end of the year.

Giacometti admits that because of Sia’s complex and far-flung business dealings, the recoveries have not come cheap. Giacometti and his advisors have claimed nearly $500,000 in fees and expenses – paid for out of the recovered money.

Sia said Giacometti and his advisors are only interested in dragging this case out and generating more fees from his estate.

“I’m sorry I ever filed bankruptcy,” Sia said.

Sia, who now lives in Macau and does consulting work for casinos there, said he would like to return to Hawai’i someday.

“If there is ever an opportunity there, of course I would like to come back,” Sia said.

But first, he plans to rebuild his business one deal at a time.

“I am just going to work hard and prove it to myself that I can come back,” Sia said. “When this thing is over, and those guys are gone, I will still be around.”

* * *

May 17, 2001


A federal grand jury includes his friends and family in charges.

By Tim Ruel, Honolulu Star-Bulletin

Former Honolulu businessman Sukamto Sia has been indicted yet again, this time along with two of his younger brothers, two business partners and his girlfriend.

A federal grand jury yesterday added 13 new counts to the nine charges already pending against Sia, 42.

Twelve of the new counts name Sia directly, and some are related to earlier charges brought against him.

The charges include counts of bankruptcy fraud, wire fraud, bank fraud and making false statements.

The U.S. government is also seeking to have Sia forfeit a $4.5 million estate on nine acres in the Bel Air district of Los Angeles, where he has been staying for the past few months with girlfriend Kelly Randall.

Also named in the indictment are Sia’s brothers Suwardi Sukamto, 35, and Sumitro Sukamto, 37; Singapore resident Khee Pow Yong; Indonesian resident Johannes Sjah; and Randall, 33, of Los Angeles.

The six defendants have not yet entered their pleas to the new charges.

Sia’s attorney William McCorriston is out of town and could not be reached for comment last night.

The new indictment alleges a complex web of conspiracies that Sia is alleged to have taken part in during his tenure as chairman of the former Bank of Honolulu and after he filed for personal bankruptcy on Nov. 6, 1998.

Indonesia-born Sia bought a 30 percent interest in the Bank of Honolulu in 1987 along with his Indonesian father-in-law, Atang Latief, who bought 70 percent. Latief later sold his interest to Sia.

The government alleges that in 1997, Sia received a $40 million loan from Singapore bank Commerzbank using duplicated shares of his Bank of Honolulu stock.

The Bank of Honolulu board had been told that Sia lost his original shares, so they issued new shares. But Sia actually pledged the first set of shares for an earlier $40 million loan from another Singapore bank, Societe Generale, the government said.

Sia’s brother Suwardi Sukamto was allegedly involved in the scheme, according to the indictment.

The government alleges Suwardi Sukamto is also tied in with British Virgin Islands company Indobridge Investments Ltd., which owns the estate occupied by Randall and Sia.

Randall has also been charged with making a false statement by opening a bank account a year ago for Sia under an assumed name.

Another defendant, Johannes Sjah, is the founder of Indobridge and also founded one of four companies that received a million-dollar deposit when Sia sold his Gulfstream personal aircraft before filing bankruptcy, the government alleges.

Four charges of bank fraud also involve a deal in which four $1.5 million loans were set up in March 1997 at the Bank of Honolulu under the name of Indonesian cigarette magnate Putera Sampoerna.

Sampoerna has told authorities he never authorized the loan. The money really went to Sia, with help from Suwardi Sukamto, the government alleges.

According to records obtained from Sia’s bankruptcy case, a written order from Suwardi Sukamto to the bank in reference to the account reads, “Keep in mind that all communications with customer will be through me!!!”

No hearings have been scheduled on the indictments but are expected in the next couple of weeks.

See also: Suharto

For more, GO TO > > > The Indonesian Connection


Sun International Hotels Ltd. – From Honolulu Advertiser, 01/25/01, by Kevin Dayton and Tanya Bricking:


When Gov. Ben Cayetano traveled to the Bahamas last year, he met with executives from an international hotel and casino company that is now proposing a new 1,500-room resort at Ko `Olina that would include gambling.

The gambling proposal by Sun International Hotels Ltd. appears to have little hope of approval by the state Legislature this year. Although Cayetano said yesterday he is willing to listen to the plan, he has long opposed casinos in Hawai`i and isn’t promising to support Sun’s proposal.

Cayetano was in the Bahamas Dec 9-13 visiting the Atlantis Resort, a facility owned by Sun International that boasts the largest aquarium in the world. Kim Murakawa, Cayetano’s press secretary, said the governor’s main purpose for the trip was to visit the aquarium, but Cayetano was informed at the time that Sun would propose a development in Hawai’i.

Cayetano was accompanied on the taxpayer-financed trip by his former chief of staff, Charles Toguchi, who is now a lobbyist for Sun, and by public relations executive Jim Boersma, who has represented Sun for about a year.

Boersma said the governor, Toguchi and he had dinner with Sun executives, but that as far as Boersma knows, Cayetano did not discuss gambling with the executives.

Sun is proposing two bills that would allow developers to compete for a license for a single casino in West O’ahu. The operations would be overseen by a gaming commission and pay a wagering tax of 12% to the state.

Under the bills, the state would be guaranteed a minimum take of $32 million to $42 million a year for the first three years, with $30 to $40 million going into a scholarship program for college-bound students who maintain grades of a B-minus or better, Boersma said.

The proposal will be introduced in the Senate by Senate President Robert Bunda, D-22nd (Wahiawa, Waialua, Sunset Beach), and in the House by Rep. Nathan Suzuki, D-31st (Salt Lake, Moanalua)….

* * *


Some of Sun’s top shareholders (as of 9/30/00): #1 – Baron Capital (4,350,123 shares valued at $83,739,870); Barrow Hanley Mewhinney & Strauss; Morgan (JP); Mellon Bank; Gamco Investors; Goldman Sachs ; Colorado Public Employees Retirement System

And who are some of the top shareholders of Baron Capital?: #1 – The Charles Schwab Corp (27,152,100 shares at $963,899,550); Sotheby’s Holdings, Inc; Flextronics International; Apollo Group; Polo Ralph Lauren Corp. …

And what are some of the top holdings of Barrow Hanley Mewhinney & Strauss?: #1 – Entergy Corp (24,844,558 shares at $925,459,790); Phillips Petroleum; Allstate Corp; BP Amoco; Reliant Energy; (V.P. Dick Cheney’s) Halliburton Company; Philip Morris Companies; Occidental Petroleum … And some the top sellers of Barrow Hanley stock?: XL Capital (Marsh & McLennan); PNC Financial . . .

