Harboring a Land Bonanza

Do union members know their boss stands to benefit from turning their pension fund investment into a gambling casino?

San Francisco Plumbers union boss Larry Mazzola's quest to turn a concert venue into an Indian gambling casino hit a significant roadblock last week as supervisors in Lake County unanimously adopted a resolution opposing the idea.

"I packed that hall," said Supervisor Rob Brown, sponsor of the resolution, referring to the 150 or so locals who showed up in support of the resolution.

The measure "demonstrates there's a lack of local governmental support for that to be a casino site," added Cheryl Schmit, director of Stand Up for California, an anti-casino group. "That would make it difficult to get gubernatorial concurrence for a casino."

The setback could be as much personal as professional for Mazzola. Lake County property records show Mazzola and his wife own 228 acres near Konocti Harbor Resort. A 56-acre parcel and a 13-acre parcel owned by a trust that Mazzola and his wife control form a continuous piece of land adjoining the Konocti Harbor Resort land. A parcel held under the name Vera Mazzola also adjoins the resort. The Mazzolas own 160 acres of hilly grassland a mile or so to the west of the resort. These properties could become much more valuable if ever absorbed into the pseudo-Indian reservation established as part of Mazzola's proposed gambling deal.

Mazzola, a well-known and powerful Democrat, has been working to arrange a gambling pact between an unnamed group of Indians, a Las Vegas casino company, and a real estate investment firm run by powerful lobbyist Darius Anderson. The idea is to make a profitable gambling casino out of now money-losing Konocti Harbor Resort, a concert venue 2 1/2 hours north of here owned by Plumbers and Pipefitters Union Local 38, which Mazzola runs.

The backing by Anderson, widely considered an important California rainmaker, seemed to have given the gambling scheme real heft. In this vein Mazzola told his union's members last month that a deal might get preliminary approval as soon as Feb. 16. Mazzola, who sits as head of the San Francisco Labor Council and president of the S.F. Airport Commission, didn't return a voice mail message requesting comment.

But Gov. Arnold Schwarzenegger has stated he views skeptically any Indian gaming deal on land not part of an already existing Indian reservation, especially if local area residents oppose a casino project.

And Democratic members of Congress, whose help might be necessary to bring a gambling deal to fruition, have now made ethical propriety a priority. And forcing a gambling deal upon an unwilling Lake County for the benefit of a San Francisco Democratic power broker doesn't fit most people's idea of good ethics.

For the sake of these politicos' own integrity, and for north state residents who'd rather not see Mazzola's and his union's property turned into a gambling, condominium, tract-home complex, we can hope Lake County's wishes carry the day.

While a Lake County Indian gambling deal might theoretically benefit Mazzola, the real estate investor, it would be a certain boon to Mazzola, the troubled union boss.

As reported in this column earlier, a Konocti Harbor Resort gambling deal might stop federal attorneys from pursuing allegations that Mazzola helped improperly divert $36 million from employee benefit trust funds of the union. He used the money to support the money-losing Konocti Harbor Resort, according to a 2004 Labor Department lawsuit.

If Mazzola can somehow get the Konocti land recognized as an Indian reservation with a casino on it, it might be possible to sell the resort at a high enough price to repay the union benefit trusts, possibly satisfying Labor Department demands.

According to an appraisal report by HVS International, which was submitted to the U.S. Department of Labor attorney who is handling the funds diversion lawsuit against Mazzola, the resort land's value would increase from $8.5 million to $11 million if it became possible to build an Indian casino on the site.

And there's the rub — obtaining such approval means jumping through myriad regulatory hoops.

Such a deal might be made possible if the Bureau of Indian Affairs were to issue a decision allowing an Indian tribe to turn the Konocti site into federally recognized tribal homelands.

But such a fix might also require the cooperation of a person in Congress such as Barbara Boxer, Nancy Pelosi, or George Miller, a type of favor-dealing the Democratic Party has promised to banish from Washington.

I called each of these politicians' offices, and learned of no such legislation in the works.

"Since the Abramoff scandal, politicians don't want to give the impression they're caving to lobbyists and interests like this," said Lake County Supervisor Brown. "With our Board saying, my God, we don't want this, it makes it hard for them to go against the governor's proclamation of not building casinos without community support."

Mazzola, however, apparently believes a gambling deal involving Darius Anderson's Kenwood Investments is imminent.

On Jan. 22 Mazzola wrote a letter to union members aimed at responding to my Jan. 17 column, "Let the Gaming Begin," in which I outlined the politically linked gambling proposal, its relationship to the Labor Department lawsuit, and how such a deal might require significant influence trading in Washington.

Mazzola refers to the column as a "fantasy concocted in the mind of the writer," and said he had asked his attorney to review the article.

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