Credit rating of Ilitch held Detroit gaming company (parent of MotorCity Casino) downgraded, given negative outlook after 12+ months

excerpted from

IBL - InterNet Bankruptcy Library

http://www.bankrupt.com/about_ibl.html

T R O U B L E D C O M P A N Y R E P O R T E R
Tuesday, October 17, 2006, Vol. 10, No. 247

CCM MERGER: Moody's assigns Loss-Given-Default Ratings

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In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the gaming, lodging and leisure sectors, the rating agency confirmed its B1 Corporate Family Rating for CCM Merger Inc.

Moody's also revised or held its probability-of-default ratings and assigned loss-given-default ratings on these debentures:

Debt Issue	Old POD Rating	New POD Rating	LGD Rating	Projected Loss-Given- Default
Five Year Senior Secured Revolver	B1	Ba3	LGD3	35%
Seven Year Senior Secured Term Loan B	B1	Ba3	LGD3	35%
8% Senior Secured notes	BR	B3	LGD5	88%

Moody's explains that current long-term credit ratings are opinions about expected credit loss which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds.

Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha-numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations.

Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%).

CCM Merger Inc. owns and operates MotorCity Casino in Detroit,Michigan.

http://bankrupt.com/TCR_Public/061017.mbx

T R O U B L E D C O M P A N Y R E P O R T E R
Tuesday, July 4, 2006, Vol. 10, No. 157

CCM MERGER: Moody's Confirms Corporate Family Rating at B1, Outlook Negative

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Moody's Investors Service confirmed CCM Merger Inc.'s B1 corporate family rating, B1 senior secured bank loan rating and B3 senior unsecured note rating. A negative rating outlook was assigned. These rating actions conclude the review process begun on April 17, 2006.

The confirmation considers that despite a recent decline in operating results and high expected peak leverage due to upcoming expansion activity, CCM Merger continues to benefit from being one of only three casinos authorized to operate in Detroit, MI, a high density gaming market that has exhibited a good historical growth pattern.

CCM Merger is also expected to derive some positive impact from the opening of its expanded property as well as the lower tax rate relative to the opening of the expansion. Under Michigan statute, the gaming tax rate for the Detroit casinos will drop from 24% to 19% once the expanded property is opened.

Additionally, in the near-term, the Detroit market should receive some benefit from the smoking ban in Windsor that went into effect on June 1st.

The negative ratings outlook acknowledges CCM Merger's recent lower than expected operating performance which highlighted its vulnerability to aggressive promotional activities by its competitors, despite the historical strength and positive long- term outlook for the Detroit market and recent market share improvement. As a result, CCM Merger is now weakly positioned in its rating category and more vulnerable to a ratings downgrade if future operating results fall short of Moody's expectations.

Moody's most recent rating action on CCM Merger occurred on April 17, 2006 when the company's ratings were placed on review for possible downgrade in light of the company's operating performance in 2005 that was materially below Moody's expectation.

CCM Merger, Inc. owns and operates MotorCity Casino in Detroit, Michigan. The company is currently undergoing a $275 million expansion which will include additional gaming space, restaurant outlets and a new hotel.

. http://bankrupt.com/TCR_Public/060704.mbx

T R O U B L E D C O M P A N Y R E P O R T E R
Monday, June 26, 2006, Vol. 10, No. 150

CCM MERGER: High Debt Levels Prompt S&P to Downgrade Ratings

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Standard & Poor's Ratings Services lowered its ratings on Detroit-based casino owner and operator CCM Merger Inc., including its corporate credit rating to 'B' from 'B+'.

Additionally, all ratings were removed from CreditWatch where they were placed with negative implications on April 7, 2006.

The outlook is stable.

"The downgrade reflects Standard & Poor's assessment that the combination of weaker-than-expected operating performance during 2005, a highly competitive operating environment in the Detroit market, and high debt levels associated with the ongoing expansion project, have resulted in higher-than-expected near-term peak debt leverage that would no longer be consistent with the former rating," said Standard & Poor's credit analyst Michael Scerbo.

As a result of the 6% gaming tax increase effective Sept. 1, 2004, and a much more aggressive marketing environment by competitors, CCM's earnings during 2005 declined materially from the prior year despite revenues remaining relatively flat. This competitive environment continued during the first quarter of 2006 and is likely to remain the case in the near to intermediate term.

Still, over the long term, the market is expected to stabilize, which will enable CCM to reduce debt balances once the expansion of its gaming facility is complete.

However, during the expansionary period, CCM's adjusted total debt to EBITDA is expected to reach 8x in 2006, before potentially declining to levels more appropriate for the new rating in subsequent years. Operating disruptions associated with construction are expected to be limited, given the location of the expansion behind the current facility.

http://bankrupt.com/TCR_Public/060626.mbx

T R O U B L E D C O M P A N Y R E P O R T E R
Wednesday, April 19, 2006, Vol. 10, No. 92

CCM MERGER: Slow Revenue Growth Prompts Moody's Ratings Review

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Moody's Investors Service placed the ratings on CCM Merger Inc., on review for possible downgrade in light of slow growth of gaming revenues in the Detroit market, and the company's operating performance in 2005 that was materially below Moody's expectations due to unexpectedly competitive market conditions.

