Enigmatic partners pursue a rich deal

Casinos: The Seminole chief is dismissed and a lawyer shot, but Baltimore's Cordish Co. completes the difficult project.

HOLLYWOOD, Fla. - Donald Trump thought it couldn't be done. He'd exercised all his usual charms to land a casino development deal with the Seminole Tribe of Florida - hiring lobbyists, wheedling politicians, indulging tribal leaders at his Manhattan office tower - but none of it took root, and the author of The Art of the Deal abandoned the cause.

Even one of his most trusted associates said the prospects for developing a Las Vegas-style casino for the tribe were hopeless, Trump said. Richard T. Fields, a business associate and one-time manager for Marla Maples, then Trump's wife, worked the Seminole casino project on the developer's behalf and declared it a lost cause.

But sometime after that failed courtship with the Seminoles - and after his business relationship and friendship with Trump were "terminated," according to the real estate magnate - Fields found a new ally: Baltimore developer David S. Cordish. And a new deal was on.

"He said it was impossible, then he did it for himself," Trump said in a recent interview. "We're looking at that very closely."

Two Seminole Hard Rock Hotel & Casino complexes developed by the Cordish Co. - the fruits of a deal that Fields initiated, according to tribal officials - will be finished in the coming days. The resort-style facility near Tampa that opened fully on Thursday, and the flagship project in Hollywood expected to open in May, are among the most envied and potentially profitable casinos in the Indian gambling industry. Their 3,800 gambling machines, bingo and poker games, hotels and restaurants are expected to generate more than $4.76 billion in net revenue over the next 10 years, with more than $1.3 billion going to a Cordish Co. subsidiary, making the firm one of the highest-paid casino developers to ever strike a deal with an Indian tribe.

An examination of the Seminole Tribe's casino development deal, including a study of financial documents and court records, offers a revealing glimpse inside the boardrooms where the multibillion-dollar casino deal was crafted. Fields was the first of many enigmatic characters that Baltimore's celebrity development firm embraced during its three-year plunge into tribal gambling and politics.

The Cordish Co. eventually signed the deal with James E. Billie, the Seminole Tribe's alligator-wrestling chief, who was later ousted from office amid allegations of embezzlement, corruption and sexual harassment. Tribal official Timothy W. Cox - engaged as a Cordish Co. business partner - was arrested by the FBI, accused of squandering Seminole riches through shadowy businesses in Nicaragua and Belize, and later cleared after an abortive federal trial. The tribe's general counsel, one of the Cordish Co.'s primary contacts, was shot three times as the deal neared completion.

The Cordish-led development team of respected bond lawyers, strategists, gambling experts and Wall Street financiers worked desperately to prevent events from sullying the project. They helped write and implement new tribal laws and issued lengthy legal opinions in hopes of pacifying nervous investors.

And in the end, they pulled together the deal. Cordish calls it his proudest accomplishment.

"It's conceivable with this deal that David Cordish is going to make more money in two years than he's made his entire life," Cox said.

The Fields connection

The Cordish Co., developer of the Power Plant at Baltimore's Inner Harbor, is one of the nation's specialists in designing and building urban retail and entertainment projects. The only five-time winner of the Urban Land Institute's prestigious development awards, the company has carried out successful projects in Houston, Charleston, S.C., and other cities.

Its development success aside, the Cordish Co. had never built a casino or worked with an Indian tribe prior to its contracts with the Seminoles and was thus lacking in the particular experience and political dexterity that such deals typically demand. As such, any study of the company's leap into the casino development business quickly leads outside the company, to Fields.

In March 1996, long before the Cordish Co. contemplated an Indian casino in Florida, Fields and Trump flew to the Seminole Tribe's Big Cypress reservation in a private jet to meet with Billie, a godfather of the Indian gambling business who opened the nation's first high-stakes Indian bingo hall in Hollywood in 1979. Billie is known for such exploits as eating a panther that he shot in the Everglades, then arguing in court that endangered species laws do not apply on Indian land. "Chief" Billie - he always preferred that title to the more precise "chairman" - says he has long admired Trump's swashbuckling style.

How Fields, 58, came to the casino development business is unclear. He did not respond to repeated requests for an interview. Fields worked with commercial casinos in Nevada in the 1980s when he led the national expansion of the Catch A Rising Star comedy club chain. And he was a close Trump associate, serving as a family spokesman during such sensitive episodes as Maples' alleged extramarital affair and the time a former employee was accused of stealing her shoes.

