Clinton casino parking lot at center of federal investigation now sits empty
CLINTON — A parking lot next to an Indian casino here was once at the center of what a federal agency claims was a lucrative scheme to skim gaming revenues from the Cheyenne and Arapaho Tribes.
It now sits empty, barricaded by concrete blocks.
Tom Fox, the owner of the lot, said he blocked off access to the parking spaces after the tribes stopped making lease payments to him. He insists his more than $1 million-deal to lease the parking lot to the tribes was all above board.
The National Indian Gaming Commission investigated and reported the Cheyenne and Arapaho Tribes' casino paid more than $1.2 million over 18 months to lease the two-acre parking lot adjacent to the Lucky Star Casino — claiming the deal was about 10 times the fair market value of the land.
Fox said he charged the tribes that much to lease the Clinton parking lot because its prime parking spaces were favored by older casino patrons. The parking lot even increased the amount of gaming revenue the tribe took in, he said.
"I know the lease payments sound like they are excessive, but the fact is, $50,000 a month compared to what they (the Cheyenne and Arapahos) were making is trivial," Fox said.
Gaming machine vendors typically make similar lease arrangements with Indian tribes that include a percentage of gaming revenues, Fox said.
The lucrative parking lot contract was in "clear violation" of federal Indian gaming laws meant to protect gaming as a means of generating revenue for Indian tribes, Jonodev O. Chaudhuri, National Indian Gaming Commission chairman, said in a statement.
Fox said he would have been willing to negotiate with the Cheyenne and Arapaho to purchase the land, but the tribes never approached him.
In the aftermath of the commission's action, Fox said he was forced to resign from his job with the Red Rock-based Otoe-Missouria Tribe in order to avoid losing his gaming license.
Fox purchased the parking lot in 2012, but Brian Foster, former director of gaming for the Cheyenne and Arapaho Tribes, provided a $150,000 down payment on the land drawn from his personal bank account, records show.
In an email, Foster allegedly laid out the scheme to purchase the parking lot, as well as long-term plans for the land that would "keep the (National Indian Gaming Commission) out of the picture," according to an email quoted in the tribes' settlement agreement.
Foster said he never personally benefited from the deal and that he provided money for the down payment in order to protect the land from being purchased by another party who might not have been willing to lease it to the tribe.
'Never made a penny'
"I never made a penny off that land," Foster said.
Foster negotiated a deal in 2012 to lease the parking lot adjacent to the tribes' Lucky Star Casino in Clinton for $25,000 per month plus 1 percent of the gross gaming revenue from the casino, according to the a settlement agreement the commission struck with the Cheyenne and Arapaho.
"Parking is very important to a casino," Foster said.
In total, the tribes paid more than $50,000 a month to lease the small parcel of land.
In a statement, Cheyenne and Arapaho Gov. Eddie Hamilton said the tribes cooperated with the commission's inquiry into the parking lot lease.
"As we move forward, we will look to hold those people accountable who have squandered away our tribal resources for their own personal gain," Hamilton said in a statement. "My administration is dedicated to continuing these efforts. In doing so, we hope to strengthen our tribes and provide a better future for our tribal members."