Wednesday, May 7, 2008

The Tribe In The Media: Mohegan Comes Under Scrutiny In Pennsylvania

Feather News
Updated with footnote at end of article

Last week Pennsylvania State Senator Jeffrey Piccola requested the investigative backgound and suitability report on the Mohegan's Pocono Downs application for a gaming license from that state's gaming board. Instead of receiving that report, a lobbyist from the Mohegan Tribe showed up at the senator's office asking what the senator was concerned about, which only triggered a new concern. Specifically, Sen. Piccola questioned why a lobbyist was tipped off by the gaming board to his request for information.

An article in today's Pocono Record newspaper perhaps sheds light on the senator's initial concern, which is why certain relationships were not disclosed by the Tribe in its application for a gaming license or in the required annual updates to that initial application. The license of one slot parlor operator, the owner of the Mount Airy Casino, has been suspended for not disclosing certain relationships and has called into question the ability of the state's gaming board to effectively regulate the industry. Now, according to the article, it seems that Mohegan will have to defend its reasoning for not disclosing its relationship with Dennis Troha (until his indictment), a former partner in the proposed Menominee Tribe casino in Wisconsin.

Note: Any references to the tribe above refers to the tribe's business arm, the Mohegan Tribal Gaming Authority. All gaming endeavors by the tribe are conducted under MTGA or subsidiaries of MTGA.

The Pocono Record article follows:

Mohegan Linked To Corrupt Wisconsin Developer
By Howard Frank
Pocono Record newspaper
May 07, 2008

Pennsylvania gaming regulators didn't know about Wilkes-Barre slots operator Mohegan Sun's relationship with a corrupt developer in Wisconsin.

The board suspended the gaming license of Mount Airy owner Louis DeNaples when he was accused of hiding his connection with reputed underworld figures. No such action has been taken against Mohegan yet, but the company did cut its ties to the developer.

Mohegan Sun, a category 1 slots licensee, also operates Pocono Downs racetrack and four off-track wagering sites, including one in East Stroudsburg.

Regulators require Pennsylvania slots licensees to update their initial gaming applications yearly. Board officials said they had no knowledge of Mohegan's dealings with the developer as late as last week.

Mohegan Sun at Pocono Downs is owned by Downs Racing, which in turn is owned by the Connecticut-based Mohegan Tribal Indians. They ran into trouble while trying to expand their gaming operations into Wisconsin.

Wisconsin licensing officials discovered Mohegan's developer was being investigated in connection with a scheme to secure the approval of Wisconsin's governor for an $800 million casino. The developer, Dennis Troha, was indicted for illegal campaign contributions in March 2007, and pleaded guilty to money laundering charges in June of that year.

The developer's guilty plea came after Mohegan Sun's Pennsylvania category 1 slots license was approved. But an investigation by Wisconsin authorities revealed wrongdoings and mob ties going back long before the partnership began in 2002.

Section 1326 of Pennsylvania's gaming law requires licensees to keep their initial applications up to date annually. According to the legislation, "The application for renewal shall include an update of the information contained in the initial and any prior renewal applications. ..."

Troha was Mohegan's partner in the Kenosha casino project in Kenosha. Troha was indicted by the federal government in 2007 for funneling campaign contributions through family and friends and lying to the FBI.

Troha was the sole owner of Kenesah Gaming, a company formed to secure a contractor license and land a deal from the state of Wisconsin for gaming in Kenosha. The company received financing from Troha, the Menominee Indian Tribe of Wisconsin and the Mohegan Tribal Indians of Connecticut.

Mohegan was trying to expand into Wisconsin, which only allows tribal gaming. In order to secure a deal, they needed the governor's approval for a land agreement with the local Menominee Indian Tribe and Mohegan.

The incumbent governor of Wisconsin, Jim Doyle, was running for re-election in 2006.

