Wednesday, July 7, 1999 | 11:40 a.m.
DULCE, N.M. -- The Apache Nugget Casino has been so poorly managed that the Jicarilla Apache Tribe had to provide nearly $1.2 million to cover deficits in its first two years of operation, despite nearly $16 million in revenue, according to a management review obtained by The Associated Press.
The Dulce casino's accounting system is in "total disarray" and revenue was funneled into a loan program used by tribal officials and their friends and relatives, according to the report by a Dulce management consultant. The report details examples of nepotism, financial mismanagement, high salaries for friends and relatives of casino managers and excessive travel expenses but generally doesn't blame specific individuals for the problems. "There seems to be little effort in controlling cost," the report states. "The areas relating to employee compensation and travel seem out of control."
The loan program might have violated federal lending and disclosure laws, and further investigation could reveal potential violations of federal and state laws, Indian gaming compacts and Internal Revenue Service codes, the report states.
For instance, it notes payroll taxes might have been improperly withheld.
The review dated March 10 was conducted by Vigil & Associates Inc. at the Tribal Council's request.
Council members "were real concerned about what was going on," said Thomas Vigil, president of Vigil & Associates. They were having difficulty getting a response to their inquiries from casino officials, he said.
The National Indian Gaming Commission, an independent federal regulator established under the federal Indian Gaming Regulatory Act, is taking a close look at the casino.
"It's a matter that's under investigation," said Kyle Nayback, the commission's director of congressional and public affairs. Nayback wouldn't comment on the status of the investigation.
The Apache Nugget casino opened in May 1996. It is at the center of a dispute on the Jicarilla Reservation that has led to the ousting of an elected president, Arnold Cassador, and a power struggle among tribal families.
At stake is a casino that, according to the report, had revenues of nearly $8 million in each of its first two years of operation. Cassador, who resigned last month and then was impeached, has accused the council of corruption and said casino profits are being funneled to friends and family of the Tribal Council. He opposes casino gambling as a revenue source for the tribe.
Tribal Council members have said they impeached Cassador because he violated the Jicarilla Constitution by voiding council-approved contracts, firing administrative staff and creating other problems.
Tribal Council member Ron Julian, a spokesman for the council, said he hasn't seen the casino report and wouldn't comment about its contents.
The review, which referred to independent audits for fiscal years 1997 and 1998, found the casino's accounting system "is totally inadequate and leaves room for fraudulent activity and/or embezzlement."
Underlying all the problems was the casino's lack of a budget and end-of-the-month accounting procedures.
"This can easily lead one to conclude that at no time, especially since July of 1998, does anyone truly know how much cash is on hand at any one time," the report states.
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