McCain's role in East Bay Indian casinos

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September 29, 2008

SAN FRANCISCO - According to the Berkley Daily Planet, "Sunday's New York Times featured a major investigation of the ties of the Arizona senator and his staff to the gambling industry, closing with a look at his role in the controversial billion-dollar casino planned for Richmond's Point Molate.

"Initially opposed to the spread of tribal casinos into cities, McCain changed his position after the Guidivlle Rancheria Pomo band briefly hired Wes Gullet, a Phoenix-based lobbyist, …

"Gullet had met his spouse while working on McCain's staff, and had managed the Arizonan's 1992 Senate run, was a ranking aide in his unsuccessful 2000 presidential try, and is currently serving as deputy campaign manager for the senator's presidential run, the paper reported.

"In 2005, McCain had led the opposition to granting the Lytton Band of Pomos a permit to conduct full-scale Las Vegas-style gambling operations at their Casino San Pablo-something not cited in the Times story but reported in these pages at the time.

"The Lyttons had bought a struggling card room operation and sought to turn it into a 2,500-slot machine full-scale gambling resort, but McCain charged the tribe had acquired the casino "the wrong way" and vowed to fight the federal law passed in 2000 that would have granted the tribe an exemption from federal gambling statutes.

"Six months after McCain announced his opposition, the tribe installed 500 slot-like high-speed bingo machines—legal under federal law—and abandoned their plans for a full-scale gambling palace with the still-forbidden slots and table games of a Las Vegas casino.

"While McCain was stifling one tribe's plans, he was boosting those of the Guidivilles.

"Developer James B. Levine, a Berkeley entrepreneur who had made his fortune in the toxic waste cleanup business, had joined with the Guidivilles, enlisting the help of a powerful Republican who had close ties to both McCain and the Clinton wing of the Democrats.

"Levine said Monday that he hadn't seen the Times article, and said he would comment Tuesday after reading it.

"Former Maine governor and Clinton Secretary of Defense William S. Cohen became a partner in Levine's Upstream Point Molate LLC. He was also the best man at McCain's wedding in 1980, the Times reported.

"Point Molate was a U.S. Navy refueling station located on a stunning section of shoreline near the foot of the Richmond San Rafael Bridge. And while the City of Richmond had bought the base for $1 under terms of the federal Base Closure and Realignment Act of 1988, cleanup is still underway under the supervision of the Navy and conducted by Levine's former firm, LFR Inc. (for Levine Fricke Recon) of Emeryville.

"While Gullet told the Times he was hired to advise a tribal administrator on his congressional testimony, the newspaper reported that a lawyer for the Guidivilles said the tribe hired McCain's ally and sometimes staffer Gullet "to insure that Mr. McCain's overhaul of the Indian gambling laws did not harm the tribe."

"The Arizona senator introduced his legislation in November 2005, though it eventually failed to pass.

"But, the Times reported, McCain then pushed Department of the Interior staff—who oversee tribal affairs including the approval of new tribal reservations created for gambling operations—to rewrite the rules on casinos.

"Former Assistant Secretary of Indian Affairs Carl Artman told the Times, "Senator McCain made it clear it was one of his top priorities." After the new guidelines were in place, the department denied the casino applications of 11 tribes—but not that of the Guidivilles.

"And while McCain's efforts were successful in derailing the full scope of the Lyttons' plans for San Pablo, installation of the fast-paced bingo machines proved a bonanza for both the tribe and the city, thanks to a Master Services Agreement between the city and the tribe.

"While San Pablo had been struggling financially as the poorest of Contra Costa County's cities, and officials had been debating dissolving the city's incorporation and handing the reins of government over to the county, the revenues from the machines sent the city's share of cash flowing.

"While the city reported receiving $2.96 million in business license revenues in fiscal year 2004-2005, the installation of the machines in the second month of the following fiscal year sent revenues up to $7.42 million for 2005-06, $9.5 million for 2006-07 and an estimated $9.95 million for the year just ended.

"The casino now accounts for more than half the city's general fund revenue and a town once facing bankruptcy and dissolution has been able to move forward with a wide range of public services, including $4 million in its current budget for a first-time homebuyer program.

"It was the promise of just such benefits—along with jobs for the city's struggling African American community—that led Richmond City Councilmembers to endorse two proposed casinos, Levine's Point Molate and the Sugar Bowl in unicorporated North Richmond, a project of the Scotts Valley Pomos backed by Florida sports and casino entrepreneur Alan Ginsburg.

"A municipal services agreement with the Sugar Bowl developers was ruled invalid earlier this month by a Contra Costa County Superior Court judge who said that the city violated state law in approving the accord without first conducting an environmental impact review.

"The 20-year pact would give the city $335 million to provide road improvements and emergency services for the casino.

"A separate environmental review under federal law is already underway for the Sugar Bowl, while Levine and the Guidivilles are preparing both state and federal environmental reviews for the Point Molate project."

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