In summer 1999, Fields began making frequent visits to the Seneca Nation near Niagara Falls, N.Y., seeking an exclusive deal to develop casinos for the tribe. He was soon banned from the reservation, current and former tribal officials say, because of his history with Trump, whose criticism of Indian gambling had annoyed Native American leaders years earlier.

But Fields was no longer working for Trump when he showed up on the Seneca reservation. And he would not stay banned for long.

David Cordish says he doesn't recall how or when he met Fields, and hardly acknowledges him except to praise his skills and integrity.

"He's hardly an employee of mine," Cordish said. "But I really think whatever my arrangements might or might not be with him - I'm not even saying I have an arrangement with him - is a private matter."

However, public records show that Fields has had close business ties to the Cordish Co. in the years since parting with Trump. The Florida Department of State lists Fields' company, Coastal Development LLC, as a partner or manager of Power Plant Entertainment LLC, the Cordish Co. subsidiary that is handling the Seminole project. Fields or his company contributed tens of thousands of dollars to politicians and political committees in Florida and other key gambling states, sometimes stating on campaign finance reports that Power Plant was his employer.

And Power Plant's contract with the Seminole Tribe lists three parties that are empowered to accept legal service of documents on the company's behalf: the Cordish Co., its New York law firm and Fields.

A decisive moment

Precisely when the relationship between Fields and the Cordish Co. began is difficult to determine, but the decisive moment is not - it was the day in early 2000 when Fields introduced the Cordish Co. to the Seminoles, and to Chief Billie.

According to Billie, the Seminoles had never heard of the Cordish Co. in April 2000 when Fields arrived at the tribe's Hollywood headquarters accompanied by Joseph S. Weinberg, a Cordish Co. vice president. The two met with Billie and other tribal officials and proposed, according to some who attended, a hotel and casino with a Margaritaville theme. Billie says he rejected the concept because he had once been snubbed at a political function by Jimmy Buffett, who had parlayed his popular song into a chain of theme restaurants.

Still, Seminole officials were interested, and a background check revealed the Cordish Co.'s track record of delivering the type of grand project the tribe was after. Billie said he dispatched Cox to Baltimore to learn more about the proposal and to see what the Cordish Co. was all about.

"I wanted it to be really fabulous in a sense, because we started these bingos in the United States and we were one of the last ones who tried to make it look any better," Billie said. "But I got tired of talking to those guys."

Conflicting accounts

Cox, a self-described "redneck," was Billie's most-trusted associate. Now 34, he encountered Billie in the late 1990s when the chairman offered to pay for his child's hospital visit after pleas from Cox's wife, who is a Seminole. By late 1999, Cox had become operations chief of the Seminoles' business affairs.

David Cordish says he has spent no more than about 10 seconds in Cox's company and suggests that the former Seminole employee is not a reliable source.

"The Sun should be careful with Mr. Cox," Cordish said.

Cox, conversely, says he spent about 20 hours in Cordish's company and offers a detailed and accurate description of the developer's Power Plant office, describing the layout, the furniture placement, artwork and distinctive architectural details.

"I made four trips to his office in Baltimore, including one with my wife, and I met with David Cordish every time," Cox said. "We had meals together, sat in on a conference call together, ate at the ESPN Zone downstairs. Ask him about that motorcycle video game. He likes that."

Cox was soon in frequent contact with the two men who would become the face of the Cordish Co. in Florida - Joe Weinberg and Richard Fields.

Thinking big

By the summer of 2000, the Seminole project had evolved into a two-city plan to build hotel and casino complexes under a licensing agreement with Orlando-based Hard Rock Cafe International, a firm the Cordish Co. knew well and Billie - a sometime singer and songwriter - had long admired. The Hollywood casino, considered the project's flagship, was envisioned with a 400,000-square- foot retail and entertainment center, featuring the kinds of national shopping and restaurant venues that Cordish has a long history of delivering. And unlike the Las Vegas-style casino pursued by Trump, the Cordish Co. agreed to develop a "Class II" gambling hall, which could not offer blackjack or other table games but did not need approval from the state of Florida.

Over a long weekend at the end of July, after months of negotiations, the tribe signed two contracts with Power Plant, the Cordish Co. subsidiary - one to develop the two casino sites and another to arrange most of the financing.

