Capitol Consulants of Hawaii: Double Dipping Gambling Conflicts, Resume Padding Lies or Harboring Secret Partners?

When it comes to public disclosure of political campaign finance and lobbying activities, the State of Hawaii is akin to something you might find in a small unsophisticated backwoods town controlled by “Good Ol’ Boys.” There is no consistency. Record keeping and access to records are spotty. Electronic filing means emailing documents and databases are misunderstood. What is available for examination is either elementary or unnecessarily cumbersome and sheds little light. The most recent campaign finance disclosure available online date back to 2006 elections. Sunlight is something only found at a beach.  It’s clear that in Hawaii they don’t take public disclosure seriously. Nevertheless...

John Radcliffe

Lobbyist John Radcliffe

John Radcliffe is employed by Capitol Consultants of Hawaii (Capitol Consultants) a Honolulu-based lobbying firm.  The firm’s website identifies Radcliffe as Vice President and Lead Lobbyist.  Among others industries and special interests, he is closely identified as a lobbyist for labor.

By his resume, Radcliffe maintains he was first retained in 2001 to lobby for Detroit casino syndicators Michael Malik and Marian Ilitch, through their mouthpiece and politico Tom Shields; Lansing-based PR firm Marketing Resource Group.  It was reported extensively that the Detroiters launched an expensive 2-year unsuccessful push for the legalization of gambling in Hawaii in 2000 but public records for that period are not readily accessible so we were unable to confirm lobbying registrations or expenditures.

Although Radcliffe and his Detroiter clients have admittedly failed to file timely lobbying disclosures in the past --  at onetime even saying a lobbying report hadn’t been filed because it was “lost in a Michigan snow storm” -- TheVerifiableTruth.com can confirm Radcliffe was registered to represent the Detroiters in 2005, 2006 and 2007-2008.

TVT has been unable to find any records indicating Radcliffe registered to represent the Detroiters during 2009 when Gov. Linda Lingle, a Republican who opposes gambling in Hawaii, was still in office. 

But when the race for Hawaii’s next governor began in 2010, Radcliffe again registered to represent the Detroiters. 

And when Neil Abercrombie, a Democrat, was elected Governor, he asked Radcliffe to help him identify key staff members and make key appointments. Radcliffe again registered as lobbyist for the Detroiters in 2011.

G. A. "Red" Morris

Lobbyist George A. Morris

George A. “Red” Morris is President and also a Lead Lobbyist at Capitol Consultants. He and Radcliffe are associates but Morris also maintains separately G. A. Morris, Inc.  As part of a resume that Morris shares via the G.A. Morris website, he claims  Marketing Resource Group (Detroiters) as a client from “2000-present.” 

TVT was able to confirm that Morris had registered as a lobbyist representing the Detroiters in January 2010 but according to the Hawaii State Ethics Committee Website, Morris was terminated as the Detroiters’ lobbyist a couple months later on April 30, 2010. However, TVT has found no other official lobbying disclosures to suggest Morris had ever reported lobbying for the Detroiters prior to 2010 despite the representations on Morris’ resume.

And given that Morris’ resume claims he was a lobbyist for the Detroiters from 2000-present, TVT was surprised to see that Morris’s resume also indicates Boyd Gaming as a Morris client from “1995-present.” Boyd is a publicly traded (NYSE: BYD) Las Vegas gambling conglomerate with casinos throughout the U.S. 

TVT has confirmed that Morris was registered as a lobbyist for Boyd Gaming in 2005 and from 2006-2008; and again following the 2010 termination as lobbyist for Marketing Resource Group.  As with Radcliffe, TVT found no records that he was registered to lobby for the either Detroiters or Boyd Gaming in 2009.  

Conflicts? Padded Resume Lies? Double Dipping? Secret Partners?

That Morris could have represented the Hawaii interests of Boyd Gaming at the same time he was representing the interests of Detroit casino syndicators is curious; although, clearly that’s what Morris’ resume suggests.  And why would Morris make misrepresentations on his resume?  Or did he?

Likewise, that Morris and Radcliffe, both principal lobbyists with the Capitol Consultants lobbying firm, could represent both the Detroiters and Boyd Gaming at the same time without a conflict is curious.

