WampaGate

The empire has no clothes

Is There a Lesson in this for Massachusetts?
Are the Wampanoag & Mohegan tribes in over their heads?

By Peter Kenney

We in Massachusetts should perhaps keep an eye on what is happening with Connecticut's Mohegan tribe and its gambling empire.

At this time, the Mohegans have $1.2 billion outstanding in bonds -- debt that they have sold to the public as a way of raising capital for their expanding gambling operations. Yet the current issue of Forbes, as well as that ever-busy rumor mill are wondering if the Mohegans are in over their heads.

In fact, Moody's, the respected bond rating service, is hinting that if the Mohegans do not start generating some positive cash flow their bond rating will be lowered. Moody's is conducting a credit review and the tribe's $925 million loss is unsettling. Only one of the tribe's new ventures -- at Pocono Race Track in Pennsylvania -- is anywhere near producing income. This would mean the tribe will pay higher interest to its bond holders without seeing any compensating increase in income/profits. It could also mean that they will be unable to attract investors at all.

Dodgy doings in Dairyland

Staying away from criminals is one lesson we could all learn from the Mohegans. And, be careful about the contracts you sign. The Mohegans have signed an exclusive contract to manage a casino resort complex planned for Wisconsin. They have formed a partnership with the Menominee tribe in that state and the Menominees -- in partnership with a man named Dennis Troha -- have purchased the Dairyland Greyhound Park in Kenosha, Wisconsin. The former dog track is intended as the site for the new casino resort. But, Mr. Troha might not be available for opening day.

Far above the legal limit

Last week he pled guilty to some very nasty federal charges. It seems that Troha, through an arrangement whereby he funneled money through his family members, made contributions to politicians, one in particular, far in excess of legal limits. A $100,000 total contribution will get Uncle Sam's attention. Troha is due to be sentenced late this week. The whole Troha story, easily found all over the web, includes some very shady doings indeed.

A very expensive attitude

He made his fortune in the trucking business, where people often rub elbows with the wrong sorts of folks, even gangsters. While there are reports suggesting links between Troha and some underworld figures, his real difficulties seem to arise from allegations that he used improper and even illegal  tactics to avoid compliance with union regulations, that he paid lower-than-required wages and so on.

Troha is clearly not a man easily impeded by trifles such as laws. And this attitude could put him in federal prison for 25 years and cost him hundreds of thousands of dollars in fines.

Having decided not to go through a trial has Troha also decided to talk? It is reported that as many as three other individuals -- public officials  -- are on the block waiting for their own axes to fall. Presumably they were the recipients of, or couriers for, the Troha cash.

Whose mail are the checks in?

Imagine, this man was a partner of the Wisconsin Menominee. The Mohegans have saved the day by entering into a confidential contract to buy out Troha's interests in the Dairyland Greyhound Park project. But, the Mohegans themselves -- or at least some of their tribal council officers -- were also heavy contributors to Wisconsin politicians. No one from the Mohegans has been charged or implicated in wrongdoing.

This situation does, however, remind us of all those checks written by Mashpee Wampanoag Tribal Council officers and family to certain politicians in Washington who held positions from which they could help the Wampanoags.

Fewer coins to pop

Gambling used to be big business in this country. Now it is huge. Several things may combine to make the picture for large scale expansion of gambling/resort development in general, and tribal gambling enterprises in particular, less appealing now and in the future than in recent  times.

The soft economy, probably already in recession, will mean that there are fewer coins to pop into the slot machines and less disposable income generally. Then there is the issue of competition and market saturation -- how much gambling is too much? When will we reach that limit? Are we near it now? And, who is the competition for our own tribe, the Wampanoags of Mashpee?

Outfoxing the Mohegans

The Mohegans are involved in five gambling projects. Mohegan Sun is enormously profitable, but the tribe was the victim of very clever contract writing by their original partners, Len Wolman and Sol Kirzner. Wolman and Kirzner are the money men behind the Wampanoag gambling plans for Middleboro.

Not only did they outfox the Mohegans in their original deal, they are now receiving huge annual payments ($78 million last year) from the Mohegans to buy out their interests. Being aggressive businessmen Wolman and Kirzner are putting this new money to work backing the Wampanoag efforts, efforts, which if fruitful, will compete more or less directly with the Mohegans in Connecticut.

The Mohegans are also the tribal entity behind an effort to build a billion-dollar gambling and resort complex in Palmer, Massachusetts. Many in both the Indian and the gambling world seem to think that the Mohegans are rich enough from their own Mohegan Sun enterprise to finance and build this complex without either outside financing, or even federal protection from state regulations. They could simply compete with other applicants on an equal footing as private developers.

The big “what if”

What if Glenn Marshall -- the now deposed and disgraced former chairman of the Mashpee Wampanoag tribal council -- has already committed his tribe to the same type of contract with Wolman and Kirzner that allowed the two men to mine money from the Mohegan Sun development? Would the Wampanoags then be faced with a decision…to spend between half and all of a billion dollars to buy these men out?

Yes, a careful study of the history of the Mohegans in the gambling business could be very instructive for our Indian neighbors in Mashpee.