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Was McCain A Key Player In Point Molate Casino?

By Richard Brenneman
Thursday October 02, 2008 - 09:18:00 AM

Is Republican presidential nominee John McCain the key player in the behind-the-scenes maneuvers that may turn the East Bay into California’s first urban gambling resort? 

Sunday’s New York Times featured a major investigation of the ties of the Arizona senator and his staff to the gambling industry, closing with a look at his possible role in the controversial billion-dollar casino planned for Richmond’s Point Molate. 

Initially opposed to the spread of tribal casinos into cities, McCain changed his position after the Guidiville Rancheria Pomo band briefly hired Wes Gullet, a Phoenix-based lobbyist, the Times reported. 

But James D. Levine, the casino project’s Berkeley developer, said late Wednesday that “any implication that Sen. McCain intervened to help is certainly not true.” He said no one from the Times contacted him. 

Gullet had met his spouse while working on McCain’s staff, and had managed the Arizonan’s 1992 Senate run, was a ranking aide in his unsuccessful 2000 presidential try, and is currently serving as deputy campaign manager for the senator’s presidential run, the paper reported. 

In 2005, McCain had led the opposition to granting the Lytton Band of Pomos a permit to conduct full-scale Las Vegas-style gambling operations at their Casino San Pablo—something not cited in the Times story but reported in these pages at the time. 

The Lyttons had bought a struggling card-room operation and sought to turn it into a 2,500-slot-machine full-scale gambling resort, but McCain charged the tribe had acquired the casino “the wrong way” and vowed to fight the federal law passed in 2000 that would have granted the tribe an exemption from federal gambling statutes. 

Six months after McCain announced his opposition, the tribe installed 500 slot-like high-speed bingo machines—legal under federal law—and abandoned its plans for a full-scale gambling palace with the still-forbidden slots and table games of a Las Vegas casino. 

While McCain was stifling one tribe’s plans, he was boosting those of the Guidivilles, according to the Times. 

Levine, a Berkeley entrepreneur who made his fortune in the toxic-waste- cleanup business, had joined with the Guidivilles, enlisting the help of a powerful Republican who had close ties to both McCain and the Clinton wing of the Democrats. 

Former Maine governor and Clinton Secretary of Defense William S. Cohen became a partner in Levine’s Upstream Point Molate LLC. He was also the best man at McCain’s wedding in 1980, the Times reported. 

Point Molate was a U.S. Navy refueling station located on a stunning section of shoreline near the foot of the Richmond–San Rafael Bridge. And while the City of Richmond had bought the base for $1 under terms of the federal Base Closure and Realignment Act of 1988, cleanup is still underway under the supervision of the Navy and conducted by Levine’s former firm, LFR Inc. (for Levine Fricke Recon) of Emeryville. 

While Gullet told the Times he was hired to advise a tribal administrator on his congressional testimony, the newspaper reported that a lawyer for the Guidivilles said the tribe hired McCain’s ally and sometime staffer Gullet “to insure that Mr. McCain’s overhaul of the Indian gambling laws did not harm the tribe.” 

Levine said “we did hire Mr. Gullet to help us in meetings with the staff” while they were developing the new set of regulations. He was hired, Levine said, because “the Guidivilles had followed the established process” in applying for the reservation status “and it was disconcerting to hear that changes were being contemplated” after the process was already underway. 

Even with the new regulations, he said, the Guidivilles qualified, just as they had under the old rules. 

Levine said he never met with McCain at any point during the application process and that he believed “both Sen. McCain and Sen. Obama would approve” of the environmental and economic benefits the casino would bring to the community. 

The Arizona senator introduced his legislation in November 2005, though it eventually failed to pass. 

But, the Times reported, McCain then pushed Department of the Interior staff—who oversee tribal affairs, including the approval of new tribal reservations created for gambling operations—to rewrite the rules on casinos. 

Former Assistant Secretary of Indian Affairs Carl Artman told the Times, “Senator McCain made it clear it was one of his top priorities.” After the new guidelines were in place, the department denied the casino applications of 11 tribes—but not that of the Guidivilles. 

