Jack Utsick faces contempt in SEC ponzi scheme case that spawned Paris Hilton & Michael Malik, lawsuits

2.06.09

Ex-promoter faces contempt in Fla. SEC fraud case

By CURT ANDERSON

MIAMI (AP) — A once high-flying concert promoter of acts such as Aerosmith, Elton John and Shania Twain could face contempt charges for failing to show up in Miami for a Securities and Exchange Commission fraud case that has spawned a multimillion-dollar lawsuit against Paris Hilton.

The promoter, John Utsick, 66, now lives in Brazil and refuses to return to the U.S. out of fear he'll be arrested for possible criminal violations, his attorney Richard Kraut said at a hearing Friday. The SEC wants to take his deposition regarding assets he took from his former company, Worldwide Entertainment Inc.

"Mr. Utsick has created this issue. He decided to flee," SEC attorney Robert Levenson said at the hearing.

Kraut said Utsick isn't hiding, but he wouldn't divulge in court where he lives in Brazil. "He's not in the Amazon someplace," the lawyer said. "He's not dodging anything."

The deposition dispute is the latest twist in a case first brought by the SEC in 2006 claiming that Utsick fleeced some 3,000 investors out of nearly $300 million between 1998 and 2005. Utsick, whose company promoted tours and concerts by top rock and country music acts and other shows, allegedly created a Ponzi scheme in which he paid older investors out of money from new investors, while his business actually lost gobs of money.

U.S. District Judge Paul Huck previously found against Utsick and appointed a receiver to identify assets around the world intended to return some of the lost investments. That receiver, Michael Goldberg [Akerman Senterfitt], said he soon will send the first installment of as much as $25 million to be divided among investors, and eventually hopes to recover up to $60 million.

One of Utsick's yet-to-be sold former assets is a 17,500-seat amphitheater in Berlin, Germany. There's also sizable property in northern Florida, condos in the Miami area and six homes in California, Goldberg said.

The SEC wants to take Utsick's deposition to find assets he took personally and may still have. Kraut said Utsick's position is that as chief of the company he was entitled to the assets as a form of salary. Huck said he would give the two sides one more week to reach an agreement before deciding on the contempt issue.

"I don't have a lot of sympathy for Mr. Utsick. He's the one who put himself in this situation," Huck said.

The Hilton lawsuit stemmed from a 2006 film in which she appeared called "National Lampoon's Pledge This!" Utsick's old company, Worldwide Entertainment, invested in the movie and was an executive producer. Part of the deal was that Hilton was to pitch the movie on TV talk shows and media interviews, but Goldberg says that never happened.

"Hilton failed to attend any talk shows or telephonic or in-person interviews," the lawsuit says.

Goldberg said he is seeking about $7 million from Hilton and her management company, with trial in that case set for May 18. Ultimately any money recovered would go to Utsick's defrauded investors.

Hilton's lawyers contend that she fulfilled her main obligation to the film — publicity events at the Cannes Film Festival — and that there were only "vague and unspecific requests" that she do other appearances after it was released. At the time, they said, she couldn't do it because she was filming her reality TV show "The Simple Life."

"Defendants are not currently aware that the producers ever arranged any dates or agreements for Ms. Hilton to appear on any talk show," attorneys Michael Weinstein and Stephen J. Binhak said in court papers.

NOTE: this case also spawned a multimillion dollar fraudulent transfer lawsuit against Detroit casino syndicator and real estate developer Michael J. Malik, Sr., (Goldberg v. Malik) who is a longtime business partner with Mrs. Marian Ilitch. Ilitch Holdings, Inc. subsidiaries include Detroit Tigers (Comerica Park), Detroit Red Wings (Joe Louis Arena), Fox Theatre, MotorCity Casino, Olympia Entertainment, etc.

Ex-promoter faces contempt in SEC fraud case

2.06.09

MIAMI - A once high-flying concert promoter is facing contempt for failing to show up in Miami for a Securities and Exchange Commission fraud case.

A federal judge decided Friday to give 66-year-old John Utsick another week to give a deposition in the case. Utsick moved from Miami to Brazil in 2007.

The SEC claims that Utsick and others fleeced thousands of investors out of $300 million from 1998 to 2005.

Utsick once promoted shows around the world by acts ranging from Aerosmith to Elton John to Shania Twain. Utsick's lawyer says he won't come to the U.S. unless he is guaranteed he won't be arrested on possible criminal charges. SEC lawyers say they have no authority to make such a promise.

Criminal investigators examining ponzi scheme centered around concert promoter Jack Utsick

2.04.09

Fla. rock concert promoter in Ponzi probe

MIAMI, Feb. 4 (UPI) -- Criminal investigators have joined a financial probe of former Miami concert promoter Jack Utsick accused of cheating investors in a Ponzi scheme, sources say.

Utsick, 65, was once of the world's biggest rock concert promoters, staging shows by such music stars as Elton John, the Rolling Stones, Santana, the Pretenders and Aerosmith. But now officials allege Utsick, who is living in Brazil, has refused to obey two court orders to return to the United States in a civil lawsuit, The Miami Herald reported Wednesday.

The newspaper, without naming sources, said Utsick is also part of an FBI criminal investigation for allegedly diverting millions from his concert investors to pay for collector cars, a luxury condo, artwork and other personal expenses. The U.S Securities and Exchange Commission has seized Utsick's company, Worldwide Entertainment of Miami Beach, Fla.

"What we were seeing was a Ponzi scheme," plaintiffs' attorney Michael Goldberg told the Herald.

Court records indicate Utsick is accused paying investors -- many of them former airline pilots -- from revenues of future rock concerts.

Federal case against one-time concert promoter Jack Utsick now includes FBI investigation

2.04.09

Feds want promoter Jack Utsick in Miami for Ponzi case
Miami Beach concert promoter Jack Utsick has rejected court orders to return to Miami, where he is under investigation by the FBI for allegedly fleecing his investors out of millions.

BY MICHAEL SALLAH
msallah@MiamiHerald.com

Three years after his entertainment empire crumbled under debts and lawsuits, Miami concert promoter Jack Utsick is under FBI investigation for allegedly diverting millions from his investors to pay for collector cars, a luxury condo, artwork and other personal expenses.