The Cordish Co. was already thinking bigger. The contracts also gave the firm the right to use the Seminole name to market casino development services to other tribes as long as the Seminoles received 7 percent of the proceeds.

To help with that new effort - and, David Cordish says, to meet a demand of the Seminoles - Power Plant also formed a partnership with Cox, enlisting him as a consultant and promising him 20 percent of any deal he could land. Cox had negotiated a deal to operate a Hard Rock Cafe at a hotel in Nicaragua, and Power Plant fronted him $500,000 for rent, according to a copy of Cox's contract with the developer.

Among the tribes

Cox says he and Fields were soon talking to Indian leaders across the country, pitching the development services of the company that was delivering the goods for the Florida Seminoles.

A spokeswoman for the La Jolla Band of Luiseno Indians in California said the tribe reached a tentative deal with Fields and Cox for a casino near San Diego, and sent representatives to Florida to learn more about the Cordish Co. Fields met later with the Oneida Nation of Wisconsin, a tribe pursuing a controversial claim to its historic homeland in New York with plans to build a casino there, and with whom Cordish said he is still negotiating.

The new Cordish Co. gambling team also made an aggressive push with the Seneca Nation of New York, and soon had a deal for exclusive rights to build Seneca casinos in Niagara Falls and Buffalo.

Members of the Seneca Tribe say they were lavished with dinners, theater tickets and trips - to President Bush's inauguration in Washington, shows in New York City and the Seminole casino site in Hollywood - though they are uncertain who paid for what. Cox's contract with the Cordish Co., which he provided to The Sun, promised him $1 million if he could land a deal with the Senecas.

"They definitely gave the impression that they were eager to reach an agreement," said Arnold N. Cooper, the Senecas' former treasurer and chief financial officer.

The Senecas rejected the Cordish offer, signing instead with Malaysian billionaire Lim Kok Thay, who offered the tribe an $80 million loan at 29 percent interest. Cooper, for one, believes the Senecas should have signed with Cordish instead.

"They [Cordish Co. officials] were very professional and made promises that seemed realistic, which not everyone does in this business," he said. "I thought it was a good deal. We should have taken it."

But the focus of the Cordish Co. and the Seminole Tribe remained in Florida.

A difficult path

On Jan. 8, 2001, Billie, Cox, Weinberg, Fields and assorted politicians and dignitaries gathered for a groundbreaking ceremony on the Hollywood reservation, crowded around a mound of sand sculpted into the shape of a guitar. The event had been delayed once before because the project's financing was shaky, but this time tribal officials and their development partners poked shovels in the dirt and triumphantly declared the complications resolved.

"We've been waiting for this day for a long time," Billie said, according to an article in the tribe's newspaper, The Seminole Tribune.

But the Cordish Co.'s problems were just about to begin, and Billie's long reign as tribal chief was just about to end.

Billie and Cox had been losing favor with the tribal leadership and would soon be the subjects of an internal audit. An Internet gambling operation Cox was engineering in Belize was catching FBI attention, as was his hotel deal in Nicaragua. And an 18-year employee of the tribe was about to go public with allegations that she had had a sexual relationship with Billie, was forced to have an abortion, and that he fired her then gave her more than $100,000 to keep quiet.

The Cordish Co. had taken a chance signing a contract with the Seminoles, who even then faced a lawsuit filed by the U.S. attorney in Tampa, who contended that the tribe's gambling machines were illegal under Class II regulations. And while everyone was smiling at the groundbreaking, financing for the new hotel-casinos was far from assured.

Worried investors

The first meeting with Merrill Lynch & Co. and the bond attorneys who would figure out how to pay for the $455 million Hard Rock project was still three weeks away and the circumstances were already beginning to spook the wealthy investors that Cordish needed to make the deal work.

"People who buy tax-exempt bonds tend to be fairly conservative," said Perry E. Israel, an attorney who helped arrange the project's tax-exempt bonds - the first time such financing has ever been used for an Indian gambling project. "As things got more and more - let's say things were unusual - then the investors got worried."

"I was being told repeatedly by the professionals trying to sell these bonds - J.P. Morgan, Merrill Lynch - that the leadership and the internal matters of the tribe were a big concern to the investment community - probably the biggest concern," said Ed Gray III, executive director of the Capital Trust Agency, a municipal agency that issued bonds for the casinos on the tribe's behalf. "For a while, the Cordish people were more into damage control than they were into development."