And who are some of the other top shareholders of Entergy Corp?: Immediately following #1 (Barrow Hanley Mewhinney & Strauss) is #2 – Putnam Investment Mgmt (Marsh & McLennan); Fidelity Mgmt & Research; Morgan (JP); Barclays (Committee of 300); Capital Research & Mgmt; Goldman Sachs . . . Some of top former owners who sold stock: Prudential Mgmt; American Express; Invesco . . .


Solomon Kerzner – Chairman of the Board and CEO of Sun International since 1993. Prior to founding Sun Internationall, Kerzner developed Sun City in South Africa.

Howard Kerzner – President since June 1996. The son of Solomon, Howard was previously an Associate of Lazard Freres & Co. Prior to that he worked for the First Boston Corp.

Howard Marks – Director. Marks is Chairman of Oaktree Capital Management, LLC. Oaktree Capital manages funds in excess of $17 billion for institutional investors.

Eric Siegel – Director. Seigel is a Principal of Pegasus Insurance Partners and a retired limited partner of Apollo Advisors, and Lion Advisors LP. He is also a Director and member of the executive committee of El Paso Electric Co.

Kevin DeSanctis – Chief Operating Officer, North American Operations. Prior to joining Sun International in July 1995, DeSanctis served as Executive Vice President and CEO of Hemmeter Enterprises . . .

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See also: Ben Cayetano ; Chris Hemmeter ; Resorts International ; Solomon Kerzner

For more on the Hawaii Connection, GO TO > > > Broken Trust


Terry McAuliffe – Billionaire businessman, friend and top fund-raiser for William and Hillary Clinton, Al Gore and the Democratic Party. Clinton-appointed head of the DNC.

From The Public i (An Investigative Report of the Center for Public Integrity):

Army General Had Business Deal
With Clinton-Gore Money Man

By Nathan Heller, The Center for Public Integrity

(Washington, Apr 27, 2000) – Lt. Gen. Claudia J. Kennedy, the first female three-star general in the history of the U.S. Army and the accuser in a sexual harassment scandal, was in business with controversial Democratic money man Terence McAuliffe for almost two years, The Public i has learned.

Kennedy’s position as a board member of three of McAuliffe’s Florida companies might violate Defense Department ethics regulations that prohibit military officers from taking private positions that are offered because of the individual’s role in the military….

Kennedy never received compensation, as the companies never obtained the necessary funding and never got off the ground….

Two of the companies on whose board Kennedy sat were holding companies; the third was a property-and-casualty insurance company….

McAuliffe has been the financial angel of the Clinton administration, by his own estimates raising close to $275 million for everything from the Clinton-Gore election campaigns to inaugural festivities, the millennium celebration, President Clinton’s library and Hillary Clinton’s campaign for the U.S. Senate.

A businessman with interests ranging from venture capital to home building, McAuliffe is also credited with conceptualizing the coffee klatches and Lincoln Bedroom sleepovers that raked in millions in soft money for the Democratic Party during the 1996 campaign. Vice President Al Gore, whose presidential campaign also relies on McAuliffe’s fund-raising prowess, has called McAuliffe “the greatest fund-raiser in the history of the universe.”

Kennedy recently made headlines when the Washington Times disclosed that she had filed a sexual harassment complaint against another high-ranking general in the Army, Maj. Gen. Larry G. Smith, alleging that he groped her in Oct 1996…. Kennedy is only the third woman to achieve three-star general rank in the U.S. military, and the first in the Army….

Raises Ethical Questions.

Kennedy’s role as a board member of a commercial entity while still on active duty raises ethical questions. Dept of Defense Joint Ethics Advisory 5500.7-R does allow active officers to hold private positions in a “personal,” as opposed to an “official,” capacity. However, the regulations expressly prohibit DoD employees from serving as “an officer, member of the Board of Directors, or in any other similar position in any non-Federal entity offered because of their DoD assignment or position.”

Kennedy, along with most of the companies’ other board members, has no experience in property and casualty insurance…. According to her official Army biography, she has never lived in Florida….

Board Positions Not Listed Accurately.

Kennedy also failed to accurately list her board positions on her personal financial disclosure reports for the last two years. In her reports covering 1997 and 1998, Kennedy lists all of her private board positions ab beginning in Oct 1997, when in fact two of the three companies filed incorporation papers on May 15, 1997, five days before she was confirmed for three-star rank by the Senate….

Father-in-Law Says Kennedy Was Aware.

. . . According to Swann, McAuliff’s father-in-law, the companies planned to pay their directors “board fees” as soon as they turned a profit. … “She would have been aware of the likelihood that she would be paid,” Swann told the Public i.

Kennedy sat on the boards of Jefferson Capital Holdings, Inc., Jefferson Capital Group, Inc., and Jefferson Capital Insurance Co., all incorporated in Florida. . . .

Besides McAuliffe, Kennedy was initially joined on two of the boards of directors in May 1997 by Jack F. Moore, Monsignor William A. Kerr, Charles H. Lydecker and George I. Pollack.

Moore is the former international secretary of the International Brotherhood of Electrical Workers, and is currently being sued by the U.S. Dept of Labor, which charges that he mismanaged the union’s pension funds to bail out Swann in the early 1990s, when Swann’s Florida savings and loan went belly up. . . .

Kerr is the president of La Roche College, a small Roman Catholic school near Pittsburgh. …

McAuliffe runs several companies in Florida, including Orlando’s second-largest home building company, American Heritage Homes . . . .He also served on the board of regents at La Roche.

Lydecker is chairman of the Florida Housing Finance Corp., a state agency that funds low-income housing projects. … Lydecker is a vice president at Brown & Brown Insurance of Daytona Beach, and is a director of two other McAuliffe companies in Florida, Columbia Financial Holding Co. and Jefferson National Title Insurance Co.

George Pollack is president of Florida Health Care Management Corp., a health care management company that runs a variety of health care facilities in Florida. … Pollack said he had no experience in insurance . . .

Jefferson Capital Insurance Co. was set up in May 1997 … to buy insurance policies from the Florida Residential Property and Casualty Joint Underwriting Association, known as the JUA. The JUA was created by the Florida Legislature in Dec 1992, after Hurricane Andrew devastated the state and its insurance industry, causing $16 billion in insured losses. . . .

At one time holding more than 1 million policies, the JUA has slowly “depopulated” its policies over the years by selling them off to private insurers, often encouraging such privatization by offering cash royalties for each policy purchased by a private insurer. Such incentives led to the creation of what became known as “takeout companies,” essentially insurance companies started for the explicit purpose of buying out JUA policies and reaping the large royalties.