Utsick -- once one of the world's largest concert promoters -- has been ordered to appear in federal court in Miami on Friday in a civil case filed by regulators trying to recover money they say he took from hundreds of investors who backed his concerts.

But Utsick, 65, who is now living in Brazil, has refused so far to obey two court orders to return to Miami.

Utsick, who promoted shows for Elton John and the Rolling Stones, could not be reached for comment. But documents in the federal civil case say he has requested immunity from arrest if he agrees to travel to Miami.

Lawyers for the U.S Securities and Exchange Commission, which has seized his company, said they could not make those guarantees.

"All I can say at this point is that he hasn't shown up," said Bob Levenson, trial counsel for the SEC.

Judy Orihuela, a spokeswoman for the FBI's Miami office, declined to comment.

The criminal investigation is the latest development in the government's ongoing case against the once-prominent entertainment guru, whose Worldwide Entertainment of Miami Beach consistently put on some of the largest concerts in the United States and Europe.

After disputes between Utsick and his partners, the SEC began an investigation four years ago into the firm's far-flung enterprises.

Initially, investigators determined Utsick and two former partners were selling unregistered securities to finance concerts featuring bands that include Santana, the Pretenders and Aerosmith, according to court records.

Then, regulators said they discovered that Utsick was actually losing money on most venues, though he had been claiming to be earning millions of dollars each year -- $112.5 million in 2005.

"What we were seeing was a Ponzi scheme," said receiver Michael Goldberg, a lawyer [Akerman Senterfitt law firm] who has been tracking down assets for nearly three years.

Along the way, Utsick was tapping into his investors' funds to support a lavish lifestyle, including a condo in South Beach's Portofino Towers, $34,000 for artwork, $200,000 for a yacht, and nearly $500,000 in credit card bills for purchases at Macy's, Bloomingdale's and Victoria's Secret, according to SEC filings.

To keep the company going, Utsick was paying investors -- many of them former airline pilots -- from revenues of future concerts, court records state.

In all, the longtime promoter was accused of fleecing investors out of $293 million, according to the government's lawsuit in 2006.

Goldberg said many of the investors knew Utsick from his days as a TWA pilot in the 1970s.

"What's sad is that some of these people lost their life savings," Goldberg said. "They took money from their retirement accounts because they trusted him.''

In previous statements, Utsick blamed his financial problems on the rapid growth of his business and pledged to work to repay investors. But investors will more than likely realize only a return of "pennies on the dollar," said Goldberg, who is expected to soon disburse more than $21 million in a first round of reimbursements.

Court records show Utsick left his home in Miami Beach and moved to Brazil in late 2007.

Just days before he departed, he sold a Porsche and a Mercedes-Benz and pocketed the money -- a violation of a court order, regulators said.

Despite two court orders to return to Miami in the government's civil case, Utsick has refused, court records state.

Utsick's attorney, Richard Kraut, declined to comment on whether his client would return for the court hearing Friday before U.S. Judge Paul Huck, who is expected to rule on a contempt motion.

Kraut has asked regulators to give assurances Utsick will not be arrested if he returns to Miami, but the SEC has declined to make any such promise.

Goldberg said he didn't believe the SEC could offer any such protection.

"There is no such provision under the SEC that even allows that,'' he said. "At this point, he's not cooperating with us."

Another aide to Alaska's Rep. Don Young implicated in Abramoff Lobbying Scandal

2.02.09

Rep. Don Young aide implicated in lobbying scandal

By ERICA WERNER

WASHINGTON (AP) — A second former staffer to an Alaska congressman has been implicated in the Jack Abramoff influence-peddling investigation as the scandal sweeps up a growing number of ex-Capitol Hill aides and lobbyists.

Fraser Verrusio, who worked under Republican Rep. Don Young when the congressman chaired the House Transportation and Infrastructure Committee, figures in plea deals reached recently by two former Abramoff associates and a one-time congressional aide.

Identified in federal court papers only as "Staffer D," he's described accepting an all-expenses-paid trip to Game One of baseball's 2003 World Series from lobbyists who wanted his help.

Two attorneys familiar with the case said Monday that Staffer D is Verrusio, who was policy director on the transportation committee for about five years. The attorneys spoke on condition of anonymity because of the ongoing investigation.

An attorney for Verrusio, Paul Rauser, didn't immediately return a call. A Justice Department spokeswoman declined comment.

The lavish trip to the series game between the Florida Marlins and the New York Yankees at Yankee Stadium has already helped prosecutors win corruption-related guilty pleas from three people: Trevor Blackann, a former aide to two Missouri Republicans; James Hirni, a former Abramoff lobbying associate; and Todd Boulanger, another former Abramoff deputy.

Boulanger and Hirni helped provide the World Series trip. Blackann and Verrusio were the recipients and were also treated to a chauffeured SUV, dinner at an expensive steakhouse and a visit to a strip club, court papers say.

The purpose was in part to influence Verrusio and Blackann to help an equipment rental company win favorable language in a highway bill, according to a plea deal Boulanger accepted Friday.

Abramoff is in prison and has cooperated with the Justice Department to help convict more than a dozen people, including former Rep. Bob Ney, R-Ohio.

Mark Zachares, also a former Young aide, pleaded guilty to conspiracy in April 2007. Zachares acknowledged accepting gifts and a golf trip to Scotland from Abramoff's team in exchange for official acts on their behalf.

Young's spokeswoman did not immediately return a call for comment Monday. Young has denied wrongdoing but in December he stepped down under pressure as lead Republican on the Natural Resources Committee, saying he wanted to focus on clearing his name in an unrelated corruption investigation in Alaska.

Celebrity-like visit by Ilitch Holdings CEO to U.S. Attorney's Office highlighted

A 2007 Annual Report published by the U.S. Attorney Stephen J. Murphy, Eastern District of Michigan gives (see pg. 53) celebrity-like stature to a visit to the U.S. Attorneys Office by Christopher Ilitch, CEO of Ilitch Holdings, Inc., the parent company of Little Caesar Enterprises, Detroit Tigers, Detroit Red Wings and MotorCity Casino. (See photo and caption right).

