Tribe's gaming millions disputed

Seminole leaders have spent hundreds of millions, sparking audits and member complaints.

MIAMI - The Seminole Tribe of Florida's leaders have spent millions on lavish homes, boxing rings, basketball courts and other gifts for themselves and relatives as the tribe's gambling enterprise has expanded into one of the nation's largest, a newspaper's investigation shows.

The South Florida Sun-Sentinel reported in its Sunday editions that since 2000, members of the Seminoles' Tribal Council have spent more than $280-million from funds they control on such items as luxury vehicles, TVs and stereo systems, and cosmetic surgery for tribal members. They also have paid for vacations, home repairs and criminal defense lawyers, according to thousands of pages of tribal documents the newspaper reviewed, including audits, budgets and council resolutions.

The spending has triggered audits by federal regulators, and complaints among Seminoles that the gambling profits benefit certain members at the expense of the rest of the tribe.

Each of the tribe's almost 3,400 members receives about $120,000 annually in profits - a far cry from the $100 annually each member received in 1979.

"I'm not sure we're functioning as a tribal government should, because as far as the spending, we don't take enough steps to control it," tribal member Andrew Bowers Jr. told the Sun-Sentinel. Bowers is a lawyer who served two years on the five-member Tribal Council before losing his seat in a May election. "It's not being spent equally on everyone."

The tribe operates one of the most lucrative Indian gaming enterprises in the country, including its recent purchase of the Hard Rock International hotel and restaurant chain for nearly $1-billion. It also recently signed a 25-year agreement with the state to offer Las Vegas-style slot machines, blackjack and baccarat at its six casinos.

The tribe could net hundreds of millions annually from the deal, with the state receiving a minimum of $100-million annually. The pact still needs federal approval and is facing legal challenges from some members of the Legislature and possibly from other gambling interests in the state.

'General welfare'

Under the federal Indian Gaming Regulatory Act, tribes can spend gambling profits only on five broad categories, including funding government services and providing "for the general welfare of the tribe."

Spending on individual members must be through programs, such as housing and recreation, with criteria typically tied to financial need. Payments outside of established programs to select individuals, or purchases of personal cars, boats and landscaping, are prohibited by law.

The council has spending flexibility with revenues from non-gambling enterprises, which are not regulated by the federal government.

The tribe, considered a sovereign nation, is not obligated to open its records. The Seminoles are subject to some federal laws but also have their own government: a corporate board that controls the nongambling enterprises and the more powerful Tribal Council that governs the tribe.

A 2005 audit from outside accountants warned of a practice "where certain council representatives can request and approve checks to themselves under $10,000 without a second approval."

"We noted numerous expenditures below the $10,000 limit occurring in round dollar amounts," the auditors wrote, noting an increased risk of fraud.

The council did not adopt the auditors' recommendation to require two approvals for checks.

Council member David Cypress has spent more than $160-million since 1999, more than the other council members combined. Cypress used some of the money to buy and remodel a boxing gym and spent millions on himself, his family and friends. He could not be reached for comment Sunday.

Inquiry advised

Tribal spokesman Gary Bitner said he wasn't aware of much of the spending and said "most people connected with the tribe" were not either.

Longtime council member Max Osceola Jr., designated by the tribe to speak on behalf of the council, said council members and their families have received the same assistance available to all Seminoles.

"I'm responsible for every Seminole member," Osceola said. "It's not who my blood family is, it's not who my clan is. It's the 3,320 Seminoles I'm responsible for."

Phil Hogen, the chairman of the National Indian Gaming Commission, which regulates tribal spending of gambling profits, told the Sun-Sentinel that the recent spending practices uncovered "cry out for some inquiry, and they will receive that."

The commission has scheduled a visit to the tribe in December to review its 2007 spending.

"I am surprised to learn that council members are expending dollars of this magnitude," said Hogen, a member of the Oglala Sioux Tribe.

The IRS began an audit last year and requested tribal financial documents. The agency declined to comment.

[Last modified November 25, 2007, 23:06:38]