Seminoles in court over casino lease
By JEFF TESTERMAN, Times Staff Writer
Three months ago, the Seminole Tribe of Florida stopped sending lease payments to the partnership that built its Coconut Creek Casino, a 24,000 square-foot structure that generates an estimated $61-million a year.
Seminole officials say they were hoodwinked in a lease contract negotiated largely by James E. Billie, the longtime tribal chairman who was suspended last year in the midst of a federal grand jury investigation.
The contract called for Coconut Creek Gaming, a partnership headed by Maitland developer Alan H. Ginsburg, to pick up the tab for more than $20-million to provide startup capital, buy equipment and construct the casino in Broward County.
But there was a huge payback. The deal obligated the tribe not merely to repay the $20-million, but also to pay "incentive rent," a 35 percent cut of net casino revenues over 10 years that could bring Ginsburg's company more than $200-million.
When the tribe stopped making those $1.7-million monthly payments in July, the contract dispute ended up in court, with both sides hurling new accusations.
Ginsburg's partnership sued in Broward Circuit Court Oct. 11, asking for the appointment of a custodian to review the tribe's financial records. The lawsuit cited "a void in tribal leadership" and an "atmosphere of unrest and confusion that has plagued the tribe since the suspension of James Billie."
Seminole general counsel Jim Shore called that hogwash.
"There is no void of leadership here," Shore said. "The bottom line is that the tribe wasn't aware of all the facts in this contract, and for the amount of money these guys put into this, they're getting back a huge return on their investment."
The tribe successfully argued that the suit should be moved to federal court, because any lease of Indian lands or facilities falls under the jurisdiction of the U.S. Department of the Interior.
The tribe has also asked for a review of the Ginsburg contract by the National Indian Gaming Commission, which regulates all Indian gambling. Tribal attorneys want the NIGC to look at a friend of Billie's who was a secret partner in the development of the Coconut Creek Casino.
The tribe is forwarding to the NIGC details of an $8-million promissory note paid under the contract to a company called Coconut Chips, "a party that appeared to have no relationship to the casino transaction," said tribal attorney Donald Orlovsky.
Coconut Chips is run by Gary Fears, an Illinois hotel developer and steakhouse owner who befriended Billie as early as 1996 in an effort to win a lucrative management contract at the Coconut Creek Casino. Fears gave the tribe a $1.7-million property near the casino site as well as the unlimited loan of a $670,000 Turbo Commander aircraft.
Questions about Fears' background blocked his attempt to get the management contract. In Illinois, Fears defaulted on a state-sponsored loan and met resistance from the Illinois Gaming Board while attempting to win a riverboat gambling license.
Fears' secret involvement in Ginsburg's deal was ultimately revealed by sworn depositions given by Fears and Billie in a civil suit. Shore said the tribe began researching Fears' involvement after the St. Petersburg Times published excerpts from the depositions in July 2001. Friday, Billie said he has no regrets about the Coconut Creek contract or Fears' involvement.
"Strange bedfellows takes place in these kinds of things," Billie said. "If it weren't for Gary Fears, the tribe wouldn't be making the money they are.
"I may pay $100-million to someone to do a casino for us, but the tribe will make many times that. You got to look at the overall thing."
Billie, the focus of a federal investigation that began more than three years ago, was ousted by the tribal council in May 2000. Council members declared Billie would remain suspended pending the resolution of a sexual harassment suit against him and a forensic audit of Seminole finances.
The harassment suit ended with a confidential settlement this month. The audit, still ongoing, led to a civil suit in which the tribe accused Billie and Timothy W. Cox, his handpicked administrator, of a stock manipulation scheme that drained $20-million from the Seminole treasury.
A federal judge dismissed the suit on jurisdictional grounds.
But in June, Cox and two business partners were charged in a federal indictment with conspiracy to embezzle $2.77-million from the tribe and launder the money through a shell company in Belize. That trial is scheduled for December.
-- Jeff Testerman can be reached at (813) 226-3422 or by e-mail at firstname.lastname@example.org.
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