Given the complex Michigan-based business holdings of the Ilitch family, and the proclivity for legal challenges, this sort of favorable, start-struck, celebrity-like treatment of Ilitch seems inappropriate and raises questions of objectivity. Members of the Ilitch family -- particularly Christopher's older brothers Ronald and Michael Jr. -- and their closest partners have a deep history of professional and personal legal challenges allegedly involving illegal substances, assault, domestic violence, prostitution, impaired driving, campaign finance violations, etc.

Politico paid to gather signatures on petitions may have also invested in AtMashpee LLC

Lee Albright was an investor in Atwater Entertainment Associates LLC (Atwater) according to a web site seeking to alert former Atwater partners to possible class-action claims involving the entity's former manager. Detroiter Herb Strather originally syndicated interest in Atwater as a way to raise capital needed to promote gambling in Detroit and then establish MotorCity Casino.

AtMashpee LLC, another Strather-created Detroit-based casino syndication in which a large majority of Atwater's members are reported to have also been investors, is suddenly at the center of a Jack Abramoff-related scandal making headlines this week.

Glenn Marshall, former chairman of Massachusetts's Mashpee Wampanoag tribe and a Strather (AtMashpee) partner, admits he is guilty of all criminal activity outlined in a Department of Justice (DOJ) complaint filed this week. Marshall has also agreed to cooperate in ongoing DOJ investigations which could include AtMashpee and its investors.

It is not clear yet if Albright is one of the Atwater investors who also put money into AtMashpee LLC.

Albright is the president of National Petition Management (NPM), perhaps the leading U.S. firm paid to collect signatures on political petitions intended to qualify measures (initiatives, referenda, propositions, proposals, etc.) for the ballot. NPM has offices in Michigan and Northern California. At one time NPM's was incorporated in Michigan.

The Daily Kos reports that from 1992-2006, NPM successfully qualifed 75 measures to be on ballots in 15 states. That list included qualifying two Michigan gambling measures: (1) allowed three commercial casinos to be opened in Detroit; and then (2) virtually protects those Detroit casinos from the threat of any future gaming competition in the state. Specifically:

1996 - Michigan First! Proposal E - gambling in Detroit (organized by Atwater investors Herb Strather and Mary Ann Dalgleish, and Dimitrios Papas, founder of Monroe Partners LLC - Greektown Casino; Strather and Papas were later disqualified from receiving Michigan gambling licenses and forced to cash-in their respective casino interests before the gambling halls opened; voters statewide narrowly approved Proposal E which provided for three commercial gaming establishments in Detroit).

2004 - Let Voters Decide Yes on Proposal 1 (bankrolled by Detroit's three established commercial casino interests and Michigan Indian tribes with gaming interests which included MGM Grand Detroit, Marian Ilitch owner of MotorCity Casino, Kewadin Greektown Casino, Saginaw Chippewa Indian Tribe, Little River Band of Ottawa Indians; voters approved Proposal 1which now requires a statewide vote to approve any other new/expanded gaming ventures).

Strather began working with the Mashpee tribe in 2000 and reportedly dumped some $15 million into efforts to get the Mashpee tribe federally recognized and then build a tribal casino on Cape Cod. In exchange for bankrolling the Recognition effort and casino plans, Strather's group was promised 6-6.5% of the casino's annual gaming revenues over 20 years -- a deal some have valued at more than $1.2 billion.

Strather (AtMashpee) funnelled $4 million from investors into a hidden account enabling Marshall's criminal activity.

U.S. Sen Stevens indicted; Rep. Young still under investigation on related matters

TALKINGPOINTSMEMO
7.29.08

TED STEVENS INDICTED ON 7 CRIMINAL COUNTS

Ted Stevens, the senior senate Republican from Alaska, has been indicted on seven counts of making false statements for failing to disclose on his Senate financial disclosure forms hundreds of thousands of dollars worth of gifts he received in Alaska over seven years. He will not be arrested but will be allowed to turn himself in.

The FBI investigation leading to the indictment began almost two years ago when the FBI raided Steven's son, Alaskan State Sen. Ben Stevens, and others. At the center of the investigation were executives from VECO who have plead guilty to bribing at least four legislators includin the younger Stevens. Ted Stevens' Road To Ruin

Wall Street Journal reporters Evan Perez and Jim Carlton write that the investigation has upended Alaska state politics, casting scrutiny on Sen. Stevens -- who is running for re-election this year -- and on his congressional colleague, Rep. Don Young of Alaska, who is also under investigation.

Port Huron casino promoter fined for breaking California's political reform laws; denied a casino license in Michigan

Michael J. Malik, Sr., the promoter behind the Bay Mills casino proposal for Port Huron, Michigan, was fined in 2006 for breaking California's political reform laws by failing to report a $26,500 casino-related contribution in 2004; and it's believed that Malik has been under investigation in California since Spring 2007 for breaking similar laws in 2006.

California's Fair Political Practices Commission (FPPC) fined BarWest L.L.C. (a casino syndicate controlled by Michael J. Malik and Mrs. Marian Ilitch) on two counts of failing to comply with California's political reform laws.

Malik had failed to report that his Detroit-based BarWest L.L.C. made a contribution of $26,600 in October 2004 to the San Joaquin County GOP Committee. As it was, then-GOP Congressman Richard Pombo, who also happened to be chairman of the House Natural Resources Committee that oversees Indian gaming matters, was from San Joaquin County. Malik paid a fine of $6,500.

As that 2004-2006 investigation was coming to a conclusion, Michael Malik was again making other contributions to the campaign committees of individual members of the California legislature (primarily between July 1, 2006 and December 31, 2006) and failing once again to report those contributions as required under California's political reform laws. In fact, it appears Malik may have contribute $25,000 or more to 15 or more political committees during that time and failed to report those contributions as a major donor under California law.

TVT understands the FPPC has been conducting an investigation for the better part of 2007 into Malik's failure to report these contributions and other matters involving payments by BarWest LLC, Michael Malik and lobbyists (Capitol Ventures, Roseville; Governmental Advocates, Inc.) Malik employed in California.

