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Report on Lucky Star Casino fuels allegations

By Tony Thornton Modified: August 30, 2008 at 7:12 am •  Published: August 30, 2008
CONCHO — A report released Friday alleges self-dealing by people formerly associated with Lucky Star Casinos, including the casino's management company from 1993 to 2007.

The investigative report claims Southwest Casino Corp. bribed Cheyenne and Arapaho officials in hopes of securing an extension of the company's lucrative management contract.

That contract was worth $23 million between 2002 and 2007, and the Minnesota company's financial viability depended on securing an extension, the report states.

‘No objectivity in it'
Southwest Casino President Thomas Fox disputed the report's claims, saying it was prepared to aid the tribe's governor, Darrell Flyingman, in his lawsuit against the company. The lawsuit claims $10 million in damages by Southwest Casino, which filed a counter claim. Both matters are in arbitration, Fox said.

"There's clearly no objectivity in it,” Fox said of the 30-page report prepared by Grant Thornton, one of the nation's largest auditing firms.

"It's very surprising that they could write a report that is so biased and lacks objectivity,” Fox said.

Flyingman responded: "That's what Southwest is good at — lying. They know they're in hot water. ... The ammunition is there. It's the evidence of what Southwest did to our people.

The report claims Southwest Casino Corp. funded the tribes' gaming commission, which threatened the commission's ability to independently regulate the Lucky Star chain of casinos.

IRS documents showed the company paid $36,000 to one gaming commissioner and $29,000 to another for unsupported travel expenses, the report states.

Company general counsel Thomas Snook said Southwest Casino's contract with the tribe required the company to pay certain travel expenses for tribe officials, including gaming commissioners.

According to the report, auditors also found evidence to support allegations that Southwest Casino Corp. used Lucky Star money to influence tribe officials in hopes of securing a contract extension in 2006 and 2007. At the time, Flyingman was trying to remove the management company.

The report cites $55,000 in payments were made to tribe officials and members who were planning a vote on the contract extension. Read the report

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