Typically, either circumstance would be recognized as presenting conflicts that clients wouldn’t tolerate; unless of course, Boyd Gaming and the Detroiters had no conflicts but rather, had shared interests in Hawaii.

Are Detroiters Again Fronting for Las Vegas?

If Morris wasn't misrepresenting circumstances on his resume, it is possible that while he only registered as a lobbyist for Boyd that he considered himself a lobbyist for the Detroiters if, in fact, the two entities had been coordinating efforts to legalize gambling in Hawaii and establish casinos on Oahu.

As a publicly traded company, Boyd might have to disclose its efforts to advance gambling in Hawaii and establish a casino.  If another group was fronting for Boyd's interests, Boyd might avoid the need for disclosures.  If the effort was unsuccessful, Boyd's shareholders wouldn't realize it as a failure by Boyd thereby minimizing any negative impacts to stock values.

In the mid 1990s, when the Detroiters were working to get gambling approved in the Motor City, they fronted for Las Vegas’ Circus Circus.  They secretly funded a last minute multi-million dollar advertising push as part of the campaign to win voter approval for gambling halls in Detroit and a partnership agreement that surfaced after the campaign made it clear the Detroiters had been “reimbursed,” by their Las Vegas partners, for the costs of the campaign.

There’s a stigma among voters and elected officials toward big Las Vegas gambling interests so they prefer to remain silent partners until approvals are in-hand.  The Detroiters are comfortable and able to front for their Las Vegas colleagues who have deep pockets and greater tolerance.  A couple of years ago, it was discovered that one of the Detroiters’ original MotorCity Casino partners, Herb Strather, was fronting a proposed Massachusetts casino, as they had in the mid 1990s, for South African gambling magnates Sol Kerzner and Len Wolman.

When reporter interviewed Herb Strather he failed to do the math

In February 2005, Robert Ankeny wrote in Crain's Detroit:

When MotorCity was being organized in the days before the city's Detroit casinos were authorized, Strather said, 112 Detroit area people each bought one or more $25,000 units in the company that eventually founded the casino.

"Many put in $100,000, four units," he said, making their holdings worth about $1.7 million today.

Strather said this investment growth in MotorCity doesn't include the $38.5 million that he and three other initial investors - Nellie Varner, Ron Slavik and James Blain - received when they sold their shares to Ilitch and to Mandalay, operating partner for MotorCity.

These four, along with former New Detroit President Paul Hubbard, funeral director O'Neill Swanson, and Barbara Callaway, who was Strather's grade-school teacher, were the original investors in 1994 when the city of Detroit voted approval for three casinos, Strather said.

Then, in March 2005, Robert Ankeny of Crain’s Detroit wrote:

Strather, who in the early 1990s organized the group that became Atwater Entertainment Associates L.L.C., said he, Karmanos and about two dozen of the 108 partners who own fractional shares of MotorCity also have offered to buy out and restructure that 11.5 percent of MotorCity for $118 million. Strather withdrew from the casino licensing process in 1999 before MotorCity opened, he said, in part because overdue taxes on some of his past development projects might have hindered approval from the Michigan Gaming Control Board.

But just a few months later, in October 2005, Robert Ankeny wrote:

Detroit-based Atmashpee L.L.C. scored a victory in a decades-old battle to win federal recognition for the Mashpee Wampanoag tribe in Massachusetts, said Herb Strather, Detroit developer and organizer of the company…

Atmashpee (the name is a blend of Mashpee and Strather’s Atwater Associates, organizers of what became MotorCity Casino L.L.C.) includes $12 million invested by more than 200 people. About 150 of them are former Atwater partners, he said

How is it that Ankeny could write in February & March that Strather's Atwater Entertainment Associates was a group of 108 - 112 partners and yet in October he reports 150 former Atwater partners represented 3/4s of the 200 investors in Strather’s AtMashpee casino syndication?

Was Ankeny enabling Strather to spread falsehoods and mistruths to some benefit?

Were Strather's inconsistencies meant to attract new investors or give some comfort to existing investors?

