August 9, 1996 issue
MAHNOMEN, MINNESOTA
None of the more than $12 million in WELSA money that went into building
the Shooting Star Casino has been repaid to White Earth. White Earth
officials learned Wednesday.
Meanwhile, accountants told them, the management company Gaming
World International, has been making considerable money in the enterprise.
The firm gets five percent more of the net profita than allowed by
contract; the casino is paying the salaries of Gaming World employees; and
Gaming Wold neither pays the cost of training casino employees nor has it
trained in a trio of tribal members to assume casino mangement, as directed
by the contract.
Reaction ranged from shocked silence to anger at Wednesday's
meeting of the Gaming Commission at the casino, as commissioners and
attorneys absorbed the news., "This is really disheartening," said RTC
Chairman Eugene "Bugger" McArthur. The Gaming commission is made up of RTC
members.
Under the five-year contract between White Earth and Gaming World,
$5.5 million of the WELSA money should have been paid back to White Earth
by the time Gaming World's contract is up in March of 1997. While none of
the money has been returned to the band, Gaming World has receive $9.2
million over the past four years.
Two pots of White Earth Land Settlement Act money was used by the
previous council to build the casino: $5.5 million slated for tribal
economic development and $6.4 million slated for heirs. The heirs couldn't
be found and their share reverted to the band. With interest drawn from
investment, the two pots total $12.086 million. Subsequent loans to
finance the hotel and gaming equipment brought the total tribal investment
to $27 million. Gaming World invested $100,000, which the company recouped
almost immediately, accountants said.
The RTC and officials of Gaming World were slated to meet Tuesday
Aug. 6, to discuss the situation.
Commisions resolved last Wednesday to:
-Ask accountants to determine what amount of money should have been paid
Gaming World, had the proper 70-30 percentage split been followed, instead
of the 65-35 split identified is casino financial reports as "the current
interpretation of the management agreement";
-Escrow all future payments to Gaming World until the financial picture is
clear; and
-Send a "breach of contract" letter to Gaming World
Within hours of after the meeting, rumors began flying that
substantial layoffs would be made at the casino. However, there was no
discussion of layoffs by the Gaming commission or staff, and commissioners
said they're not anticipating any.
District II Representative Tony Wadena also attended the meeting,
but said he came as an observer, not a participant, because he doesn't
recognize the authority of the other four members to act as a tribal
council.
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Bernard J. Rock, Sr.
Leech Lake Pillager Band
Spotted Eagle Warrior Society
North Central Minnesota Native American Veterans
Outreach and Resource Center