Shereen Siewert

Gannett Wisconsin Media Investigative Team

A proposed partnership between Hard Rock International and the impoverished Menominee Tribe of Wisconsin would funnel millions in profits back to Florida if Gov. Scott Walker approves the plan to open an $808 million casino complex in Kenosha.

Details of the agreement between the Menominee and Hard Rock — including the percentage of profits that the Florida Seminoles tribe would receive — have not been made public. The Menominee tribe is awaiting final approval for the casino from Gov. Scott Walker, who has until Feb. 19 to announce a decision. The partnership would mark the first time any casino project in Wisconsin would be managed by an out-of-state tribe.

"The question becomes, do we really want that revenue from the casino...being sent to Florida?" asked Richard Monette, a University of Wisconsin-Madison law professor. "That percentage becomes key, and those factors should be public."

Hard Rock would likely receive 30 to 35 percent of the Kenosha casino's total revenue and as much as 40 percent, predicted Monette, who is director of the Great Lakes Indian Law Center. Previous arrangements with potential developers called for the Menominee to share at least 25 percent of its gambling revenue.

Cullen Werwie, a spokesman for the Wisconsin Department of the Administration, said such details of tribal gaming compacts are not a matter of public record.

Michael Beightol, a spokesman for the Menominee, called the revenue percentage a "moving target" that will decrease in increments after Hard Rock is repaid its initial $800 million investment into the project.

"In a project of this magnitude, they should absolutely be reimbursed for that investment, and they should make a profit along the way," Beightol said.

Hard Rock, the multi-billion dollar entertainment and gaming organization owned since 2007 by the Seminole Tribe of Florida, announced last October its partnership with the Menominee tribe. The partnership instantly gave the Wisconsin casino proposal added credibility and visibility.

Missteps and partnerships

Monette called the decision by the Menominee to bring in Hard Rock a "misstep," complicating the decision for Walker by adding an out-of-state partner to share in the profits. A better solution, he said, would have involved a partnership with the Potawatomi and other tribes to keep the casino profits in Wisconsin.

Beightol, who is not a member of any tribe, said the Menominee tried to form a partnership with the Potawatomi, but those efforts were rebuffed.

"The Potawatomi turned their backs not only on income for members of their own tribe, but they turned their backs on one of the poorest tribes in the state," Beightol said.

George Ermert, spokesman for the Potawatomi, acknowledged that a partnership was considered several times, but each time Potawatomi officials were uncomfortable with the terms proposed by the Menominee.

"The issue was brought up. But every time the offer was made it came with a catch," Ermert said.

In Wisconsin, tribal gaming is a $1 billion industry; more than $50 million in gaming revenue goes into the state's coffers each year. Whether the Kenosha project would turn into a huge windfall for the state is a matter of debate, and some tribes have been vocal in their opposition.

The Forest County Potawatomi, amid fears of job and profit losses at their Milwaukee casino, are withholding their annual $25 million payment to the state.

The road to riches

Any management deal between the Menominee and the Seminoles will supplement what has already become a lucrative gaming business for the Florida tribe. The Seminoles operate seven casinos in Florida, including two under the Hard Rock name. Figures reported to Florida gaming officials show the Seminoles were on pace to take in $2.1 billion this fiscal year.

Public filings from the National Indian Gaming Commission, one of two organizations overseeing the gaming industry, show the Seminole tribe has paid more than $12 million in fines handed down by the federal government since 1997 — more than any other tribe in the nation.

For those reasons and others, Ermert said he has serious concerns about the Seminoles being involved in Wisconsin's tribal gaming industry, including the tribe's leader, Chairman James Edward Billie.

"There are some serious issues with leadership," Ermert said. "We're talking about FBI investigations, leaders who have been indicted on charges of conspiracy, embezzlement, money laundering. James Billie himself was tossed from office because of the things he did."

Beightol said although Hard Rock is owned by the Seminoles, there is a sharp separation between corporate operations and tribal politics.