Shortly after two of the McAuliffe-Kennedy companies filed their incorporation papers on May 15, 1997, Jefferson Capital Insurance Co. Applied for a certificate of authority from the Florida Department of Insurance to qualify as an approved buyer of JUA policies. By July, the company had been approved to take out a total of 100,000 JUA policies over 15 months, ansd estimated its take-out royalties at $2.5 million for the first year of operations.

Company Never Sold Insurance.

Yet, according to Florida Dept of Insurance files … the company never actually went into the business of selling property and casualty insurance. The documentation indicates that McAuliffe was unable to come up with a $7 million loan necessary for funding the company. At no point in the lengthy application file does he or the company’s attorney identify the potential lender.

Swann confirmed that the company was never capitalized in time. When the loan (actually in the form of “preferred stock interest”) came through, all of the profitable JUA policies had been handpicked by other takeout companies. Remaining were the high-risk coastal policies, a circumstance that prompted the company to abandon its venture. Swann declined to identify the “private party” that eventually did put up the money for McAuliffe.

* * *

From Drudge Report, 12/11/99 – Clinton’s closest and most loyal Washington friend, Terry McAuliff, has raised more than $275 million for Clinton’s causes, reports Jeff Gerth in Sunday editions of the NY Times. Along the way, he’s made millions of dollars for himself, too! . . .

McAuliffe has spawned “a web of business deals, from telecommunications to real estate” that McAuliff keeps far from the public spotlight. . . . Gerth claims: “McAuliff has transformed the art of raising money for public figures into the art of raising money for himself, leveraging a personal fortune from his political fund-raising contacts.” . . .

McAuliff tells Gerth that he uses his influence to get people together with President Clinton or to recommend them for presidential appointments. . . .

“McAuliffe, 42, sits on 10 corporate boards, none of them public companies. He travels to Africa and Asia, where he meets with heads of state….

He is an active stock trader. He speaks and plays golf regularly with his best friend, Clinton.”

* * *

From Laborers.org,, 12/22/97: THE HEAT IS ON CLINTON’S MONEYMANControversy is swirling around fund-raiser Terry McAuliffe. . . . As finance chairman for the Clinton/Gore Reelection Committee, McAuliffe pulled in a staggering $43 million in eight months. That made him the front runner to head the DNC – a job he turned down. Instead, McAuliff has turned his attention to his home building, insurance, and marketing businesses. . . .

~ ~ ~

But McAuliff is finding that it’s not easy putting politics behind him. His name has been linked to the fund-raising scandal that resulted in the disqualification of Teamsters President Ronald Carey. . . .

~ ~ ~

The U.S. Attorney’s Office in Washington is trying to learn more about how McAuliffe earned a lucrative fee in helping Prudential Insurance Co. of America lease a downtown Washington building to the government. Prudential just settled a civil case involving that lease for over $300,000 without admitting any liability. . . .

~ ~ ~

(McAuliffe’s) business partners often are the same Clinton and McAuliffe people he taps for campaign contributions. . . . For example, Carl H. Linder, Jr., chairman of American Financial Group, Inc. and a generous giver to both parties, donated — along with whom McAuliff is friends — are also his partners in private deals. . . .

~ ~ ~

Take his relationship with the International Brotherhood of Electrical Workers. In 1991, McAuliff formed a partnership with a pension fund jointly operated by the IBEW and the National Electrical Contractors Assn., a management trade group. . . .

The IBEW fund currently has $6 billion invested in stocks, bonds, and real estate. . . . In the 1991 deal that McAuliffe packaged and brought to the fund, the fund put up $38.7 million in cash for five apartment complexes and a rundown shopping center near St. Petersburg. McAuliffe got a 50% equity stake, even though the fund put up all the money. . . .

No investment adviser was involved, says John M. Grau, co-chairman of the fund and executive v.p. of the National Electrical Contractors Assn. because McAuliffe’s plan seemed like a slam-dunk: The pension plan was acquiring the properties at $10 million below their appraised price.

Why such a deal? Because the seller was the Resolution Trust Corp., which had taken control of the properties from Orlando-based American Pioneer Savings Bank. The RTC had rescued the S&L and placed it in receivership a year earlier — costing taxpayers $500 million.

American Pioneer had been owned by Richard A. Swann, father of Dorothy Swann, McAuliffe’s wife….

~ ~ ~

The elder Swann once presided over a $2 billion commercial empire. But it crashed when regulators declared the S&L insolvent. . . .

Since then, Swann says, he acts as McAuliffe’s attorney in business ventures and is paid fees for managing McAuliffe companies. Mcauliffe says Swann is not a partner but is paid to “help with the management.” Three such deals involved the IBEW and its pension funds. . . .

McAuliffe’s primary IBEW contact was Jack F. Moore, now retired as International Secretary of the union and co-chairman of the jointly managed pension fund. . . .

~ ~ ~

In June, 1992, the IBEW pension fund did another deal with McAuliffe. It loaned him $5.8 million to buy 284 acres of Country Run, an Orlando subdivision of mostly unimproved lots. It, too, had formerly belonged to Swann’s S&L. McAuliff’s intention was to improve the lots and sell them or develop the property himself. . . .

~ ~ ~

HEADACHES. The Country Run land itself served as the primary collateral for the loan. But McAuliffe also pledged his half ownership of the St. Pete properties as additional security. . . .

Real estate consultant Marilyn K. Weitzman, president of New York’s Weitzman Group Inc. and adviser to the pension fund … told the fund it should expect at least a 20% return.

That wasn’t even close to what it got. The fund ended up with only a 5.3% annual gain — and lots of headaches.

For one thing, McAuliffe’s additional collateral vaporized by August, 1993, when the fund agreed to buy out all but a small portion of his share in the first deal, the St. Pete partnership.

“We didn’t sell as many [Country Run] lots as we hoped,” says McAuliffe. “You have ups and downs in real estate.”

Once McAuliffe’s Country Run loan was in default, the fund had the right to foreclose and take possession. But the fund never foreclosed, says Grau, because it didn’t want to be left holding undeveloped land.

~ ~ ~

Last October, after more than three years of nonpayment, the fund sold off the Country Run loan in a package with the St. Pete properties. . . . The buyer? Terry McAuliffe. He and partner Lindner are now building homes on the Country Run lots with their company, American Heritage Homes, Inc. . .

~ ~ ~

Today, McAuliffe is the second-biggest homebuilder in Orlando. . . . Meanwhile, the fund’s Country Run return wound up being about half what similar loans were earning in that time span . . . As for the St. Pete properties, McAuliffe sold them to a real estate investment trust.

~ ~ ~

The IBEW not only financed McAuliffe’s ventures, but it also helped boost his stature as a Democratic fund-raiser by contributing $6 million to party candidates from 1991 to 1996. . . The Labor Dept.’s inspector general is looking into the IBEW fund’s investments. . . .