One must consider that if Mr. Malik blatantly violated political campaign laws in California, it's possible he has also been violating political reform laws and lobbying disclosures in Michigan, New York, Washington, D.C. and elsewhere.

Certainly if California's FPPC finds Malik and his associates violated laws once again in California, it would be responsible for authorities in other states and Washington, D.C. where Malik is involved with political contributions and lobbying payments to investigate his giving practices.

Mike Malik has partnered with Marian Ilitch and the Ilitch family on various casino syndications and development projects over the last 15 years. However, Malik failed to win approval for a gaming license in Michigan in 1999 and was forced to transfer his shares in Detroit's MotorCity Casino to Marian Ilitch. Since then, throughout their various partnerships, Malik appears to have played the role of political "bag-man" or "bad cop" to Marian Ilitch's "good cop."

Some suggest Mike Malik plays the role of Marian Ilitch's "Consigliere." It has been reported that there is a doorway that connects Malik's office to Marian Ilitch's office providing him with direct access into her private domain.

A business venture that involves Michael Malik and the Bay Mills Indian Community, a federally funded enterprise involved in the research and manufacturing of plastic parts and devices, is rumored to be under investigation by the FBI.

It would seem appropriate for the Michigan Gaming Control Board (MGCB) to revisit Mr. Malik's close association and affiliation with Marian Ilitch and the Ilitch Family.

Ilitch Consigliere fined and under investigation by California's FPPC; investigations warranted elsewhere

Late last year (10.24.06), California's Fair Political Practices Commission (FPPC) fined BarWest L.L.C. (a casino syndicate controlled by Michael J. Malik and Mrs. Marian Ilitch) on two counts of failing to comply with California's political reform laws. Malik had failed to report that his Detroit-based BarWest L.L.C. made a contribution of $26,600 in October 2004 to the San Joaquin County GOP Committee. As it was, then-GOP Congressman Richard Pombo, who also happened to be chairman of the House Natural Resources Committee that oversees Indian gaming matters, was from San Joaquin County.

Malik paid a fine of $6,500.

As that 2004-2006 investigation was coming to a conclusion, Michael Malik was again making other contributions to the campaign committees of individual members of the California legislature (primarily between July 1, 2006 and December 31, 2006) and failing to report those contributions as required under California's political reform laws.

In fact, it appears Malik may have contribute $25,000 or more to 15 or more political committees during that time and failed to report those contributions as a major donor under California law.

TVT understands the FPPC has been conducting an investigation for the better part of 2007 into Malik's failure to report these contributions and other matters involving payments by BarWest LLC, Michael Malik and lobbyists Malik employed in California.

One must consider that if Mr. Malik blatantly violated political campaign laws in California, it's possible he has also been violating political reform laws and lobbying disclosures in Michigan, New York, Washington, D.C. and elsewhere.

Certainly if California's FPPC finds Malik and his associates violated laws once again in California, it would be responsible for authorities in other states and Washington, D.C. where Malik is involved with political contributions and lobbying payments to investigate his giving practices.

Malik has partnered with Marian Ilitch and the Ilitch family on various casino syndications and development projects over the last 15 years. However, Malik failed to win approval for a gaming license in Michigan in 1999 and was forced to transfer his shares in Detroit's MotorCity Casino to Marian Ilitch. Since then, throughout their various partnerships, Malik appears to have played the role of political "bag-man" or "bad cop" to Marian Ilitch's "good cop."

Some suggest Malik plays the role of Marian Ilitch's "Consigliere." It has been reported that there is a doorway that connects Malik's office to Marian Ilitch's office providing him with direct access into her private domain.

A business venture that involves Michael Malik and the Bay Mills Indian Community, a federally funded enterprise involved in the research and manufacturing of plastic parts and devices, is rumored to be under investigation by the FBI.

It would seem appropriate for the Michigan Gaming Control Board (MGCB) to revisit Mr. Malik's close association and affiliation with Marian Ilitch and the Ilitch Family.

Los Coyotes tribal leader calls Barwest's Mike Malik "devil;" says he has "seduced" younger tribal leaders

Los Coyotes tribal spokeswoman and tribal elder Katherine Siva Saubel recently called Michael J. Malik, Sr. the "devil" and said he has "seduced" younger members of the tribe to jump aboard Malik's band-wagon. Among other things, Malik's group paid younger members of the tribe to appear in Barstow as "grassroots" volunteers during the 2006 election primary:

11.01.07
"Saubel said there is a council-only meeting today to discuss the casino efforts--a meeting she was not invited to be but plans to attend anyway. A full tribal council meeting is set for mid-November. Saubel claimed the Malik has 'seduced' the younger member of the tribe and called him 'the devil himself.'
" 'I was 83 when we started this. I'm 87 now,' Saubel said. 'I think he's just waiting for me to keel over.' "

Mike Malik and Mrs. Marian Ilitch are the principals behind the Detroit-based casino syndication BarWest LLC. Malik and Ilitch have proposed building several off-reservation casinos for tribes from opposite ends of California on a site that Barwest owns in Barstow, California.

Ilitch and her husband Mike Ilitch are the co-founders of the Little Caesars Pizza franchise. The family also owns the Detroit Tigers, Detroit Red Wings, MotorCity Casino, Detroit's Fox Theater and other sports, entertainment and restaurant operations.

Malik and the Ilitches are behind stalled proposals to build unorthodox off-reservation casinos in Port Huron, Michigan; Barstow, Califorina; and in The Hamptons on New York's Long Island. (see also: Detroit Free Press exposes Malik/Ilitch casino enterprises)


Members of the Bay Mills Indian Community have expressed concerns about Malik's involvement in their casino ventures as well as a business venture involving the research and manufacturing of various plastics products. Rumors have circulated among Bay Mills members to suggest the FBI is investigating the plastics venture.

In 1999 the Michigan Gaming Control Board (MGCB) failed to grant Michael Malik a gaming license and he was forced to transfer his interests in Detroit's MotorCity Casino to Marian Ilitch before the casino could open its doors to the public.

