A Dirty Trickster's Bush Bonanza

The man who stopped Miami recount makes gaming millions

Roger Stone, the dirty-tricks hobgoblin of Republican politics, has exploited his Bush connections to become an influence-peddling force in the $13 billion Indian gaming industry. Stone's booming business in such a federally regulated enterprise makes his recent pro bono orchestration of Al Sharpton's double-edged presidential campaign an even stranger covert caper.

The longtime GOP consultant's reward for fomenting the "Brooks Brothers mob" that shut down the Miami-Dade recount in 2000 was an invitation within days of Bush's election to serve on the Department of Interior transition working group—helping, in his own words, to staff its Bureau of Indian Affairs (BIA). Stone has since used this unannounced perch to market himself to tribes and developers from Louisiana to California, earning fat fees and contingent percentages of future casino revenue. Just two of the five deals examined by the Voice are projected to pay him at least $8 million, and perhaps as much as $13 million.

Time, The Washington Post and The New York Times have published exposés about Bush's BIA, with a February story highlighting $45 million in payments to two GOP lobbyists from four tribes since 2001. But no one has focused on Stone's profiteering, which, unlike the payments to registered lobbyists, is not reported on any public filings. He is routinely brought into casino deals in part because of his perceived ability to win Bush and/or Republican congressional support, a role ostensibly inconsistent with his financing and staffing of the Bush-bashing reverend's campaign.

But it was Sharpton himself who focused the Voice's attention on Stone's bonanza, indicating that business motives pushed Stone to take over the campaign. "It's all about Indian gaming," he said. When pressed recently to explain, Sharpton said, "I will not spell it out." In fact, Stone has a history of bizarre political operations, beginning with his Watergate-era infiltration of the McGovern campaign. And Sharpton has his own bunko background—beating up on Democrats to benefit behind-the-scenes GOP allies like Al D'Amato, George Pataki, and Mike Bloomberg.

"I helped Sharpton because I like him," says Stone, a veteran of the Nixon, Reagan, Dole, and Bush campaigns, who steered $288,000 to Sharpton's National Action Network last year. "There's no connection between helping Sharpton and my business." But with adviser Stone scripting Sharpton, any damage the reverend might do would burnish Stone's bona fides with Bush, thereby bolstering his leverage for second-term gaming deals. Stone and Sharpton concede that they still talk, and Stone's ally, Charles Halloran, remains the manager of Sharpton's suspended campaign, organizing fundraisers to pay off a $634,500 debt, $134,000 of it due to five Stone-tied aides.


STONE'S MULTIMILLION-DOLLAR MOTIVATION

The 52-year-old Stone, who's based in Miami but also has an apartment at 40 Central Park South, acknowledges he has "a piece" of at least three deals. His 2002 contract with Buena Vista Rancheria of the Me-Wuk Indians entitles him to a $250,000 retainer plus 7.5 percent of annual "gaming revenue" from a $150 million casino 35 miles southwest of Sacramento, California. Warring factions of this minuscule tribe have long stymied a deal, but they signed a tentative agreement in December that must be finalized by July. It is currently under review by BIA. Stone also has lucrative stakes in casinos connected to two other California tribes—Enterprise Rancheria, which has a BIA application and a congressional corrections bill currently under consideration, and the Lytton Band of Pomo Indians, which won BIA approval in October for a San Francisco Bay casino opposed by Senator Dianne Feinstein.

The Buena Vista agreement calls for a $25 million payment to the tribal leader who retained Stone and permits the construction of two casinos, at least one of which would pay Stone his percent off the top. Documents obtained by the Voice also list the value of Stone's interest in the Enterprise project—40 miles north of Sacramento—as between $4.2 million and $6.3 million over five years.

Sam Katz, the general partner in the Lytton deal, refuses to reveal what Stone's holdings are worth, saying only that Stone "will get a portion of the proceeds" when the already negotiated sale to another gaming company is completed. Tony Cohen, the tribe's attorney, said Katz's group would be paid "tens of millions of dollars," and Stone has told business associates that he will earn $4 million to $7 million, a figure he would not confirm to the Voice.