The Employee Retirement Income Security Act (ERISA), says a spokesperson for Labor Dept., contains “sweeping prohibitions against self-dealing and other “insider” actions by plan trustees that result in a party receiving a benefit because of the party’s relationship to the pension fund.”

~ ~ ~

Another real estate deal, this one involving Prudential Insurance, could pose legal woes for McAuliffe. The issue: whether McAuliffe pocketed an improper fee for influencing the award of a government contract.

In a letter signed on Mar. 18, 1993, Prudential agreed to pay McAuliffe $375,000 if the Pension Benefit Guaranty Corp. (PBGC) signed a 15-year, $187 million lease to occupy a downtown Washington office building owned by the insurer. . . . The U.S. Atty for the District of Columbia charged that Prudential falsely certified, after it won the lease, that it had not hired anyone to help influence the bidding process, which is illegal under the Competition in Contracting Act.

~ ~ ~

Prudential paid McAuliffe $375,000, but he says the money was a proper payment for fending off any congressional attempts to stop the deal. . .

~ ~ ~

For more, GO TO > > > Prudential: A Nest on Shaky Ground


Tony Coelho – former U.S. Congressman (D) from California; Gore’s presidential campaign manager.

From Unlimited Access: An FBI Agent Inside the Clinton Whitehouse, by Gary Aldrich:

On the heels of the Aldrich Ames spy case, the Clintons announced a presidential commission to study “Roles and Capabilities of the Intelligence Community” and to recommend fundamental changes for the CIA, the FBI, and other agencies.

The members of the commission would need to know the most secret activities of the most secret agencies in order to perform their function. So it was vital that all members of this important commission be of the highest caliber and have spotless backgrounds.

Departing Speaker of the House Tom Foley appointed former Congressman Tony Coelho to the commission. He was an odd choice. Coelho had left Congress under a cloud and had gone to New York and made millions in the commodities markets. . . .

Tony Coelho was nothing if not an interesting character. He had been in so much trouble as a congressman that more than one book and many articles had been written about him. He had been the subject of several, albeit unsuccessful, federal criminal probes. Hiring Coelho to serve on the Intelligence commission was taking the protection of national security to a new low.

The Coelho investigation was received on 7 March 1995. It was to be completed by 27 March “without fail.” To order that we finish the investigation in what amounted to fifteen working days was an outrage and impossible-and that’s what I advised my supervisor, in writing…. But he still harangued me with calls to meet the deadline. . . .

As far as I was concerned, the deadline would have to wait.

Among the allegations against Coelho – some of which he freely confessed – were the following:

>> Taking daily doses of methaqualone or phenobarbital for medical reasons

>> Prior alcoholism and considerations of suicide.

>> Illegal, unethical, or inappropriate lobbying of the new Clinton administration.

>> Personal conflicts of interest.

>> Resigning from Congress of 15 June 1989 after multiple accusations of serious wrongdoing, including violations of federal laws.

>> Failing to correctly report income on a federal income tax return.

>> Failing to report a loan of $50,000 in violation of House ethics reporting requirements.

>> Issuing, in less than one year, 316 personal checks – for a total of more than $293,000 – all drawn on a bank account for which there were insufficient funds.

>> Accepting a “sweetheart” junk bond deal from Michael Milkin (later convicted and sentenced by U.S. Federal Judge Kimba Wood).

>> Accepting a $4,000 gift from a savings and loand banker later indicted and convicted of federal violations.

>> Using inappropriate influence to protect owners of failing savings and loans.

>> Accepting illegal political contributions aboard a 112-foot yacht owned by a savings and loan businessman who was later indicted and convicted of fraud.

>> Improperly appointing a friend and large contributor to the finance chair of the DNC (the friend owned a failing Texas savings and loan).

>> Alleged improper contacts with employees of the Clinton Department of Agriculture for the purpose of influencing decisions made with respect to farm chemicals being produced by a leading manufacturer, also a big contributor to politicians.

This list is by no means complete. These are just some of the public, media-reported allegations against Coelho, most of which have never been investigated fully for one reason or another. Now there was a reason to fully investigate these allegations, but I wasn’t being allowed to.

While it was true that Coelho was never charged with any crime, the Department of Justice Office of Public Integrity only declined to prosecute him, and anyone in law enforcement and the political arena knows that declining to prosecute is not the same as declaring someone innocent.

The deeper I dug, the more cynical were the questions I posed to myself.

How much were Coelho’s chances for an important position enhanced by the fact that he was engaged in fundraising for the president’s defense against the sexual harassment lawsuit brought by Paula Jones?

Could Coelho’s opportunity to join the commission have anything to do with the fact that he defended Hillary Clinton’s celebrated windfall profits in cattle futures?

What about the public speculation that the Clintons wanted Coelho “cleared” to work on the commission in order to rehabilitate him so he could run the president’s reelection campaign?

I was not in charge of standards, nor was I in charge of the Coelho investigation; I was just asking questions, and I was only the lead agent covering the U.S. House of Representatives. Ultimately, Coelho got his security clearance from the Clinton administration and gained access to some of the most sensitive information our government has.

If you ask me why, I don’t know. . . .

* * *

November 26, 1999

Gore Official on Defensive for Circus Actions

Las Vegas casino plan is at issue

By Sara Fritz, St. Petersburg Times

WASHINGTON — In 1997 New Mexico businessman Nunzio DeSantis was searching for a business partner to join him in purchasing control of two New Jersey horse tracks.

It didn’t look like the kind of deal anyone concerned about their public image would embrace. The track owner was Robert Brennan, a notorious stock manipulator, and the board was filled with his friends. Both tracks were failing. And DeSantis was under scrutiny by the Securities and Exchange Commission.

Tony Coelho didn’t blink. A well-connected Democratic political figure and confidante of President Clinton who today is responsible for running the presidential campaign of Al Gore, Coelho signed on.

Two years later, Coelho and his partners were forced out of the company, known as International Thoroughbred Breeders, after being sued, accused of trying to “divert the stock and assets … to benefit their own financial interests.”

Today, the complex details of the ITB debacle are buried in courthouse file drawers in Wilmington, Del. But the controversy is by no means forgotten.

Recently, Coelho was questioned by SEC officials investigating charges of self-dealing against DeSantis and his ITB partners. The inquiry came to light in documents filed at the SEC by the company, which promised to “cooperate fully” with the inquiry.

Why would a high-profile guy such as Coelho choose to join in a deal involving men of less-than-impeccable reputation?

It was a lucrative deala $10,000-a-month consulting contract, a $2,500 fee for each board meeting, a generous car allowance and free travel aboard the firm’s rented jet.

Still, Coelho, already a multimillionaire who held top positions in more reputable companies at the time, was not desperate for money.

