Desperate for cash, council puts customers, employees and community at high risk
By John Weymer
The Puyallup Tribal Council made two major announcements this week concerning its financial state and their big money-maker, the Emerald Queen Casino.
First, the council posted a video on the tribe’s website addressing questions that the council has been getting from the membership concerning tribal finances at this time of the coronavirus pandemic. Chairman David Bean said that council staff found millions of dollars in additional revenue to cover per-capita payments, tribal services and programs for an additional three months, but where that money came from remains a key question.
Second, in a statement posted to the tribe’s website on Thursday, Bean announced that the EQC location in Fife will re-open on Monday, May 18. Customers will be limited to 30 percent capacity, everyone will have their temperature checked at the door and people will be “expected” – not required – to wear masks. He also said the tribe’s new casino will open in June, but no details were given. Some communities that have re-opened have experienced a 1,000 percent increase in people testing positive for the virus.
What the council presented in these announcements was with a positive spin, but not enough to avoid the fact that the tribal membership is in for some rough waters. And with the casinos opening, the threat to public health could bring trouble to the broader community as well.
Several weeks ago, the tribal council issued a letter to the membership stating that the council had enough resources on hand to deliver services to the membership at current levels through the end of June. But in their video presentation, Bean says that the council staff “prepared options” for the council that would bring long-term financial stability to the tribe.
“To date, we announce to you that we will be able to maintain the current level of services and benefits through the end of September. This includes per-capita,” Bean said.
This means that somewhere, somehow, council staff found approximately $48,000,000 to cover per-capita payments and tribal services and programs for an additional three months.Such a situation has happened before when the tribe was in trouble financially and EQC manager Frank Wright showed up with a bailout of $14 million, money that council and tribal staff were unaware of.
Wright has great concerns about the council’s spending habits. He often boasted that if he told council of all the money that the casino had, that they would spend it all. Wright not disclosing a full accounting of every penny should be a big concern to the membership. Tribal assets are not for one single member to control – those assets belong to the entire membership. Not only should the membership receive annual reports, but monthly financials as well so that they as stockholders know exactly how their investment is working for them.
Tribal members that have contacted the Tacoma Weekly have stressed similar concerns about Wright’s activities. One tribal member, whose name we will not identify, in a phone call to the Tacoma Weekly questioned the amount of jackpots that Wright’s family seems to win on slot machines not only at the EQC, but at BJ’s Bingo as well. Another tribal member reported witnessing Wright frequently visiting BJ’s Bingo to play the slots with his family at a bank of machines and passing out $100 bills – and Wright’s daughter won a $60,000 jackpot. This tribal member also questioned the tips-offs that people were getting on when to play the slot machines for the biggest payouts, as it is possible for management to know how the machines would pay out and when.
Questions need to be asked about daily audits of the machines. Each machine has a meter that tells the exact amount of money generated and what the wins and losses are. With such things as ghost payouts and issues with slot machine vendors and EQC slot machine management staff, it could make one believe that there is a problem in this area.
MISMANAGEMENT IMPACTS MEMBERSHIP
Now, the obvious question is where did all of this new money come from? How could a figure of this amount be suddenly discovered in a few weeks?
These are questions for the membership to ask, and they’re going to need outside help to get straight answers. It would take just one tribal member to file a complaint with the federal government and set in motion an investigation to get to the bottom of what’s going on with the finances. A good place to start is at the Northwest regional office of the Bureau of Indian Affairs in Portland, (503) 231-6702. Bean said that these new projections that staff presented to council are based on casino revenue, but no one can predict what the revenue will be once the EQC locations re-open.
Years ago, tribal council members Roleen Hargrove, Sylvia Miller and Larry LaPointe went straight to the feds about Bean’s alleged drug dealing so there is already a record of bringing the feds in on council when necessary.
In order to keep up with ever-growing membership numbers receiving monthly per-capita payments, Bean announced that starting in October, tribal council will be switching to a “performance based per-capita.” This means that while per-capita benefits will continue after September, payment amounts will fluctuate based on what the tribe’s casinos and other tribal business enterprises collect.
