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Foxwoods managers scrutinized; Referendum slated Tuesday in Milford.

Byline: Susan Spencer

MILFORD -- As state gaming regulators allowed an application for a $1 billion Foxwoods resort casino in Milford to move forward last week, they tried to shed light on who, exactly, would be calling the shots in the business.

Amid the applicant's web of limited liability companies and wholly owned subsidiaries, the Massachusetts Gaming Commission confirmed at a suitability hearing Wednesday that authority over the project rested with a board of managers composed of three people: Foxwoods President and CEO Scott Butera, Mashantucket Pequot Tribal Council Chairman Rodney A. Butler and Mashantucket Pequot Tribal Council Vice Chairman-elect Crystal M. Whipple.

The three board members, who are the only individuals with decision-making power over Foxwoods Massachusetts, play many roles.

Commission Chairman Stephen P. Crosby said at the hearing, "What I'm troubled by is (that) the independence of that body is crucial.''

He questioned how independent the board of managers could be if two of the three were elected tribal representatives. The third, Mr. Butera, works for the tribe.

The commission's conditional favorable ruling Friday on the suitability of Crossroads Massachusetts LLC, the license applicant driven by Colorado real estate developer David Nunes that partnered with Foxwoods to run the proposed casino, mirrored the concerns about who has control, from financing to day-to-day operations.

The five-member commission set requirements that the applicant had to receive its approval by Dec. 31 for a majority equity partner, agree to maintain the authority and responsibility structure for Foxwoods Massachusetts presented at the hearing, waive in writing sovereign nation status for the Massachusetts casino, identify an independent compliance committee, receive approval for any changes in ownership or management, and comply with the federal Bank Secrecy Act of 1970.

Late Friday, Crossroads announced it had signed a letter of intent for financing with Gaming and Leisure Properties Inc., a spin-off of Penn National Gaming, moving toward potential approval of a majority partner.

The commission's insistence on assuring adequate controls and independence for Foxwoods Massachusetts is understandable in light of Foxwoods' bumpy history in Connecticut.

The casino, officially called Mashantucket Pequot Gaming Enterprise, which is wholly owned by the Mashantucket Pequot Tribe, has had major financial troubles.

The tribe itself has been under fire for three high-ranking officials who were found guilty of federal crimes.

The commissioners wrote in their ruling: "The core issue is whether the 'wall' Foxwoods MA LLC creates between MP Gaming Enterprise (which is managed by the Mashantucket Pequot Tribal Council) and the Applicant's Massachusetts gaming operations is firm and unyielding.''

They noted that by virtue of the "wall,'' members of the tribal council were not subject to the commission's background checks.

Foxwoods representatives' testimony appeared to reassure them, particularly that of Mr. Butera.

Mr. Butera came to Foxwoods as president and CEO in 2010 after earning a reputation in the gaming industry as a turnaround artist at businesses such as Tropicana Entertainment and Trump Hotels & Casino Resorts.

He testified that over 21/2 years, he restructured Foxwoods' $2.2 billion debt. The tribe's debt has been reduced by more than $500 million and the casino has diversified its offerings.

Commissioners wrote in their suitability decision that Mr. Butera's involvement with the Milford project was a "tremendous asset'' to the applicant.

Mr. Butler is in his second term as chairman of the MP Tribal Council, a position he described to investigators as "chairman of the board for MP Gaming Enterprise, and town council president, as well as head of the MP tribal family in Mashantucket.''

He drew criticism for using the tribe's funds to support the legal defense of former treasurer Steven Thomas, who was indicted this year on theft charges for a "no-show'' job, and for hiring Anthony Beltran, who served time in prison for violent crimes, as chief of staff.

Mr. Thomas' brother, Michael, was convicted in July of embezzling $100,000.

Mr. Butler told the commission that the Tribal Council, as a young government, was working to establish better internal controls and supported its members' rehabilitation efforts.

Milford voters go to the polls Tuesday for their say on a host community agreement signed with the town. If the referendum passes, town meeting voters would have to approve a zoning bylaw change Dec. 9 for the license application to be filed with the state.

Milford is vying with a Wynn Resorts proposal in Everett and possibly a reconfigured Suffolk Downs proposal in Revere for the sole Eastern Massachusetts resort casino license.

Contact Susan Spencer at (774) 454-9000 or susan.spencer@telegram.com. Follow her on Twitter: @SusanSpencerTG
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Title Annotation:ReceivedContent
Author:Spencer, Susan
Publication:Telegram & Gazette (Worcester, MA)
Geographic Code:1U1MA
Date:Nov 17, 2013
Words:757
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