Regulators have ties to Seminoles

By BRAD GOLDSTEIN and JEFF TESTERMAN

Times Staff Writers

The National Indian Gaming Commission was created to regulate Indian gambling. Lobbying on behalf of Indian tribes is not supposed to be part of the job.

Yet the commission recently tried to broker a deal on behalf of the Seminole Tribe of Florida to legalize full-scale casino gambling across the state.

"They're not regulators, they're cheerleaders," said John Glogau, an assistant Florida attorney general who was part of those discussions.

In recent years, a growing number of people -- including former NIGC employees -- have taken issue with the close relationship between the agency and those it is supposed to oversee.

One former chairman resigned after it was revealed that he accepted donations from a lobbying group. Questions were raised at a Senate hearing about a commissioner's relationship with an Indian gambling company lobbyist. And the agency's new executive administrator was a lobbyist for one of the six Indian tribes at the center of an ongoing campaign finance investigation involving Secretary of the Interior Bruce Babbitt, records show.

Federal auditors and court cases reveal other problems with the agency: Meetings are held in secret, minutes are not kept, requests for information languish or go unanswered, attendance records are sketchy, travel expenses get reimbursed with little documentation, and no guidelines exist to prohibit employees from accepting industry perks.

Meanwhile, 45 percent of the 276 Indian gambling halls under NIGC's jurisdiction do not abide by the law -- the casinos run by the Seminole tribe among them. Those out of compliance either refused to supply an independent audit, did not conduct background investigations, operated gambling devices such as slot machines without state approval, or failed to pay required fees.

The Seminoles, for instance, have never gotten required approval by the NIGC of their contract with a private company to run the Tampa bingo hall despite regulations requiring them to do so. Pan American & Associates has run the Tampa hall since 1982.

"This is a tribal issue," said Buddy Levy, general counsel for Pan American. "One of the reasons that we feel like we have such good relations with the tribe is we never get involved in any matters outside of the four corners of this building."

The NIGC last year rejected Seminole Management Associates' contract to run the tribe's Hollywood hall because some of the company's shareholders did not pass background checks.

SMA ran the hall for 17 years and faced repeated allegations of corruption and mob influence.

"We always knew the mob was there," said Florida Attorney General Bob Butterworth, who was the sheriff of Broward County when the Seminoles' Hollywood hall opened. "We just couldn't prove it."

A California Department of Justice report from the mid-1980s on Indian bingo alleged a tie between a partner in the company that ran the Hollywood hall and the Sebastian Larocca crime family in Pittsburgh. A 1995 FBI document also showed a connection between the Seminoles' bingo hall and the Larocca mob and the Genovese crime family in New York City.

Al La Manna, a 30-year FBI agent and an expert on organized crime, told the Times he attended a meeting in late 1979 or 1980 during which a Metro Dade detective distributed a chart showing organized crime infiltration of the Hollywood operation.

Near the end of the 1980s, La Manna said, the Bureau of Prisons picked up telephone calls made by Thomas Ralph Farese, a member of the Colombo crime family in New York, instructing his crew in south Florida to "take over the Indian casino." La Manna did not know whether they succeeded.

"Taking a look at the activities of the Lucchese and Colombo families would clearly indicate to anyone with any brains that the mob was interested in what was going on with the Hollywood bingo hall," said La Manna, who now is a security analyst for a south Florida health-care firm.

In 1990, the U.S. Inspector General's Office also raised concerns about organized crime involvement in the hall.

Why did the NIGC wait so long to move against SMA?

Seminole Tribe member Joel Frank was on the NIGC from 1990 to 1993.

The answer is simple, said Michael Cox, former general counsel for the NIGC. The staff was reluctant to embarrass Joel Frank, a Seminole who from 1990 to 1993 was one of the three commissioners who ran the NIGC. Frank said in an interview that he had never heard such an allegation.

In a September conference call with Glogau, Tadd Johnson, the newly appointed chairman of the NIGC, and enforcement director Alan Fedman, did not dispute that there may be mob influence with tribal casinos "At one point, one person acknowledged it and then another person said they were concerned and looking at it," Glogau recalled.

The Seminoles are eager for a compact, which would have to be approved by the governor and the Legislature, because of the millions of dollars the tribe could make from Las Vegas-style games such as blackjack and roulette. A compact is a tribal-state agreement allowing full-scale casino gambling. Billie said he plans to lobby everyone running for governor to see if any would support such a compact.

