How Much Worse Can It Get? [UPDATED]

On November 8, 2013 Cary Spivak of the Milwaukee Journal Sentinel published an article on the newspaper’s website which ran in the next day’s physical edition and was picked up by the Associated Press and run in several other newspapers and websites:

The article discussed Oneida Eye’s publication of the October 17, 2013 Memorandum of Agreement between the Oneida Tribe, the Menominee Tribe and something called the Menominee Keshena Gaming Authority:

While the news article notes Oneida Eye’s objections to the agreement on the grounds that neither the Oneida Tribe nor the Tribally owned Bay Bank have the assets to provide $400,000,000 in senior debt financing which the agreement gives the Oneida Tribe the right to foolishly entangle itself in, that isn’t Oneida Eye’s primary objection.

We assume that if Gov. Scott Walker were to give the Menominee Tribe’s corruption-plagued off-reservation project the green light, the Seminole Tribe and their ‘associates’ could readily deposit in the Oneida Tribe’s Bay Bank a half-billion dollars to foster the illusion that the Oneida Tribe magically found financing ability for the scandal-riddled proposal.

Instead, Oneida Eye’s primary concerns are as follows:

  • In bringing the Seminole Tribe into the picture the Menominee Tribe has partnered with yet another sketchy investor with sufficient baggage to make it clear they have enough trouble trying to run ethical-seeming casino operations in Florida and elsewhere.
  • The Oneida Business Committee cannot be trusted to behave competently nor ethically with the Tribe’s own relatively small business ventures so it cannot be trusted to do any better with what amounts to a half-billion dollar scheme.

As the Enough Already Wisconsin website details, the Seminole Tribe has been cited numerous times by the National Indian Gaming Commission for violations resulting in hefty fines:

Among those violations Enough Already cites the following:

In 1997, the NIGC took action against the Seminole’s then-manager of its Hollywood, FL casino for managing a gaming operation without an approved NIGC contract and proposed a fine of $8.5 million. [NIGC Civil Fine Assessment with JPW Consultants, Inc., June 27, 1997]

In 2000, the NIGC fined the tribe $3 million for again allowing a non-approved management company to operate their Hollywood, FL casino.[NIGC Stipulated Notice of Violation and Agreed Civil Fine Assessment with Seminole Tribe of Florida, June 1, 2000]

In 2010, the Seminole Tribe of Florida were fined $500,000 by the National Indian Gaming Commission (NIGC) for violating the Indian Gaming Regulatory Act (IGRA) and NIGC regulations because the tribe repeatedly misused gaming revenues. [NIGC Agreed Civil Fine Assessment with the Seminole Tribe of Florida, October 2010]

Enough Already WI also notes an article in the Saint Petersburg Times (‘Seminoles gain entry in Caribbean casino’) that discusses the Seminole Tribe’s investment in an off-shore casino in St. Maartens which resulted in a federal investigation and allegations that threats were made to casino employees who reported having witnessed boxes of money being shipped to that island for the casino venture:

“She was told . . . that if she wanted to keep her legs, keep her mouth shut,” wrote investigator Roger Odoms, a former Seminole police officer.

The St. Pete’s newspaper report also mentions documents which show that the Dutch Ministry of Justice, which administers the island of St. Maarten, rejected the Seminole’s application to open an internet gaming site because it had “received information about the casino’s management that would “hurt the good name” of the Netherlands[.]

Enough Already also notes that more recently the Seminole have had their out-of-state expansion attempts quashed in Massachusetts and New Mexico:

Last month the Seminoles were dealt a huge setback when voters in Massachusetts overwhelmingly rejected their out of state expansion attempt there. [“West Springfield Hard Rock casino opponents celebrate ‘David against Goliath’ victory” The Springfield Republican, September 10, 2013.] Voters said no thanks by a margin of 55% to 45%.

And in October of last year the Isleta Pueblo tribe of New Mexico ended its relationship with the Seminole tribe because “the franchise did not live up to a contract agreement to provide marketing, management training and services.

If the Seminoles fail to live up to their agreements in Kenosha or mismanage the off-reservation casino to such a degree that multimillion dollar fines are imposed or – worse yet – the off-reservation casino’s license is revoked, what would the hundreds of millions of dollars of potential liabilities mean for the Oneida Tribe?

