Wednesday, February 10, 2010

Mashpee Wampanoag´s Ex-Financial Backer Speaks Out

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This installment of The Tribes In The Media is a South Coast Today article on one of the Mashpee Wampanoag Tribe´s former financial backer´s response to being cut out of a possible casino deal with the Tribe.

Original casino backers feeling jilted by tribe
By Stephanie Vosk
South Coast Today
February 10, 2010

Tribe leaders may be looking to cut ties with the people who financed their quest for federal recognition, but some of those investors don't want to go quietly.

Over the past decade, Detroit real estate developer Herb Strather formed a group of 300 investors to bankroll the tribe in exchange for a cut of future casino profits. Now that the deal has gone sour, some of the investors are considering taking legal action against the tribe if they're left out of the potential windfall.

"I feel very strongly that we've acted straightforward and honest and we've given our money and some people have given their time and I just don't think it's right," said George Pyne, an East Falmouth summer resident who bought into the project about eight years ago.

Tribe leaders have been working for months to officially cut ties with their original financial backers, Trading Cove and AtMashpee. Meanwhile, they've inked a new deal with a group of Malaysian casino investors.

Strather says he's been told that his contributors will get back between 80 to 90 percent of the money they've doled out, but only if and when a casino opens.

But Strather, who has contributed into the "seven figures" himself, said he'd have to pay his other investors first and wouldn't see a penny.

"This is not expressive of the tribe that met the Mayflower. This is not the same as the tribe that helped Harriet Tubman in the Underground Railroad, that helped the slaves," Strather said last week. "This is completely a vindictive situation."

From 1999 to 2006, AtMashpee covered the tribe's day-to-day costs.

Strather bought a horse farm in Mashpee for the Wampanoag to operate. AtMashpee hired lawyers and lobbyists to push the tribe's stalled petition through the Bureau of Indian Affairs, which ultimately led to the tribe being granted federal recognition in 2007.

In total, the group has doled out more than $25 million over the last decade, said Strather, who headed up the group of investors before stepping down a few years ago.

"We supported the tribe with a very big budget, from Day 1," Strather said. "I never, ever, ever remember saying no."

Now, Strather is hoping tribe members can convince the tribal council to keep his group involved. If not, he may literally take back the farm, he said.

Through an attorney Tuesday, the tribal council rebuffed Strather's claims.

"Herbert Strather has no relationship with the Mashpee Wampanoag tribe," attorney Howard Cooper said in a prepared statement. "His claims have no merit whatsoever, and as such the tribe will not respond further to them."

Money troubles
By early 2006, when the tribe received the initial nod from the Bureau of Indian Affairs that it would be recognized, AtMashpee had already spent $15 million.

It was also around this time that tribe members began to ask questions about where that money was actually going and what kind of influence Strather and the people he hired were exerting over the tribe.

Four tribe members went to court in 2006 to try to trace the checks. Their complaint was eventually dismissed and they were banned by the tribal council from participating in any tribal events.

As the tribe's bills piled up and the money ran low, AtMashpee in late 2006 brought in South African casino moguls Sol Kerzner and Len Wolman, who had bankrolled Mohegan Sun. They struck a lucrative deal with the tribe for a more than 6 percent stake in a future casino. AtMashpee retained control of about 5 percent of the investment, Strather has said.

But in 2008, Glenn Marshall, the chairman of the council who signed the initial deal with Strather in 2000, admitted to federal prosecutors that he funneled more than $4 million of Strather's money through a state corporation to make campaign contributions and pay his own bills.

Last year, Marshall pleaded guilty and was sentenced to 3½ years in federal prison.

"I don't know if they're trying to blame me for that or not. I simply wrote checks," Strather said in a recent interview. "No, I didn't scrutinize really a lot because I love the tribe so much. I was so liberal with them, I gave them whatever they asked me."

And when he found out the money wasn't used the way it was supposed to be, "I didn't get mad and sue them," he said.

new partners
Marshall's admission and downfall led to a wave of new tribal leadership. The new council leaders — elected in February 2009 — focused first on cutting ties with many of the advisers and associates that Strather and Marshall had hired.

Later that year, tribal leaders voted not to ratify the agreement with Kerzner, Wolman and Strather. The terms were too unbalanced, tribe leaders said.

But Strather says the disagreement arose because the plan called for a $1.6 billion casino — a model deemed no longer feasible under tough economic conditions. Instead of trying to renegotiate — which Strather says he would have been willing to do — the tribe went looking for other financial backers.

In November 2009, the tribe announced a new deal with Arkana Limited, an affiliate of Kien Huat, which is part of gambling giant Genting Group, the group that backed Foxwoods Resort & Casino in its infancy. The tribe still had not broken off from Kerzner, Wolman and Strather.

"I hope the elders will tell this new council: 'Hey, you wanna make a new deal with somebody, make a new deal. But let the original investors in there,'" Pyne said.

But his son, Jim Pyne, who also invested in the tribe, said while he does want to be a part of the casino, he'd also be happy to get his money back.

"It's been such a long process and it's looked so bad for so long with delays and put-offs. I guess if they gave me my money back today, yeah, I'd take my money back," Pyne said, adding that he isn't privy to the negotiations. "Dealing with the people that we're dealing with, they don't seem like they're ethical in the way that they're treating us."

Lawrence "Sonny" Tobey, co-chair of the tribal elders council, said his group remains behind Strather and his investors "100 percent."

"We look at that commitment as a very valid commitment and, as members of the tribe, want to live up to our responsibilities," Tobey said.

But another tribal elder, Amelia Bingham, who was among the group that sought answers about tribe finances, said Strather "should have been left out of the deal."

"He tricked the tribe," Bingham said, noting, for example, how Strather promised to deed the tribe the horse farm, but never actually did.

As the deal with Trading Cove and AtMashpee is perhaps on the verge of collapse, the tribe and its new investors are already moving forward with new casino plans.

The Wampanoag tribe secured a deal in 2007 with the rural town of Middleboro to build a casino. But in recent months, tribal leaders have met with officials in the city of Fall River about possibly relocating the gaming facility.

The tribe is also continuing talks with state officials as the gambling debate once again heats up on Beacon Hill.