Wisconsin’s St. Croix Chippewa Tribe Asked to Pay $5.5M in Fines Even Though Purportedly in ‘Financial Crisis’

Posted on: May 14, 2019, 01:47h. 

Last updated on: May 14, 2019, 01:47h.

Ed Silverstein @casinoorgedsilv Read More

Expertise: Legal, Tribal Gaming.

The St. Croix Chippewa Indians of Wisconsin are now facing $5.5 million in fines after a detailed review by the National Indian Gaming Commission (NIGC) into alleged improper spending of casino revenue.

The proposed penalties from the national tribal regulator were announced in a letter last Thursday along with a stern rebuke by the NIGC that tribal leaders and others took $1.5 million “to line their own pockets.”

The tribe runs three casinos: in Turtle Lake, Danbury and Hertel. Recent gross gaming amounts from the venues were not immediately available.

St. Croix Chippewa Finances

Outgoing NIGC Chairman Jonodev O. Chaudhuri noted the penalties come as the tribe claims to be “facing a financial crisis.” Tribal officials recently told the commission it is “impossible to overstate the precariousness of the tribe’s current financial situation” and that there are “limited resources in reserve.”

The tribe has some 1,000 members, with “many” living in poverty, according to the Milwaukee Journal Sentinel. Members get some $400 a month as a dividend per capita from tribal gaming venues.

Tribal officials have yet to respond to the media about the allegations. Letters were sent to the tribe by the NIGC this year including the one from last week.

“Money that could and should have been used to fund governmental and tribal programs was diverted away from the tribe to fill the pockets of a few individuals,” Chaudhuri chastised tribal leaders in Thursday’s correspondence.

I will take the tribe at its word that its current financial situation is indeed precarious,” Chaudhuri wrote. “But I also recognize that this may not be the case but for the misappropriations of net gaming revenue….”

Nor has there been “serious efforts” by tribal leaders to address the root of the problem, he said. The misappropriations “would have gone undetected” without the NIGC inquiry, Chaudhuri said.

He explained the federal Indian Gaming Rights Act (IGRA) was set up to ensure the entire tribe “rather than a few individuals in positions of power, are the primary beneficiaries of gaming.” The wrongdoing also impacts the “reputation” of tribal gaming nationally, Chaudhuri said.

The controversy reduces trust levels among the gaming public. Also, it “does immeasurable damage to the industry,” Chaudhuri added.

Additionally, the events send a message that tribal regulators cannot be trusted — “that Indian gaming is not regulated,” the chairman warned.

Details on Fines

The NIGC’s fine is broken down based on the alleged wrongdoing by individuals named in a Notice of Violation (NOV). It was sent to the tribe last month.

Specifically, $1.5 million was assessed for $345,632 in payments made to tribal council member Elmer “Jay” Emery and his company, Rez Connections.

A $1 million fine was assessed for payments to Jeff Taylor and Kate Wolfe Taylor of the Tribal Gaming Commission. Another $1 million fine was assessed for payments to tribal Chairman Lewis Taylor, Tribal Council Member Crystal Peterson, and former tribal council members Carmen Bugg and Stuart Bearhart.

There was also a fine of $1.5 million related to payments to “consultant” Lawrence Larsen. Another $500,000 in fines was for additional alleged misuse of revenue and failure to audit contracts.

The fine is at this point a recommendation. It still could be appealed to the entire NIGC.

Beyond the fine, the tribe could face further investigation by federal law enforcement or tax authorities, Rory Dilweg, an attorney at Colorado-based Berg Hill Greenleaf Ruscitti, said last month. It was also revealed this week that in 2010, Charles Pellino, an attorney for the tribe, had warned of possible misuse of millions of dollars in funds by the tribe in a letter sent to an unnamed tribal official, according to the Milwaukee Journal Sentinel.

The NIGC inquiry was a key achievement for Chaudhuri during his tenure as chairman. He is leaving the post this month after several years, first as acting chair in 2013 and permanent chair starting in 2015.

Later this month, he will head the Indian Law and Policy Group at the Quarles & Brady law firm, according to Indian Country Today. He was also recently named Muscogee (Creek) Nation Ambassador.