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Claims of money mismanagement balloon

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Tuesday, 06 July 2010

Claims of money mismanagement balloon with Florida Indian tribe casino funds By Robert Trigaux, Times Business Columnist Tuesday, July 6, 2010  I'm not much of a casino gambler. But I'm betting early reports of how some American Indian tribes are mismanaging or misdirecting their enormous sums of casino money, here in Florida and elsewhere, are just the start of unsavory news coverage ahead. How timely, given last week's big whoop over a new Florida law that imposes no limits on a version of poker called Texas hold 'em. That means higher wagers, bigger pots and, of course, another major economic injection into Florida's rising and tribally dominated gambling industry. In recent weeks, the nation's three top credit rating agencies — S&P, Fitch and Moody's — have all voiced concerns over questionable financial controls by the Seminole Tribe of Florida, whose holdings include the Seminole Hard Rock casinos, hotels and related entertainment businesses. The most popular in-state casinos are in Tampa and Hollywood. What has upset the rating agencies is the formal "notice of violation" issued last month from the National Indian Gaming Commission. Among the commission's findings? Tribal council members authorized nearly $200,000 for the purchases of jewelry, cars and other personal expenses for certain tribal members. Those purchases violated federal gambling laws because they benefited individuals, not the entire tribe. Tribal council member Max Osceola charged $85,000 on a tribal American Express card for jewelry, audio equipment and hotel stays. The violations occurred in 2006 and 2007, but concerns about proper money management persist. S&P said it expects the Seminoles to fix such violations this summer. The rating agency last week placed the tribe's finances, rated BBB, on its credit watch with "negative implications." "While the Tribe has taken meaningful steps over the past several years to improve its internal controls, weaknesses in governance, such as those recently identified, are not typical for entities carrying investment-grade ratings," S&P said. The Fitch rating agency agreed, last week downgrading the Seminole Tribe to below investment grade. And Moody's earlier in June said it was considering like action. It's not just the Seminoles who are under financial pressure. Last week the Miami Herald, citing federal court records, said the IRS is investigating allegations that South Florida's Miccosukee Tribe used armored vehicles to deliver up to $10 million in cash from its gambling operations to hundreds of Indians four times a year — without anyone reporting the money as taxable income. That's $61,000 per person annually. In Connecticut, the Indian tribe that runs the nation's largest casino — the Mashantucket Pequot Tribal Nation, which controls the legendary Foxwoods Resort Casino in Ledyard, Conn. — is trying to renegotiate more than $2 billion in debt it can no longer afford with banks and bondholders. A July 13 payment deadline awaits. When Gov. Charlie Crist this spring signed a gambling compact with the Seminole Tribe formalizing its casino gambling here, the promise of new state tax revenues in difficult economic times loomed large. Let's hope this flurry of financial misdeeds comes under tighter controls swiftly. But don't bet on it. http://www.tampabay.com/news/business/claims-of-money-mismanagement-balloon-with-florida-indian-tribe-casino/1107047

 

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