A major problem with this plan is that the EQC has never had player tracking, so there is no way for casino management to determine where their customers come from, how much they spend and how often they are there. This is vital information that every casino and business has in today’s world. Knowing your customer is essential. The EQC’s poor management style ignores the value of what player tracking brings to a casino. The casino would have the data to directly market to those customers that frequently visit and offer them incentives to visit the EQC again.
Wright has constantly threatened the tribal council with the loss of per-capitas if they ever added player tracking. Anytime the council interfered or asked questions regarding things like player tracking, casino management style and the favors that Wright passes out to his friends, Wright’s consistent response was that if the council interferes with how he runs the casino, they would not have the funds to pay the per-caps. The per-caps have always been a political tool for this council and any loss of per-caps would mean losing an election. From its start, the per-cap program was a political move by council member Bill Sterud to get elected without thought or concern for the future. In fact, Sterud threw the future away to get elected to his very high-paying council job.
NO ECONOMIC PLAN IN PLACE
Bean gave no detailed description of an economic plan for the tribe going forward. He simply pointed to the tribe’s new mega-casino that still sits unfinished.
“Council…still thinks that it was a good investment and the banks agree,” he said.
The new casino has been plagued with construction disasters. Tribal members who work there say that the building is sinking, large cracks have formed in the cement stairway, that there are electrical problems, flooding, walls buckling and other major issues that possibly prevented the previously planned grand opening in December of last year.
The Stillaguamish tribe’s Angel of the Winds Casino Resort in Arlington launched its phased re-opening strategy on May 13, with safety measures in place including social distancing, mandatory protective face masks and temperature checks, increased cleaning and sanitation. Operating at 50 percent capacity, visitors are required to stay in their cars until they receive a text message to enter. The casino saw about 800 people on opening day. Applying this number of quests to the EQC as an example, each person would have to lose $625 every day for the Puyallup tribal council to meet monthly per-capita costs. Since the EQC caters largely to transients and people on welfare, the average play is just $40 per customer.
A total of seven banks have loaned money to the tribe for the new casino construction. Bean said that this is because the tribe has a good history of paying its bills and managing its finances. However, the tribal council does not have a sterling record where this is concerned.
Case in point: construction companies walking off the casino job with rumblings of more than $7 million owed to them yet unpaid, and no real pay-down of bank loans from paying only the interest. In fact, the reputation of the Puyallup tribe for years has been that they don’t pay their bills and it’s impossible to sue the tribe to do something about it. Their court system is false and even if a litigant were to win in tribal court, how would they go about collecting the money? Over the years, the Tacoma Weekly has been approached by numerous business owners about how to get the tribe to pay its bills. The tribal government and EQC management love to lead small businesses along and these businesses only end up in disappointment. For the lucky ones that are on the list to get paid, it can take up to a year or more to receive payment, if they ever get paid at all.
FEDERAL BAILOUT UNLIKELY
In addressing new resources for the tribe, Bean said that staff and council are working to find these resources through the federal CARES Act and other means. The federal government’s Health and Human Services website posted on April 15 that the Puyallup tribe received $1,079,536 in CARES funds.
Treaty rights in negotiations with the federal government provide money to tribes across America. There are tribes that don’t have casinos and live in very rural areas that are dirt poor, with hospitals hundreds of miles away and very little in services. It is our obligation as a country to honor those treaty rights.
The Indian Gaming Regulatory Act was put in place for tribes to become self-sufficient and prosper, to create jobs and resources for their membership. The Puyallup tribe has received hundreds of millions of dollars over the years in federal funding and still receives a significant amount of this funding to support its tribal clinic, housing programs and other tribal services as per their treaty rights. Over the years, this funding has shrunken, and it’s getting harder and harder for the Puyallups and other tribes to attain it.
With the heightened economic disaster approaching our country, the feds will be offering money for tribal and local jurisdictions to keep their governments alive, but the Puyallup tribe has lost key players in non-tribal members that were most effective in attaining federal funds. The Puyallups will be competing with other tribes such as the Navajos and tribes in South Dakota that have experienced much more of an impact from the global pandemic disaster. Seeking federal funds for the Puyallups to offset their per-caps or to re-start their casino may not be as easy as the tribal council thinks. The current political atmosphere under Trump and a weak Democratic Party should concern the membership greatly. Funding is in jeopardy.