And while McCain’s efforts were successful in derailing the full scope of the Lyttons’ plans for San Pablo, installation of the fast-paced bingo machines proved a bonanza for both the tribe and the city, thanks to a Master Services Agreement between the city and the tribe. 

While San Pablo had been struggling financially as the poorest of Contra Costa County’s cities, and officials had been debating dissolving the city’s incorporation and handing the reins of government over to the county, the revenues from the machines sent the city’s share of cash flowing. 

While the city reported receiving $2.96 million in business license revenues in fiscal year 2004-05, the installation of the machines in the second month of the following fiscal year sent revenues up to $7.42 million for 2005-06, $9.5 million for 2006-07 and an estimated $9.95 million for the year just ended. 

The casino now accounts for more than half the city’s general fund revenue, and a town once facing bankruptcy and dissolution has been able to move forward with a wide range of public services, including $4 million in its current budget for a first-time homebuyer program. 

It was the promise of just such benefits—along with jobs for the city’s struggling African-American community—that led Richmond City Councilmembers to endorse two proposed casinos, Levine’s Point Molate and the Sugar Bowl in unincorporated North Richmond, a project of the Scotts Valley Pomos backed by Florida sports and casino entrepreneur Alan Ginsburg. 

A municipal services agreement with the Sugar Bowl developers was ruled invalid earlier this month by a Contra Costa County Superior Court judge, who said that the city violated state law in approving the accord without first conducting an environmental impact review. 

The 20-year pact would give the city $335 million to provide road improvements and emergency services for the casino. 

A separate environmental review under federal law is already underway for the Sugar Bowl, while Levine and the Guidivilles are preparing both state and federal environmental reviews for the Point Molate project. 

Richmond Mayor Gayle McLaughlin said Tuesday that the environmental reports on Point Molate weren’t going to be ready until December. 

“None of this surprises me,” said the mayor when asked about McCain’s purported role in the project. “The way the dots connect up is very interesting. These back-door dealings between major politicians, developers and lobbyists, at the expense of our communities, are reprehensible.” 

Robert Cheasty, former mayor of Albany and activist with Citizens for Eastshore Parks, said he hated to see this opportunity for public access to the shoreline sold off to the gambling industry. 

“Senator McCain has disgraced himself for his role in supporting bringing this corrupting influence to the San Francisco Bay Area and to Richmond, a city that needs a helping hand, not a demoralizing influence on its community,” he said. 

Marjie Mejia, chair of the Lyttons, did not return calls for comment, nor did Doug Elmets, the tribe’s Sacramento-based publicist. 

McLaughlin said she hopes that the city can find other uses for Molate than the two alternatives offered city councilmembers before the deal was signed—Levine’s casino plans or a counter-offer from Chevron. 

The Times article may have already produced one impact, according to the Native American gambling news blog at “McCain cancels Nevada visit after gambling story” ran the headline on a Tuesday entry at the site. Another cancellation for a scheduled Reno appearance came from George W. Bush, though he offered a replacement, Dick Cheney. 


McCain’s money 

The Arizona senator has raised nearly twice as much from the gambling industry as his Democratic challenger, raking in $260,025 to Barrack Obama’s $132,633, according to the website and reprinted by the Times. 

While reported that Obama had the larger share of tribal gambling contribution, accounting for $56,100 of his total compared to $5,000 for McCain, the Times reported that the Mashantucket Pequot Tribe gave McCain his second-largest donation from the gambling section. 

Seven of McCain’s top 10 gambling- sector donors are Nevada-based casino operators, with MGM Mirage at the top with $108,450. The other two tribal donors gave just $8,000 each, according to the Times. 

For both candidates, gambling donations were a small segment of total contributions, according to OpenSecrets. org. Retirees were McCain’s top contributors, with $23.5 million, compared to $23.2 million for Obama. 

Lawyers were at the top of Obama’s list, with $24.1 million, compared to the $7.96 million McCain got from them.