What's Caused the Apparent Rift between Detroit Casino Syndicator Michael Malik and Shinnecock Lance Gumbs; and Who's Being Enriched by Malik?

Michael J. Malik, Sr.,
controversial co-founder,
Gateway Casino Resorts, L.L.C.

A News Day article reporting on the Shinnecock Indian Nation's rejection of a new contract with Detroit-based Gateway Casino Resorts and its co-founder Michael J. Malk, Sr., includes the following:

"Gateway needs to understand that they are not going to control our tribe," said Lance Gumbs, a former tribal trustee who voted against the pact.

During the last decade Lance Gumbs, then a trustee of the Shinnecock Indian Nation was one of those out front on efforts to gain Federal Recognition and pursue casino development.  However, in an unprecedented run-off earlier this year, Gumbs was ousted as Trustee by Fred Bess, a former Trustee. It's been reported that Bess is seen by some members of the Tribe as a tool of casino syndicator Malik.

Had Gumbs been a perceived as useful to Detroit casino syndicator Michael Malik, it's likely that Malik would have helped to ensure Gumbs remained in a leadership role.  However, had Gumbs fallen out of favor with Malik, it's likely Malik or his agents would have worked to replace Gumbs as trustee.

There's some suggestion that among other things, Gumbs believes the Shinnecock should undertake casino development closer to its Long Island Reservation.  Malik apparently wants a site closer to Manhattan.  A recent Shinnecock gaming update circulated included artist's renderings of a mega casino-entertainment development labeled "Governor's Island."

This past week, it's come to light that a war has been brewing among those on the Shinnecock's Long Island reservation.  And now it's clear that Gumbs was among those who stood against the Tribe signing a new go-forward contract with Malik's syndicate Gateway Casino Resorts, LLC, despite that Malik and fellow investors may have spent as much as $40 million helping the Shinnecock receive Federal Recognition and advancing schemes for casinos.  Last night, Shinnecock tribal members voted 121 to 153 against continuing the partnership with Malik's Gateway.

Lance R. Gumbs
tribal leader,
Shinnecock Indian Nation

That Malik has apparently been funneling payments to as many as 12 members of the Shinnecock Nation, is one of the things that reportedly caused some among the Shinnecock to distrust and be suspicious of Malik. Some individuals have been treated to trips out of state on Malik's personal G4 aircraft. Nearly 600 members of the tribe live on the reservation and hundreds more are enrolled as members.

• Why is Gumbs no longer a Shinnecock Nation Trustee?  What went on behind the scenes of the last election?
• Was Gumbs once the recipient of payments from Malik and then suddenly cut-off?
• If a rift occurred between Gumbs and Malik, what else was that about?
• Since Malik succeeded convicted felon Ivy Ong as the Tribe's partner, who has received payments, gifts, trips, honorariums or other enrichment from Malik, his affiliates or agents?  
• What roles do those individuals play, or have they played, with the Tribe?  
• How is paying off certain members of the Shinnecock Nation different than the payola Malik's one-time MotorCity Casino partner Herb Strather funneled to members of the Mashpee Wampanoag tribe via its one-time Chair Glenn Marshall?

See also:

• Shinnecock Gumbs named to Newspaper's Power List Hall of Fame
• indianz.com: Trustee Lance Gumbs ousted by Shinnecock Nation Voters
• It's Carcieri not Malik that poses Bigger Problems for the Shinnecock Nation
• Statement by the Trustees of the Shinnecock Nation Following Thursday's Vote Denying them Authority to Contract with Detroit Casino Syndicator
• Distrust and Suspicion of Detroiter Michael Malik Cause Tribe to Reject Casino Syndicator, New Contract
• Shinnecock Vote Down gaming pact with Gateway Casino Resorts, reject longtime investors Michael Malik & Marian Ilitch
• Votes Are Counted & Shinnecock Nation Gives Thumbs Down to Contract with Michael Malik's Gateway Casino Resorts
• Artist's Renderings of Detroiters' Planned Shinnecock Casino Development at Belmont Race Track
• What They Won't Tell You: Insights on Gateway Casino Resorts, its Detroit Organizers and Their Plans for Shinnecock Casinos

Shinnecock Nation Casino Timeline

Detroiters' Shinnecock Casino Schemes

Timeline (Past History & Future Activity)

2001-2012

Of particular note in 2012, the Developer (Gateway Casino Resorts) plans to negotiate a State Compact with Governor Andrew Cuomo, get said Compact introduced and approved by the New York Legislature; and present and get Congressional approval of something called "Mandatory Acquisition Legislation."  And overlaying all of that are ongoing PR advertising campaigns carried out by Lansing-based Marketing Resource Group to spin the developer's schemes and control messages. What's not outlined here are payments to the tribe and "salaries" or payments by Gateway Casino Resorts to key tribal members who support the schemes.

Shinnecock Nation Gaming Authority Timeline 2001-2012

Concerns Raised that "Investors" like Ivy Ong, Ilitch Family are Dangerous to Tribes' Long Term Interests

The Shinnecock Casino Campaign: Tribal Identity, Local Politics and Tangled Legalities

By John A. Strong

Professor Emeritus , Long Island University

...Ivy Ong, apparently frustrated that Peebles’ initial legal strategy had been rejected by Judge Platt, was reported to be negotiating the sale of his majority interest in the Shinnecock casino with [Michael Malik and ] Michael and Marian Ilitch, who own Little Caesar’s Pizza, the  Detroit Tigers, the Detroit Red Wings and MotorCity Casino.

 Tribes have had to rely on sources of money and support which have their own agendas.  Signed agreements with tribes stipulating a specific percentage of the anticipated casino profits, for example, can be used as collateral to raise money for another enterprise.  Investors, such as Ivy Ong and the Ilitch family, are willing to spend huge sums of money in the hopes that there will be a profitable payoff in casino profits.
 
