Again, tribe's application for casino license cleared

Friday 8th May 2020

The Arkansas Racing Commission, by a 6-1 vote Thursday, once again accepted an application on a "good cause" basis from Cherokee Nation Businesses, which is one of two companies competing for a license for a casino in Pope County.

The commission also unanimously set points values on criteria that will be used to score their applications.

But Oklahoma-based Cherokee Nation Businesses and its competitor, Gulfside Casino Partnership of Mississippi, told the commissioners that litigation is inevitable no matter which is awarded the license.

Thursday's meeting was set earlier this week to address problems created by technical difficulties at the previous meeting on April 15. Those difficulties hampered discussion on the agenda items, chairman Alex Lieblong said. Some commissioners had participated by teleconferencing.

[RELATED: See complete Democrat-Gazette coverage of casinos in Arkansas at arkansasonline.com/casinos]

John Tull, an attorney and expert on the Arkansas Freedom of Information Act, complained in an April 29 letter to the commission that the unanimous votes at the previous meeting should be voided because the group violated the FOIA by reaching a decision in private before a public meeting.

Tull said the commission's April 15 votes followed "very little public discussion."

Thursday's meeting was nearly 90 minutes long, with discussion on the Cherokees' request taking up most of the time. The meeting was held at the attorney general's office, which barred physical public access and provided only telephone audio with no video option.

"Following the technical issues with the April 15 meeting, it was determined this meeting would occur via conference call," commission spokesman Scott Hardin said. "There was not a visual component or presentation in today's meeting that would require video-conferencing. The agenda items were effectively accomplished via conference call."

While Commissioner Butch Rice spent several minutes asking Cherokee attorney Dustin McDaniel questions and issuing challenges, the remaining commissioners spoke very little, if at all.

Rice was one of the few participants who identified themselves before speaking. Discerning the owners of the voices was difficult for others listening in.

All commissioners were physically present at the meeting except Commissioner Denny East, who joined by telephone, Hardin said.

Rice -- who voted April 15 to grant the Cherokees' request -- was the only dissenting vote Thursday. His initial motion to deny the Cherokees' "good cause" exception failed to get a second.

When asked after the meeting why his vote changed, Rice said in a statement through Hardin that he was unable to ask his intended questions at the April 15 meeting because of the technical issues.

"With an opportunity to ask those questions today, Mr. Rice obtained the information he was seeking," Hardin said. "This information led to a 'no' vote on the request for good cause."

Constitutional Amendment 100 -- which was passed by voters in November 2018 to allow a new casino each in Pope and Jefferson counties, and allowed the expansion of gambling at the racetracks in Hot Springs and West Memphis -- requires endorsements from local officials, but it does not stipulate when they must be obtained.

On March 25 this year, Pulaski County Circuit Judge Tim Fox ruled unconstitutional a commission rule and a state law that add a requirement that the endorsements come from local officials serving at the time of the application.

The commission's first application window closed May 30, 2019, with five applicants, including the Cherokees and Gulfside. All were rejected by the Racing Commission in June because none met the commission's rule in place at the time, although Gulfside had endorsements from officials who had left office in December 2018.

The Cherokees resubmitted their application after receiving endorsements from current county officials in August.

But a second application window established by the Racing Commission was "abandoned" after Pulaski County Circuit Judge Wendell Griffen, in a separate case filed by anti-casino group Citizens for a Better Pope County, issued a temporary restraining order barring the commission from issuing the Pope County license in that second window.

Griffen, however, said his ruling did not prohibit the commission from taking applications after an application period is closed, if the application can show "good cause." The Cherokees applied a third time.

In a separate lawsuit, Gulfside sued the commission because its application, unlike any of the others, included letters of endorsement from previous local officials.

Rice said it was unfair competition to accept the Cherokees' application because that company had already viewed its competitors' applications submitted during the first window.

Rice peppered McDaniel with several questions, with the tone becoming stern at times.

