A magistrate of the Court of Indian Offenses has asked the U.S. Attorney to look into allegations of missing funds set aside for construction of a proposed lake-side resort casino.
In a letter dated Nov. 26, Judge William C. Wantland advised U.S. Attorney David E. O’Meilia of allegations launched by Seneca-Cayuga Secretary-Treasurer Kay Crow Ellison that approximately $8 million is missing from a $10 million line of credit established for the purpose of building a casino.
Wantland, noting that the proposed casino project has not yet broken ground, said he became aware of the allegations through pleadings filed in a case pending before him.
“Such an allegation, if true, would indicate a serious crime involving gaming money … This court has not heard anything in regard to the pleading, and so I cannot state whether there is evidence substantiating this allegation,” Wantland wrote. “However, I do feel that the court has an obligation of reporting alleged criminal action to the proper authorities.”
Attorneys for the tribe said they welcome an investigation.
“(An investigation) will only help clear the good name of Chief Paul Spicer and the other members of the Business Committee,” said Thomas Hayde, Spicer’s attorney. “Hopefully that will help bring this political unrest to an end and the tribe can move forward with the development of the new casino and the brighter days ahead.”
Hayde presented the News-Record with financial records outlining the tribe’s per-capita account as well as the $10 million line of credit which have both been scrutinized by a group of tribal members who believe that tribal funds have been misappropriated.
“(The documentation) shows that there is no ‘missing’ money from any Seneca-Cayuga per-capita account or from the tribe’s $10 million line of credit,” Hayde wrote in an e-mailed response to questions regarding the allegations. “(The first document,) a letter from Bank of Oklahoma president Ron Leffler, shows the balances of the per capita accounts, totaling approximately $13.4 million. The second document is a balance sheet summary of the tribe’s line of credit with Bank of Oklahoma. The $10M line of credit was used to pay off and re-finance two earlier lines of credit, one for the Oasis Player Tracking system at the casino, and one that was the original line of credit for development of the tribe’s new casino. Approximately $3.1 million of the new line of credit was used to pay off and re-finance those earlier lines of credit. Further, the balance sheet demonstrates that the remaining amount outstanding (approximately $5.3 million) is entirely accounted for in payments to vendors involved in the development process for the new casino, including principally the development firm and the architectural and engineering firm.”
The tribe’s balance sheet creates more questions than it answers, according to Scott Edwards, attorney for Kay Crow-Ellison.
“Most alarming is that $4 million has been paid to the developer without authorization of the business committee or the tribe’s development committee,” Edwards said. “The payment was made without the knowledge of the Secretary-Treasurer of the tribe who is required to account to the tribe for all tribal funds. Thousands have been paid to the tribe’s ‘independent forensic auditor’ who is now running the current casino. Finally, hundreds of thousands have been expended on architects without first establishing a budget or approval of the tribe’s Development Committee. Yes, tribal members are concerned.”
Last week, 36 tribal members submitted a letter to the regional director of the Bureau of Indian Affairs to air their concerns regarding the use of the $10 million line of credit and the establishment of a tribal court system and police force — two matters which they say exemplify Spicer’s disregard of general council directives.
“It has, for the past 70-plus years of our tribe, under our current constitution and bylaws, been the tradition, custom and law of the tribe that the general council is the supreme governing body,” tribal members wrote in their letter to Jeannette Hanna, regional BIA director. “The business committee has always honored the wishes of the general council. That is, until Mr. Spicer became chief.”
A business committee resolution date June 15, 2007, authorizes the the business committee to borrow $10 for a period of one year in order to develop and build a second casino, pay off all existing indebtedness payable to International Gaming Technologies and its affiliate SODAK, ad refinance existing indebtedness payable to Bank of Oklahoma.
“The monies used to secure this loan had been set aside by our general council in a special fund and were not to be used until further instruction from the general council,” tribal members wrote. “Mr. Spicer disregarded these instructions and has virtually used all of the tribe’s money … The bridge loan Mr. Spicer took out is due and payable on July 8, 2008. The tribe has no ability to pay this debt which means our ‘safety net’ is gone. Ten million dollars is gone in one year’s time — no new casino, no hope for a new casino.”
Tribal members are specifically concerned with a $4 million payment to Caywil, a corporation owned by developer Thomas Wilmot . That payment, according to the authors of the Dec. 26 letter, was paid to Caywil for funds expended on a New York casino project which was never realized.
“Chief Spicer could clear this matter by providing concerned tribal members and the US Attorney with the underlying documents that support his unilateral payment of $4 million to Caywil,” Edwards said.
Regarding the tribal court system, opposing tribal members say the general council denied the establishment and funding of a tribal court system — first on Jan. 26 of 2007 and again on June 2 of the same year.
“We would request, of you have not already done so, considering asking the solicitor for the BIA to give a legal opinion regarding concerns we have raised and in the regard to the memorandum opinion on establishing a tribal court system written and submitted to you by Scott N. Edwards,” the members wrote.
The members’ letter is subsequent to a November letter written by Wantland in which he, too, seeks an opinion from the BIA on the status of the Seneca-Cayuga’s court system.
“I am aware of the provision of 25 CFR 11.1 in regard to the establishment of a tribal court and the CFR determination of the authority of the CFR court for the Seneca-Cayuga Tribe,” Wantland wrote. “There has been no termination of CFR jurisdiction in regard to the Seneca-Cayuga Tribe and I am not aware of any BIA approval of codes of law for the tribe. Further, I am advised that there is no current provision for any appellate jurisdiction or procedure for the tribal court … I respectfully ask you to make an administrative decision as to whether this court is recognized and whether termination of CFR jurisdiction is in the works.”
“Litigation that has been on going since June has been further complicated by the tribe’s expedited establishment of a tribal court,” Edwards said. “All parties in this matter would like a final determination of the BIA position on the validity of the tribal court.”
Matters of the tribe are scheduled to return to Wantland’s court at 10 a.m. Thursday in Miami.