Lagging results from investments in Mississippi casinos and other businesses may force tribe to mortgage some tribal land to stay solvent The Lac Du Flambeau Band of Lake Superior Chippewa is considering mortgaging off reservation land to offset a cash crunch called by multimillion-dollar investments, including a bid to development a casino boat in Natchez, Miss, according to the
Milwaukee Journal-Sentinel.

The cash crisis is so severe that the Chippewa band's lawyers were told last month to quickly close on a $50 million bond deal "so that the contractors would not walk off the job in Mississippi," where the tribe is an investor in a planned Mississippi River casino, according a memo by Brian Pierson, a Milwaukee attorney representing the tribe.

The Lac du Flambeau has already poured at least $8 million into the riverboat project.  Proceeds from the bond offering were used to refinance $22 million in debt that was incurred on the Mississippi project and on Lake of the Torches Resort Casino on the tribe's Vilas County reservation. The bulk of the remaining $28 million is earmarked for the Mississippi boat deal, which has not yet received a required state gaming license.

The Lac du Flambeau failed in an earlier attempt to launch a gambling boat in Cancun, Mexico, according to the Journal-Sentinel. The tribe lost more than $3 million on that boat, dubbed the Dream Catcher, and bills continue to run up as it sits in dry dock in Florida. The boat is for sale.

In a three-page Feb. 2 memo to the Tribal Council, a copy of which was obtained by the newspaper, Pierson blames financial woes on the low seasonal revenue at the tribe's profitable casino in northern Wisconsin; payments on bonds that came due; and a multimillion-dollar investment in XIT Networks, a start-up telecommunications security company based in Houston.

"The stars have clearly aligned in the wrong way at this time," Lac du Flambeau spokeswoman Laura Stoffel told the newspaper. She predicted the 3,300-member tribe would work its way out of the squeeze by summer.

Pierson's memo urged tribal leaders to work quickly to protect its "credit rating, reputation and prestige."

"It is important to convey calmness and cool-headedness to the BIA (Bureau of Indian Affairs), the Tribe's lenders, the business community generally, the State of Wisconsin and to the Tribe's neighbors," Pierson wrote. "Indian country melt-downs are a source of delight to anti-Indian people. They do lasting harm to tribes."

Tribal police and Vilas County sheriff's deputies were dispatched to the William Wildcat Community Center last week when approximately 70 tribal members engaged in a heated and loud argument over the tribe's financial shape, Stoffel said.

Spokesmen for the tribal police and sheriff said the crowd disbursed without incident and no arrests were made.

The Tribal Council is contemplating mortgaging property to obtain an operating line of credit. The property that would be mortgaged is known as fee lands--real estate that had been owned by tribal members, sold decades ago and repurchased by the tribe in recent years when casino dollars began flowing.

Other options outlined by Pierson include liquidating the tribe's investment in the proposed Mississippi casino--which tribal officials say is now worth $8 million--and its investment in XIT, which is estimated at approximately $3 million.

-- Staff reports