Additionally, weak financial performance relative to expectations is occurring at a time when the company's risk profile is elevated due to construction of its permanent gaming facility in Detroit. However, Moody's notes that CCM's cash balance at year-end 2005 is sufficient to support the company's capital spending program.

The review for possible downgrade will consider the overall outlook for revenue growth in the Detroit market, and the degree to which the recently aggressive promotional environment will impact the company's leverage and coverage measures in 2006 in comparison to prior Moody's expectations.

Moody's anticipates concluding this review after the receipt of first quarter results, further discussions with management concerning plans to manage through challenging market conditions, but in any event, within the next 60 days.

Moody's previous rating action on CCM occurred on Jul. 6, 2005 when initial ratings were assigned to the company. The ratings included:

• a B1 corporate family rating;
• a B1 rating on the $100 million senior secured revolving credit facility due 2010;
• a B1 rating on the $650 million senior secured term loan B due 2012; and
• a B3 rating on the $300 million senior unsecured notes due 2013.

CCM Merger, Inc., owns and operates MotorCity Casino in Detroit, Michigan. For the eighth month period ended Dec. 31, 2005, the company generated approximately $319.9 million in adjusted gross revenues.

http://bankrupt.com/TCR_Public/060419.mbx

T R O U B L E D C O M P A N Y R E P O R T E R
Tuesday, April 11, 2006, Vol. 10, No. 86

CCM MERGER: Poor Performance Cues S&P to Put B+ Rating on Watch

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Standard & Poor's Ratings Services placed its ratings on CCM Merger Inc., including the 'B+' corporate credit rating, on CreditWatch with negative implications. Detroit-based CCM Merger is the parent company of MotorCity Casino. The CreditWatch listing reflects a decline in MotorCity's operating performance in 2005 relative to Standard & Poor's previous expectations.

EBITDA performance in 2005 fell short of expectations partly due to a more competitive marketing environment in the Detroit market. CCM Merger does not publicly file its financial statements.

Even though revenue growth in 2006 has been positive through February, Standard & Poor's will review CCM Merger's EBITDA expectations for 2006 and in subsequent years, as well as expectations for competitive operating conditions in the Detroit gaming market, when resolving its CreditWatch listing. If the ratings review results in a downgrade, Standard & Poor's expects it would be limited to one notch.

http://bankrupt.com/TCR_Public/060411.mbx

T R O U B L E D C O M P A N Y R E P O R T E R
Friday, July 8, 2005, Vol. 9, No. 160

CCM MERGER: Moody's Rates $625 Million Secured Bank Facility at B1

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Moody's Investors Service assigned a B1 Corporate Family Rating to CCM Merger, Inc. along with a B1 rating on the company's existing $625 million 1st lien senior secured bank facility. At the same time, Moody's assigned a B3 rating to CCM's new $200 million senior unsecured notes due 2013.

Proceeds from the new $200 million senior notes will be used to refinance CCM's $200 million existing 2nd lien term loan. The 2^nd lien term loan, along with $550 million of 1st lien bank debt were used to fund the April 2005 acquisition of the 75% interest in MotorCity Casino not controlled by CCM's principal shareholder, Marian Ilitch.

The ratings consider CCM's high leverage and single asset profile. Pro forma Debt/EBITDA is about 5.2x, however that is expected to increase to almost 7.0x over the next 18-month period as a result of a $275 million expansion project that is expected to be funded with $50 million from cash flow and $225 million of additional senior secured revolver borrowings made available under a greenshoe option contained in the bank loan agreement. Leverage is not expected to decline to below 5.0x until two years following the opening of the expansion.

The two notch difference between the company's B1 senior secured bank loan rating and B3 senior unsecured note rating acknowledges the substantial amount of senior secured debt that will remain in CCM's capital structure over the next few years.

Positive ratings consideration is given to the successful operating history of the casino and the considerable size and density of the <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Detroit gaming market. Detroit's win per unit statistics are among the best of all domestic gaming markets.

Additionally, the Detroit market benefits from Michigan's passageof Proposal 1 in November 2004 that requires a voter referendum for new forms of gaming in that state. Currently, MotorCity Casino is one of three commercial casinos that are permitted to operate in Detroit. The rating also takes into account that the proposed expansion will fulfill CCM's obligation under its development agreement with the City of Detroit, and as a result, will make the company eligible for a reduced wagering tax from 24% to 19%.

The stable ratings outlook is based on the expectation that CCM will reduce acquisition and expansion related debt over time to a level more consistent with its rating. Despite the expectation of continued high leverage, favorable market characteristics including strong demographics, limited competition and high barriers to entry should make it possible for the company to generate free cash flow and reduce debt once the expansion is complete. Separately, the company's bank agreement has been amended so that prior to the completion of the expansion, there is no cash flow sweep, although 75% of excess cash flow will go into an account to be used for construction purposes. Following the completion of the expansion, however, 75% of excess cash flow will be applied towards term loan debt reduction.

CCM's single asset profile, high leverage, and expected free cash flow deficits through fiscal year 2008 limit its ratings upside.

The ratings could go down if CCM fails to comply with the terms of the development agreement with the City of Detroit and/or the company takes on a material amount of additional and unanticipated debt.