Last year, following a two-year investigation, California's Fair Political Practices Commission (FPPC) fined Malik's Barwest LLC on two counts for failing to report a $26,600 contribution Malik made to the San Joaquin County GOP Committee in 2004 -- Malik paid a $6,500 fine; and TVT has learned the FPPC is investigating numerous unreported political contributions and questionable lobbying payments Barwest's Malik made in 2006.

Signficant set backs for Detroit casino syndicators Mike Malik & Marian Ilitch in 2007

Things haven't been going well for Detroit casino syndicators Michael J. Malik, Sr. and Mrs. Marian Ilitch.

Port Huron casino scheme remains stalled in Congress after 15 years

Malik's plans for a Bay Mills Indian tribe off-reservation casino in Port Huron, Michigan have once again been derailed. The Chairman of the House Natural Resources Committee failed to consider the proposal as was originally planned at a hearing held yesterday (11.15.07) in Washington, D.C. Chairman Nick Rahall (D-WV) said that any possible consideration of the scheme promoted by Malik's Blue Water Resorts wouldn't be heard until next year at the earliest. Malik and the Ilitch Family have been behind the Port Huron scheme for more than 15 years. A Malik associate has made claims that the casino syndicator has spent $10 million pushing his plan. Rumors are swirling that those involved with a federally subsidized plastics venture the tribe has fronted (including tribal President Jeff Parker and Malik) may be the target of an FBI investigation.

Barstow casino agreements terminated/expired

In September, the spokeswoman of the Los Coyotes Band of Indians informed BarWest LLC that it was terminating their partnership agreement. BarWest is a Malik/Ilitch casino syndicate formed in 2003 that has been pushing a scheme for two Indian casinos in Barstow, California. Similar to the scheme for Port Huron, the California legislature has refused to consider the unorthodox proposal the last two years and a gaming Compact that BarWest had negotiated for the tribe in 2005 expired this past September. Malik and the Ilitch Family have been pushing their Barstow casino scheme since 2001. Malik claims he's spent $19 million pushing their Barstow schemes. A squabble among the leadership of the Los Coyotes tribe has left people questioning who really makes decisions and speaks for the tribe today.

Federal Judge rules against Long Island casino scheme

A judge last month ruled that the Shinnecock Indian Nation can not build a casino on property it has obtained in Hampton Bays on Long Island. Gateway Casino Resorts, a Malik/Ilitch casino syndication, has been bankrolling the tribe's plans. In a 129-page ruling, Judge Joseph F. Bianco said a disputed parcel outside the reservation is not sovereign territory. Though the tribe owns the “Westwoods” land in fee, it lost aboriginal title hundreds of years ago. Bianco asserted that even if aboriginal title still existed, the tribe can’t use the site for gaming due to the “highly disruptive consequences” of the proposed 61,000-square-foot casino. Nearly 20 pages of the opinion were dedicated to the impacts of gaming on the environment, traffic, health and safety. The tribe has yet to receive federal recognition needed to develop any casino. A pre-dawn raid was conducted on the reservation and in the surrounding community this past year to round up members of a suspected drug ring.

MotorCity Casino's hotel opening delayed, casino revenues falling

In 2005, Marian Ilitch purchased all outstanding shares of Detroit Entertainment LLC and took 100% control of Detroit's MotorCity Casino. Since then she has undertaken what is now reported as a $300 million expansion of the gambling hall including a 25% increase in gaming space and the addition of a 400 room hotel. The expanded gaming floor opened in June and after a two month bump in revenue, the casino's revenues have now fallen for three consecutive months. And, the opening of the hotel property has been delayed by a month. While the staff blamed the delayed opening on late delivery of furniture; the truth is, the hotel property has lost some key personnel in recent months, construction isn't complete, and Ilitch faced the threat of a strike in October. This past year, Standard & Poors and Moodys downgraded the credit ratings of MotorCity Casino parent company CCM Merger, Inc. Malik was forced to share his original shares in MotorCity Casino back in 1999 when the Michigan Gaming Control Board (MGCB) refused to grant him a casino license.

Malik and Ilitch have seen little progress with new gambling ventures since they parted company with former partner Tom Celani several years ago. Celani, on the other hand, has gone on to further establish himself as a serious player in the gambling industry across the U.S.; and, this past year among other things Celani won the management contract for the Cal-Neva Resort in Lake Tahoe once owned by Frank Sinatra.

BREAKING NEWS: Rahall pulls off-reservation casino bills from agenda for today's Natural Resources Committee hearing

A highly anticipated House Natural Resources Committee hearing on bills that would allow two Michigan tribes to build off-reservation casinos far from their current reservation lands has been postponed until 2008 at the earliest. The start of today's hearing was delayed one hour.

Nick Rahall (D-WV), Chairman of the House Committee on Natural Resources, opened today's mark-up hearing, which had been delayed for one hour, by announcing the postponement of two agenda items dealing with:

• H.R. 2176 (Stupak): To provide for and approve the settlement of certain land claims of the Bay Mills Indian Community.



• H.R. 4115 (Dingell): To provide for and approve the settlement of certain land claims of the Sault Ste. Marie Tribe of Chippewa Indians.

Chairman Rahall reported at the outset that today's meeting will be the last meeting for 2007; indicating, that at the earliest, the two off-reservation casino bills could be taken up in 2008.

Postponement of the hearing likely indicates that proponents of the two casino bills did not have the votes on the House Natural Resources Committee to move the bills out of committee. It may also signal concern among House leadership about rumored FBI investigations of Bay Mills Indian tribe's leader and federally funded plastics ventures.

Jeff Parker, Bay Mills' plastics ventures rumored to be subject of FBI investigation

Several sources have contacted TheVerifiableTruth.com (TVT) to indicate that Mr. Jeff Parker, president of the Bay Mills Indian Community is under investigation by the FBI for white collar crimes associated with the various federally subsidized Bay Mills plastics enterprises.

Last year Senator Debbie Stabenow and Senator Carl Levin both annouced federal grants for the plastics enterprises totalling nearly $1 million. Both Stabenow and Levin are beneficiaries of political campaign funds contributed by Mr. Michael J. Malik and his frequent gaming partners Mike & Marian Ilitch. Malik reportedly "owns" 49% of the Bay Mills plastics enterprises.