‘Senior debt’ usually means that such a holder can acquire the assets of the defaulting enterprise, but what good would ‘owning’ an off-reservation casino in Kenosha do for the Oneida Tribe when there’s absolutely zero guarantee that the State of Wisconsin would allow the Oneida Tribe to operate it as a casino and might more likely conclude that the facility should not be used for gaming purposes rather than allow it to hurt the good name of Wisconsin?

Beyond the failures, inexperience or corruption of the developers the Menominee have chosen to work with thus far, there is also the questionable competency and ethics of the Oneida Business Committee which can’t even keep Tribally-chartered Oneida Seven Generations Corporation and its offshoots in check.

OSGC is facing millions of dollars in liabilities due to the fact that it lied to the public and to elected officials about its proposed dioxin-emitting garbage incinerator projects in the City of Green Bay and on the Oneida reservation.

OSGC’s actions have been so reprehensible that on May 5, 2013 the General Tribal Council – as the supreme governing body of the Oneida Tribe – voted to direct the Business Committee to immediately forbid OSGC from building or operating any kind of incinerator anywhere on the Oneida reservation.

In fact, OSGC’s very real threats to the fiscal and physical health, safety and welfare of the Tribe – which were fully supported by the Business Committee in violation of the Tribe’s Code of Ethics and their Oaths of Office – resulted in a petition with over 360 signatures calling for GTC to vote whether to dissolve OSGC at an upcoming December 15, 2013 Special GTC Meeting:

In the meeting packet the document titled ‘Financial Impact of Petition – Dissolution of Oneida Seven Generations Corporation’ submitted by Tribal Chief Financial Officer Larry Barton shows a chart of OSGC and its offshoots which are split into two groups.

Group one is called Subsidiaries & Consolidating LLCs (Glory, LLC; Oneida Generations, LLC; Oneida Energy Inc.; Green Bay Renewable Energy, LLC) and Group two is called Equity investments (Oneida-Kodiak Construction; Partnership Drive, LLC; North Packerland, LLC: Babcock I, LLC).

CFO Barton’s analysis also include a table comparing the following:

  • Book Value from Business Venture Balance Sheet
  • Fair Market Value Determined by McGladrey Business Valuation Group
  • Voluntary Transfer Price (“The Offer” or “Purchase Price”)
  • Specified Involuntary Transfer Price (“The Offer” or “Purchase Price”)

The table cites amounts (which obviously cannot be verified without having access to accounting records) for Babcock I, North Packerland, and Partnership Drive, but makes absolutely no reference to Oneida-Kodiak Construction because – as noted in the chart of the two groups – the bubble for Oneida-Kodiak Construction says, “No valuation performed.”

Corporate Structure of Oneida Seven Generations Corporation

Corporate Structure of Oneida Seven Generations Corporation

Why was no valuation performed of Oneida-Kodiak Construction?

[SEE UPDATE BELOW]

According to what some Business Committee members have told Tribe members, Oneida-Kodiak Construction’s books simply don’t add up, which can only make one wonder if the accounting records of the other OSGC-related enterprises are truly on the level.

Oneida Eye readers will recall that Tribal Chairperson Ed Delgado called for a cost analysis to be done to determine the full extent of the financial liabilities that Oneida-Kodiak Construction’s incompetency regarding their improper installation of doors in the Anna John Resident Centered Care Community burdened the Tribe with, and noted that kind of evaluation couldn’t determine the deep costs to the quality of life for Oneida elders and their families unnecessarily inflicted by Oneida-Kodiak Construction:

Beyond that, Oneida Eye has received reports from Tribe members who are familiar with the business dealings of Oneida-Kodiak Construction who have said that if all of the information comes to light there will likely be people facing jail time. In fact, the information they were privy to was so disturbing that they said they had trouble sleeping at night given how damaging it would be to the reputation of the Tribe.

The information included reports that personal construction projects for Tribe members may have been improperly financed with corporate funds, and that corporate funds may have been illegally co-mingled with money from loans and conditional grants provided to Oneida Energy Inc. by the Wisconsin Department of Commerce and the Wisconsin Economic Development Corporation which were to be used solely for garbage incinerator projects and for which OSGC serves as the guarantor:

As Oneida Eye has reported, Oneida-Kodiak Construction was a partnership between OSGC and Alliance Construction & Design, but all signs point to that partnership having been dissolved:

What led to the apparent dissolution of Oneida-Kodiak Construction?