These new ratings were assigned:

• Corporate Family Rating -- B1;
• $75 million senior secured revolving credit facility due 2010 -- B1;
• $550 million senior secured term loan B due 2012 -- B1;
• $200 million senior notes due 2013 -- B3; and
• Stable ratings outlook.

CCM Merger, Inc. owns and operates MotorCity Casino in Detroit, Michigan. For the twelve-month period ended April 30, 2005, the company generated about $440 million in net revenue.

http://bankrupt.com/TCR_Public/050708.mbx

T R O U B L E D C O M P A N Y R E P O R T E R
Friday, July 1, 2005, Vol. 9, No. 154

CCM MERGER: S&P Rates Proposed $625 Million Sr. Sec. Loan at B+

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Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating to Detroit, Michigan-based CCM Merger Inc., the parent company of MotorCity Casino.

At the same time, Standard & Poor's assigned its 'B+' rating and a recovery rating of '3' to the company's proposed $625 million senior secured credit facility, reflecting Standard & Poor's expectation that lenders would realize a meaningful recovery of principal (50%-80%) in the event of a payment default.

In addition, Standard & Poor's assigned its 'B-' rating to the company's proposed $200 million in senior unsecured notes due 2013, reflecting the large amount of priority debt in the capital structure.

Proceeds from the proposed debt issuances will refinance existing indebtedness used to fund the acquisition of MotorCity. The outlook is stable.

"The ratings reflect the expectation for high debt levels over the next few years to fund the acquisition and the future expansion of MotorCity, as well as the company's reliance on a single-property for cash flow generation and construction risks associated with a proposed expansion," said Standard & Poor's credit analyst Emile Courtney. "These factors are partially mitigated by some barriers to new competition in Michigan, as commercial gaming cannot be expanded without a voter referendum, solid customer demographics, and expectations for stable cash flow generation," Mr. Courtney added.

http://bankrupt.com/TCR_Public/050701.mbx

as of December 28, 2006

CCM Merger Issue Ratings	Moody's*	Standard & Poor's**
Corporate Credit Rating	B1	B/stable/--
Senior Secured Bank Credit Facility ($650 million)	Ba3	B/--/--
Senior unsecured ($300 million)	B3	CCC+

* The ratings from Aa to Ca by Moody's may be modified by the addition of a 1, 2 or 3 to show relative standing within the category.

**The ratings from AA to CC by Standard & Poor's, may be modified by the addition of a plus or minus sign to show relative standing within the category.

http://www2.standardandpoors.com/portal/site/sp/en/us/page.ratingssearch/ratings_search/2,1,1,5,0,0,0,0,0,0,0,0,0,0,0,0.html?cspage=or&SearchValue=390542

http://www.moodys.com/moodys/cust/qckSearch/qckSearch_search_result.asp?n_id=808508218&fr_ref=C&PB2_nam=CCM+Merger%2C+Inc%2E&searchQuery=ccm+merger&search=1&searchIdent=qcksearch&searchresult=named&portid=&frameOfReference=corporate

Equivalent Credit Ratings
Credit Risk	Moody's*	Standard & Poor's*
Investment Grade
Highest quality	Aaa	AAA
High quality (very strong)	Aa	AA
Upper medium grade (strong)	A	A
Medium grade	Baa	BBB
Not Investment Grade
Lower medium grade (somewhat speculative)	Ba	BB
Low grade (speculative)	B	B
Poor quality (may default)	Caa	CCC
Most speculative	Ca	CC
No interest being paid or bankruptcy petition filed	C	C
In default	C	D

Source: The Bond Market Association

* The ratings from Aa to Ca by Moody's may be modified by the addition of a 1, 2 or 3 to show relative standing within the category.

**The ratings from AA to CC by Standard & Poor's, may be modified by the addition of a plus or minus sign to show relative standing within the category.

Big Lagoon Chairman Virgil Moorhead was first to allege Governor Schwarzenegger may harbor racial tendencies toward Native Americans

In the closing days of the Fall 2004 elections, Governor Schwarzenegger found himself at the center of a storm swirling around suggestions he was a racist. It was a quote in a Reuter’s wire service story October 16, 2004 attributed to Big Lagoon tribal chairman Virgil Moorhead that got the ball rolling.

Campaigning against several ballot measures that would have allowed widespread expansion of Indian gaming in California, Schwarzenegger suggested Native American gaming tribes were “Ripping us off!”

The first wire story written by Adam Tanner for Reuter’s on October 15/16 featured Big Lagoon tribal chairman Virgil Moorhead, who was the first Native American to suggest that Schwarzenegger’s comments bordered on racist. That’s when the situation erupted. Moorhead’s allegations spread like wild fire and before you knew it, the story was big national news. Former Minnesota Governor Jesse Ventura was weighing in to condemn Schwarzenegger from halfway across the country.

Ten months after Virgil Moorhead set off a media frenzy when he questioned whether Governor Schwarzenegger harbored racial tendency toward Native Americans, the Governor signed a gaming agreement with Moorhead allowing Moorhead's tribe, Big Lagoon Rancheria from Humboldt County, to relocate its proposed Las Vegas style casino 700 miles away from its ancestral reservation to the Mohave Desert community of Barstow.