To government watchdogs such as Chuck Lewis, executive director of the Center for Public Integrity, the story of the Coelho-DeSantis partnership represents another turn in a highly controversial political career that has marked Coelho as a man who lacks the ability to make sound ethical judgments.

“There is a dark shadow over everything that Tony Coelho does,” Lewis says. “There is a pattern of unbridled arrogance to the point of being self-destructive — a sense of ‘get out of my way, I’m Tony Coelho.”‘

A decade ago, Coelho, then the third-ranking Democratic leader in the House, was forced to resign from Congress after it was revealed that a California savings and loan executive had given him an opportunity to invest in a lucrative $100,000 junk bond deal with borrowed money he failed to disclose.

After that, Coelho used his political connections to amass great wealth in private business deals. And he continued to advise the Democratic Party, accepting numerous presidential appointments to government boards and commissions. But even his service in these minor government posts has caused controversy.

Coelho’s deal with DeSantis is being investigated by the SEC. And the State Department’s inspector general is continuing to investigate alleged free-spending and other improprieties by the former congressman when he served as commissioner general of last year’s World Exposition in Lisbon, Portugal.

This time, Coelho’s activities are creating bad publicity for Gore. And critics are questioning why the vice president selected such a controversial figure to run his campaign.

“It calls into question the vice president’s judgment,” Lewis says. “Why the vice president would choose him to run the campaign is baffling to me. To me, he is the very last person I would pick. Coelho’s never been successful in running anything, and he has been so besmirched by scandal that he couldn’t be appointed to any position that would require Senate confirmation.”

Gore would not comment for this story. Nor would the vice president’s campaign staff respond, when asked, whether Gore took Coelho’s controversial past into account before hiring him.

Coelho’s lawyer, Stanley Brand, dismissed such criticism as the unfair burden of “a guy who’s been picked over for years.” He said Lewis and others “are holding Tony to a standard that’s unrealistic because he moves between the worlds of business and politics” where the ethical standards are different. . . .

In the few interviews Coelho has granted since he left Congress, he answers questions about his business dealings by portraying himself as loyal to a fault.

“I commit to relationships; I never walk away from people,” he once told the Washington Post.

It was Coelho’s brand of loyalty that got him involved in business with DeSantis. He met DeSantis while working for Wertheim Schroder and their friendship led the New Mexico businessman to invite him into the race track deal.

Coelho was not disturbed that a previous firm owned by DeSantis had been cited by the SEC for “knowingly or recklessly” inflating its net income. Nor was he put off by Robert Brennan’s reputation for bad-faith dealings.

DeSantis, who could not be reached for this story, wanted Coelho for the ITB deal because at the time the former congressman was serving on the board of the Las Vegas casino company Circus Circus, now known as Mandalay Resort Group. DeSantis wanted to acquire ITB to build a Las Vegas casino, and he saw Coelho as someone with experience who could pass muster with Nevada gaming regulators.

Coelho told his business associates he resigned from the Circus Circus board to avoid a conflict when he teamed up with DeSantis. But records show Coelho did not depart Circus Circus until six months after joining ITB.

While Coelho was on the Circus Circus board, he chaired the compensation panel and developed a generous pension plan for board members. The pension plan came under attack in the Teamsters report, however, and was rescinded by the board shortly before Coelho departed. . . .

Coelho took charge of the Gore campaign when the candidate was slipping in the polls to Bill Bradley, the former senator and basketball star. The new campaign manager’s assignment was to impose strict discipline on a bloated, lethargic campaign organization. . . .

In high-profile political campaigns, it is standard procedure to investigate appointees in order to prevent embarrassment caused by unfavorable stories in the news media. Campaign officials have refused to say whether Coelho’s business failures were brought to the vice president before he was hired, but there is no evidence the Gore campaign took a hard look at Coelho’s past.

Of course, a thorough investigation of Coelho would have taken a long time. In his last publicly available financial disclosure report completed in June 1998, Coelho reported serving as an officer or board member of at least 33 companies or other organizations and received income from more than 85 sources….


Triads – From The Laundrymen: . . . The Triads are the most notorious of the Chinese mobs — a blood brotherhood that materialized in the seventeenth century to overthrow the Ching Dynasty.

When their rebellion ultimately failed two centuries later, many of their members fled to Hong Kong, Indochina, and North America.

Independent units linked by an oath of fraternity, the Triads do everything from drug trafficking and money laundering to business extortion and burglary. They are the primary force within Southeast Asia’s Golden Triangle.

Spanning the mountains and valleys that cut across the borders of Laos, Thailand, and Myanmar — which used to be called Burma — the region produces anywhere from 60 to 120 tons of heroin annually. A kilo of this Triad-distributed drug wholesales between $400,000 and $600,000. Cut to 6-percent purity, the street value can easily reach $10 million.

Triad is unquestionably the most powerful force in the world’s heroin trade . . .

Police in Hong Kong have identified 57 active Triad organizations, which have offshoots in Taiwan, the Philippines, Vietnam, and Australia.

But their real future lies in North America. . . .

Today, Chinese gangs are securely established in San Francisco, Los Angeles, New York, Toronto, and Vancouver. They have long had a presence in London, and are now beginning to show up in places where they have no traditional ties, such as Germany. Police there recently raided ninety Chinese restaurants, questioned 653 people, arrested 102 of them, and seized 24 false passports, more than $1 million in cash, large amounts of cocaine and heroin, and several weapons.

They also uncovered evidence of what the police described as “Mafia-type” money laundering schemes. . . .

* * *

From Year of the Rat : . . . Our Tale of Three Cities

Macao, Los Angeles, and Phnom Penh (the capital of Cambodia) — explains how ethnic Chinese criminal gangs, called Triads, created their own money conduit to the Clinton White House, for their own benefit and for their business partners in Beijing. They visited the White House many times, made illegal contributions to the Clinton-Gore reelection campaign, and were photographed at the place of honor beside the president and vice president of the United States. . . .

The Chinese Triads and the Sicilian Mafia share certain characteristics– they’re in the same lines of business. A 1998 U.S. Justice Dept report listed Triad business as “narcotics trafficking, money laundering, contract murders, illegal gambling, loansharking, extortion, interstate prostitution rings and alien smuggling.” . . .

As the Canadians point out, since a major goal of the Triads is to infiltrate legitimate business, their own appearance of legitimacy is important:

“Triad members work very hard at ingratiating themselves with police, government officials and politicians. The easiest way for them is by making substantial donations to charitable organizations, joining service clubs, donating funds to universities, sometimes obtaining honorary doctorate degrees, or contributing to political parties … Public photographs of Triad figures with politicians is another favorite technique.” . . .

As early as 1982, Triad leaders were trying to buy access to the Democratic Party.