"We did not submit a request for an extension of time and to my knowledge no one else did and I think we would've seen it if someone else had done so. But the reason for that was because," McDaniel said, pausing when Rice abruptly cut him off.

"Mr. McDaniel, I'm not worried about anyone else. I'm asking you the question," Rice said. "Did you send a letter to the Racing Commission office or the attorney general's office with a formal request for an extension of time to complete your application? It's a yes or no."

Rice also challenged McDaniel about the omission of the city of Russellville from a $38.5 million "Economic Development Agreement" that was negotiated with the Cherokees by Ben Cross, county judge of Pope County, before the Quorum Court's endorsement.

The agreement benefited Pope County, several municipalities and nonprofit groups, but left out the city of Russellville.

McDaniel said Russellville was left out of the agreement because Mayor Richard Harris declined to participate in the negotiations.

Harris twice asked the commission to be allowed to respond to McDaniel's assertion, but Deputy Attorney General Butch Reeves denied the request.

"No, sir, you're not a part of this," Reeves told Harris.

In an interview after the meeting, Harris said McDaniel's assertion was "false," and he reiterated that he was never invited to any meetings associated with the financial agreement nor was he ever asked what Russellville "would desire" as part of the negotiations.

Harris added that McDaniel told him in August that Harris was "purposefully not invited to the EDA discussions because they knew my position on a casino in Pope County.

"At the time the actions by the Quorum Court were taken, it was my opinion that any EDA or endorsement of a casino operator was in violation of the will of the Pope County voters," Harris said. "I am not certain as to why the county judge and the Cherokee Nation Business continue to express this falsehood, except maybe to detract from their own transgressions and their unwillingness to take ownership for the actions that they have taken. Finally, the Arkansas Racing Commission should not allow Mr. McDaniel to state such falsehoods during the meeting without challenge or allowing me to respond."

Pope County voters rejected Amendment 100.

When the chairman called for a motion at the end of the discussion, he was met with silence from the other commissioners. After a couple of minutes, Lieblong made the motion, which was then quickly seconded before the measure was approved.

The commission also voted to assign a points value to each of the four merit criterion listed in the state's gambling rules to evaluate casino applicants: the applicant's experience with casino gambling; timeline for opening the casino; proof of financial stability and access to financial resources; and summary of the proposed casino.

Each will be assigned a maximum of 30 points except for the casino timeline, which was weighted at 10 points.

Jerry Malone, an attorney for Citizens for a Better Pope County, said in a filing in Pulaski County Circuit Court last week that the commission's application windows should be voided because of the commission's failure to follow one of its rules and assign points values to the scoring criteria.

McDaniel, a former state attorney general, told the commission that each of the points should be weighted equally to avoid a conflict in any future litigation "whether that's us or Gulfside."

"I want this to be over with for the state and for parties as quickly as possible, and it seems like the most defensible position would be in the absence of a clearly, articulated weighted scale," he said. "Equal weighting is the presumption."

Reeves, of the attorney general's office, said the whole point of the points scoring is to give fairness to the applicants.

Part of the motion that was approved was to allow Gulfside and the Cherokees 10 days beginning today to submit "supplemental information" to the commission.

Gulfside attorney Casey Castleberry said the casino operator's officials maintains that it is the only eligible candidate for the Pope County license.

"I would like to, for the record, lodge an objection to allowing any amendment of application. Our position is the application period ended May 30 of 2019," Castleberry said. "The parties should be stuck with the applications that they submitted prior to that time."

When contacted after the meeting, Chuck Garrett, chief executive officer of Cherokee Nation Businesses, said through a spokesman that he was appreciative of the actions taken by the Racing Commission to accept their application.

"We thank chairman Lieblong and the commissioners for their patience and dedication throughout this complicated process," Garrett said. "Today's action represents another significant milestone for Cherokee Nation Businesses, the people of Pope County and the state of Arkansas. We respect the ongoing commitment of the commission to do what is in the best interest of Pope County and the state of Arkansas, and we look forward to earning its full support."

A Section on 05/08/2020

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