Wednesday, August 31, 2011

Scandal Continues to Plague Political and Lobbying Activities of Detroiters Bankrolling Shinnecock Casino Plans

For more than a decade, campaign contributions and lobbying fees doled out by Michael J. Malik, Sr. and his partners in the Ilitch Family are often attached to controversy, scandal, alleged corruption and illegal activities.  Consider that in 2010, Mrs. Michael Malik was forced to tell a Detroit-area Court that he had a consistent “pattern of bullying, intimidation and influence peddling.”

1st Campaign Contribution Controversy Verified in the Media: 
Governor under Fire for Accepting Malik’s Money
In 1998, an investigation by the Augusta Chronicle revealed then-South Carolina Governor David Beasley had accepted campaign contributions from Detroit casino interests, namely Michael Malik and Tom Celani, an earlier Malik gaming partner.  They had played significant roles in a fundraiser organized for the South Carolina Governor in Detroit. 

At the time, South Carolina had no legalized gambling and the Governor had taken a public pledge not to accept or be influenced by gambling money.  While Malik and Celani helped bankroll a 1996 campaign to approve gambling in Detroit and were by 1998 affiliated with gambling interests some of which they controlled, no casinos had yet been approved or built in Detroit.  It was not common consideration that Detroit money might be gambling money.

Clearly, the hope was that people in South Carolina would not realize that contributions raised in Detroit were directly from those heavily invested in or affiliated with gambling. (Beasley Donors Disputed; Augusta Chronicle; 8.03.98)

Reporters & Watchdogs Make Case for All-Star Congressional Influence Peddling
On the eve of Major League Baseball’s 2005 All-Star Game (Detroit), an AP reporter broke a story about a $5,000 per head fundraiser being held in Detroit during the All-Star events to benefit then-Congressman Richard Pombo.  He was chair of the congressional committee overseeing Indian matters.  (Pombo no All-Star in watchdog group’s eyes; Associated Press; 7.13.2005)

Hosts of the All-Star Game fundraiser for Pombo were Malik and Christopher Ilitch, CEO of Ilitch Holdings.  His parents are Detroit Tiger’s owner Michael Ilitch and Marian Ilitch, Malik’s partner who reportedly has bankrolled the Shinnecock Indian Nation’s efforts to win approvals needed to establish gaming on Long Island. Perhaps most controversial was the timing of events.  Less than 48 hours after the Malik/Ilitch All-Star fundraiser, Pombo had scheduled a congressional hearing with an agenda item that read “Status of Settling Recognized Tribes’ Land Claims in the state of New York.”

For several congressional election cycles, the Ilitch Family and Malik had collectively been among Pombo’s top tier of donors. They had hosted or participated (bundling) in fundraisers on his behalf and also were flying him around the U.S. in a private jet. All they had invested in Rep. Pombo had remained under the radar until the All-Star Game story broke.  The watchdog groups Common Cause and Citizens for Responsibility and Ethics in Washington (CREW) helped break the story and kept the controversy alive for the remainder of the 2006 elections. Congressman Pombo failed to win re-election.

Failed to Disclose $26,600 Campaign Contribution; Fined $6,500 in CA
In 2004, the year before the All-Star Game controversy, Barwest, a Malik/Ilitch casino affiliate bankrolling attempts to secure approvals of various Indian gaming proposals in Barstow, CA, had quietly contributed $26,600 to Pombo’s local GOP Central Committee.  Malik failed to report the Barwest contribution to California election officials.  California’s Fair Political Practices Commission (FPPC) became aware of the possible violations of that state’s political reform laws and an investigation got underway.  In 2006, the FPPC found Malik’s Barwest violated state election law on two counts and fined Malik $6,500. (Press Release; California Fair Political Practices Commission; 10.24.2006)