Were these representations designed to make others like Len Wolman, Sol Kerzner and brothers Richard & Stephan Slavik think there was more to AtMashpee LLC than there really was? Or were there some never-revealed "silent" partners behind Atwater Entertainment Associates that perhaps included Wolman, Kerzner and/or the Slavik brothers?

As noted in the first Ankeny reference above, the Slaviks' cousin, J. Ronald Slavik, was known as an "investor" in Atwater Associates.

See "Investors" List: Atwater Entertainment Associates LLC

Strather partnered with Slaviks on affordable housing development in 2001

A Crain's Detroit Business story published 10.21.01 about the development by Scripps Park LLC of a new affordable housing project reported:

Scripps Park is turning the Jeffries West housing project into 347 privately-owned houses and rental units. The group is made up of of businessman Herb Strather; The Slavik Co., based in Farmington Hills; Rosenberg Housing Group, based in New York City; Premier Property Management, based in Fenton; and local nonprofit Core City Non-Profit Housing Corp.

Scripps Park was supported by attorneys at Honigman Miller Schwartz and Cohn L.L.P.

Brothers Richard (now deceased) and Stephan Slavik, along with Len Wolman, chair of Connecticut-based Waterford Group, and South African Sol Kerzner, chair of Kerzner International, were members in Trading Cove Associates which bankrolled development of the Mohegan Sun casino resort in Connecticut. Then in 2006, Strather announced he'd handed over controlling interest in a proposed Mashpee Wampanoag casino on Cape Cod to the same group of investors.

J. Ronald Slavik, cousin of Richard and Stephan Slavik, was one of the so-called "investors" in Atwater Entertainment Associates LLC, another casino-related syndication that Strather organized in the mid 1990s to jump-start MotorCity Casino.

Reporter: Kerzner & Wolman have money troubles, Strather seeks new investors for Cape Cod Casino scheme

Taken from a story by Stephanie Vosk published on 1.05.09 in the Cape Cod Times:

Tribe's longtime investor seeks new blood

...For years, Herb Strather and his investors bankrolled the tribe's quest for federal recognition from the U.S. Bureau of Indian Affairs, upping the ante to $40,000 a month, and later $100,000, according to court documents.

But the process, officially ongoing since the 1970s, still took a lot longer than anticipated. In December 2006, about 10 months after the tribe received a preliminary thumbs up on its federal recognition application, the man from Detroit officially handed over the vast majority of his stake in a proposed casino to a company called Trading Cove, headed up by South African casino developers Sol Kerzner and Len Wolman.

Five years ago, Strather said, he may have been able to maintain about 20 percent of the project. Today, he controls a little more than 5 percent.

MONEY TROUBLES
The financial problems of Kerzner and Wolman, who are the "operators and the funders" of the project, have been well publicized. The credit rating for their Rhode Island "racino," Twin River, has been downgraded by at least two companies, and Moody's Investor Service cited a high probability the company will seek bankruptcy protection.

Strather's not in trouble as far as the Mashpee project is concerned — he doesn't have those kind of debt obligations for the casino, he said.

It's his other various projects that are suffering from the current economic recession. "We have other businesses, real estate businesses, and yes that business is tough," he said.

But many of his original investors — including O.J. Simpson's attorney Johnnie Cochran and his kindergarten teacher — have died since his business with the tribe began, and new blood — and money — are welcome, he said.

"Many of these people who came in are gone. I've had at least a dozen investors die," he said. "They helped make a dream come true, and their legacy will live on, although they are not alive now to reap the benefits of it."

BUYING IN
Strather is likely looking for investors who can not only help financially, but have political influence at the local level, experts say... (See Original Story)

Contact Stephanie Vosk at svosk@capecodonline.com

Waterford Group affiliate placed a lien against AtMashpee LLC

A Secured Party, KSW MASS, LLC c/o Waterford Group Investments LLC, P.O. Box 715 Waterford, CT 06385-0715 filed a Michigan UCC Lien (Filing No. 2008101916-9) against a Debtor, AtMashpee, LLC, on 6.26.08.

The UCC Lien is described as “Security Interest and Proceeds.”

* * *

A limited liability company known as KSW MASS, L.L.C. was organized in Delaware on 11.29.06.