Since obtaining the Governor's support, Moorhead has failed to generate support for his agreement from more than six members out of 120 in the combined houses of the state legislature. A powerful Assembly committee rejected Moorhead's agreement with the Governor in June 2006; the agreement must be ratified by both the Assembly and Senate to be considered a valid agreement.

Sampling of coverage from 10/15-10/30, 2004:
Agua Caliente shocked over governor’s jab at Section 14 (Desert Sun 10/29)
Former Minnesota Gov. Ventura rips Schwarzenegger over gambling ... (North County Times 10/27)
Schwarzenegger still says “ripping us off” (Indianz.com 10/25)
Schwarzenegger opposes gaming initiatives amid renewed charges of racism (Indian Country Today 10/22)
Local tribe levels racism charges against governor (The Palm Springs Desert Sun 10/20)
Governor's remark draws ire (The Sacramento Bee 10/20)
Tribes want governor's apology (The Riverside Press-Enterprise 10/20)
CNIGA Demands Apology From Governor For Inflammatory Remark (Press Release 10/19)
Tribes bristle at Schwarzenegger's campaign rhetoric (Copley News Service 10/19)
Schwarzenegger pushes gaming initiatives' defeat (SD Union Tribune 10/15)

Six bills in Congress, over six years & political gifts in the six figures: That's what Ilitch Family has invested in Port Huron Casino deal

No fewer than six bills were introduced in Congress during the six year run-up to 2004 attempting to resolve land claims alleged by the Bay Mills Indian Community as leverage for congressional approval of a Port Huron casino. All six have met with little success.

Nevertheless, the authors of the congressional bills received the benefits of $234,000 in political contributions from the family of Mike & Marian Ilitch and Michael Malik, their casino syndication partner, during the last two election cycles. Most had not previously been supported by the Ilitch Family or Malik.

Since 1999, there have been at least six different bills introduced in Congress attempting to bring closure to the ongoing land claims of the Bay Mills Indian community and facilitate trading of land in Charlotte Beach, MI, for a lucrative casino site in Port Huron or elsewhere; but despite the six efforts and hundreds of thousands of dollars spent, none of the bills have made much progress.

It should be noted that in 1996 the Bay Mills Tribe filed official claims in State and Federal Court which were subsequently tossed out for administrative reasons at that time. The "claims" have never been adjudicated or otherwise validated raising questions about the need for any settlement agreement or recognition of a settlement agreement by Congress.

• 1999-2001 Rep. Stupak introduces three bills
  The first three bills were authored by Rep. Bart Stupak (D-MI) between 1999 and 2001 (H.R. 3412, 1634 and 2495) – he was unable to enlist any co-authors on to those bills. From September 2002 through June 2006, Ilitch Family members and Malik contributed $9,000 to Stupak’s campaign committee.

• 2002 Reps Bonoir & Young intro H.R. 5459
  In 2002, Rep. David Bonoir (D-MI) authored a bill (H.R. 5459) and Rep Don Young (R-AK) signed onto the bill which sat in committee. Nothing significant was contributed to either Bonoir or Young at this point.

• 2002 Sen. Stabenow introduces S.2986
  Also in 2002 Sen. Debbie Stabenow (D-MI) introduced S. 2986 in the Senate without any co-authors. Sen. Harry Reid (D-NV) was a formidable force for Stabenow considering rank, power and constituency backing his opposition to Stabenow’s bill. The struggle between Reid and Stabenow (both Democrats) was chronicled and questioned in the media.
  
  Stabenow was first elected to the Senate representing Michigan in 2000 without any financial support from Detroit’s Ilitch Family or Michael Malik. That changed between 2003 & 2006 when Ilitch Family members and Michael Malik effectively contributed more than $113,000 toward Stabenow’s ’06 re-election.
  
  In 2003, the Ilitch Family and Malik made 17 contributions totaling $32,000 to “Stabenow for U.S. Senate;” all but four of the contributions were logged on December 16, 2003. On December 8, 2005, Michael Malik and Marian Ilitch contributed $54,400 ($26,700 each) to the Democratic Senatorial Campaign Committee (DSCC) earmarked for Michigan and Stabenow’s ’06 re-election effort.
  
  A little more than six months later, on June 30, 2006, Mr. and Mrs. Ilitch gave another $26,700 ($13,350 each) to the DSCC. In effect the Ilitch Family and Michael Malik contributed at least $113,000 to Stabenow’s re-election campaign.
  
  In July 2004, Mike & Marian Ilitch and Michael Malik made contributions totaling $20,000 split between Senator Harry Reid’s campaign committee “Friends for Harry Reid” and his leadership PAC “Searchlight Leadership Fund.” Malik had made one previous contribution to Senator Reid’s campaign committee in June 2003 bringing the total directed to Sen. Reid to $22,000. No further contributions were directed toward Senator Reid in the ’06 Election Cycle. Reid's Searchlight Leadership Fund transferred $10,000 to Stabenow in February 2005, six months after Ilitch/Malik contributed $12,000 to Searchlight.