In addition to these three stakeholder positions, a Stone prospectus, circulated last summer in California for casino investors, listed four other tribes that supposedly had agreements with Stone. The 157-page prospectus names Stone as one of three "participants" in Ikon LLC, a Mississippi company that the brochure says "now has an agreement" with the Ione Band of Miwok Indians to build a $120 million casino in Plymouth, California. Stone contends that he hasn't been associated with Ione since 2001. He dismisses the prospectus as old, though documents dated August 14, 2002, and March 10, 2003, appear in it, and Ikon is the name of his Washington-based firm.

Willard "Bud" Smith, another Ikon principal, adamantly denied that Stone is currently associated with the project. If he is, he'd be in line for another multimillion-dollar payday should it be built. Ione, however, is the thorniest issue on BIA's current agenda, with the DOI inspector general investigating the project, as well as a storm of local and congressional opposition to it. Ione, Enterprise, and Stone's Buena Vista faction—if the settlement is approved—will be landless tribes, making them the heaviest lobbying lifts, requiring administrative or congressional exemptions to obtain federally designated land in trust. That's precisely what Lytton won in October. With potential multimillion-dollar deals like these dangling, it's highly unlikely that Stone would take on the Sharpton campaign if it antagonized his Bush allies.

Hiding himself from the burden of public disclosure, Stone has brought an old lobbyist friend, Scott Reed, who already represented Connecticut tribes, into the incestuous world of California gaming. He got Buena Vista and the developers doing the Lytton and Enterprise ventures to retain Reed's firm, Chesapeake Enterprises. The campaign manager for Bob Dole in 1996, Reed, unlike the tarnished Stone, actually registers on behalf of the tribes he represents, only works on retainer, and is now doing cable appearances as a GOP insider.

"I'm paid to think, not lobby," insists Stone. He was, for example, "very helpful" to Katz when he suggested ways to win the support of anti-gambling senator and "very dear" Stone friend Arlen Specter, whose campaigns Stone has long aided. In 2001, Specter played a key role in protecting a special land-in-trust exemption that had been granted to Katz's project. Similarly, a two-page Stone memo in March 2003 to Enterprise's development team lays out "a legislative strategy in which we will attempt to insert language" in a still-pending technical corrections bill. Urging that the bill not identify the tribe or casino location, Stone wrote that it was "essential to maintain the element of surprise," contending that a "premature leak" to Congressman Wally Herger "would be disastrous."

Since 2001 Reed has represented a dozen tribes and developers, many unconnected to Stone. Stone hovers in the shadows because of the scandals that have dogged him for years— especially his jettisoning by the Dole campaign after widespread news accounts of a magazine ad he and his wife placed, with photos, seeking swinging partners. Since then, his career as an up-front lobbyist or consultant in presidential campaigns has come to a gradual end.


STONE: FROM BAKER TO CHENEY

Despite Stone's sordid past, former secretary of state James Baker, who was coordinating the 2000 Bush recount operation in Florida, tapped him to run its street operations. Stone has been credited in television and book accounts with putting together the mixed mob of Cuban and congressional-aide protesters who prevented the count in Miami—universally seen as the turning point in the battle that made Bush president. Out of sight in both a Winnebago and the building across the street, Stone ordered the shutdown. "I said, yes, break the door down," Stone told the Voice. "It was only when the Democratic commissioners removed the ballots that you had a near riot." Stone now says that "after" this Miami performance, he was "asked if I wanted to serve on the transition."

The Stone prospectus, which is titled "Indian Gaming Opportunities," contains a bio that features Baker's "recruiting" of him for the Florida recount and discloses that he "subsequently served on the Presidential Transition" for Interior. It even contends that Stone "was involved in selecting appointees for that department for the present administration." A brief introduction makes five references to Interior's role and twice as many to "federal" powers in Indian gaming, concluding, "We believe that based on our superior political contacts we could win all necessary approvals in a time between 8 and 16 months."