For more than 15 years, Malik and members of the Ilitch Family have also backed plans for an off-reservation Bay Mills Indian casino 350 miles from the reservation in Port Huron, Michigan. The casino proposal is to be heard by the House of Representatives' Natural Resources Committee this coming Thursday (11/15). The tribe has two casinos on its Brimley, Michigan reservation.

It has been reported to TVT that during the recent Bay Mills Indian Community election cycle, Mr. Parker's opponents circulated flyers with details about the FBI investigation but TVT has not received copies of any such flyers.

Anyone with additional knowledge of this rumored FBI investigation, or possessing documents related to the investigation, or which can confirm or verify the investigation, is encouraged to contact TVT confidentially at allverifiable@gmail.com.

Compendium of posts regarding Bay Mills Indian Community's plastics ventures

The following are posts made previously to TVT related to the various plastics business enterprises (Integrated Composites LLC, Polycom Inc., Great Lakes Composite Institute, International Composites Institute of Michigan, etc.) involving Anthony Andary, the Bay Mills Indian Community, Jeff Parker and Michael J. Malik, Sr.:

• Jeff Parker, Bay Mills' plastics ventures rumored to be subject of FBI investigation
• BIA approves Bay Mills land-in-trust application for plastics venture
• Tribe to borrow $4 million to fund federal grant requirement, other investments in Plastics venture
• Tribe's chair reported two members were hired for its plastics business
• International Composite Institute of Michigan pitched to EUP Workforce Development Board
• Bay Mills plastics venture awarded $906k U.S. Commerce Dept. grant
• Bay Mills GTC ignored tribe members request for investigation into structure of plastics venture
• Gaming Tribe seeks to diversify while developer still pushing off-reservation casino
• Concerns raised about Malik & Bay Mills Tribe's Plastics Business long before $900k federal grant awarded
• Bay Mills & Malik get into Plastics; Senator Stabenow announces they'll get $900,000 federal jumpstart
• UPDATE: More Money (post election) to Sen. Stabenow brings total to $117,200 from Malik & the Ilitch Family
• Bay Mills Indians have received more than $35 million in federal grants since 2000

Doolittle, six aides hit with grand jury subpoenas

8.27.07

Doolittle, six aides hit with grand jury subpoenas

A federal grand jury has issued subpoenas to six aides to embattled GOP Rep. John Doolittle (Calif.), who is under investigation by the Justice Dept. over his ties to imprisoned former Republican lobbyist Jack Abramoff.

The subpoenas were issued to Ron Rogers, Doolittle's chief of staff; Dan Blankenburg, deputy chief of staff; Alisha Perkins, scheduler; Evan Goitein, legislative director; Martha Franco, senior executive assistant; and Gordon Hinkle, field rep.

The subpoenas are the latest sign that the federal corruption probe of Doolittle is continuing to gather steam. Doolittle's home was searched by FBI agents earlier this year. The agents were looking for any evidence regarding Doolittle's ties to Abramoff. Julie Doolittle, the congressman's wife, did consulting work for Abramoff, and Doolittle himelf wrote letters to the Bureau of Indian Affairs on behalf of several of Abramoff's Indian gaming clients.

Doolittle has denied any wrongdoing, and he has accused the Justice Dept. of harassing him and his wife, but after his home was searched [on Friday, April 13th], House GOP leaders forced him to give up his seat on the powerful Appropriations Committee.

Doolittle's office could not be reached for comment on the subpoenas at press time.

Update: The Associated Press is reporting that Dollittle has been subpoenaed for his legislative records going back 11 years (viatalkingpointsmemo.com). Doolittle will fight the subpoena, arguing that this investigation violates the balance of powers between the legislative and executive branch, according to his lawyer, David Barger.

WSJ Editors note Alaska's Sen. Stevens, Rep. Young may be headed for trouble

9.24.07

JOHN FUND ON THE TRAIL
North to the Future
The men who gave us the "Bridge to Nowhere" may be headed there themselves.

On Friday Alaska's Gov. Sarah Palin ordered the state to prepare a "fiscally responsible" alternative to the infamous "Bridge to Nowhere," which made the state a national laughingstock and shone an unwelcome spotlight on the pork-barrel greed of its all-Republican congressional delegation. The $398 million bridge would have connected Ketchikan (population 7,400) to its airport on a nearby island inhabited by 50 people.

The same day, the Associated Press reported that the FBI has recorded two phone calls between Sen. Ted Stevens, who sponsored the bridge, and Bill Allen, a Stevens patron who dominated state politics as the head of the oil-services firm VECO until he pleaded guilty to bribing state legislators this year. Mr. Allen has also testified in open court that he paid some of the bills incurred in the expensive remodeling of Mr. Stevens's Alaska home. Last month, FBI agents raided the senator's home to secure evidence about the remodeling work. Few expect Mr. Stevens, who has served since 1968 and rose to become chairman of the powerful Appropriations Committee, to survive politically.

An era is ending in Alaska politics. For decades the state justified its raids on the federal treasury because Washington owned so much of the state and had locked up so many of its natural resources to development (the oil underneath the Arctic National Wildlife Refuge being the most famous example). In what some called "compensation," the state made sure it became No. 1 in the nation for pork per person--$984.85 for each Alaskan in 2005.

The arrogance Alaska congressmen displayed in pursuing their taxpayer largesse was stunning. Rep. Don Young, the former Transportation Committee chairman and the state's lone House member, became famous for trying to secure funding for another dubious bridge near Anchorage, this one costing $223 million. Art Nelson, Mr. Young's son-in-law, is part owner of 60 acres of what he described as "beautiful property"--land that would be opened up to development by the new bridge. He admitted discussing the project with his father-in-law. Mr. Young said he saw no conflict of interest.

But Mr. Young is nonetheless highly sensitive about the projects he promotes. Earlier this year Rep. Scott Garrett, a New Jersey Republican, sought to trim $11.8 million from programs for aboriginal populations in Alaska and Hawaii. Mr. Young, who once threatened to chew off the ear of an opponent, turned on Mr. Garrett with similar ferocity: "Those who bite me will be bitten back." He bellowed against members who would attack his projects: "It's my money!" He then claimed that the GOP lost control of Congress in 2006 because of "members who want to cut spending."

