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The Byrne Report

Rigged Game


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WHEN WE LAST SAW fictional cultural icon Michael Corleone, he was ushering his casino-owning family into the embrace of Wall Street. His 21st-century real-life counterparts have presumably eschewed the garrote and machine gun as instruments of negotiation, preferring to take the law itself into their hands, primarily by larding government officials with cash.

Engineering the social acceptance of organized gambling through the use of legalized bribery may have replaced the dead-horse-in-the-bed routine, but there is something all too familiar about the coldness of a calculation that uses the genocide of Native Americans as the moral justification for circumventing laws set up to protect all people from harm.

Take Station Casinos Inc. of Las Vegas, Nev., as a case study. The public company is the fifth largest gambling corporation in the United States, operating a dozen hotel-casino-entertainment complexes in the Las Vegas Valley alone. It has grossed billions with its trademark "neighborhood" casinos, replete with bowling lanes, family restaurants and round-the-clock childcare services.

In 1997, the Nevada legislature passed a law limiting the number of new hotel-casino projects. Since the half-dozen biggest gambling houses in Nevada collectively control the Legislature, that statute can be seen as a self-interested move to curb overdevelopment of casinos before bullets replace joint-operating agreements.

Station was hit particularly hit by the growth restrictions. Then the Legislature upped gambling-related taxes in 2003. Station's controlling stockholders, brothers Frank and Lorenzo Fertitta, must have been fed up with the state interference. Flush with Las Vegas cash and desperate to expand, they hooked up with several tax- and regulation-immune Indian tribes to front the exportation of their gambling business outside Nevada.

In California, the brothers Fertitta partnered with the United Auburn Indian Community in 2003 to build Thunder Valley casino in exurban Placer County. The multibillion dollar company guaranteed a $215 million loan to the tribe, which had no money nor any expertise in casino construction and management. Station operates Thunder Valley's 2,700 slots machines, 98 game tables, 500-seat buffet and 4,500 parking spaces in return for 24 percent of the net. The architecture and ambiance, by the way, are not even remotely aboriginal, but faux Tuscan.

According to U.S. Securities and Exchange Commission filings, Station has signed similar casino development and management partnerships with the Gun Lake Indian tribe in Allegan County, Mich.; the Mechoopda Indian tribe in Butte County, Calif.; the North Fork Rancheria of Mono Indian tribe near Fresno; and the Federated Indians of the Graton Rancheria in Sonoma County, the latter of which seeks to build a controversial megacasino in Rohnert Park.

With tribes in tow, all that is needed to turn California into a full-fledged faux Tuscan Purgatorio is the compliance of federal and state government officials.

In the month leading up to the November 2004 election, which featured two gambling-related initiatives, Station Casinos sluiced $456,000 into the fray, including a gift of $240,000 to organs of the California Republican Party. The Republican governor, Arnold Schwarzenegger, is in charge of negotiating tribal compacts. Station tossed the toothless California Democratics a $20,000 muffin.

The company has retained Darius Anderson of Platinum Advisors LLC to lobby for its interests in Sacramento. (Anderson partnered with U.S. Sen. Barbara Boxer's son, Douglas, to buy an option on property desired by Station Casinos, but I digress.) In Washington, D.C., where major project-specific decisions on Indian gambling are routinely made, Station is paying hundreds of thousands of dollars to power lobbyists at Patton Boggs and the Federalist Group.

Last year, Station Casinos contributed some $58,000 to federal candidates and parties. Through its political action committee, according to the website PoliticalMoneyLine.com, Station Casinos paid $28,000 to members of the Senate Indian Affairs Committee; Republican Sen. Orin Hatch received up to $2,500; and Senate Minority Leader Harry Reid, the Democrat from Nevada, got a $10,000 chip. The top fundraisers last year from gambling purveyors at large, according to OpenSecrets.org, were George W. Bush ($340,000) and Sen. Reid ($310,000). Performance, not ideology, rules this game.

The brothers are personally very generous. In 2004, according to a Station Casinos spokesperson, Frank handed over at least $47,000 for federal candidates and parties, such as Bush-Cheney '04 and the Republican National Committee. Lorenzo played with $49,000, hitting hard on Reid and Bush-Cheney.

Frank Fertitta III, aka "Three Sticks," is only 43; baby brother Lorenzo is 36. Who the heck are these guys? Read more about them next week in the Byrne Report.

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From the February 16-22, 2005 issue of the North Bay Bohemian.

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