In fact, Stone was not among the 38 members of the formal Interior transition committee, consisting of prominent lawyers and members of conservative environmental groups. But that committee never met, according to members contacted by the Voice, responding instead to phone calls and e-mail from a small "working group" whose names were never released. Tom Sansonetti, who was tapped by Vice President Dick Cheney to lead the working group, told the Voice, "We built a network of advisers that helped us put together the transition briefing books, and Roger was one of those." Currently the assistant attorney general in the Justice Department overseeing Interior and several other departments, Sansonetti says he "reached out to Roger for his thoughts on Indian gaming." Calling Stone "very helpful," Sansonetti said he "may have had some names" to recommend for key posts.

Told that Stone had boasted to gaming associates that Cheney himself called after Miami-Dade to ask what Stone wanted, Sansonetti, the former Republican National Committeeman from Cheney's home state of Wyoming, said: "It would not surprise me if Cheney contacted him separately. I'm sure he knows Roger and knew that he would have a lot to contribute to the transition in general." Stone says he doesn't remember who called him: "I filled out a form with the areas in which I wanted to serve. I checked the box for Interior and served with about 40 other people." He says he's "met Cheney" but is not a friend of his.

Stone sent notes on Bush-Cheney Presidential Transition Foundation letterhead to tribal leaders, asking them to support the appointment of Neal McCaleb as head of BIA. McCaleb, who was subsequently appointed, says that he never met Stone but that he did meet Reed "through mutual friends" he refused to identify, "fairly soon after coming to Washington" from Oklahoma. Stone says he set up a meeting for McCaleb with Specter and that Reed "coordinated" other "efforts to get McCaleb" through Senate confirmation, though McCaleb insisted that Reed did not formally "prepare" him for the hearing.

Stone also helped by submarining McCaleb's top competitor, an Indian leader named Tim Martin. A kiss-of-death letter endorsing Martin appeared "out of the blue," Martin remembers. It was signed by Donald Trump, a client of Stone for 20 years who was all over the media at the time for having funded an anti-Indian advertising campaign in New York while simultaneously trying to do Indian projects in California and Connecticut. "I don't know why Trump did that," says Martin, who'd never spoken to Trump. "I don't think he and I have ever been in the same city at the same time." Stone says he "most certainly did" the Trump letter, claiming he saved BIA from "even bigger scandals" because Martin was supported by the lobbyists who are the focus of the ongoing Washington Post stories and a future hearing by Senator John McCain.

"It knocked Martin out," recalls Wayne Smith, the former deputy assistant secretary at BIA who recalls McCaleb attributing the letter to Stone (McCaleb abruptly terminated a Voice interview). The letter reinforced the irony of Stone's role in the BIA transition, as he and Trump had just been fined $250,000 in October by the New York State Lobbying Commission for Trump's secret funding of Stone-directed ads blasted by tribal leaders as "racist." Tying a tribe proposing a casino that would've competed with Trump's Jersey empire to "drug trafficking, money laundering, the mob, violence, and the smuggling of illegal immigrants," the ads featured pictures of cocaine lines and drug needles.

Beyond McCaleb, Stone and Reed pushed other top Bush gaming appointments. "If you are lucky," says Stone, suggesting he was, "a transition team will sift through a thousand résumés for mid- to low-level positions." Stone acknowledges a role in eventually installing Chuck Choney on the three-member National Indian Gaming Commission, while Reed and partner John Fluharty urged the hiring of Aurene Martin, who got the No. 3 job at BIA. Interior general counsel William Myers, a former law partner and a friend of Sansonetti now up for a federal appeals judgeship, hardly needed much help from Stone. But Stone told clients like Russell Pratt, the president of Buena Vista's development company at the time, that he aided Myers's appointment and had "easy access" to him. Stone now says he meant access through Sansonetti and Myers's ex-firm.