Tribal politics

On April 29, 2001, a front-page article in the St. Petersburg Times, headlined "Chief's hold on Seminoles is slipping," revealed a yearlong federal investigation involving Billie and Cox, and reported that FBI agents were looking into allegations of money laundering, tax evasion and sexual harassment.

By the next morning, Israel's job description seemed to have changed.

Israel, a $475-an-hour attorney in Sacramento, Calif., is regarded as one of the foremost authorities on the complexities of tax-exempt financing and municipal bonds. Three months earlier he had been brought in by Merrill Lynch, the underwriter of the Seminole bond offering, to preside over the financing package for the tribe's Hard Rock casinos - a deal that the company had termed "Project Paradise."

But on April 30, Israel was talking about Billie. According to his billing records, filed among the volumes of public documents relating to the bond sale, Israel spent five hours discussing the article and other "due diligence" concerns surrounding the Hard Rock deal. His bill for the day: $2,586.08.

The trouble had started months earlier, mostly in the tribe's private offices and boardrooms, out of public view. Billie and Cox, saying they wanted to rein in the tribe's spending, had begun placing budget restrictions on other members of the five-member ruling council, which Billie chaired. While the Seminoles took in more than $350 million a year from the tribe's five casinos, court testimony later revealed that tribal leaders spent tens of millions of dollars on luxury cars, private jets, sports tickets and gifts.

The records of Billie's spending habits were perhaps less remarkable, but his fellow councilmen - who were fast becoming his enemies in early 2001 - began holding their own meetings and expressed suspicions that the chairman was getting money from other sources, namely Cox's hotel venture in Nicaragua and an Internet gambling venture that Cox was organizing in Belize. Saying that they were unaware of the tribe's businesses in Central America, the councilmen ordered a tribal investigation and began a campaign to rein in Billie.

When rumors surfaced that former employee Christine O'Donnell was alleging that Billie had sexually harassed her, the tribe's leaders reportedly urged her to go public, despite the Seminoles' history of settling such claims.

"It was stated to me on various occasions that [tribal officials] could not do anything to James E. Billie concerning my termination until a lawsuit was filed concerning a sexual harassment charge against James E. Billie," O'Donnell said in a sworn affidavit filed two years later in a federal lawsuit Billie brought against the tribe.

On May 10, 2001, Cox resigned amid the federal and tribal investigations - the same day that O'Donnell filed her lawsuit in federal court. On May 24, 2001, citing the sexual harassment allegations against their longtime chairman and lingering questions about his handling of tribal finances, the other four members of the Seminole council voted unanimously to suspend Billie.

The ordinance to suspend Billie was drafted by the tribe's chief counsel, Jim Shore, who testified later that he had help from Eric Dorsky, the tribe's outside counsel based in Davie, Fla. The day before the ordinance was approved, Dorsky spent the day in "multiple phone conferences with Joe Weinberg," according to the attorney's billing records.

There is no evidence that the Cordish Co. played any role in removing the tribe's chairman. But for more than a year, the Hard Rock development team was meeting and negotiating with the tribal attorneys and officials battling with Billie. Fields and Weinberg spoke with the tribe's lawyers and others involved in the deal nearly every day for long stretches, and sometimes several times a day. All shared a common interest - keeping Billie and his associates from causing more damage to their fragile project.

One element of the deal - a tribal law giving voters only 21 days to petition for a referendum to reverse new tribal ordinances - stymied Billie's attempted return to power. Pushed by the bond team to protect investors from the vagaries of tribal politics, the law was passed by the tribal council in August 2001 and led to the rejection of a petition from Billie that was signed by hundreds of Seminoles who wanted him reinstated.

"I think it's very easy for him to point to this deal and say this is what got him kicked out, but I don't believe it," Israel said. "If anything, maybe the questions we raised caused other members of the tribe to raise questions and that led to some of his problems. But I don't believe that either. I think even if this deal never took place he was going to face some problems.

"He did great things for the tribe. You can't deny that. But I think, maybe, in the end, he lost sight of the fact that his own interests and the interests of the tribe weren't always the same."

Fragile financing

The Cordish Co. had initially expected to secure the financing by mid- to late 2001, but the ripple effect of Billie's ouster and the tribal investigation sent tremors through the investment community for the next year.

Merrill Lynch started trolling for investors in October 2001, and had little trouble impressing them with the casinos' estimated profits and the bonds' tax-free interest rates of up to 10 percent. But the continued saga of the Seminoles scared investors away.