The NIGC, on the other hand, sees a compact as the quickest route to resolving a long-running legal battle with the tribe. U.S. Attorney Charles Wilson has asked a judge to remove the slot machines the tribe has been running in Tampa and Immokalee for years. Those machines are illegal under federal law and therefore the tribe must have a compact with the state, he contends.

Glogau said he told NIGC officials in September that Gov. Lawton Chiles opposes a compact with the Seminoles and that the state's voters in the past 20 years have rejected three proposals to legalize casino gambling. Yet the full gaming commission lobbied him on the tribe's behalf later in Washington, D.C., Glogau said.

Scott Dacy, executive administrator for the NIGC, declined to comment about the presence of organized crime at the Seminole gambling halls. But he defended the agency's attempt to broker an agreement with the state.

The NIGC wants the tribe to comply with federal law, Dacy said. "One way to bring them into compliance is to help facilitate a state compact," said Dacy, who worked as a lobbyist for one of six tribes involved in an ongoing campaign finance probe by the Department of Justice.

The National Indian Gaming Commission was created by Congress in 1988 to curb abuses and prevent undesirable people from infiltrating Indian gambling. It has struggled to keep up with the explosion of Indian gambling across the country.

The agency has a 35-member staff to monitor the gambling operations of 184 tribes in 28 states. The Nevada Gaming Control Board, by contrast, has 400 employees overseeing the 213 non-Indian casinos in that state. Recently, Congress agreed to give the NIGC the power to raise another $8-million annually from casino fees, and there are plans for an additional $1-million to hire field investigators, auditors and attorneys.

The NIGC board is comprised of two associate commissioners appointed by the Secretary of the Interior and a chairman appointed by the president. Two of the three seats must be held by Native Americans.

The agency is slow to respond to requests for public documents. The Times has submitted seven Freedom of Information Act requests to the gaming commission over the past year. Despite reassurances from commission lawyers that the requests would be honored, just one has been answered.

Recently, Dacy hired the public relations firm of James McCarthy to answer questions from the Times. The agency also has its own employees who handle public information requests.

The loose atmosphere at the Indian Gaming Commission has not escaped the attention of the Inspector General's Office, which in an audit in April questioned the sloppy way commissioners documented travel and the inability to account for employees' work hours.

In some instances, auditors discovered the commission had overcharged outside companies to perform mandatory background investigations, undercharged others for fingerprinting, and often never required Indian tribes to submit the annual fee required to run high-stakes bingo.

The commission has never performed a full audit of an Indian casino to determine if money is being properly distributed to tribal members.

Some tribes have adopted stringent measures to curb cheating and ensure they get their fair share of gambling revenue. But the Seminoles have allowed their non-Indian casino managers to oversee virtually all aspects of the operations.

Although the tribe is now running the Hollywood casino, it took over only after the NIGC stepped in. When the NIGC rejected one company's contract, the tribe immediately hired another company, JPW Consultants, owned by brothers James P. "Skip" Weisman and Eugene P. "Butch" Moriarty -- the same men who managed the hall under the previous company. The switch was made without NIGC approval.

In May, the gaming commission proposed fining JPW $8.5-million for managing the hall without an approved contract. Weisman is still appealing the NIGC's ruling to an administrative court within the Department of the Interior, leaving open the possibility of JPW's return.

For a time tribe comptroller Ted Boyd kept the books for Hollywood casino managers that he would later review for the tribe.

For a time, Ted Boyd, the tribe's comptroller, was on the payroll of the Hollywood casino -- keeping the books for the casino managers that he would later review for the tribe. He did so at Billie's request, he said, despite the apparent conflict of interest. "He wanted me to keep a watch on them," Boyd told the Times, "and this was one way to do that."

Similarly, Bruce Rogow, the lawyer who represents SMA, also serves as a lawyer for the tribe.

The recent NIGC audit did not examine the commissioners' activities to see if they adhered to federal rules governing gifts, or if the agency had established any ethical guidelines for its employees. In contrast, the Nevada Gaming Commission has a policy that forbids its staff members from accepting trips, receiving complimentary rooms or having a financial stake in a gambling company.