According to the indictment, Troha 'loaned' about $50,000 to a business he controlled, Johnson Houston Partners in 2005 and 2006. At the same time, several Troha relatives issued checks to the "Doyle for Governor" campaign totaling $47,500. Johnson Houston Partners issued checks to those relatives for the exact amounts of their contributions. The "loans" were never repaid.

Troha was also charged with making false statements to the FBI as part of its investigation into the campaign contribution scheme.

Troha pleaded guilty to a separate charge of exceeding campaign contribution limits to President George W. Bush, and to the Democratic Party in June 2007. He was sentenced to six months of probation and given no monetary fine. The charges in connection with the Wisconsin gubernatorial contributions were dropped.

Subsequently, several of Troha's former associates pleaded guilty to similar charges.

This year, according to published reports, Kenosha County Executive Allan Kehl, a strong public proponent of the casino project, resigned his position and pleaded guilty to receiving $15,000 in bribes from Troha for his work related to the Kenosha casino project.

Troha's activities were discovered by gaming authorities in Wisconsin during an investigation tied to his company's application for a gaming license. The license application was subsequently withdrawn.

Troha is a former trucking company owner who, according to published reports, was worth $33 million.

The Pennsylvania Gaming Control Board, the entity which licenses and oversees slots gaming in Pennsylvania, said it had no knowledge of Troha's relationship to Mohegan Sun. It is not apparent whether Mohegan Sun, which received its license before Troha's guilty pleas, ever disclosed its relationship with the developer and former trucking company owner.

Pennsylvania Gaming Board Chairman Judge Mary DiGiacomo Colins said that she didn't recall seeing any information regarding Troha. But Colins said if the board's investigative arm, the Bureau of Investigations and Enforcement, was looking into Troha's ties with Mohegan Sun, she wouldn't become aware of it until and unless a report was issued by the bureau.

A spokesperson for the board could not say whether the annual renewal required a slots licensee to disclose such a relationship.

But the initial gaming application in Pennsylvania requires the applicant to disclose any relationship with those accused of crimes. It asks "Has applicant or any of its officers, directors/partners or trustees ever been indicted, charged with or convicted of a criminal offense or been a party to or named as an unindicted co-conspirator in any criminal proceeding in the commonwealth or any other jurisdiction?"

Troha and the Mohegan Indian Tribe were both investors in Kenesah Gaming, although the Pennsylvania regulations may not consider this a partnership arrangement. They may also not interpret the Mohegan Indian Tribe as owners of the licensed entity in Pennsylvania, even though they own the 99 percent stakeholder in Mohegan Sun at Pocono Downs.

The board suspended Mount Airy owner Louis DeNaples' gaming license following his indictment by a Dauphin County prosecutor of lying about his relationship with reputed mobsters. The board appointed a trustee, Dr. Anthony Ceddia, to oversee the casino. They also banned DeNaples from any involvement in the business, and from physically stepping into the casino or its related properties. Mount Airy opened in October 2007 with 2,525 slot machines, the state's first and still only category 2 standalone slots casino. DeNaples oversaw the casino for less than two and a half months before his license was suspended.

End of Pocono Record article.

Note: The ongoing "Tribe In The Media" series occasionally reprints selected articles that we come across in the non-Indian press in order for tribal members to witness how the tribe is portrayed in the media. It has been brought to our attention that, since the posting of this Pocono Record newspaper article, some tribal councilors have questioned its accuracy. We are looking into exactly what was said by our tribal councilors out of curiosity but, let's be clear, it is up to the tribal council to respond to any innacuracies in the national media. The Feather News simply "cut and pasted" the article. At least three other media outlets, all widely read, reprinted the same Pocono Record article on May 7th: Indian Country Today, The Falmouth Institute and Thousands of Pennsylvanians read the Pocono Record, which is the main, local newspaper in the Pocono Mountains. We feel it is not only the job of the tribal council but it is their responsibility to respond to the Pocono Record to point out any statements made in that newspaper that they feel are inaccurate. We will monitor that Pennsylvania newspaper and keep our readers posted on the tribal council's response.