"No one ever points a finger at Hard Rock," Beightol said. "This is one of the most trusted brands globally. Hard Rock is a highly respected organization."

As for Billie, many Native Americans don't view the Seminole leader as a "tax-delinquent criminal," but as a freedom fighter who put himself on the line to ensure a better future for tribes nationwide, said Monette.

"I'm surprised the Potawatomi would invoke the non-Native vision of the Seminoles," Monette said. "They know the Seminoles and Chairman Billie have been fighting the good fight."

A living legend

The current Seminole leader, 70-year-old James Billie, has a long, complicated history with the tribe and a storied career.

Billie served in the Vietnam War, was a licensed cosmetologist, wrestled alligators for money and in 1999 was nominated for a Grammy Award. Also in 1999, Billie was named a "living legend" at the Native American Music Awards, according to the organization's website.

First elected in 1979, Billie changed the lives of American Indians across the country by opening the first high-stakes bingo operation on the Seminoles' Hollywood reservation. In 1981, court documents show, the tribe won a landmark court battle against the state of Florida to keep the bingo hall open.

Over the years, the tribal budget grew from $500,000 in 1979 to more than $650 million in 2001, the year Billie left office. But during that 22-year span, the Seminoles evolved into a $1 billion-a-year empire.

The Seminoles did not acquire Hard Rock until 2007, but Billie first struck a deal to develop two Hard Rock casinos in 2000. That deal fell apart when Billie became the target of a federal grand jury investigation over allegations of embezzlement and theft involving federal grant money,according to a 2001 St. Petersburg Times report. He was not indicted in connection with those allegations.

Shortly after the federal embezzlement investigation launched, Billie was impeached by the Seminoles over allegations of sexual misconduct, according to the report. Then in 2011, he was re-elected by a large margin.

During Billie's absence, the tribe's coffers grew bigger, but so did their headaches. The tribe made headlines for years; the biggest came in the wake of a 2010 investigation that revealed another tribal leader, David Cypress, was part of a $25 million double-billing scheme, according to court documents. The investigation resulted in a $500,000 fine to the national gaming commission.

Monette compared the financial difficulties of the Seminole leaders to that of anyone who is faced with newfound wealth including lottery winners and professional athletes.

"It doesn't have to be maliciously criminal," Monette said. "Every year you hear about some young person who gets this big check, goes out and buys a Corvette, and crashes it and dies. They're not all saints, but there are a lot of reasons these things happen."

Background checks

Wisconsin law requires all business entities that have a vested interest in gaming operations to undergo financial and criminal background checks as part of the casino licensing approval process, Werwie said. That process is underway and cannot be waived.

Background checks on businesses and casino employees are also performed at the federal level when third-party management agreements are proposed, said Eric Shepard, acting general counsel for the National Indian Gaming Commission. Shepard said there is no pending enforcement action against the Seminole Tribe of Florida, and the tribe complied fully in response to past violations.

As part of the governor'sapproval process, Walker asked Department of Administration Secretary Mike Huebsch to conduct an independent financial and economic analysis of the proposed Kenosha casino. Werwie said Huebsch and the department are "continuing to work to find a win-win scenario."

Monette said the real question for Walker shouldn't be about the character of the Seminoles, but whether the Kenosha casinoproposal is ultimately in Wisconsin's best interest.

"The revenue issue, whether we want revenue going the state of Florida, is the real argument," Monette said. "You can make that argument without bashing the Seminoles."

Shereen Siewert, 715-845-0773 or ssiewert@gannett.com. On Twitter as @ShererenSiewert.

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Status of Kenosha casino unclear

In 2013, the federal government approved plans by the Menominee tribe to build a new casino at the shuttered dog track in Kenosha. Wisconsin Gov. Scott Walker has finalauthority to approve or deny the Menominee tribe's casino application. Walker has not said which way he is leaning or when he will make his decision. The Kenosha casino may include 3,100 slot machines, 75 blackjack tables, a 5,000-square-foot entertainment venue, a 400-room hotel, a conference center and nearly 50,000-square-feet of retail space.