If there is no immediate pay-off, they move on, often leaving the tribe in disarray.  There is a danger that a small tribe will find it difficult to protect its own long term interests when dealing with such wealthy, highly sophisticated groups of investors and their teams of lawyers and public relations consultants...

Detroiter Mike Malik isn't the First Shady Character to push Shinnecock Casinos on Long Island

hen-Oklahoma businessman Ivy Ong was the first to bankroll and push Shinnecock Casino plans. After electing new Shinnecock tribal leaders who were supportive of Ong’s scheme, the tribe entered into an agreement with Ong and ONG Enterprises on May 1, 2003, which gave Ong exclusive rights to develop and manage a Shinnecock casino. By the time Ong came to partner with the Shinnecock he already had a shady past. Subsequently, he pleaded guilty to federal conspiracy charges and was fined by the National Indian Gaming Commission for improper involvement with Seminole Indian gaming activities.

New York Times
The Big Gamble 3.23.2003

By Julia Mead

...Mr. Ong, who served four months under house arrest for his part in a 1995 counterfeit baby-formula scheme, called his guilty plea to misdemeanor charges a matter of expediency. He also disputed press reports that he patronized a slain Las Vegas loan shark and is a subject of a federal grand jury probe into the Seminoles' gaming operation in Oklahoma...

Long Island Business News
Oklahoma developer confirms Shinnecock casino deal7.13.2003

by Rosamaria Mancini
 Ivy Ong, a prominent Oklahoma developer best known for his work on gaming facilities, confirmed this week that he has signed a contract with the Shinnecock Indian Nation to build a casino on the East End of Long Island. Ong, a controversial figure with a criminal record, said he would provide the necessary funding for a 65,000-square-foot casino on a 79- acre site in Hampton Bays known as Westwoods... Ong has helped the Seminole Nation and Iowa Nation tribes build casinos. His criminal record stems from a counterfeit baby-formula scheme in 1996, according to news reports that cite court records. He pleaded guilty to two misdemeanor charges in federal court and testified against an associate who went to prison. The Daily Oklahoman also reported that his name surfaced in a murder trial as a loan shark customer of slain Las Vegas mobster Herbie Blitzstein. Ong has attributed his conviction to a failure to file paperwork, and he has denied knowing the people involved in the loan shark case...

The Oklahoman | NewsOK
Guilty plea expected in casino corruption
9.21.2007

A former casino developer was accused Thursday in a federal conspiracy charge of making illegal payments to at least three officials of the Seminole Nation to let him run tribal casinos. Ivy K. Ong, 65, of California also was accused of failing to pay $199,610 in federal taxes. He is to plead guilty today, his defense attorney, David Ogle, said. The charges:

• Ong is accused in the charge of paying $44,100 to one tribal official between October 2000 and March 2004. 

• He is accused of paying $7,190 in January 2002 to get a second tribal official's house out of foreclosure. 

• He is accused of paying $8,607 in April 2001 to renovate a third official's home... 

In January 2008, the National Indian Gaming Commission issued a final ruling, not involving the Shinnecock, on matters involving the Seminole which found that Ong and Carlo Worldwide Operations LLC had been managing an Indian gaming facility without a contract and improperly held a proprietary interest in Indian gaming activity. NIGC issued a civil fine of $5,150,000.


Ong's Assignment of Shinnecock Agreement to Detroit Interests
On March 19, 2004, according to correspondence from the National Indian Gaming Comission to the Shinnecock Nation Gaming Authority dated March 16, 2011, Ong transferred his Shinnecock casino rights to Gateway Casino Resorts. Some reports suggest Gateway paid Ong $25 million. Gateway Casino Resorts was organized in Detroit during 2003 with membership that includes the leadership of Marian Ilitch and Michael J. Malik, Sr.


Like Ong, Gateway Casino Resorts' Malik Also Has a Controversial and Criminal Past
In 1997 Malik was arrested for beating the 12-year old son of his then-girlfriend in the street of a residential neighborhood and sentenced to probation. In 1999 he was forced from the partnership that founded MotorCity Casino because at that time and subsequently he has failed to receive a commercial gaming license from the Michigan Gaming Control Board (MGCB). It was reported the 1997 arrest, IRS troubles and perhaps other circumstances contributed to MGCB concerns.

The AP broke a national influence peddling story in 2005 which contributed to the re-election downfall of Rep. Richard Pombo, then chair of the House National Resource Committee. Malik and Christoper litch hosted multiple higher dollar fundraisers at the MLB All Star Game in Detroit benefiting Pombo who was to chair Congressional Hearings on Capitol Hill two days later on the fate of Shinnecock Federal Recognition. Then later, Malik was found (2006 & 2009) on multiple counts to have violated political campaign finance laws and fined $10,500. Malik/Ilitch and affiliates have been associated with other political finance and lobbying scandals.

In 2008, an Arizona Court found Malik guilty of illegal discharge of a firearm; ordered him to community service; and fined him nearly $15,000. Also in 2008, a receiver in a federal ponzi scheme case filed suit in Federal Court (Goldberg v. Malik) alleging Malik’s involvement in a fraudulent transfer and Malik was subsequently ordered to repay $170,000.

Then there is the default on a $1 million line a credit; failure to pay property taxes; foreclosures; certificate of forfeiture, one month marriage to the mother of his 3-year-old son, etc. etc. etc.

News accounts in 2007 reported the chairwoman of the Los Coyotes Band of Indians called Malik “the Devil” and indicated he was “seducing” younger members of her tribe.

Malik’s then wife was forced to tell a Detroit Court in 2010 that he had a history of “bullying, intimidation and influence peddling.”