• 2003 Rep. Candice Miller introduces H.R.831
  Then, on February 13, 2003 Candice Miller (R-MI) introduced H.R. 831 which was co-authored by Don Young (R-AK), the second time he signed on to a Bay Mills land claims resolution bill. On May 23, 2005, the Ilitch Family and Malik made a total of 8 contributions totaling $16,000 to Alaskans for Don Young, Inc. There are no records of previous or subsequent contributions to Young.
  
  From March 2003 to June 2005, Ilitch Family members Michael Malik and one Ilitch Holdings, Inc. employee (executive assistant David Agius ) made a total of 20 contributions to Rep. Miller’s campaign committee or “leadership committee” totaling $74,000 -- $14,000 to the campaign ($13,000 of that delivered on March 11, 2003) and $60,000 to her CANDICE (Conservative American Network Delivering Increased Congressional Excellence) PAC with most of those contributions logged on April 2, 2004 and June 30, 2005.
  
  Michael Malik was the first-ever donor to CANDICE PAC on March 19, 2003 (one week after Malik/Ilitches gave $13,000 to Miller's candidate committtee). Mark Valente III, the committee’s treasurer (a former Grosse Pointe Park, Michigan City Councilman turned D.C. PAC treasurer/lobbyist who is a lightning rod for controversy in the Abramoff era), filed a Statement of Organization with the Federal Election Commission establishing CANDICE PAC on February 13, 2003. On June 28, 2006 amidst numerous investigations (see Center for Public Integrity's "PAC-men Lobbyists" & "Summary of Findings") looking closely at these “leadership PACs,” Valente terminated CANDICE PAC. From inception to termination at least 48% of all funds received by CANDICE PAC came from the Ilitch Family/Malik and one other Ilitch employee, an administrative assistant.
  
  Disclosure documents note that Mr. David Agius, an executive assistant to Christopher Ilitch at Ilitch Holdings who also serves as president of Ililtch Children's Chairities (Ilitch family's charitable fund), made a $5000 contribution to CANDICE PAC on June 30, 2005. That same day, Michael Malik, Mike & Marian Ilitch and Christopher Ilitch, CEO of Ilitch Holdings, Inc., each gave $5000 to CANDICE PAC too. However, unlike the other four, Agius had no record of giving to federal candidates before June 30, 2005; nor after.
  

Conclusion
Since 1999, at least six bills have been introduced in Congress specifically to bring resolution to the Bay Mills Indian Community’s federal land claims assertions. In addition to more than $2.5 million in lobbying fees paid by “Team Ilitch,” its affiliates and agents during this period, individual members of the Ilitch Family and Michael Malik contributed more than $234,000 to those in Congress who were willing to author and introduce the six bills on behalf of the Bay Mills Indian Community, Brimley, MI.

When Detroit's Mayor Kwame Kilpatrick raised questions about potential conflicts of Marian promoting a casino just an hour away from Detroit, Marian Ilitch's publicist replied, with a sarcastic question, “how could she have a financial stake in a Port Huron Casino when one doesn’t exist?” When probed further, especially after reports she’d aggressively lobbied Lansing lawmakers during 1998 Compact negotiations for four tribes, her effort was described as simply “opening a few doors” for her friends from Brimley, MI.

And then, in November 2006, at a Port Huron Council meeting, Michael Malik and a surrogate, Dick Cummings spoke on the Bay Mills casino matter. Cummings suggested Malik and Marian Ilitch had spent $10 million in legal fees managing the Bay Mills drive for a third casino, off-reservation, during the last decade.

Those are some awfully pricey doors. One doesn’t throw around that kind of money without some sort of expectation implied or otherwise guaranteed.

SOURCES: PoliticalMoneyLine for Congressional Quarterly; Center for Responsive Politics, opensecrets.org; Federal Election Commission; The Library of Congress, THOMAS.

You may also want to review these posts:

• Seven attempts by tribe's backers to win congressional approval for off-reservation casino using IGRA loophole
• Port Huron Columnist provides measured Q&A on Bay Mills casino circumstances
• Detroit casino syndicates headed by Marian Ilitch and Michael Malik top $2.5 million lobbying for casino expansion opportunities on Capitol Hill
• Tribe's casino backers have paid DC lobbyists at least three-quarters of a million dollars
• Bay Mills Indian Community has paid Capitol Hill Lobbyists $1.32 million
• Rep. Candice Miller introduced HR 813 on February 13, 2003 to approve settlement of unsubstantiated land claims and a casino for Port Huron
• Aide negotiated '11th Hour' Port Huron casino deal for Gov. Engler; then returned to private practice, retained by those who got the deal
• Voters & local officials questioned Gov. Engler's flip-flop on casino policy and the Port Huron casino deal he signed on his way out the door.

Ilitch administrative aide gives $5000 to Rep. Candice Miller

FEC disclosure documents note that Mr. David Agius, an executive assistant to Christopher Ilitch CEO of Ilitch Holdings, Inc., who also acts as president of the Ilitch Family's "Children's Chairities," made a $5000 contribution to CANDICE PAC on June 30, 2005. That same day, Michael Malik, Mike & Marian Ilitch and Christopher Ilitch, CEO of Ilitch Holdings, Inc., each gave $5000 to CANDICE PAC too. However, unlike the other four, Agius had no record of giving to federal candidates before June 30, 2005; nor after.