Even many of Mr. Young's constituents seem to disagree. A poll conducted this summer by the free-market Club for Growth found that 66% of Alaskans disapproved of the "Bridge to Nowhere." When asked to choose between a prospective candidate who wants to cut federal spending "even if that includes cutting some money that would come to Alaska" and a candidate who is willing to increase overall federal spending "as long as more federal spending and projects come to Alaska," the vote was even more lopsided: 71% of Alaska's residents chose the skinflint.

Adding to Rep. Young's woes, The Wall Street Journal reports that he has become a target of the same federal investigation that's been looking into connections between Sen. Stevens and VECO. Mr. Young has a lot more to worry about than whom to bite on the House floor. The same can be said for Mr. Stevens, whose pork-barreling days are likely numbered.

Of course, politicians naturally want to take credit for dragging federal dollars home. But the GOP Congress let the situation go berserk. In 2005, Congress authorized a record 13,999 earmarks. The scandals surrounding just a few of them involving disgraced lobbyist Jack Abramoff and ex-Rep. Duke Cunningham sent reporters scurrying to find what other nuggets of news might be buried in the remainder. Majority Republicans suffered most, even though Democrats routinely secured an estimated 45% of earmark spending.

Now it's Democrats who are championing earmarks and trying to hide them from the public, all the while proclaiming their desire for openness. House Minority Leader John Boehner took an important step toward reclaiming the party's fiscally conservative brand last week when he announced he would try to force a vote on greater earmark transparency.

It's time for Senate Republicans to step up to the plate. It's increasingly clear that their Sen. Stevens has ethically compromised himself and brought shame to the Senate. Will his colleagues continue to kowtow to him as a powerful Appropriations Committee member and allow him to serve on other key committees? Or will they send a signal that they are prepared to shun senators who abuse the public trust?

Doolittle aides questioned about Abramoff connections

9.06.07

Aides testify before jury

Rep. John Doolittle's staff questioned over lobbyist connections.

By David Whitney - Bee Washington Bureau

Rep. John Doolittle's office has confirmed that two staff aides testified under subpoena Wednesday before a federal grand jury investigating the congressman's connections to lobbyist Jack Abramoff.

Alisha Perkins, who has worked for six years as the congressman's scheduler, testified before the grand jury Wednesday morning, said the congressman's press aide, Gordon Hinkle.

Hinkle said Perkins was served a grand jury subpoena about the same time as was Ron Rogers, the congressman's chief of staff, and his deputy chief of staff, Dan Blankenburg.

Blankenburg also appeared before the grand jury Wednesday and later issued a statement.

"This morning I testified before the federal grand jury," he said. "Overall, it was a very uneventful experience. I was questioned primarily about the operations of our office. To me, the process represents a necessary and promising step toward the truth."

The scheduler is one of the most important administrative jobs in a congressional office. Perkins would have known who was trying to reach the congressman by telephone or in person.

Unlike Blankenburg, who started working for the congressman in 2005, and Rogers, who joined the office only in May, Perkins' work in the office dates back long enough that she would have been there when Abramoff and his associates, most notably Kevin Ring, were seeking to meet with the Roseville Republican. Ring, according to billing records from Abramoff's lobbying firm, frequently was in Doolittle's office meeting with him or his staff. Ring used to work for Doolittle and, after joining Abramoff's firm, was the lead in handling lobbying for several of Abramoff's clients, including the Commonwealth of the Northern Mariana Islands and some Indian tribes.

Ring abruptly resigned from his lobbying job on April 13, the same day FBI agents searched the Doolittles' home in Oakton, Va., raising speculation that he was in negotiations with the Justice Department over his fate. His attorney has repeatedly declined to comment. Ring invoked his Fifth Amendment constitutional right against self-incrimination in 2005 rather than answer questions from the Senate Indian Affairs Committee.

In a statement Tuesday, Doolittle said he hopes that the testimony of his staff will bring quick closure to the investigation that has been going on for three years. He has denied any wrongdoing, but said prosecutors believe Abramoff paid his wife, Julie, for work she didn't do in an effort to reward him for help he provided to the lobbyist.

Washington Post blogger Paul Kane reviews the dismantling of the GOP leadership the past two years

from a post 08.17.07 by Paul Kane at the washingtonpost.com's blog "Capitol Briefing:"

About This Blog | Meet Paul Kane

The House GOP Leaders' Precipitous Fall

The dissolution of a once proud House Republican leadership team is near complete.

Dennis Hastert (Ill.), the affable wrestling-coach-turned-House-speaker, and Deborah Pryce (Ohio), the former head of the GOP Conference, both announced this week that they do not plan to stand for reelection next year, ending political careers that total more than 36 years combined.

Taken in isolation, these announcements aren't earth shattering. Hastert's retirement was long expected. And Pryce's announcement, made yesterday in Columbus, is somewhat of a surprise given how aggressively she had been assembling a campaign operation. Her departure reflects the fact that her central Ohio district had become one of the most competitive in the nation.

Taking the long view, these announcements are the latest in a series of shattering blows to a House Republican leadership team that, prior to 2006, ran the chamber with an iron fist and a view that they would never lose their majority. Of the top six GOP leaders from the last Congress, only Rep. Roy Blunt (Mo.) remains in a leadership position ... (Complete Post)

* John T. Doolittle (Calif.): A DeLay acolyte, Doolittle's future as GOP conference secretary was already murky once the majority leader gave up his leadership post. Doolittle battled his own Abramoff allegations throughout 2006, barely defeating the underfunded Democrat Charlie Brown with less than 50% of the vote. Despite the near loss and Abramoff questions, Doolittle announced a bid for another leadership post after the '06 midterms -- a campaign he gave up in less than a day. Now a back bencher, Doolittle's home was raided by the FBI in April [Friday the 13th] as part of the Abramoff investigation. California Republicans are openly talking about ousting him in a 2008 primary.