BIA's Smith claims that McCaleb told him when he started in September 2001 that Reed was "very important to the White House." McCaleb gave Smith a short list of insiders and lobbyists, including Reed, that he said Smith should "talk to and make sure they don't get upset with you." Smith wound up doing a half-dozen lunches with Reed, who pressed him on behalf of Buena Vista. Smith said his top aide, Aurene Martin, "always dealt with Reed's partner, Fluharty" and "urged me to be helpful to him." So did Jennifer Farley, who oversaw BIA matters in the White House and knew Reed and Fluharty from the Dole campaign, where she worked as a press aide. Smith says Farley and Martin openly championed the same position as Reed on Buena Vista. Martin even met at BIA with Fluharty, Pratt, and the Buena Vista tribal leader, Donna Marie Potts, to hear their case, a morning meeting that followed a strategy session the night before in Stone's Washington office.

When Smith was forced out in a June 2002 swirl of controversy, Martin became deputy, even moving up temporarily to McCaleb's job after his December departure. Coming to BIA from Colorado senator Ben Nighthorse Campbell's Indian Affairs Committee staff, where Stone has long had well-placed contacts, Martin has been the only fixture at BIA in the first Bush term. At a September 2002 hearing of Campbell's committee, for example, she made no attempt to defend a decision Smith made against Buena Vista, paving the way for a Stone-conceived corrections bill that passed in 2004 and re-establishes Stone's tribal chief.


IT'S OUR TURN

Smith recalls that at his first lunch with Reed, in the fall of 2001, Reed told him that Democrats had been "making money off of Indian gaming for too long" and "ran this place," referring to BIA. Calling the business "very lucrative" and pointing out that it could lead to major GOP contributions, "Reed said it was 'our turn,' " Smith recalls. "He talked to me as if I worked for him." Smith says Farley had already called him about Fluharty and said she was "sending over a friend to meet me," which Smith did, recalling that Farley had said much the same when she "called over urging that Martin be interviewed" for a top post. While Fluharty would not answer most Voice questions, he denied the Reed quotes and the Farley introduction.

Stone, who never contacted Smith, obviously saw the same opportunities, becoming a "casino developer," as he called himself in a recent deposition, after a California referendum boosting Indian gaming passed in March 2000. He began madly chasing cross-country deals that fall, at the same time that he played his Winnebago Warrior role in Miami-Dade and joined the transition. From November 12 to November 14, he picked up the tab at the Hyatt in San Francisco, where he entertained one wing of the Ione tribal war, Nick and Joan Villa, and signed an exclusive agreement with them. In the same time frame, he was entertaining the rival Mississippi group led by Willard Smith, bringing them to Jersey for hard-boiled negotiations about Ione and five other tribes, and signing deals with them.

Stone's sidekicks in both negotiations were Hersh Kozlov and Al Luciani, who worked for billionaire Carl Icahn, the owner of the Luciani-run Sands in Atlantic City. Luciani, who is now listed in Stone's prospectus as part of his team, recalls that these early conversations with Stone "started in the later part of 2000, got serious in February of 2001," and abruptly ended when Icahn "lost his enthusiasm because all of Roger's tribes were landless." But Luciani remembers Stone "telling me about his role in the Bush transition and saying that he knew Cheney," leaving the impression that he had "played a role in placing people at BIA."

While these talks were going on, a Philadelphia Inquirer clip materialized that spelled out Stone's transition role. The clip, dated December 22, 2000, and headlined "Veteran GOP Operative Named to Transition," said that Cheney had installed Stone as "Deputy Director of the working group charged with making recommendations for all Senate-confirmation level positions" at Interior, repeating virtually verbatim all of the Stone achievements cited in his prospectus bio. When a Voice check with the Inquirer established that the clip had never appeared in that paper and the Voice asked Stone about it, he said, "You can believe whatever you want to believe." Later, Stone e-mailed the Voice the identical clip with the Inquirer removed and the letterhead of an Atlantic City radio show superimposed, insisting that a developer had "incorrectly attributed" this script to the Inquirer "without my knowledge."