Tribal activists of the past are either gone or too old to take on this fight. It’s up to younger and middle-aged tribal members to be involved. The tribe doesn’t need a white person representing them in Olympia or Washington, DC, and the tribal council should not depend on lobbyists and highly paid consultants such at Tim Thompson and Norm Dicks, who have been paid hundreds of thousands of dollars for very little results.
A bailout for the Puyallup’s recreational casino is not something that the federal government should do when most of the tribes in Washington state have been so successful. For example, the Tulalips, who live in an area with a fraction of Tacoma’s density yet have one of the most beautiful facilities with retail amenities and entertainment. The Muckleshoots: To pay for building their new mega-casino, scheduled to open in the spring of 2021, this well diversified tribe sold the Snoqualmie Falls Resort that they purchased years ago. Purchasing Emerald Downs was another very wise move. A horse race track with Class 2 gaming will also provide growth, as track betting is through the roof because of the lack of gambling opportunities for those folks who like to bet on horses. For the Puyallups, they had the best opportunity and best location for their new casino and once were ahead of everyone until they dropped the ball. It took the tribe 20 years to get their big casino and what they ended up with is a concrete albatross that is sinking into the paved-over tideflats. The tribe had so many other location choices for their casino, with their best bet being two mega-casinos in Fife side by side, saving millions on overhead.
RESERVING FOR THE FUTURE
Even though the tribe’s casinos have raked in billions of dollars over the years, tribal council had only enough money on hand to get the tribe through June until the new money was discovered last week. Another question that the membership should put before their council is where did all the money go to put the tribe in the position that it is in today? And what of diversifying the tribe’s income base, rather than put all the eggs into one basket with the casinos?
Again, the membership cannot rely on the tribal council during these unprecedented times. In the council video address, Bean revealed that tribal members are asking to see the financial statements and the tribe’s audits. Times have changed, and old ways of operating will need to adapt in response, including council transparency. Tribal members taking charge can be just one of the ways for the tribe to ensure its longevity for this and future generations.
Public at risk
The Puyallup Tribal Council has publicly announced the re-opening of the EQC in Fife on Monday, May 18. It will open at reduced capacity.
Communities that have re-opened are seeing as high as a 1,000 percent increase in new cases of the virus. This risk is not only to the patrons and employees of the casino, but to the entire community. The EQC has a reputation as a homestead for the homeless. It is rumored that EQC employees have either tested positive for the virus or have shown symptoms, or are simply complaining of the stomach flu.
Ensuring the safety of the public will take extreme and extraordinary measures. The casino is required to have its procedures regarding the COVID pandemic approved by an outside health official and tribal gaming authorities to receive certification before opening. The National Indian Gaming Commission (www.nigc.gov) has put forth strict guidelines. For example, the NIGC requires that all casino employees receive training on COVID-19 safety and sanitation protocols, with more comprehensive training for housekeeping, cleaners, food and beverage and security. This is just a small example. It would be next to impossible for the casino to perform the necessary training of employees in the proper sanitation of its casino to meet the May 18 opening date. The casino’s website states that masks are expected and look like will not be provided by the casino. These conditions, with people staying for a long period of time breathing recirculated air, make the perfect combination for the virus to spread. People are at a greater risk when staying in places for long periods of time breathing recirculated air. It is recommended that when visiting an establishment that you spend as short a time as possible to prevent the spread of this virus. The casino environment will put large numbers of people in close proximity for hours at a time.
To open the casino and put employees at risk, and especially Native Americans who have been among the hardest hit from the virus, could bring catastrophic legal action and the enforced closure of the casino.
Tribal members are advised to verify that the tribal council and casino management are following proper procedures for re-opening the casino. Contact the following:
- Bureau of Indian Affairs/Northwest Region, (509) 231-6702
- U.S. Attorney General/U.S. Department of Justice, (202) 514-2000
- National Indian Gaming Commission, Portland Regional Office,(503) 326-5095