Before he fled the country for South America, New York City Triad leader Eddie Chan was bragging about his political contributions to former Congresswoman Geraldine Ferraro’s (D-NY) reelection campaign. The amount of money he actually contributed wasn’t really that high– $1,000 according to the New York Times– but it’s useful to show intent.

A decade later — the Clinton-Gore erathe money would really begin to roll in. . . .


U.S. Bureau of Indian Affairs

El Dorado at Last:
The Casino Boom

Did Clinton cronies cash in on Indian gambling?


July 18, 2001

Gambling sponsored by Indian tribes has exploded from bingo games in the late 1970s to full-fledged casinos owned by 196 legally designated “gaming tribes” and generating $10 billion in revenues last year–with approximately 175 more groups petitioning for tribal recognition and casino rights.

Gaming, often viewed as an economic self-sufficiency program for exploited Native Americans, is now shadowed by controversy and, critics charge, mounting scandal.

In the last weeks of the Clinton administration, two top officials of the Interior Department’s Bureau of Indian Affairs made controversial decisions rejecting staff recommendations and issuing three valuable tribal designations.

Both then returned to private practice in Indian law, taking high-paying jobs in firms handling gambling issues.

The two officials also issued rulings in three Connecticut tribal cases that have prompted a lawsuit by the state attorney general designed to stop further casino development.

Under current law, little-known groups–some with only the thinnest of genealogical or historical links to American Indian identity–can qualify for recognition as a federal tribe and open a casino.

Indian gaming has become so controversial that late last year Rep. Frank Wolf (R., Va.) and Rep. Chris Shays (R., Conn.) wrote President Clinton asking for a moratorium on new tribal recognitions.

Mr. Clinton ignored the request.

Rep. Wolf now is calling for “a sweeping investigation” of the BIA. With state legislatures and local communities also sounding alarms, it’s time to take a closer look at the new El Dorados.

Champions of Indian gaming say it brings wealth and power to tribes mired in poverty and attendant miseries. Revenues from casino gambling are leveling the playing field with the white man after centuries of mistreatment, its advocates say.

Opponents say that only a tiny portion of the Native American community actually benefits from the casino bounty and that gambling is an insidious evil–destroying lives, attracting loan sharking and money laundering, drugs and organized crime. Critics charge that many of the Indians seeking to open casinos do not qualify as tribes, and may, in fact, not even be Indians. Groups of dubious Indian descent, critics say, often act as front-men for powerful non-Indian investors hoping to reap gambling riches.

The Indian casino boom was born in 1987, with the Supreme Court’s ruling in California v. Cabazon Band of Mission Indians. Concerned by the possible infiltration of organized crime, California had attempted to restrict bingo and card games on the Cabazon Indian reservation. But the court affirmed the right of Indian tribes to conduct gambling operations on reservations, free of state regulation. “The State’s interest in preventing the infiltration of the tribal bingo enterprises by organized crime does not justify state regulation,” it ruled. “State regulation would impermissibly infringe on tribal government.”

Congress responded by passing the 1988 Indian Gaming Regulatory Act. Any “recognized” Indian tribe complying with the provisions of the act could open gambling enterprises. An “Indian tribe” was defined as any “tribe, band, nation, or other organized group or community of Indians” that would be “recognized as eligible” by the Secretary of the Interior and “possessing powers of self-government.” The casino gold rush was on.

What this currently entails is evident in the controversy over Clinton administration decisions by then-BIA director Kevin Gover and deputy director Michael Anderson. The decisions were documented in a Boston Globe exposéé in March, but not widely reported elsewhere. On his last day in office, Mr. Gover rejected staff findings and granted federal recognition to the Chinook Indians of Washington state. Mr. Gover “personally rewrote the staff’s findings,” the Globe’s Sean Murphy reported, “inserting his own conclusions to affirm the tribe’s authenticity while editing out years of work by government historians, anthropologists, and genealogists.”

Mr. Gover stepped aside on Jan. 3 and named Mr. Anderson acting director. Mr. Anderson then recognized the Duwamish of Seattle as a tribe, reversing an earlier Interior Department finding.

On President Clinton’s last day in office, Mr. Anderson recognized the Nipmuc of Massachusetts as a tribe, rejecting the findings of Interior Department historians, according to the Globe.

Earlier this month, the Nipmuc signed a casino development deal with Lakes Gaming, a Minnesota-based corporation that manages a casino in Louisiana and has other Indian casino development agreements in Michigan and California. The deal calls for Lake’s continued support in recognition battles and development of a casino in return for 35% of net income for seven years.

Mr. Gover, a member of the Pawnee Tribe, is now an attorney with the Washington law and lobbying firm Steptoe & Johnson, where he is building an Indian gaming practice.

After leaving the administration, Mr. Anderson, a member of the Muscogee Creek Nation, joined the law firm of Monteau, Peebles and Crowell, specialists in Indian gambling issues.

Mr. Anderson declined to comment on details concerning the Duwamish and Nipmuc cases, but noted that both are under review by the Bush administration, and said that in the Nipmuc case he had denied one branch of the tribe federal recognition. In the Chinook case, Mr. Gover says, “I disagreed with the staff findings, but the decision was mine to make.” While there may have been an appearance of impropriety in the last-minute decisions, Mr. Gover added, “these applications had been hanging around for years and were past due.”

In two other controversial BIA cases, Mr. Gover and Mr. Anderson overruled staff and issued rulings helping pave the way for new Indian casinos in Connecticut, a state already staggering under the weight of the Foxwoods and Mohegan Sun casinos, each owned by a federally recognized tribe. Each casino generates about $1 billion in annual revenues and skirmishes with the state over legal, social and regulatory issues. Nine other Indian groups in Connecticut are seeking federal recognition.

In one Connecticut case, Mr. Gover reversed preliminary findings by professional BIA historians that two Connecticut Indian groups did not qualify as tribes. The groups, the Eastern Pequot and the Paucatuck Eastern Pequot failed to meet two key criteria for tribal status: continuous existence as a community and continuous political governance. The Eastern Pequot have not “demonstrated the existence of a modern community” or shown “the existence of political authority or influence,” states a BIA analysis obtained by the Journal.

The Paucatuck likewise did not meet the community standard and have “not demonstrated the continuous existence of a political process from 1883 to the present.”

The Eastern Pequot (650 members) and the Pauckatuck Eastern Pequot (150 members) share a 220-acre state reservation in North Stonington, Conn., and have been bitterly feuding for decades, each group claiming the other is an imposter. According to genealogical studies commissioned by local towns fighting casino development, neither group in fact may be descended from the historic Pequot Nation, the basis of their tribal claims.