Is it possible that "KSW" stands for Kerzner, Slavik, and Wolman? Those parties are reportedly now in control of any future Mashpee Wampanoag casino resort on Cape Cod, MASS. (EnterpriseNews.com: Meet the Money Men).

Those parties were also part of the Trading Cove Partners that financed and developed the Mohegan Sun in Connecticut.

Sol Kerzner is Chairman and CEO of Kerzner International

Slavik Suites, Inc. was formed by Michigan-based brothers Richard Slavik (deceased 3.11.08) and Stephan Slavik (Slavik Builders, Inc.).

LMW Investments, Inc. is a Connecticut-based enterprise formed by brothers Len Wolman and Mark Wolman. The Wolmans are officers and directors of Slavik Suites.

Slavik and LMW are the members of Waterford Group LLC. Len Wolman is Chairman of Waterford. Waterford partnered with Kerzner to form Trading Cove Partners.

Waterford Gaming LLC is a wholly-owned subsidiary of Waterford Group LLC. A 10-K filed with the SEC by Waterford Gaming LLC provides more details into the relationship complexities of the businesses owned by the Wolmans and the Slavik family.

AtMashpee LLC, the "debtor" subject to the KSW MASS UCC Lien was organized by Detroit casino syndicator and real estate developer Herbert Strather.

Kerzner and Wolman (and by some accounts Slavik) took control of the Mashpee Wampanoag casino project from Strather once the tribe received Federal Recognition. Strather is reported to have bankrolled that tribe's efforts up to that point to the tune of $15 million. If what's been represented were true, wouldn't Kerzner, Slavik, Wolman by buying-out AtMashpee rather than placing a lien against the enterprise? Or did those parties also finance AtMashpee? Was Strather fronting for KSW all along?

And further do AtMashpee's investors know about the KSW MASS/Waterford Group UCC lien? In the wake of the wide-reaching Bernard Madoff ponzi scheme should AtMashpee "investors" be looking more closely at their circumstances?

The MGCB denied Mike Malik a license, what makes anyone think he can get licensed by the NIGC?

The Michigan Gaming Control Board (MGCB) refused to grant Michael Malik a license as a partner of MotorCity Casino in 1999. He has failed to win any other license from the MGCB since. Malik has never been licensed to manage a casino and given his past history isn't likely to receive a license.

Malik claims his Blue Water Resorts LLC would have a multi-million dollar management contract for a Bay Mills Casino in Port Huron and would be paid 30% of net-win revenues for seven years . If the MGCB wouldn't license Malik, what makes anyone think that the National Indian Gaming Commission (NIGC) would approve a management contract under Malik's control?

This suggests that Malik is fronting for some other interests (maybe Marian Ilitch, Las Vegas players, Kerzner & Wolman, etc.) who will step in and purchase the management contract from Malik before he has to go before the NIGC.

It wouldn't be politically expedient today for Mayor Kwame Kilpatrick, reportedly a staunch opponent of any Port Huron casino, to see that Marian Ilitch, the proprietor of the Detroit's MotorCity Casino, is bankrolling the Port Huron casino proposal today; but if history repeats itself, Malik could avoid scrutiny by the NIGC by selling the Blue Water Resorts LLC mangement contract to Marian Ilitch or some other entity controlled by Ilitch Holdings, Inc. when and if he ever gets the many approvals needed to build a Bay Mills Indian Community casino in Port Huron.

The question is ... who is Michael Malik fronting for in Port Huron -- Ilitch or someone else -- and what implications does that secret have for Port Huron?

It was revealed this past year that Michael Malik's former MotorCity Casino partner Herb Strather (he also failed to receive a license from the MGCB back in 1999) has been fronting in Massachusetts for big time casino operators Sol Kerzner and Len Wolman.

Part II: Strather fronting for big time casino owners all along

10.07.07

Casino deal remains clouded in secrecy

By STEPHANIE VOSK and GEORGE BRENNAN
Cape Cod Times

October 07, 2007 6:00 AM
Editor's Note: This is the last of a two-part series. (Part 1)

MASHPEE — South African casino moguls Sol Kerzner and Len Wolman resuscitated the Mohegan tribe's bid for federal recognition, and more than a decade later they continue to reap millions of dollars.