BIA extends comment period on proposed Section 20 rules for Indian gaming

The Bureau of Indian Affairs has extended (re-opened) the comment period on proposed IGRA related rules, published October 5, 2006, for gaming on lands acquired after October 17, 1988. Comments must be received by February 1, 2007.

Federal Register
January 17, 2007
(Volume 72, Number 10)

... On October 5, 2006 (71 FR 58769), the Bureau of Indian Affairs (BIA) published a proposed rule to establish procedures that an Indian tribe must follow in seeking to conduct gaming on lands acquired after October 17, 1988. The Indian Gaming Regulatory Act allows Indian tribes to conduct class II and class III gaming activities on land acquired after October 17, 1988, only if the land meets certain exceptions. This proposed rule establishes a process for submitting and considering applications from Indian tribes seeking to conduct class II or class III gaming activities on lands acquired in trust after October 17, 1988. On December 4, 2006, the BIA published a notice making corrections to the proposed rule and extended the comment period until December 19, 2006. Eighteen comments were received after December 19, 2006. Several of these comments raise substantive issues that may result in modification of the proposed rule. The comment period is reopened to allow consideration of the comments received after December 19, 2006, and to allow additional time for comment on the proposed rule. Comments must be received on or before February 1, 2007... (complete notice)

Proposed Rules as published in the Federal Register on October 5, 2006 (text or pdf).

Team Ilitch directed $40,000 to RICH Political Action Committee

Detroit casino syndicators Marian Ilitch & Michael Malik, along with their partners, affiliates and lobbyists contributed $40,000 to Rep. Richard Pombo’s RICH Political Action Committee.

That’s two and a half times the combined $16,000 in contributions that got Ilitch and Malik two spots on RICH Pac’s “Top Ten List” (ahead of #10 Jack Abramoff)

1. Rick Kessler (Richard S. Kessler) & former Rep. Billy Evans of Kessler & Associates (K&A), contributed $3,000 to RICH PAC during 2004/05.
   
   Documents on file with the Secretary of the Senate indicate in 2003 and 2004, K&A was retained by Wheat Government Relations, the primary lobbyist for “Team Ilitch,” in an arrangement for K&A to handle gaming and Indian Country matters.
   
   Kessler & Associates was representing Team Ilitch’s interests in Washington, D.C. “under the radar.” Team Ilitch had officially hired Wheat Government Relations and Wheat, in turn, passed through fees retaining Kessler & Associates; to add further curiousity it looks like Wheat may have paid K&A more than Wheat was paid by his collective “Team Ilitch” clients.
   


2. George Baker and Susan Hirschman, Williams & Jensen (Barbara Bonfiglio) contributed $3887 from 2003-06. Bonfiglio, then RICH PAC treasurer, signed Malik (MJM Enterprises & Development) to a lobbying contract in September 2003 for representation on gaming matters. Bonfiglio’s firm was paid $220,000 for representation from 2003-2005.
   


3. Richard Alcalde, Federalist Group/Potomac Partners DC contributed $2,500 on December 7, 2005. By 2006, Ilitch/Malik and affiliates had terminated or mothballed the seven other lobbying firms that had represented their interests at some point since 2002 and placed all of "Team Ilitch's"needs in the hands of Alcalde (Potomac Partners DC) and rookie lobbyist Daniel X. Feliz who joined with Alcalde in 2006. Feliz had a stand alone contract with Michael Malik’s Blue Water Resorts earlier. Malik’s MJM Enterprises and the Shinnecock Indian Nation have retained Alcalde. For 2005 & 2006, Alcalde has been paid an average of $280,000 per year; that’s more than Team Ilitch had previously paid any of the seven other lobbying firms retained between 2002 and 2006.
   


4. Four partners at Mercury Public Affairs (Kieran V. Mahoney; Kirill Goncharenko; Gregory E. Strimple & Michael F. McKeon) contributed $13,000 to RICH PAC on December 7, 2005. There are no records filed with the Secretary of the Senate to suggest Mercury Public Affairs represents any affiliates of "Team Ilitch" in D.C.; however, documents on file in New York indicate the Shinnecock Nation Gaming Authority retained representation by Mercury Public Affairs in New York during 2005 and 2006 for fees of $240,000 per year.

There are no records to suggest anyone affiliated with Wheat Government Relations (the primary lobbying firm representing "Team Ilitch' interests since 2002) contributed to RICH PAC during the ’04 or ’06 cycles.

Team Ilitch and affiliates paid $2.5 million in lobbying fees to eight different lobbying firms including those highlighted here for representation on gaming and Indian matters since 2002; Wheat Government Relations was paid $1 million or 40% of the total lobbying fees. Wheat has not reported any representation of Team Ilitch interests in 2006.

Mike & Marian Ilitch and Michael J. Malik, Sr. contributed collectively $16,000 to RICH PAC and Robert G. “Bob” Guenthardt, Malik’s associate from the Little River Band of Ottawa Indians/Manistee Casino project contributed $1000.

Malik and Ilitch contributed enough to land them two spots (#5 & #9) on RICH PAC’s “Top 10” cumulative donor list, leapfrogging #10 Jack Abramoff; but it didn’t stop there.

