Mohawk casino deal may be good for future, causes rift in the present

Thursday, April 27, 2000 | 10:14 a.m.

For now, though, the agreement is generating discord among tribal leaders and jeopardizes a planned $500 million Catskills casino.

On Wednesday a $12 billion class-action lawsuit against Park Place Entertainment was filed on behalf of tribal members unhappy with the new deal.

The suit filed in Tribal Court alleges that Park Place "fraudulently induced" the Tribal Council to enter into the agreement and accuses Park Place of interfering with the tribe's earlier deal with Catskill Development and the Monticello Raceway Development Co. to build a casino on the raceway.

Members were seeking damages from Park Place, its chief executive Arthur Goldberg and chief counsel Clive Cummis.

Park Place, owner of Caesar's Palace and Bally's casinos, will give the Mohawks $3 million for the exclusive rights to develop and manage future Mohawk casinos in the state. Park Place also promised to give the tribe 70 percent of any future profits.

Park Place Entertainment's plans include building a major casino somewhere near but not at Monticello Raceway, the site where another group has been planning for four years to build a second casino for the Mohawks.

The Mohawks also operate the Akwasasne Mohawk Casino at St. Regis. Earlier this month, the tribe seized control of the casino from a private management company they had hired. Tribal leaders accused the firm of mismanaging the casino, which is drawing sparse crowds and reportedly losing up to $300,000 a month.

Some tribal members expressed frustration that the deal with Park Place was negotiated in secrecy by the Tribal Council and questioned what it meant for the future of the Catskill casino.

"They owe the tribe an explanation of what they are doing," said Barbara Lazore, a former subchief. "Here we are on the doorstep in Monticello and they go and do this ... it was very disturbing.

"I don't mind the chiefs looking at other proposals but you don't stop the one that is there ready to go," she said.

Subchief Harry J. Benedict, one of six tribal officials who signed the agreement, said tribal leaders feared that Catskill Development would not get the approval of the National Indian Gaming Commission to run the Monticello casino. So they worked out a deal with Park Place, he said.

"We're just trying to do what's right. I think we got the best deal we could," Benedict said.

The plan involving Catskill Development, approved by the Interior Department April 6, had been awaiting approval by Gov. George Pataki when the new deal with Park Place became public last week.

The federal government gave approval to the raceway plan after extensive and protracted review of the Mohawks' application. The tribe's new deal with Park Place, if it involves a new site, would appear to put the project back to "square one," said Rex Hackler, a spokesman for the U.S. Department of Interior.

Robert Berman, president of Catskill Development, said he was "not surprised" by the lawsuit. He said Park Place's motive is to derail a Native American gambling operation in Monticello, which potentially could draw customers away from the casinos 90 miles away in Atlantic City.

"The deal is designed only to protect Park Place's substantial Atlantic City holdings," he charged.

Cummis of Park Place denied that, saying his company seeks to expand its market through acquisition and construction. He said the Raceway site is too small for the casino Park Place has in mind.

"This is going to be an exceptional opportunity for the Mohawks today and for generations hereafter," said Cummis, adding that the state of New York will benefit richly as well.

A call to Cummis for comment on the lawsuit was not immediately returned.