The Mashpee Wampanoag tribe can only wonder how much of their sovereignty has been signed away to help Kerzner and Wolman continue their dominance of New England's gambling industry. Their ties to the 1,500-member Mashpee tribe pre-date their public relationship, perhaps by years.

The tribe's deal with the men ignited the renewed debate to legalize casinos in Massachusetts. With Gov. Deval Patrick's recent thumbs up on full-scale gaming, they could ultimately change the face of the Bay State.

In February, when the tribe received the final word it would receive federal recognition, the ink was already dry on a deal signed two months prior by tribal leaders and Kerzner, 72, and Wolman, 52.

Then tribal Chairman Glenn Marshall, 57, hid the fact that a casino deal was in place — both from the tribe at large and the public.

In a meeting with the Times editorial board in February, he hinted that the tribe's most public investor, Detroit casino developer Herb Strather, 56, would soon play a smaller role in the tribe's quest to build a casino. But Marshall hedged when he was asked about whether he would entertain signing a deal with other investors.

"Let me tell you, if (Strather) wanted out, he could sell and make money right now," Marshall told the editorial board. "But it would have to be somebody the tribe liked. Somebody who was successful in the arena. Somebody with style and grace."

In a letter to the tribal council in 2004, Strather already referenced other unnamed investors and warned that they might pull out if Marshall was voted out as chairman in the 2005 council elections.

But with Marshall's victory that year, the investors held tight — and silent — as the Bureau of Indian Affairs reviewed the tribe's petition for federal recognition. (Complete Story)


http://www.southcoasttoday.com/apps/pbcs.dll/article?AID=/20071007/NEWS/710070340

Part I: Strather was fronting for big time casino owners all along

10.06.07

Developers exercised control in tribe's casino push

By STEPHANIE VOSK
and GEORGE BRENNAN
Cape Cod Times

Editor's note: This is the first of a two-part series. (Part 2)

MASHPEE — With a multimillion-dollar investment on the line and federal recognition within reach, it was casino developers, not Mashpee Wampanoag leaders, who controlled the tribe's interests, records indicate.

Investors, looking to expand their casino empire, and a few tribal council leaders kept most of the 1,500 tribe members in the dark about their secret deals. And with questions raised internally about tribe finances in 2004, Herb Strather, a Detroit casino developer who helped bankroll the tribe's quest for federal recognition, was desperate to keep Chairman Glenn Marshall in office.

That year, Paula Peters, whose father once held the council chairmanship, announced she would run against Marshall.

The announcement spurred Strather to write a letter to the council on Nov. 24, 2004, about three months before the election. Strather wrote that it would be a mistake to allow Peters to run against Marshall for the chairman's seat.

"It has always been my understanding that Ms. Peters is anti-gaming," Strather wrote. "... What happens to the confidence of our investors who have stuck by us in this long battle?"

Those investors would turn out to be South African casino moguls Sol Kerzner and Len Wolman, who have had their hands in a major portion of the gaming industry in New England: Mohegan Sun in Connecticut and Twin River in Rhode Island.

In the same letter, Strather endorsed Marshall. "If there were a change in leadership, I fear my financial partners would rethink their position, as the majority of them invested after meeting and being comfortable with Glenn and Shawn (Hendricks)."

At the time, Hendricks, now tribal council chairman, was vice chairman of the tribal council.

Strather told the Cape Cod Times in spring 2006 that he had given the tribe $15 million to help it gain federal recognition, making no public mention of other investors at the time. Without the designation, the tribe would be unable to open an Indian casino.

Through two spokesmen, Strather said Wednesday he remembered writing the letter but declined to comment.

But the letter is evidence that Strather, his investors in concert with Marshall, not the tribe at large, were the driving force behind the push to bring casino gaming to Massachusetts. (Complete Story)

http://www.southcoasttoday.com/apps/pbcs.dll/article?AID=/20071006/NEWS/710060341/1018/OPINION

A one-time partner of Marian Ilitch & Mike Malik, had previous bribery conviction; bankrolled current plan for Cape Cod casino

9.01.07

Casino investor Strather has criminal past

By Stephanie Vosk
STAFF WRITER

Gambling tycoon Sol Kerzner isn't the only Mashpee Wampanoag casino investor with a charge of bribery on his record.

