Mohegan Sun Casino Owners Received $54 Million In Stimulus Money

Tribe that runs casino raking in $1 billion-plus per year got government check.

June 11, 2010, 2:08 PM

June 17, 2010 — -- With the support of Sen. Chris Dodd, D.-Conn., the federal government has awarded $54 million to Connecticut's politically well-connected Mohegan Indian tribe, which operates one of the highest grossing casinos in the U.S.

The tribe runs the sprawling Mohegan Sun casino, halfway between New York City and Boston, which earned more than $1.3 billion in gross revenues in 2009. Each tribe member receives a cut of the profits, a number a tribal official said was "less than $30,000" per capita per year. The stimulus money is a loan from a U.S. Department of Agriculture rural development program that is meant to help communities of less than 20,000 people that have been "unable to obtain other credit at reasonable rates and terms and are unable to finance the proposed project from their own resources."

Lynn Malerba, chairwoman of the Mohegan Tribal Council, defended the award of the stimulus loan to the tribe, and said that every member of Connecticut's seven-member Congressional delegation except one had provided assistance in securing the funds. "The whole Connecticut delegation, I think aside from [Rep.] Jim Himes, who was traveling, sent a letter in support."

Bryan DeAngelis, communications director for Sen. Dodd, confirmed Dodd's support for the loan. "Senator Dodd supported this project in the same manner and for the same reasons he supports federal assistance for other Connecticut projects – creating and preserving local jobs," said DeAngelis. "The only factor that mattered in Dodd's support of these loans was job creation and economic recovery in Connecticut." A former aide to Dodd, Charles Bunnell, is Chief of Staff for External and Governmental Affairs for the tribe.

An aide to Sen. Joseph Lieberman said the senator "is supportive of any constituent that applies for federal funding that will create jobs."

Mohegans Obtained Support from Connecticut Delegation

Staffers for House members Joe Courtney, Chris Murphy, Rosa DeLauro and John Larson confirmed that they had signed a letter to the USDA about a loan to the tribe. A spokesperson for Rep DeLauro said the congresswoman "did indeed sign on to a letter to the USDA asking for consideration of the eligibility of the Mohegan tribe for a loan."

A spokesperson for Rep. Jim Himes said the congressman "did not weigh in on this specific project since it is not in his district."

The $54 million loan represents more than one-third of the $167.8 million allocated by the USDA in the latest wave of stimulus funding for its rural development program.The loan is just part of $74 million in loans directed to the Mohegans by the USDA for the construction of a community center and tribal government building.

USDA officials said that part of their consideration in moving forward with the project was the tribe's continued challenge in obtaining credit because of the ongoing economic crisis.

The tribe's Lynn Malerba issued a press release when the money was awarded, saying that the construction of a community center and government building would provide important jobs to unemployed workers and help the tribe finish a project that was both shovel-ready and integral to the tribe's identity.

"Nearly 20 years ago, before the tribe gained federal recognition, creating a community and government center was our goal," said Malerba. "The community center is central to who we are as a people." The construction, which began in April 2007 and was halted in early 2009 in the economic downturn, has been scaled back by about $15 million from original plans.

In a statement to ABC News, USDA spokesperson Justin DeJong also said the loan would provide employment. "The loan that USDA provided will help create an estimated 1,200 jobs for this shovel-ready project in Southeastern Connecticut. Construction for the project was underway before the economic downtown, was suspended because of the credit crunch, and the USDA loan is helping the Tribe to restart construction."

"As with all beneficiaries of funding through this program," said DeJong, "the loan will be repaid to USDA with interest. The loan will provide jobs for contractors in the area, and allow construction of a building that will house health, education, community programs, a library, and Tribal court -- critical infrastructure needed to keep rural communities strong throughout the country."

$53.6 Million in Casino Profits

In a May 27 press release from the USDA announcing the award, the USDA said that after completion the project would support 1,279 jobs. In a June 8 press release from the tribe, the tribe estimated the project would create 114 direct jobs and "1,239 indirect jobs through vendors and subcontractors in the region."

The Mohegan Tribal Gaming Authority currently employs 9,600 people at the Mohegan Sun and other properties.

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In fiscal 2009, $53.6 million in casino profits went into the coffers of the Mohegan tribe, which uses the money to fund college scholarships, housing and health care. Each of the tribe's 1,700 members receives personal payments from gaming proceeds, and though the amount varies, Bunnell told Newsday in 2009 that the annual per capita payment was "less than $30,000."

American Indian tribes have received about $2 billion in stimulus loans and grants since the passage of the Recovery Act. The money received, by law, cannot be used for casinos or gambling projects, and is intended to revitalize Native American communities. There are currently 564 federally recognized tribes, and about 300 Indian casinos.

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