Career Ending All-Star Scandals; Congressional Investigations
In 2003, Barbara Bonfiglio, the controversial Washington D.C. attorney/lobbyist/PAC treasurer, signed casino syndicator Michael Malik‘s MJM Enterprises & Development as a lobbying client of her firm Williams & Jensen. Malik paid Bonfiglio $220,000 between 2003 & 2005. Malik had matters before committees chaired by Reps. Richard Pombo, Don Young and Jerry Lewis -- Bonfiglio served as PAC treasurer/advisor to these members' leadership committees. In the midst of various GOP scandals including that involving House Speaker Tom DeLay, TPM Muckracker reported that Bonfiglio abruptly left Williams & Jensen in March 2006 and resigned as treasurer/advisor to various PACs and fundraising committees for Sen. Rick Santorum and Reps. Tom DeLay, Richard PomboJerry Lewis, Don Young and others. She was subpoenaed at least once, in 2004, in connection with the DeLay corruption scandals. Malik distanced himself and affiliates from Bonfiglio but continued to invest heavily in her friends Pombo (Natural Resources/Native America Affairs), Young (Transportation) & Lewis (Appropriation).

Continued Affiliation with Controversial D.C. Lobbyists
When Malik left the Williams & Jensen lobbying firm, he took his business to Potomac Partners and lobbyist Richard Alcalde.  Alcalde particularly had a close relationship with Congressman Jerry Lewis, whose congressional district included the California desert community of Barstow, one of the communities where Malik/Ilitch have tried to build a casino.  At that time, Lewis was also the chair of the House Appropriations Committee.  Malik/Ilitch were hoping to get federal funds to support casino-related projects in Port Huron, Michigan, and other funds to support business ventures Malik pursues with the Bay Mills Indian Community.  Again, controversy ensued when the Washington Post reported that D.C. based Potomac Partners (Alcalde) was paying Lewis’ Las Vegas-based step-daughter to be a "strategic partner." 

Further, nearly all of Malik’s other affiliates and Indian partners had contracts with Wheat Government Relations, the lobbying firm of former Congressman Alan Wheat.  But in truth Wheat was funneling the funds to the Kessler & Associates (lobbyists Richard S. Kessler, Billy Lee Evans).  With the funds to Kessler funneled through Wheat, Kessler could avoid publicly disclosing the firm was a lobbying for Malik, Malik’s affiliates and partners, and “Gaming” or “Native American” interests.  In 2004 alone, Malik/Wheat paid Kessler almost $300,000 using that scheme. In all Kessler was paid nearly $600,000. The following circumstances unfolded after the scheme filtering payments to Kessler & Associates was exposed: the Kessler firm submit revised disclosure documents recategorizing the Wheat client work as involving issues of Indian/Native American Affairs or Gaming, Gambling & Casinos; Billy Lee Evans ceased his lobbying career in 2007; and in 2008, Kessler & Associates was disbanded.  Richard Kessler formed Hamilton Advisors in 2008 and has lobbied on behalf of one or two clients each year since.  The Wheat firm has continued to lobby on behalf of various Malik/Ilitch affiliates and partners.

Failed To Disclose Another 17 CA Contributions Totaling $26,500; Fined Again!
In 2006, Malik/Ilitch believed they were close to getting a gaming Compact approved in California. Governor Schwarzenegger had negotiated an amended Compact with the Los Coyotes Band of Indians, the tribe Malik/Ilitch bankrolled in California. That Compact was pending ratification by the State’s legislature.  Malik/Ilitch and their affiliates contributed heavily to those who would sit on the committees that would make the initial recommendation to ratify.  At the same time, California’s FPPC was wrapping up its investigation into the 2004 failure by Malik/Barwest to disclose the $26,600 to Pombo’s GOP Central Committee.  Malik was spending thousands to influence legislators in 2006 and despite the experience of the previous 2-year FPPC investigation and a significant fine, when he filed his official year-end 2006 major donor campaign disclosure reports, he indicated $0.00 in campaign contributions during the second half of 2006 when, in fact, he had actually given 17 lawmakers a total of $26,500.  Another FPPC investigation ensued and in 2009 the FPPC found Malik had violated California’s campaign reform laws in 2006 and this time fined $4,000. (Press Release; FPPC; 2.19.2009)