Sen. Levin announces support for Port Huron off-reservation casino in letter to city's Mayor

8.02.07

Levin support spurs casino hopes
Senator's backing could push vote in U.S. legislature

By MIKE CONNELL
Times Herald

U.S. Sen. Carl Levin, who had been neutral on the issue of a casino in Port Huron, has switched course and thrown his support behind a proposed casino at the Thomas Edison Inn.

Casino advocates, who had sought the senator's backing for five years, hailed his decision.

"Hopefully, this will get us moving," said Wallace Evans, chairman of the St. Clair County Board of Commissioners. "We either have to get on with it or get off of it, but getting Carl's support is huge. (A casino) is a no-brainer as far as what we need to get things turned around in Port Huron."

Levin, a Democrat, is one of the most influential figures on Capitol Hill. He has served in the Senate since 1978 and is chairman of the powerful Armed Forces Committee.

He voiced his support in a letter to Mayor Alan Cutcher, who had written the senator July 10, a day after the Port Huron City Council passed a resolution on the topic.

"I have been neutral toward this proposal until now, given the number of casinos already in Michigan," Levin wrote. "However, your arguments are persuasive relative to the economic situation in Port Huron, coupled with the presence of the casino in Sarnia. In light of the unique situation, I will support the federal legislation introduced by Rep. Bart Stupak earlier this year allowing the Bay Mills project to proceed if it passes the House of Representatives."

Land swap dates to 2002
Stupak's bill, which was co-sponsored by U.S. Rep. Candice Miller, R-Harrison Township, calls for Congress to approve a deal made in August 2002 by former Gov. John Engler and the Bay Mills Chippewa band of the Upper Peninsula.

As part of the deal, Bay Mills surrendered its long-standing claim to property at Charlotte Beach, a 110-acre subdivision on the St. Mary's River south of Sault Ste. Marie. In exchange, Bay Mills would be allowed to buy the Edison Inn, create a reservation and build a casino and resort hotel.

The Engler-Bay Mills agreement does not require the approval of the Bureau of Indian Affairs, as is normal for Indian-run casinos. However, it does require the approval of Congress and President Bush.

The council resolution of July 9, which was introduced by Councilwoman Laurie Sample-Wynn, called on Michigan's congressional delegation to support the agreement. It passed 6-0 with Councilman Jim Fisher abstaining.

Levin's letter was dated July 23. Cutcher, who has been on vacation, was back in town Wednesday, but efforts to reach him for comment were unsuccessful.

Developers ready to build
Mike Malik, a former Algonac city councilman and a close associate of Detroit's wealthy Ilitch family, is spearheading the casino development. He has spent millions of dollars on lawyers and lobbyists in an effort to push the issue through Congress.

"Carl Levin on board with this project will be a great step forward," Malik said. "He's definitely a powerful force who can move this finally to fruition."

Malik said there has been no movement on the Stupak-Miller bill, which was introduced in early May. It remains in the House Natural Resources Committee, and its prospects are unclear. On Wednesday, a committee spokeswoman said nothing is on the schedule for the casino bill.

If the legislation ultimately is approved, Malik said casino developers are ready to begin construction.

"We've been ready for years," he added.

Past bills go nowhere
For five years, Levin had neither supported a Port Huron casino nor opposed it. His ambivalence was regarded as a problem by the casino's supporters because it made it easier for other lawmakers to thwart the project.

In 2002, U.S. Sen. Harry Reid, D-Nev., blocked it in the Senate, where he is now the majority leader. He was concerned about the precedent of bypassing the Bureau of Indian Affairs.

The bill was rewritten to address Reid's concerns, but it was killed in the House by U.S. Rep. Mike Rogers, R-Brighton, a retired FBI agent. Two years ago, another bid was stymied by former U.S. Rep. Tom DeLay, then the House majority leader.

Earlier this year, Miller said the proposal was languishing because it lacked the support of Levin and Gov. Jennifer Granholm.

"If we had a united front, it would be much more helpful," she said.

Saginaw tribe has claim
Miller and U.S. Sen. Debbie Stabenow, D-Lansing, have led the push for a Port Huron casino despite the strong opposition of Mayor Kwame Kilpatrick and other Detroit officials, who see it as a competitor to the three casinos in Michigan's largest city.

Levin is a Detroit native and a former president of the Detroit City Council.

The Port Huron casino also is opposed by the Saginaw Chippewa, whose casino at Mount Pleasant is the state's largest gambling facility. The Saginaw tribe argues it - and not Bay Mills - has an ancestral claim to Port Huron. The tribe includes descendants of the Black River and Swan Creek bands, who had reservations in St. Clair County from 1807 to 1836.

Supporters of a Port Huron casino argue it would be an economic boost for the city, which has a double-digit unemployment rate and one of the nation's highest rates of mortgage foreclosures. They also argue that gambling already exists in the larger community.

The Ontario Lottery and Gaming Commission operates its Port Edward Charity Casino directly across the St. Clair River from the Edison Inn. The commission also operates and manages more than 450 slot machines at the privately owned Hiawatha Horse Park in Sarnia.

City desperate for jobs
Richard Cummings, president of the Michigan Machinists Council, said Port Huron desperately needs the 2,500 to 3,000 jobs a casino is expected to produce. The city, faced with a deteriorating tax base and dwindling revenues, also expects to receive a share of the casino's net revenues.

Cummings formerly led the county AFL-CIO, which endorsed the casino ahead of a 2001 advisory vote where Port Huron voters endorsed the project. In return for its support, the AFL-CIO won a pledge that a casino would pay union wages.

"Sen. Levin has high seniority and is on some very important committees," Cummings said. "Sen. Stabenow has been working on this issue all along. With both senators working together, it's a very positive step in the right direction for Port Huron."

Cummings and Evans are among the community leaders who have traveled to Washington to lobby for the casino with Levin and other members of Michigan's congressional delegation.

Levin also has received financial support from casino backers. In the year's first quarter, which ended March 31, the senator received at least $100,000 in campaign contributions from more than 100 donors, including Malik, pizza magnate Mike Ilitch and Port Huron philanthropist Jim Acheson.