Detroit casino developer Herb Strather, the tribe's first and most visible investor, was arrested on a bribery charge in 1977 for trying to buy off a police officer in Michigan, according to a 1997 report in the Detroit Free Press.

Strather bankrolled the Wampanoag's effort to gain federal recognition, which cost millions of dollars. In exchange, Strather has said he would be given a portion of the development rights on a Wampanoag casino.

In 1997, two years before Strather started giving money to the Mashpee tribe, Strather told the Detroit Free Press that he was pulled over after drinking to celebrate a big real estate deal in 1977, and had an outstanding ticket on his record. When Strather offered the policeman a pair of new shoes if he let him pay the ticket the next day, he was arrested.

Strather paid a $500 fine and did community service for the misdemeanor, the Free Press reported.

The Times could not reach Strather for comment yesterday. Scott Ferson, the Wampanoag's spokesman, said yesterday that tribal leaders are aware of an arrest on Strather's record, though not of the specifics.

Shortly after federal officials granted the Mashpee Wampanoag preliminary federal recognition in March 2006, Strather told the Times he had given the tribe approximately $15 million, about two-thirds of which financed the tribe's quest for federal recognition.

Last spring, after the tribe officially received federal recognition, the tribe announced that Kerzner and his partner Len Wolman had signed on as the lead investors for a resort casino. Strather has since faded into the background of the tribe's quest to build a casino.

Kerzner and Wolman were the prime investors for the Mohegan Sun casino in Connecticut and Twin River gaming facility in Rhode Island.

Wolman said recently that he had a business relationship with Strather in Detroit prior to becoming involved with the Wampanoag.

Applicants for Indian casino licenses are intensely scrutinized by the U.S. Bureau of Indian Affairs. Others involved in the casino business, including investors, do not go through such stringent checks, if any, Ferson said.

The Mashpee Wampanoag Tribal Council plans to establish a gaming authority which will apply for, and if granted, hold the license for a casino, he said. The tribe never intended for Strather to hold the license, according to Ferson.

It's the licensees who have to be clean, he said. Bureau of Indian Affairs officials do not allow anyone with a felony conviction to be involved in casino operations.

The Mashpee Wampanoag Tribal Council has been in damage control mode for the past week following revelations that tribal council chairman Glenn Marshall was convicted of rape, a felony charge, in 1981. Marshall, 57, was also found to have lied about his military record when testifying before Congress. He resigned Monday.

"This is why the government has regulations on gaming," Ferson said of Marshall's conviction. "When the tribe applied for a license, that would have been known."

Kerzner, who was charged in 1986 of trying to bribe a South African government official in exchange for exclusive gaming rights, was never convicted. The charge was dismissed in 1997. He has since received at least one license from the Bureau of Indian Affairs to operate Mohegan Sun in Connecticut for a time. Kerzner has also secured commercial licenses in several states and abroad.

Strather, however, has had trouble getting a license.

In the 1990s, Atwater Entertainment, of which Strather was a founding partner, poured money into supporting a referendum question to allow casinos in Detroit. The grass-roots effort came after the Michigan governor ruled against allowing casinos in Detroit .

The referendum passed, and one of three licenses was subsequently given to Atwater for what would become the MotorCity Casino.

Nelson Westrin, former executive director of the Michigan Gaming Control Board, told the Times in 2001 that state investigators place any investor holding more than a 1-percent interest in a casino through a thorough background check.

The Detroit News reported at the time that Strather and his partner had experienced financial difficulties over their 25-year business relationship. They paid taxes late, and the U.S. Department of Housing and Urban Development cited a real estate company they owned for several violations, the News reported.

Strather subsequently sold his interests in the casino, which opened in 1999.

John Page, deputy director of enforcement for the Michigan Gaming Control Board, would not release any details yesterday of Strather's involvement in Detroit casinos other than he was a license applicant and later sold his share.

Stephanie Vosk can be reached at svosk@capecodonline.com