Tribe That Runs Foxwoods Facing 'Dire' Finances

NEW HAVEN, Conn. (AP) -- The chairman of the tribe that runs Foxwoods Resort Casino is warning of ''dire financial times'' that he says threaten the tribe's living standards.

Michael J. Thomas, chairman of the Mashantucket Pequot Tribal Nation, sent a letter to tribal members last week noting earnings ''are down considerably'' in the recession with no signs of immediate improvement. He also noted the likely legalization of gambling in Massachusetts and New York will eat away at profits and market share.

''These are dire financial times for our tribe,'' Thomas wrote in the letter, obtained by The Associated Press on Wednesday. ''The situation is serious and threatens our tribe.''

The tribe is on the brink of default and is trying to restructure $2.3 billion in debt, the New London Day reported Wednesday, citing an adviser to the tribe who spoke on condition of anonymity. The debt is $1 billion more than the tribe can sustain, and it is at risk of defaulting Monday on a $700 million line of credit with lenders, the newspaper reported.

Telephone messages were left Wednesday with tribal officials for comment on the report, which also cited a plan by an investment bank to continue operating the casino while the debt is restructured.

The tribe opened Foxwoods in 1992 and the casino has become one of the world's largest. Foxwoods last year opened the $700 million MGM Grand, a 30-story, 2-million-square-foot property that includes a new casino, hotel, a 4,000-seat performing arts theater, restaurants, luxury stores, the largest ballroom in the Northeast and new convention space to accommodate thousands.

Thomas alluded to the troubles in his letter, saying he intended to introduce a resolution to put the tribe's money in a ''lock box'' only to be used for government and incentive payments to tribal members.

''Regardless of what may happen, I have made it clear that we will not accept Wall street mandates for cuts to tribal government or the incentive,'' Thomas wrote. ''Anyone who puts the interests of consultants, bankers and bond holders ahead of our tribal community will have to answer to me.''

Foxwoods has laid off 800 casino workers since last summer as a result of declining slot revenue because of the poor economy.

Mohegan Sun, Connecticut's other tribal casino, has cut more than 500 jobs through attrition and delayed an expansion project. But Mohegan Sun, operated by the Mohegan Tribe, said in a statement Wednesday that the casino is financially healthy.

The casinos turn over 25 percent of their slot profits to the state under an operating agreement.

Paul Young, executive director of the Connecticut Division of Special Revenue, said his agency has not been notified of a plan to restructure Foxwoods' debt.

Young said he would expect the tribe to continue operating and making its payments to the state.

Gov. M. Jodi Rell said Wednesday Foxwoods' financial woes were a concern.

''We know that they have been experiencing financial difficulty for some time and I think that they're working to try to address it with their lenders and hopefully they can,'' Rell said. ''Obviously, it's a concern to us. It's a revenue to the state.''

Connecticut officials said Wednesday the two tribes will pay the state $25 million in slot revenues to compensate for promotions that allowed gamblers to use slots for free.

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Associated Press writer Susan Haigh contributed to this story.

Cleaning of Puget Sound Brings Tribes Full Circle

By WILLIAM YARDLEY
Published: August 24, 2009
SEATTLE — When contractors were bidding for federal stimulus money designated to help clean up Puget Sound, a few skeptical competitors asked Jeff Choke how much experience his dive team had in addressing pollution here.

“I’d say, ‘We’ve been doing it since the day the settlers first showed up,’ ” Mr. Choke said as he steered an aluminum skiff out of Shilshole Bay on an overcast afternoon recently.

Mr. Choke is a member of the Nisqually Indian tribe, one of many tribes that fished for salmon in Puget Sound for centuries before Europeans arrived and began aggressively fishing with large commercial nets that depleted populations of Chinook, sockeye and other kinds of salmon. Now the Nisqually tribe has a dive team that is part of a $4.6 million stimulus-financed effort to remove fishing nets that were lost or discarded decades ago but can still kill fish, birds and other animals.

Mr. Choke said that although having Indians get involved in the project might make for compelling symbolism given the longstanding tensions over how their way of life was altered by settlers, what the project really offers is a chance for the storyline to move beyond old debates.

“We want to diversify,” Mr. Choke said, referring to the tribe’s expanding business interests, which include casino gambling and the harvesting of geoduck clams in the sound, a pursuit that first led the tribe to start its dive team.

“Everyone has had a part in this,” Mr. Choke said, “and to clean this up, it takes both sides.”

The net-removal project is being organized by the Northwest Straits Initiative, a conservation agency authorized by Congress. The project is being held up by its supporters as an example of environmental restoration that creates jobs — about 40 in the next 18 months, many of them for divers — and has a measurable impact.

Before being awarded the stimulus money, the initiative had spent seven years piecing together small grants to slowly remove nets that were lost to rocky seafloors or artificial structures in the area’s historic fishing grounds.

“In many cases, it’s layer upon layer of net,” said Ginny Broadhurst, the director of the initiative.

With more than 3,000 nets believed to be underwater, the project was expected to take many more years to complete. Now, however, Ms. Broadhurst said the group is getting four boats up and running at sites like the San Juan Islands in the north of the sound to tribal fishing grounds in the south. The work should be finished by the end of next year.

“The ocean faces lots of problems, from acidification, the ocean becoming more acidic, to the water temperature rising and a slew of other problems, but marine debris is something that we can do something about,” said Nir Barnea, a manager in the marine debris program for the National Oceanic and Atmospheric Administration, the federal agency that distributed the stimulus money. “This project, for example, we can complete the removal of just about all nets in Puget Sound.”

The project follows earlier net removal efforts in Alaska, Hawaii and other states.

In Puget Sound, the removal of the nets follows major changes; fish populations have declined, restrictions have increased and the fishing industry is a small fraction of what it was in the 1970s and 1980s.

Because the fishery is much smaller, Ms. Broadhurst said, the number of nets that will be lost in the future “is going to be really minimal as compared with that historic high.”

Her group has spent years surveying the sound to identify lost nets for removal. Jeff June, a field manager for the project, said the group has a database containing 584 locations of lost nets, with some locations containing several nets. Divers have found skeletons of harbor seals and porpoises tangled in nets; more often they encounter countless crabs, starfish and small fish trapped in the monofilament, which became more common in the 1970s. Those nets do not degrade the way older nets of hemp and other materials do.

When the nets are lost, said Mr. Barnea of the federal agency, “they keep on doing what they were designed to do.”

Steve Sigo owns the boat that the Nisqually tribe’s dive team has been using for its recent dives off Point Jefferson on the Kitsap Peninsula, across Puget Sound from Shilshole Bay in Seattle. Mr. Sigo, a member of the Squaxin Island tribe, said if he were not helping to remove nets he would probably be fishing for salmon, particularly given the strong runs reported this year. But Mr. Sigo, joined by his 12-year-old son, Andrew, said he planned to stick with the net-removal project as long as he could.

“My first year was ’74 fishing commercially, and so I’ve lost nets,” Mr. Sigo said. “I’ve fished up in this area, fished the San Juans, fished everything, so it’s kind of nice to be on the cleanup end of it instead of the losing-the-net end of it. It’s kind of neat because it’s kind of full circle to get this opportunity.”