Jackpot

How four tiny Indian tribes, with help from powerful gambling interests, are trying to transform the Bay Area into a slot machine Mecca

But in practical terms, the provision is toothless. Since Ginsburg's and Levine's Pomo tribes don't need the governor to concur if and when they get federal approval to acquire casino land, the provision doesn't apply to them anyway.


All of which helps explain why someone like Don Arnold, the 55-year-old retired BART operator who is chairman of the Scott's Valley Band of Pomo, has become as sought-after as a millionaire at a charity picnic. His tribe maintains an office near the Lake County town of Kelseyville, with 11 staffers and an official annual budget of $362,000 that he says is heavily supplemented by Ginsburg. The tribe's dream is to have a casino up and running in unincorporated North Richmond, just up the road from San Pablo, in 2007.

"I've been wined and dined by everybody south of the Pecos River," jokes the self-proclaimed "cement Indian," who grew up in San Francisco and went to Mission High School with rocker Carlos Santana. Arnold hooked up with Ginsburg in the spring of 2003 after one of the Florida real estate tycoon's emissaries approached him at a Native American conference in San Diego. His tribe had come within a whisker of being wooed by an East Coast investor (whom Arnold won't identify) a few months earlier, but felt cheated after finding a "development fee" buried in the final contract that, had the deal been signed, would have cost the tribe millions of dollars. "Let's be honest," says Arnold. "A lot of tribes have been taken in by promises, but we don't operate that way." He politely declines to discuss even the general parameters of the tribe's deal with Ginsburg, except to say that Ginsburg "is giving us a fair shake."

Don Arnold, chairman of the Scott's Valley Band of 
Pomo. His tribe's casino ambitions are underwritten by 
Florida investor Alan Ginsburg.
Paolo Vescia
Don Arnold, chairman of the Scott's Valley Band of Pomo. His tribe's casino ambitions are underwritten by Florida investor Alan Ginsburg.
A sign beckons gamblers to the San Pablo card club, 
where the Lyttons want to open a casino.
Paolo Vescia
A sign beckons gamblers to the San Pablo card club, where the Lyttons want to open a casino.

The Scott's Valley tribe wasn't Ginsburg's first Bay Area casino play, nor was it his last. In the spring of 2002, leaders of the Guidiville Band of Pomo (named after the Mr. Guidi who sold them their rancheria near Ukiah) were approached by intermediaries for an energy company allegedly interested in partnering with the tribe to build a power plant. The talks were fruitless. Among the promoters was Gary Fears, a longtime Ginsburg associate with a checkered history as it relates to Indian gaming. Fears soon returned to the tribe to pitch a casino deal.

In 1999, Fears had helped negotiate a casino contract with a Seminole tribe in Florida in which Ginsburg and other investors, who had put up less than $20 million, stood to make $200 million within 10 years. Federal regulators, apparently finding the contract a bit too generous for the investors, declared it illegal. After an internal audit, the tribe's leader, James Billie -- whom critics accused of being in Fears' pocket -- was removed from office. The embarrassment didn't stop there. Last year a confidential memo written by Paul Filzer, a lawyer for Ginsburg, was inadvertently faxed to the new Seminole leadership; it outlined a comprehensive plan to return the ousted Billie to office. The Seminoles quickly filed the memo in federal court, characterizing it as an attempt by Ginsburg and Fears to control the tribe for their own benefit.

When Fears started talking about a casino with the Guidivilles, he brought along an impressive companion in Kevin Gover, the former head of the Bureau of Indian Affairs in the Clinton administration. In July 2002 the tribe signed a casino development deal with Fears that it came to regret. Besides obligating the tribe to pay all of the casino's pre-development, construction, and start-up expenses, plus interest, during the first five years, the contract awarded Fears' company 75 percent of the casino's net revenue. But Fears didn't stay in the picture long. Court records show that in December 2002 the firm he set up to consummate the Guidiville deal assigned its interests to another entity, NGV Gaming, whose principal is Alan Ginsburg.

Whether Ginsburg ever gets to work with the Guidiville tribe may be up to a federal court. After concluding that the contract it signed with Fears (later handed off to Ginsburg) was void, the tribe earlier this year began working with Upstream's Jim Levine, the Emeryville investor partnered with Harrah's. Levine is trying to acquire casino land on the tribe's behalf along the Richmond shoreline at Point Molate. (He had earlier pursued a development deal with Arnold's Scott's Valley tribe before it cast its lot with Ginsburg.) In September, Ginsburg sued Upstream and Harrah's for $1 billion, claiming "tortious interference" of his company's contract with the Guidivilles, a claim Levine says is baseless: "We didn't interfere with anything they were doing. The Guidivilles notified us that their contract was void and that they were free to proceed with us." Ginsburg did not respond to interview requests.

Not to be outdone in lining up a heavy hitter for the Guidivilles' Point Molate project, Levine and Harrah's have acquired as their chief lobbyist former U.S. Defense Secretary William Cohen, who during his time as a U.S. senator from Maine served on the Senate Select Committee on Indian Affairs. "We believe in going with the highest quality in every aspect of our project, and that means using the highest-quality team to get there," Levine says.

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