But both groups have powerful financial backers. The Pauckatuck have signed a development agreement with Donald Trump. The Eastern Pequot are working with a wealthy Connecticut golf course developer, David Rosow.

In January, Connecticut Attorney General Richard Blumenthal and three towns near the Pequot reservation filed a federal lawsuit against Mr. Gover in his official capacity as BIA head and other senior Interior Department figures, charging that “rogue federal bureaucrats” had hijacked the tribal acknowledgment process.

Mr. Blumenthal wants the withdrawal of the Gover ruling in the Pequot case and a review of BIA procedure. Mr. Gover calls the suit “a classic stall tactic.”

In a second Connecticut case, Mr. Anderson re-opened a tribal application after the group had been rejected because it failed to show Indian descent. Connecticut’s 80-member Golden Hill Paugussett group was rejected for tribal status in 1996. According to the BIA finding, the Golden Hill “did not descend from a tribe, but from a single individual whose Indian ancestry has not been determined.”

Mr. Gover recused himself from the case because earlier in private law practice he had represented the Golden Hill in its tribal recognition bid. In 1999, Mr. Anderson re-opened the application, concluding that the BIA should not have based its rejection solely on genealogical grounds.

The Golden Hill plan to build a big casino in Bridgeport. They are backed by New York developer Thomas Wilmot. A heavy Democratic Party contributor and Hillary Clinton fundraiser, Mr. Wilmot told a Connecticut newspaper that he had invested $4 million in the effort to win federal recognition.

The Golden Hill case also is noted in Mr. Blumenthal’s lawsuit. Last year, the towns near the state-recognized Pequot reservation unsuccessfully sought Mr. Gover’s recusal in the Pequot cases, citing his earlier involvement with the Golden Hill tribe and BIA rulings during his tenure that gave increased weight to state recognition of Indian groups. The Pequot and Golden Hill cases await final determinations.

Outraged by BIA conduct, Rep. Wolf in March called for “a sweeping investigation” of the BIA affair, saying that many Indian groups had become “pawns in a billion-dollar battleground” for tribal recognition. In a letter to Attorney General John Ashcroft, Mr. Wolf requested “an investigation into the pattern of conduct over the past four years at the BIA.” The General Accounting Office also is probing tribal recognition at BIA.

The Clinton administration was very active in tapping new and prospective Indian wealth for campaign contributions. An October 1994 memo from Clinton-Gore campaign chief Terry McAuliffe to Deputy White House Chief of Staff Harold Ickes lists Richard Hayward, then-chairman of Foxwood Casino’s Mashantucket Pequot Indian tribe, as one of the “top supporters of the President,” contributing “$650,000 to the DNC this year.”

During the Clinton era, millions poured into Democratic Party coffers from pro-gaming Indians and their allies.

An Indian gambling lobbyist in New Mexico during much of the 1990s, Mr. Gover worked closely with the Clinton fundraising effort as director of Native Americans for Clinton/Gore before being named to head the BIA.

In a June 1995 memo to White House political directors, Mr. Gover wrote that there “is a lot of money in Indian country, and a lot of it has gone to the DNC.” He urged the White House to send operatives to a convention of the Indian casino lobby, the National Indian Gaming Association (NIGA).

“Send your top people to these meetings,” he wrote. “The NIGA tribes are political powers and must be courted.”

The White House responded. During the campaign, tribal leaders went to the White House for coffee with the president and dined with Vice President Gore. Top DNC officials met with the NIGA. Mr. Gover pressed the Indian agenda, much of it related to gambling. “The tribes’ anger at the Administration’s failure to state plainly its opposition the gaming tax is justified,” Mr. Gover wrote White House political director Craig Smith on Oct. 4, 1995.

On the eve of his Senate confirmation hearings in 1997, Mr. Gover deflected charges by New York Times columnist William Safire that as a lobbyist for New Mexico gambling interests he had represented a “criminal enterprise”–a casino run by the Tesuque Pueblo Indian tribe.

During the dispute over the legality of gambling in New Mexico, a federal judge had called the Tesuque casino a “criminal enterprise” that used money “derived from unlawful conduct.”

Mr. Safire warned that as head of the BIA, Mr. Gover “will be in a position to use federal power to encourage generous criminal gambling enterprises to blossom on reservations across the land.”

Mr. Gover says there was “no pressure at all” from the White House or its allies during his tenure at BIA, and that he “made it a point not to know” which tribes were contributing to the Democrats, to insulate himself from campaign-finance controversies.

The 1996 campaign also entangled Mr. Anderson in controversy. According to the final report of the Senate Governmental Affairs Committee investigation into the campaign-finance scandal, Mr. Anderson was a “figurehead” for a controversial Interior Department decision denying Chippewa Indian tribes the opportunity to build a casino in Hudson, Wis.

The Interior Department denied the Chippewa’s application that Interior take land at a failing dog track into trust for conversion into a casino; such “off-reservation” trust acquisitions were provided for in the 1988 Indian gaming act, as a path toward tribal economic self-sufficiency.

The Senate report concluded there was a “direct relationship” between the White House, the Interior Department, and donations received by the Democrats from local casino-owning tribes opposed to the competition in Hudson.

An independent counsel probe into the matter concluded that there was not enough evidence to charge Interior Secretary Bruce Babbitt with lying to Congress about his role in the affair.

Concerned about losing market share, a group of Wisconsin tribes lined up against the Chippewa. The opposition tribes hired a powerful Washington lobbyist and poured over $300,000 into Democratic coffers.

When their land trust application stalled, the Chippewa hired a lawyer, Paul Eckstein. Mr. Eckstein later testified to Congress that he went directly to Interior Secretary Babbitt, who told him the Chippewa application would be denied. He said Mr. Babbitt told him that Harold Ickes had directed him to issue a decision that day.”

Mr. Eckstein testified that Mr. Babbitt said, “Do you have any idea how much these Indians with gaming contracts have given to the Democrats? Half a million dollars.”

When then-BIA head Ada Deer unexpectedly recused herself from signing the final letter denying the Chippewa application, the task fell to Mr. Anderson. The Governmental Affairs Committee concluded that Mr. Anderson was “simply a figurehead for the decision.” Mr. Anderson dismisses the Senate report as “partisan” and says the independent counsel report concluded there was no evidence of wrongdoing.

Yet viewed in light of the new BIA misconduct allegations, the Senate and independent counsel probes might be worth revisiting. Is there a pattern of influence-peddling between casino interests and senior Clinton administration figures? Were Mr. Gover and Mr. Anderson acting as figureheads for powerful political and financial interests? Beyond the allegations of possible corruption at the BIA, what is to be done about the Indian casino boom? Is it a blessing or a curse?