Taken in context with contributions from these other Ilitch/Malik partners, agents and affiliates, collectively Team Ilitch contributed $40,000 or more to RICH PAC during the period Rep. Pombo served as Chairman of the House Resources Committee.

This should be taken in context with all of the other involvement Ilitch/Malik had with Pombo from 2004-2006, including: $26,600 delivered to the San Joaquin County GOP Committee; a two-day extravagant hosted $5,000 per person All-Star Game fundraiser in Detroit; two $25,000 contributions delivered to the RNC the day after the All-Star Game; and other gifts including travel.

Note: Under California's political reform laws, Barwest L.L.C. was to have reported the $26,600 contribution made 10/18/04 as a "major donor" in disclosure filings due January 31, 2005. No disclosures were filed. A second reporting period for major donor disclosures ended June 30, 2005. Again no disclosures were filed. Michael J. Malik, Sr. did not file disclosure documentation declaring Barwest L.L.C. a "major donor" until September, 5, 2005 -- nearly a year after making the curious contribution and almost nine months (and two reporting periods) after disclosures were required.

You may want to review these posts:
The Verifiable Truth: Motown's Team Ilitch tops Abramoff on Congressman's "Top 10 List"

PE.com: Tribes meet over gaming issues

10:00 PM PST on Tuesday, January 16, 2007

Tribes meet over gaming issues

PECHANGA CASINO: Planned discussion topics include addiction and the state's energy needs.

By MICHELLE DeARMOND

The Press-Enterprise

The state's largest tribal organization is meeting this week in the Temecula area, where Indian leaders and state and federal officials plan to talk about gaming and other key issues.

Anthony Miranda, chairman of the California Nations Indian Gaming Association, and Los Angeles Mayor Antonio Villaraigosa are scheduled to speak today at the opening ceremonies.

Miranda, a member of the Pechanga Band of Luiseño Indians, will deliver the state of the tribal nations address at the Pechanga Resort & Casino near Temecula.

The annual Western Indian Gaming Conference comes as several Inland tribes await legislative approval of gaming agreements they signed in August with Gov. Schwarzenegger that would allow them to expand their casinos. Lawmakers failed to ratify the agreements with four Inland tribes and one San Diego County tribe last year. Other deals, including a two-casino plan for Barstow, also remain unratified.

The gaming agreements, known as compacts, can't take effect until the Legislature ratifies them and the U.S. Interior Secretary approves them.

Among the events planned for today is a panel discussion about Sacramento politics. A federal political report is scheduled for Thursday. Other discussion topics include problem gambling and the state's energy needs.

Gaming exhibits and panel discussions are planned for today and Thursday, and a private membership meeting for the California Nations Indian Gaming Association is planned Friday.
There are 68 California tribes in the association.

Reach Michelle DeArmond at 951-368-9441 or mdearmond@PE.com

http://www.pe.com/localnews/inland/stories/PE_News_Local_D_casinos17.38234ef.html

Newsday: Waiting to be recognized

Waiting to be recognized
Shinnecock Indians have years to go until the government rules on their authenticity as a tribe

BY JOHN MORENO GONZALES

Newsday Staff Writer

Long before federal court cases and a casino controversy, the Shinnecock Indians began what is now 30 years of research into the history of each family on their reservation, and they may have another 15 years of heavy genealogical lifting ahead of them.

Since 1978, it has been one of the hoops the U.S. Bureau of Indian Affairs insists the tribe must jump through toward its goal of federal recognition, a necessary step before having the right to build an East End casino. But because of a near half-century backlog at the bureau, the Shinnecocks may have to wait as long as the year 2014 to learn if they are a sovereign people in the eyes of the government.

Beginning the same year the BIA instituted the federal recognition process still in use today, the tribe has spent hundreds of thousands of dollars and some emotional currency on the effort to trace Shinnecock family trees, tribal leaders say.

"It's a process that is extremely costly, extremely time-consuming and personally burdensome," said Marguerite A. Smith, a chairwoman of the Shinnecock Reservation's recognition committee. "People are offended that they should have to justify their very being."

Quality of life in the balance

More than just the casino effort is at stake, tribal leaders emphasized. Opportunities for better educational and housing assistance programs also would come with BIA recognition.

"We want to provide a better education for the children, better health care, better homes," said tribal chairman Lance Gumbs in a recent interview. "It has never only been about a casino."

The Shinnecocks, numbering 1,300, remain on the "ready waiting for active" list of American Indian tribes who have petitioned for recognition. The understaffed BIA says it could get to the tribe's case by 2009, then it typically takes another five years to make a decision.

There is no certainty the Shinnecocks will receive a favorable ruling.

"You have to wait until it plays out and see where the chips fall," said Gary Garrison, a BIA spokesman. "Everybody eventually gets through the process. But there has been more [tribes] who have been denied federal recognition than have been given.

"The nation began the process in 1978 when the BIA told them if it wanted sovereignty it must use the newly instituted method, Smith said. But the Reagan administration's institution of Indian gaming in 1988 has made the process a political minefield, experts said. Its public hearings are akin to amped-up town hall meetings, experts say, with hundreds of millions of dollars of gambling proceeds on the line and power plays clouding the more fundamental question of whether a tribe has met historical criteria for recognition.