Did Kevin Cornelius actually suggest that his business partners join the Mormon religion and make large donations ($200,000+) in order to obtain future business contracts (back when people still had Mitt fever and Rep. Paul Ryan was on the GOP Presidential ticket)? Is that, along with Oneida-Kodiak’s fuzzy finances, some of the reasons Kevin abruptly left OSGC and moved to North Carolina?

If the valuation of Oneida-Kodiak Construction was significant it should have been included in CFO Barton’s analysis, which suggests that perhaps it was omitted not because of the lack of liabilities it poses but rather the abundance of liabilities corporate and executive misconduct and negligence poses not just to the Tribe’s bottom line but also to the company’s executives and Board members, some of whom are also executives and Board members of OSGC.

General Tribal Council deserves answers as to whether the current and former principals of Oneida-Kodiak Construction and OSGC have not only broken GTC’s trust but may have also broken the law, and it should be noted that any attempts by the Business Committee or Tribal employees to attempt to coverup wrongdoing could be perceived as participation in a criminal conspiracy.

Holding people personally accountable for misconduct and negligence is only part of the answer for making sure that people realize they should not expect to be let off the hook just because other Tribe members have been allowed to fail upwards for far too long.

GTC is going to have to take more collective responsibility for being involved in the decision making process regarding Tribally-chartered corporations and that will require demanding access to information that the BC and Chief Counsel Jo Anne House want to keep secret.

The Tribal Chairperson and the rest of the Business Committee along with the Chief Counsel have proven themselves untrustworthy and, based on information Oneida Eye is still investigating and plans to report soon, it may even be worse than GTC can imagine.

 

[See also: OSGC: Too Big; Too Fail]

 

UPDATEIF THE BUSINESS COMMITTEE TRULY WANTS TO DEMAND ANSWERS FROM THE MYSTERIOUSLY DISAPPEARED ONEIDA-KODIAK CONSTRUCTION, THEY SHOULD SPEAK WITH THE COMPANY’S REGISTERED AGENT WHO IS STILL LISTED WITH THE WISCONSIN DEPT. OF FINANCIAL INSTITUTIONS AS BEING NONE OTHER THAN OSGC CEO & CFO BRUCE KING:

HERE IS A PDF FROM THE WDFI WEBSITE MADE TODAY, NOVEMBER 20, 2013, JUST IN CASE THE WEBSITE GOES DOWN FOR MAINTENANCE:


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Tags

Abdul Latif Mahjoob / ACTI / AREC / AREI / ARTI ACF Leasing ACF Services Alliance Construction & Design / Alliance GC (Global Conservation) American Combustion Technologies Inc. (ACTI) / American Combustion Technologies of California Inc. (ACTI) / American Renewable Energy Inc. (AREI) / American Renewable Technologies Inc. (ARTI) Artley Skenandore Jr. / Swakweko LLC Atty. William Cornelius Bruce King City of Green Bay Fmr. OBC Chair Cristina Danforth / Tina Danforth Fmr. OBC Chair Ed Delgado Fmr. OBC Sec. Patty Hoeft Fmr. OBC Vice-Chair Greg Matson Fmr. OBC Vice-Chair Melinda Danforth General Tribal Council / GTC Generation Clean Fuels Godfrey & Kahn Green Bay Renewable Energy LLC / GBRE Green Box NA Green Bay LLC Incinerators / Gasification / Pyrolysis / Plastics-to-Oil / Waste-to-Energy Jacqueline Zalim / Jackie Zalim Kelly Van Den Heuvel / Kelly Yessman Kevin Cornelius Mike Metoxen Mission Support Services Nevada LLC / Mission Support Services LLC Nathan King Nature's Way Tissue Corp. OBC Chief Counsel Jo Anne House OBC Vice-Chair Brandon Lee Stevens / Brandon Yellowbird Stevens Oneida Business Committee / OBC Oneida Energy Blocker Corp. Oneida Energy Inc. Oneida ESC Group LLC / OESC Oneida Nation of Wisconsin / Oneida Tribe of Indians of Wisconsin / Indian Country / Thornberry Creek LPGA Classic Oneida Seven Generations Corporation / OSGC Oneida Total Integrated Enterprises / OTIE OPD Lt. Lisa Drew-Skenandore Owen Somers / Oneida Internal Security Director Paul Linzmeyer Pete King III / King Solutions LLC Ron Van Den Heuvel Sustainment & Restoration Services LLC Todd Van Den Heuvel Tsyosha?aht Cathy Delgado Wisconsin Economic Development Corporation / WEDC

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