New York Post Editorial

PATAKI'S BAD BET

December 30, 2002 -- Already deep in Mario Cuomo fiscal territory with a breathtakingly irresponsible plan to borrow $4 billion for short-term operating expenses, Gov. Pataki is thought to be poised to launch another fiscally risky scheme: counting on $100 million or so in Indian gambling revenues to help balance the budget he'll propose next month. Given the highly disturbing recent revelations about the finances and characters involved in the nation's $13 billion-a-year Indian gambling industry, such a move could be a huge mistake by a governor who pledged to return fiscal integrity to New York when he first took office eight years ago.

Pataki and the Legislature entered into the New York equivalent of a Faustian pact in December, 2001, saying, in effect, that a deal with the devil - an unprecedented expansion of Indian gambling operations - was justified to help the state through the tough fiscal times certain to follow in the wake of the 9/11 attack.

In return for this seemingly easy money, Pataki and the lawmakers agreed to sell some of New York's soul to an amorphous collection of allegedly deserving "Native Americans" - some of whom now turn out to be in cahoots with such decidedly non-Indian entrepreneurs as Lim Kok Thay and G. Michael "Mickey" Brown.

Malaysian businessman Lim, of course, is the man who has "loaned" New York's Seneca Indian Tribe $80 million to build the new Niagara Falls Casino, set to open on New Year's Eve.

We put the word "loan" in quotes because the 29 percent a year interest rate is more akin to the going rate for loans negotiated on the Brooklyn piers or at the Fulton Fish Market than those offered by Midtown banks.

"Mickey" Brown is the man who brokered the original, $130 million-plus deal that put Lim, and his father Lim Goh Tong, in as the lead financiers of the Pequot Tribe's Foxwoods Casino in Connecticut, a loan now earning the Lims some $100 million a year.

Putting aside the legality of the casinos - the Court of Appeals still hasn't said how casino-based slot machines are legal in light of their specific prohibition in the State Constitution - and ignoring the socially corrosive impact casinos invariably have, one need only look to recent investigative accounts on Indian gambling to see how serious the situation is.

These accounts - depicting massive profits flowing to shadowy characters with little public accountability and with scant evidence that significant numbers of Indians are benefiting - have raised the specter of Congressional inquiries, federal Grand Juries and, of course, criminal indictments.

As the Wall Street Journal wrote last week, "The national Indian gaming story is about gambling insiders and the Indians and politicians who play along."

Politicians like Pataki, Assembly Speaker Sheldon Silver and Senate Majority Leader Joseph Bruno seem to be gambling their own reputations along with the state's credit rating.

That last could makes losers of all New Yorkers.