"The Shinnecocks are at a disadvantage," said Donald A. Grinde Jr., a professor and chairman of American Studies at the University of Buffalo who has closely watched the process for the Seneca Indians upstate. "There are more than a few people in the Hamptons [opposed to a casino] who have some pull in New York State and the federal government.

"In a bid to obtain recognition sooner, attorneys representing the Shinnecocks filed court petitions based on the Tribe List Act of 1994, which says federal courts have the authority to recognize an American Indian tribe. In November 2005, U.S. District Court Judge Thomas Platt recognized the Shinnecocks as a sovereign nation, but the BIA countered two months later that it was not compelled to recognize Platt's ruling.

The bureau argues that judicial recognition is unfair to other tribes because it allows some to leapfrog others.

"The federal courts kind of have a knee-jerk reaction and want recognition to happen sooner," Garrison said. "You're going to play round robin with the whole list. "

More hurdles

For now, the Shinnecocks are ninth on the ready waiting active list, meaning the applications of eight tribes will be reviewed before theirs is even considered. In addition to the recognition issues, the tribe faces a Town of Southampton effort to block construction in Hampton Bays on a parcel of Shinnecock-owned land known as the Westwoods. The Shinnecocks broke ground on the site after Platt's ruling, but were forced to halt by the town's federal lawsuit.

The nonjury trial before Judge Joseph Bianco is scheduled to resume on Wednesday, with the Shinnecocks attempting to counter the town's claims that the tribe has no legal right to build on the land because it historically has not been a part of the larger reservation to the east.

Faced with those hurdles, Shinnecocks continue to build the proof needed to navigate a federal recognition process that in itself could end up being a tale spanning 50 years.

BIA spokesman Garrison, himself a Choctaw Indian, said he realized the bureau was asking much of Indian tribes to retrace their history for the same federal government that once displaced them.

"We understand it's a slow process for the tribes," Garrison said. "After all, the resources of the federal government were once aligned against them to break them up."

History of Cal Neva - Sinatra's one-time casino resort property

from the Cal Neva Resort's official web site: http://www.calnevaresort.com/

The original Lodge was built in 1926 by wealthy San Francisco businessman, Robert P. Sherman, who used the Lodge as a guesthouse for his friends and real estate clients. The Lodge was designed after Frank Bacon's log cabin in the hit Broadway play "LIGHTNIN," starring Will Rogers. The Cal Neva Resort quickly became the playground for celebrities and socialites who wanted to escape from the public eye.

In 1928 The Cal Neva Resort came into the hands of Norman Biltz, known as "The Duke of Nevada." No one really knows how Biltz and Sherman became involved except that Sherman deeded the property to Biltz for real estate commissions owed to him. Then in 1930 Biltz married Esther Auchincloss Nash, granddaughter to the founder of Standard Oil and aunt of Jacqueline Kennedy-Onassis.

The original Cal Neva Lodge burned to the ground on May 17, 1937 and was rebuilt in just over thirty days by Norman Biltz and Adler Larson, both early Tahoe pioneers and developers. Over 500 men were employed to work around the clock to finish the new building which is seen today in the Indian Room, Circle Bar and main casino area.

The Cal Neva Resort earned the nickname "Lady of the Lake," weathering heavy snowfalls and the remodeling of a succession of owners including serious gamblers with names like "Pretty Boy," "Bones," and "Baby Face" during the 1940's and 1950's.

During the Frank Sinatra ownership years of 1960 to 1963, along with his associates "Wingy" and "Skinny," Sinatra built the now famous Celebrity Showroom and installed a helicopter pad on the roof in an attempt to make access easier for his colleagues and guests appearing at The Cal Neva Resort during the summer months.

Hollywood followers were enamored with Sinatra and the "Rat Pack," an unforgettable fraternity that linked itself with the White House through Peter Lawford, brother-in-law to then President John F. Kennedy. Dean Martin, Sammy Davis Jr., Juliet Prowse, and Marilyn Monroe (among others) "sang for their suppers" in the Celebrity Showroom and the Indian Room while politicians and Hollywood stars played at the tables and in the private cottages overlooking Lake Tahoe.

When the presence of one particular guest, Sam Giancana of Chicago, was noticed by authorities, it finally cost Sinatra his gaming license in a losing battle with the Nevada Gaming Control Board.

The "Lady of the Lake" suffered tremendously from neglect for nearly twenty years before she was purchased in December of 1985 and was given a new life by owner, Charles P. Bluth who operated the resort until February 15, 2005 when it was purchased by Namwest, LLC.

And so begins a new era in the life of the "Lady of the Lake". Namwest is launching a complete renovation and restoration program for The Cal Neva Resort intended to position the resort as the leading destination in Lake Tahoe with services and accommodations that will meet the needs of the most discriminating traveler. In doing this, ownership will maintain the link with history while providing the most up to date technology, facilities, amenities and services available.

http://www.calnevaresort.com/overview.php

you may also want to see these posts:
* The Verifiable Truth: Ex-owner of MotorCity gets Nev. casino license
* The Verifiable Truth: The Detroit Gaming Syndicators: Marian Ilitch, Michael Malik and Tom Celani
* The Verifiable Truth: Ilitch, Malik casino syndication partner to run Lake Tahoe casino once owned by Sinatra