Saturday, February 14, 2015

Walker rejection of Menominee Bucks offer doesn't add up

Wanted to follow up on the Bucks arena situation, where we've had some interesting discussion since the Menominee Tribe offered to basically front the state's part of any funding deal for a new Bucks arena in exchange for allowing them and the Hard Rock organization to build a casino near Kenosha (I discussed some ups and downs of it here). The Walker Administration rejected the offer immediately, with Administration Secretary Mike Huebsch saying they were "done" and had "moved on" from the issue. But Bruce Murphy at Urban Milwaukee dug into the Menominee's proposal some more, and found the Walker Admin's refusal to reconsider mysterious, to say the least.
So why did Walker reject the deal? His Secretary of Administration Mike Huebsch wrote a memorandum noting the Potawatomi tribe (which owns the Milwaukee casino and opposes the Kenosha casino) has threatened to sue the state and could gain $250 million. The tribe claims the state would have to repay its payment of $25 million per year [that their compact has been in effect] because its contract with the state guarantees no casino competitor within a 50 mile radius.

But the Walker administration hired the Dykema Gossett law firm, under a contract that would pay up to $500,000, and its attorney R. Lance Boldrey concluded that if the Potowatomi won the dispute, it would then be ruled by an earlier 1998 contract, which means it would lose nearly 2,000 slot machines and could also open the door to getting its contract cancelled by 2019. “It does not appear to be in anyone’s best interest to pursue a remedy that results in a reversion to the 1998 compact,” Boldney wrote.
So it seems like both the Potawatomi and the state would be in position to renegotiate the terms of that compact, which could be done along with approving the Kenosha casino.

Did Huebsch follow that advice, given that Mr. Boldrey is a lawyer and Huebsch attended (but did not graduate) from fundie college Oral Roberts University? OF COURSE NOT! Funny how these guys don't have much regard to those with knowledge or facts.

But it gets better. Murphy then performs an actual act of journalism and goes to a law professor at Michigan State who specializes in Indian gaming law, telling the prof about the $275 million the Menominee have offered to back up any state litigation losses related to approving the Kenosha casino, and the professor goes "Seems like that would cover the risk." Which blows away Huebsch and Walker's claim that fear of taxpayer costs due to litigation is the reason they turned down the Kenosha casino, and also knocks down their main buck-passing excuse to try to pin blame on ex-Governor Jim Doyle for signing the compact with the Potawatomi to help balance the deficit-ridden budget Doyle inherited from Tommy Thompson and Scott McCallum.

On the other side of the equation, Hard Rock International President Jim Allen says having enough money to make up those payments to the state once the Kenosha casino would open won't be a problem either, as Wisconsin's "skim" off of the potential casino's winnings is much less than they pay in neighboring states.
Adding in the $275 million bond, this makes this a $1.7 billion deal for the state. But can the casino generate enough revenue to pay for this?

That’s a slam dunk, noted Allen, whose company has long experience in the gaming industry, because the percentage of revenue charged casinos by Wisconsin is much lower than in other states. He noted that Hard Rock pays 42 percent of gaming revenues in Ohio and gaming companies in other states “pay 30 percent, 40 percent, 50 percent, even 60 percent” of gaming revenues. Even with the payment for the NBA arena and $275 million bond included, he noted, “we would still be under 20 percent of revenues in what we pay to the state.”
So why wouldn't the Walker Administration at least strongly consider the Menominee's offer, which would allow it to get out of the business of taking on the Bucks arena issue, and also allow for this casino project to get underway? It's not because this administration automatically shoots down the expansion of any gambling in this state. They would never have delayed their decision on the Kenosha casino for over a year to shake down both sides for 2014 campaign donations deliberate over the issue if this was the case.

It doesn't have anything to do with the fact that a couple hundred fundies in Bumblefuck parts of Iowa matter more to Scott Walker than the Wisconsinites that, you know, he gets paid by and is allegedly working for in his day job, is it? Noooo, it can't be that at all.

I remain ambivalent on the Bucks arena, as I still need to see its final site and how this all fits together. And given the state's bad budget, I'm very reticent to see any diversion of state funds into specific projects and out of the huge unmet needs this state has. This offer by the Menominee on the Bucks arena allowed the state budget to not be affected by this potential Milwaukee project, and the building of the casino would likely raise job and income tax revenues in the short-term (as it's being built) and long-term (as it opens up), which seems to be a win-win scenario.

As Murphy sums up in one part of his story, "This is one of the most astounding political decisions I’ve seen in more than three decades of covering state and local politics." And like a lot of things with the Fitzwalkerstanis, what seems dumb when the decision is made will likely prove to be a lot more foolish and costly over time.

With that, I'm onto braving the cold and questioning another bad Walker decision- the one that would cut the UW System's funding to balance his deficit-ridden budget, another decision that is being done for selfish reasons and will hurt the state's chances for economic growth.

1 comment:

  1. Jake, I posted the following a couple other places, but it deserves as much scrutiny as it can get. There's a WI Club for Growth/John Doe connection here...

    Part 1 – Who is spending money?:
    1) Enough Already Wisconsin Inc. has been the most active anti-casino group doing major TV and Radio buys the last couple months, including a Super Bowl ad in Milwaukee. That means they have some serious money coming from somewhere.
    2) Go to their website:
    3) Try to make a donation to their cause. Guess what? You can’t! The “Contribute” button links back to the home page.
    4) So they’ve got money for a big media campaign, but can’t accept donations over their website. They must be getting a big grant from somebody, right?

    Part 2- Where is the money coming from?:
    1) A list of Enough Already’s officers can be found on pg. 4 of this advertising contract:
    2) Note that Enough Already’s Treasurer is James Michel
    3) James Michel is also Executive Director of anti-casino group Citizens for a Strong Sheboygan, which declares on its website that it is “a project of Citizens for a Strong America.” See also:
    4) Citizens for a Strong America has gotten almost all of their past funding (and more or less been a front group for) WI Club for Growth. Both groups are right in the thick of the John Doe 2 probe.

    Additionally, Enough Already WI’s Executive Director is Brian Nemoir. He ran Prosser’s 2011 campaign and Thompson’s 2012 campaign. I bet he knows a thing or two about dark money.

    Whatever the reasoning behind it (and it’s not Iowa conservatives), the same groups and donors that have supported and coordinated with Walker all along are the ones most active in trying to kill the Kenosha casino.