"You'd be talking with people who said they were interested in investing $20 million and suddenly they'd call you and say, 'No way, we're not touching this thing,'" Israel said.

The concern among would-be investors was so pronounced, Israel said, that a lawyer was hired by the tribe specifically to participate in the deal on behalf of potential bond buyers. At his insistence, much of the deal was restructured to add assurances that investors would be paid, such as an emergency fund that would be gleaned from the casinos' profits.

The Cordish Co.'s contract did not anticipate that the process would drag past 2001, and dates had to be amended soon after the new year. At one point, growing increasingly impatient, company officials tried to fire Merrill Lynch and hire another underwriter, according to Israel.

Cordish had cause to be antsy. The developer's upfront costs were roughly $19 million, Cordish said, and would only be reimbursed if investors bought the bonds. The company was also paying as much as $100,000 a month to compensate the tribe for lost trailer park revenue at the Hollywood site.

Bonds and bullets

The development team initially hoped to have the bonds rated by Standard & Poor's or Moody's Investors Service, respected Wall Street agencies that could lend legitimacy to the deal. But while some of the lawyers were on their way to discuss the bonds with rating agency officials, the meeting was abruptly called off amid the news that Shore, the tribe's lawyer and a force behind Billie's ouster, had been shot three times while resting in his home the night before.

Shore, the son of a Seminole medicine man, had been blinded in an auto accident in 1970. On the night of Jan. 10, 2002, he was at home on his couch listening to a book on tape when three shots were fired through a sliding-glass door, hitting him but missing vital organs.

Shore, now 58, eventually recovered. The gunman was never caught. And the bonds were issued without ratings.

"Every time one of those events happened - Billie's suspension, federal investigations, criminal prosecution, civil suits, the Nicaragua thing, Jim Shore getting shot - it delayed the bond issue," Gray said. "It was significant as far as the image of the tribe and being able to convince the investors that this was a good deal."

The first bond issue, for $315 million, closed in the summer of 2002, but only after a Cordish Co. subsidiary agreed to buy $40 million worth of the bonds and Hard Rock's parent, Rank Group Plc, bought $25 million. A ceremony was held on the Hollywood reservation beneath the Council Oak - a tree where Seminole leaders signed the tribe's modern constitution in 1957. A second bond issue, for $95 million, closed a year later.

As soon as the bonds were issued, the Cordish Co. was reimbursed for up to $20 million in expenses and also was to be paid $28.7 million in fees for developing and financing the project, according to its contracts. But the true value of the Seminole Hard Rock deal for the company is in its projected long-term share of the casinos' profits - more than $1.3 billion over a decade.

Pride and a fall

The Tampa hotel and casino opened last week, and a billboard across the street from the Hollywood site, scheduled to open in May, declares: "The best is yet to come."

Cox says he drives by occasionally. The criminal charges against him were dismissed after Billie testified that the money Cox was accused of embezzling was shifted to the Internet gambling venture with his knowledge and permission.

None of the civil lawsuits lodged against Cox has been successful. He filed a lawsuit against the tribe in November, alleging that Seminole leaders conspired to remove him from his $170,000-a-year job and seeking $25 million in damages. He says he plans to sue the Cordish Co., alleging breach of contract, for backing out of its business partnership. The deal he helped to land with the La Jolla Band in California fell apart after his brush with federal authorities.

Cordish, meanwhile, says he remains proud of the Seminole Hard Rock deal, particularly given the difficulty in pulling it together. He said his company hopes to announce agreements soon for other Indian casino developments.

"The Seminole nation, just like all the other deals, they called us because they wanted a first-rate resort," Cordish said recently. "It takes patience to work with a government, whether it is the Seminole nation or the city of Charleston."

Billie says he works mostly as a laborer today, building traditional palm-thatched huts in South Florida. The sexual harassment case against him was dismissed, and none of the other allegations was sustained. He tried to run for re-election last year but was denied when councilmen determined that he was not living on tribal land - a consequence, he says, of his impending divorce.

Billie denies any thirst for a comeback. But he says the Cordish Co. is paid too much under the Hard Rock deal and that he would cancel it if he ever returns to office.

"They've got lots of money to lose, not me," said Billie, damp with sweat as he paused from nailing palm fronds to a cypress frame. "And if I come back, then they've got lots of money to lose. Not me."

Source: Baltimore Sun