The Inquirer clip was concocted to advertise an insider role that Stone actually played but had no paper trail or coverage to cite. Asked if Stone might in fact have been deputy director, Sansonetti said, "I don't think they ever had titles, but I've heard everything from deputy director on down the line."


DOUBLE AGENT MAN

Each of these Stone deals pushes the envelope. In October 2001, for example, he brought an investor to H.K. Stanley, the Louisiana developer who had a deal to build a casino for the Jena Band of Choctaw Indians on Lake Charles in Louisiana. Stone and the investor, which was variously listed as Penn Gaming and the Fort Hill Group, made an unsuccessful $10 million bid. Stone and associates, including Louisiana lobbyist and friend Bill Rimes, signed noncompete and nondisclosure agreements with Stanley, acquiring all kinds of confidential information. Two months later, Louisiana's Republican governor approved a compact for Stanley's casino, sending it to BIA for final land-in-trust approvals.

Powerhouse lobbyists weighed in at BIA for and against the deal in one of the cosmic gaming battles of the Bush era. One opponent, Pinnacle Entertainment, which was planning to construct its own $325 million casino on the lake, put Rimes on retainer. Stone also introduced Pinnacle to another close business associate and former BIA official, Phil Thompson, and he, too, was retained to oppose Jena. In addition, Rimes worked for two companies whose Louisiana casino interests had just been acquired by Penn Gaming—a deal that resulted in a substantial finder's fee for Stone. Penn, too, was potentially affected by the Jena casino plans, though its riverboats were 120 miles away. Rimes told the Voice he was "constantly advised" by Stone on how to get BIA to block Jena, the project Stone had just tried to acquire. BIA rejected Stanley's deal in March 2002.

Similarly, Pratt says he was "flabbergasted" to discover last year that "right smack dab in the middle of the period" when Stone was paid to represent Buena Vista, he was working with the next-door Ione, "the very same people he was supposed to be fighting." While Stone contends he ended his ties to Ione before signing on with Buena Vista in January 2002, the prospectus matches him with Ione throughout 2002 and into 2003. Confronted with this evidence, Stone argued that there was no conflict because his contract with Buena Vista did not contain a "radius clause" restraining him from repre- senting a nearby casino.

When Reed's efforts to get Wayne Smith to reverse a regional BIA decision against Buena Vista failed, Stone led a media campaign that, by his own account, prompted Smith's ouster. Smith's best friend, Phil Bersinger, handed Stone the ammunition he needed—letters seeking tribal consulting business that invoked his close relationship with Smith. Stone claims he persuaded Buena Vista and another tribe, California Valley, to ask Bersinger to put his business solicitation in writing, then "faxed the letters to certain members" of the press. A Time story forced McCaleb to fire Smith, though, as McCaleb told the Voice, "there was no reason to believe that Wayne had some complicity in Bersinger's activity." With the friendlier Aurene Martin running the shop, appeals stymied at BIA, and Bush's signing of Senator Campbell's corrections bill last month, the BIA ruling against Buena Vista has effectively been repudiated. That positions Stone's allies to get whatever they want—the settlement or their own casino.

Stone's pending Enterprise Rancheria deal, as well as his uncertain claim on the Buena Vista gold mine, are mere examples of his million-dollar incentive to maintain his Bush clout. His double-agent role in gaming mirrors his seemingly bizarre orchestration of the Sharpton scam. Both are just the latest sagas in Stone's exotic career of self-serving misdirection.


Research Assistance:Catrinel Bartolomeu, Molly Bloom, Andrew Burtless, Tommy Hallissey, Adam Hutton, Catherine Shu, Jessie Singer, Jennifer Suh, and Andrea Toochin

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