Milwaukee Journal Sentinel, The: SPIVAK & BICE; Offshore casino is adrift in troubled waters

It's official: The Dream Catcher is a nightmare for the Lac du Flambeau tribe.

After blowing some $3 million on the casino boat that had as much of a chance of setting sail off the coast of Cancun as the typical player does of winning the World Series of Poker, leadership of the Vilas County tribe is getting ready to abandon the project.

Just the other day, Tribal President Victoria Doud told a handful of tribal members at a public meeting that the deal is pretty much dead in the water, a statement she has since posted on the tribe's official Web site ( www.lacduflambeautribe.com/LDF_Stories/ Story_1.htm).

"We have informed the partners that we will not be putting any more money in this venture and told them that if they had faith in the project, then they wouldn't hesitate to contribute," Doud wrote. "We have given them a timeline to respond, and if they don't meet our demands, we will sell the boat.

"We can get $3 million for it. If it's sold at that point, we may make a small profit of $200,000 or so."

Funny thing, though. Tribal leaders didn't tell their Chicagoland partners that the deal was sinking. That was our job.

"Wow," said Stephen Panzarella, who owns a third of Cancun Cruises, the firm that with the tribe owns the Dream Catcher, a 155- foot vessel. "It's not true."

Actually, it is. Just read the tribal president's statement on the Web.

"No kidding how recent was that?" Panzarella said. But he did say that the sale of the boat was not out of the question.

"We have had offers on it solid offers," he said. Saying he didn't have time for further chit-chat, he concluded, "I can't see why she would say that."

The 3,200-member tribe, which has been angling for an off- reservation casino for years, joined forces with a small group of Chicago-area businessmen in buying the boat in 2004. The original plan was to fix up the vessel, install a couple hundred slot machines and assorted table games and offer cruises off the coast of Mexico ASAP.

But it's been nothing but choppy waters for the tribe.

First, the boat needed a substantial amount of work. Then, we disclosed that one of the partners, Alexander Salerno, represented a number of the most notorious members of the Chicago Outfit and that his father was doing hard time for a mob hit.

Doud responded by dismissing the importance of the revelations, saying the casino boat was "extremely close" to getting done.

"We have done the due diligence' required to ensure an honest and upright operation," Doud said in a February statement. "The Tribal government has 100 percent faith in this venture."

How times have changed in just four months.

Carol Brown, the tribe's lawyer, admitted that it has been anything but smooth sailing for the proposed floating casino.

"Obviously, the more the delay," she said Wednesday, "the more our hopes dwindle."

Brown emphasized that both the tribe and its partners had been nave about how quickly they could secure the necessary permits to launch a first-of-its-kind gambling venture docked in Cancun but operating outside Mexico's jurisdiction.

While waiting month after month for the foreign government to act, the tribe continues to underwrite the cost of maintaining and renovating the vessel, while their non-Indian partners have not contributed any cash. Leaders of the tribe decided to draw the line and give the partners a deadline after using up nearly half of a $1.2 million line of credit it obtained to help pay for the casino boat.

She said the tribe is in talks with the partners about getting them to infuse the project with some money.

"We're exercising all of our options to preserve our asset," Brown said. "We have a pretty strong argument that fiduciary responsibility requires sale of our asset."

The only thing is and Brown acknowledged this the tribe can't sell the boat by itself. The vessel is owned by the corporation, not the Lac du Flambeau, which holds a mere minority stake in Cancun Cruises.

What's more, the boat has been assessed at a little more than $3 million. That means if the tribe doesn't shut off the cash spigot soon, it will have spent more on the boat than it's worth. In other words, the deal will soon be under water.

Some tribal dissidents are doing their version of "I told you so," warning that tribal leaders could pay a political price for the treasures they have sunk in this gambling vessel that has yet to earn a nickel.

"The captain," tribal gadfly Mike Chosa said, "might be going down with the ship."

As for Henry St. Germaine, the ex-tribal president who cut the deal in the first place, well, he admits things didn't work out the way he had planned. Did he have a time set for when sun-tanned gamblers would be flocking to the boat, playing dice and helping the tribal economy?

"For sure," St. Germaine said, "I thought we'd be there now."

------------

Cary Spivak and Dan Bice can be contacted by phone at (414) 223- 5468 or e-mail at sb@journalsentinel.com.

Copyright 2005 Journal Sentinel Inc. Note: This notice does not apply to those news items already copyrighted and received through wire services or other media
Provided by ProQuest Information and Learning Company. All rights Reserved.