Congress may start looking for answers. Last month, Reps. Shays and Wolf introduced a bill to establish a commission to examine government policy toward Native Americans and give state legislatures more power in approving Indian gambling operations. “Nearly 80 percent of Native Americans don’t receive anything from gambling revenues,” Mr. Wolf said.

Most tribes “continue to live in awful poverty, plagued by disease, infant mortality, unemployment and a lack of educational opportunities.”

The new commission may take on organized crime as well. In their letter to President Clinton, Reps. Shays and Wolf noted that the “influence of organized crime on Indian gambling is alarming. Tribal leaders often find themselves forced into affiliations with members of organized crime rings. This stems directly from the lack of federal oversight for Indian gambling operations.”

Sen. Chris Dodd (D., Conn.) also has called for reform. “This is out of hand,” he recently told the Associated Press. “This is all about casinos now.” Sen. Dodd said he would discuss tribal recognition petitions with Sen. Daniel Inouye (D., Hawaii), the new chairman of the Indian Affairs Committee.

But he shouldn’t look for much help there. When Mr. Gover got in trouble at his 1997 confirmation as BIA head, it was Sen. Inouye who came to his defense, declaring himself “fully satisfied” with his credentials. The chief counsel for the Indian Affairs Committee recently told AP that Sen. Inouye “believes the process of petitions ought to be expedited rather than stopped.”

It doesn’t appear that reformers will get much help from the executive branch either. While the GAO report into the tribal recognition process promises to be thorough, the Justice Department punted Rep. Wolf’s request for a full investigation to the inspector general of the Interior Department. An Interior official says the matter is “under review.”

Translation: Don’t hold your breath.

President Bush’s new BIA head, Neal McCaleb, was sworn in on July 4. At his confirmation hearing, Mr. McCaleb told Congress that the economic influence of Indian casinos had been “very beneficial.” He promised to be an impartial judge of tribal recognition applications.

Meanwhile, Interior Secretary Gale Norton is keeping her distance. The mess at BIA, a Norton aide says, “doesn’t fit with our pro-active, forward-looking message.”

Mr. Morrison is a senior editorial page writer at The Wall Street Journal.

For more, GO TO > > > Bureau of Indian Affairs


Yakuza From tripod.com: Yakuza Stretch Tentacles Overseas . . . Like most growth-oriented enterprises, the yakuza have not confined their illegal — and legal — business activities to Japan. In the llate 1960’s the Japanese mob took advantage of the sharp rise in Japanese tourism and began organizing “sex tours” to various countries in Southeast Asia.

The yakuza also began to recruit — or, more probably, to coerce — women from the Philippines, Taiwan, South Korea and other Southeast Asia countries to work as “hostesses” in mob-controlled brothels in Japan. The overseas push proved similarly lucrative for drug trading — primarily of Korean, Taiwanese and other sources of methamphetamine (known as “speed” on U.S. streets).

Gunrunning also evolved into a profitable activity since the sale of guns is controlled so strictly in Japan that the black market price for handguns can be as much as $5,000 to $7,000.

Gangsters typically have bought the guns abroad, mostly from criminal elements in China, Taiwan, Hong Kong, the Philippines and the United States, and sold for exorbitant prices on the black market back home. . . .

American law enforcement officials maintain that until 1974 yakuza activities in the U.S. were relatively limited, both in nature and scope. Not surprisingly, given its geographic proximity and brisk tourist trade, Hawaii initially attracted Japanese gangsters. Their focus there was on fleecing their own countrymen on yakuza-organized tours that included patronizing yakuza-run bars, restaurants, brothels and other entertainment.

As the yakuza’s economic power has grown, however, they have focused greater attention on picking other fruits from the U.S. market. In this regard, mobsters found that, partly due to its heavy tourist traffic, the fiftieth state was a prime market for selling Asian-made methamphetamine (usually at a cut-rate price compared to U.S.-made speed) and/or trading these drugs for handguns. . . .

From its Hawaiian beachhead the Japanese mob has moved on to the mainland, stopping first in southern California but continuing its reach up the coast to such cities as San Francisco, Portland, and Seattle. As the yakuza have cultivated ties with other organized crime groups operating in the United States, American law enforcement officials have observed the Japanese mob in gambling centers, such as Las Vegas and Atlantic City, as well as in Newark, New Jersey, New York City and Boston. . . .

While the primary focus of the yakuza’s dealings with other organized crime groups still appears to be the trafficking in drugs and handguns, U.S. officials, aware of the Japanese mob’s expanded activity in the “above-ground” business world in Japan, have become increasingly worried about the extent to which the yakuza have been able to commingle their illicit profits with legitimate Japanese investment in the United States.

Yakuza in Business and Politics. The yakuza has always been involved in politics and business right from the start. The groups are always hungry for more power and money, wherever they can find it….

In 1987, Noboru Takeshita was elected prime minister in Japan. There were always suspicions of gangster ties in the election. . . . The Liberal Democratic Party kingmaker was made to resign from politics in October 1992 when he admitted to receiving Y500m ($4 mil) from a delivery firm, Sagawa Kyubin. The owner of the firm, Hiroyasu Watanabe, paid the kingmaker for trying to help save his business.

There is another yakuza incident that hits closer to home. West Tsusho, a Tokyo-based real estate firm, bought two American companies with help from none other than Prescott Bush, Jr.President Bush’s elder brother.

West Tsusho is an arm of a company run by the Inagawa-kai’s leader, Ishii Susumu. . . . Tsusho purchased Quantum Access, a Houston-based software firm, and Asset Management International Financing & Settlement, a New York City-based company….

With the anti-yakuza countermeasure act in place, the future for the yakuza seems bleak, at least in Japan. The North American expansion could do very well, as they channel nearly $10 billion into legitimate investments not only in the US, but in Europe as well….

For more, GO TO > > > Yakuza Doodle Dandies

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For more Game Birds hiding behind the blinds,


A Connecticut Yankee in King Kamehameha’s Court

Aloha, Harken Energy!

Apollo Advisors

Buzzards of Paradise

Dirty Money, Dirty Politics & Bishop Estate

Flying High in Hawaii

Gensiro Kawamoto: How to Pluck a Billionaire

Investigating Investcorp

How to Pluck a Non-Profit

The Nature Conservancy

The Consuelo Zobel Alger Foundation

The Puna Connection

The Vultures in Maunawili Valley

Paradise Paved

Predators in Paradise

RICO in Paradise

Songs of The Drug Vultures

Sukamto Sia: The Indonesian Connection

The Nests of Osama bin Laden

The Great Nest Egg Robberies

Vultures of the Sandwich Isles

Who’s Guarding the Hen House?

Yakuza Doodle Dandies



Last Updated on January 8, 2006 by The Catbird