Malik’s NY Contributions Bring Controversy; NY Candidates Return Funds
During the 2010 campaign cycle Malik/Ilitch again focused their political contributions toward New York and candidates who might influence decisions that would allow them to expand gaming opportunities with the Shinnecock Indian Nation. Notably efforts to win approval to build a casino and other commercial development near the Belmont Park & Race Track on Long Island. They gave the maximum to New York’s U.S. Senators Charles Schumer and Kirsten Gillibrand. They sought to influence county and state lawmakers and Malik contributed to the campaign of now Governor Andrew Cuomo.  Contributions he made in New York races for the House of Representatives and State Senate became campaign liabilities.  News Day started reporting on the controversy surrounding Malik.  Several candidates including State Senators Jeff Klein and Craig Johnson reported returning Malik’s contributions. (Sens. Johnson, Klein to return Malik contributions; Daily News; 10.13.2010) Congressman Tim Bishop said he would return the funds too.


Nearly $8 Million to Influence Lawmakers; Bordering on Unethical and Breaking Laws; and for the Purpose of Advancing Gaming Plans Fronted by Native Americans
Throughout the first decade of the 21st Century, Malik/Ilitch and their affiliates have paid lobbyists more than $6,500,000 dollars and funneled more than $1,200,000 to politicians almost exclusively for the purposes of influencing matters of gambling, Native American affairs and transportation appropriations related to, as of yet unapproved, casino development projects they have pursued in three states (Bay Mills Indian Community – Port Huron, MI; Los Coyotes Band of Indians – Barstow, CA; Shinnecock Indian Nation – Long Island, NY).  Allegations of corruption and influence peddling and findings of illegal activity swirl around these Detroit casino syndicators and those they touch. And consider the possibilities that there are other investors behind the dozens of Malik/Ilitch gaming affiliates.  Who are they? What are their histories? Who are they contributing to or lobbying? What is their influence?

Reference Sources:
Search D.C. Lobbyists, Lobbying Firms, Lobbying Clients at OpenSecrets.org
Search Donors to Federal Campaigns Committees at OpenSecrets.org

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Ilitch has backed loosing sports teams and pizza, but casinos in Detroit? Forbes.com 10.09.06 ● Marian Ilitch #1 on "25 Most Powerful People" to Watch 2006” global gaming business o1.oo.o5 ● My Kingdom for a Casino Forbes 05.08.06 ● Big Lagoon’s casino dream awakens north coast journal 07.28.05 ● Shinnecocks launch legal claim to Hamptons land newsday.com 06.16.05 ● Ilitch Plans to Expand Casino Empire RGTonline.com 07.05.05 ● Ilitch outbids partners MichiganDaily.com 04.14.05 ● Ilitch enmeshed in NY casino dispute detnews.com 03.20.05 ● Marian Ilitch, high roller freep.com 03.20.05 ● MGM Mirage to Decide on Offer for Casino in Detroit rgtonline.com 04.16.05 ● Secret deal for MotorCity alleged freep.com 02.15.05 ● Los Coyotes get new developer desertdispatch.com 02.08.05 Detroit casino figure to finance Barstow project LasVegasSun.com 07.07.03 ● Indian Band trying to put casino in Barstow signonSanDiego.com 06.04.03 Pizza matriarch takes on casino roles detnews.com 10.23.02 ● Vanderbilt gets short straw in negotiations for a casino Lansing Journal 10.06.02 ● Indians aim to drive family from tribe in vicious dispute san diego union tribune 04.09.00 ●Malik owns 2000 Michigan Quarter Horse of the Year Michigan.gov 01.01.00 ● Detroit Team to run Michigan’s newest Indian casino detnews.com 05.23.99 Tiger ties tangle Marian Ilitch detnews.com 04.29.99 ● Three investors must sell their Detroit casino interests gamblingmagazine.com 04.25.99 ● Partners’ cash revived election; They say money was crucial to Prop-E detnews.com 04.25.99 Investors have troubled histories las vegas review journal 04.27.99 ● Investor served probation for domestic assault on 12 year old boy detnews.com 04.25.99 Can a pair win a jackpot?: local men hope to... crainsdetroit.com 03.17.97

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