ARLINGTON — The state Gambling Commission has not yet reviewed the contract for the Stillaguamish Tribe’s new $19 million loan for a casino.
That’s not unusual, because the state’s gambling compact with the tribe does not contain a deadline for the tribe to provide the contract.
But the commission’s investigative agents have some questions for the tribe. They want to know if the money will come from Marshall Bank of Minneapolis or The Marshall Group, an affiliated investment banking firm in the same city, if other banks involved in the loan and whether they are federally regulated and therefore exempt from the Gambling Commission’s licensing process.
If those questions remain unresolved after planned construction begins in about two months, it could create a regulatory dilemma. The casino could theoretically be built based on the tribe’s word, but no actual proof.
"Actually, it’s kind of an interesting situation," said Neal Nunamaker, the commission’s agent in charge of licensing investigations.
"If the money is coming from one or a consortium of bona fide banks, then there are no licenses or applications that need to go forth," he said. "We just want to understand the transactions."
In May, the tribe abandoned its first attempt to finance a casino after Nunamaker and his staff insisted that the main investors — trustees of a Detroit carpenters pension fund — submit to criminal background checks.
The tribe’s consultants unsuccessfully argued that the pension fund’s investment firm, AA Capital Lending of Chicago, should be the focus of the inquiry and not the individual investors.
This time around, after consulting with Gambling Commission staff, tribal leaders said they pursued a loan from a commercial bank to avoid any such problems.
Representatives of the tribe, the bank and the investment banking company would not comment on the new loan’s structure or the banks involved.
An earlier statement from the tribe referred to Marshall Bank as the "lead bank," but did not mention any other banks. The Marshall Group’s Web site lists the Stillaguamish Tribe’s $19 million deal as two loans — a $13.9 million "construction and term loan" and a $5 million "multiple advance term loan."
Officials at Marshall Bank and The Marshall Group referred all questions to Chuck Galford of Polaris Gaming Group, a Portland, Ore.-based consultant for the tribe.
Galford said the loan does include other banks, but he would not say how many. "I don’t really know, to tell the truth," he said.
But he added that that all banks involved are regulated at the state or national level.
If that’s so, the state needs some proof, Nunamaker said.
"We certainly will do that," Galford said, but he would not say when. "The tribe’s attorneys are handling that."
Eddie Goodridge Jr., the tribe’s executive director, said he doubted the issue would linger for very long.
"While that could happen, the Stillaguamish Tribe intends to fully inform the Gambling Commission. The last thing I want to do is get held up because somebody didn’t get to read" the contract, Goodridge said. "We’ve got nothing to hide."
Nunamaker said discussions between his agents and tribal officials have already begun. The commission has prior experience with the Marshall Bank and its affiliate group in deals involving at least four other Washington tribes: the Nooksack, the Kalispel, the Yakama and the Chehalis.
Galford said the Stillaguamish project is expected to begin within two months and could be finished by fall.
Marshall Bank is listed as a member of the Federal Deposit Insurance Corp. on the FDIC’s Web site.
Reporter Scott Morris: 425-339-3292 or smorris@heraldnet.com.
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