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CONTRACTOR CHOSEN FOR CASINO CONSTRUCTION HAS SHADY PAST

In a city that has a 30-year history of pie-in-the-sky development dreams turning into botched abortions like the Turtle, Falls Street Faire, AquaFalls and the Splash Park, you would think that elected officials would exercise a little due diligence before publicly rejoicing over the arrival of the latest snake oil salesmen.

Not so.

Last week, when the Seneca Nation of Indians announced it had reached a "construction deal" with the Connecticut construction firm of C.R. Klewin Inc. to renovate the Niagara Falls Convention and Civic Center for use as a casino, politicians from Gov. George Pataki to Mayor Irene Elia were ecstatic.

"Its been a long time coming," Elia enthusiastically told reporters.

But C.R. Klewin, brought to the Seneca longhouse by controversial Indian gaming advisor Michael "Mickey" Brown, has been involved in some controversy of its own. Perhaps the mayor would have tempered her enthusiasms had she known:

• The company is currently at the center of a federal bribery investigation that led to a 24-count racketeering indictment against Joseph P. Ganim, the mayor of Bridgeport, Conn. Although neither the company nor any of its officers have been named as defendants in the case, the indictment raises serious questions as to its business practices.
• C.R. Klewin has also been the target of a number of civil suits, primarily resulting from its role in building Connecticut's Foxwoods Casino, another Mickey Brown deal. Allegations in the suits have ranged from injuries caused by workplace violence to injuries caused by shoddy workmanship on the part of the contractor.
• The company's financial rating, as disclosed by Standard & Poor's, is less than stellar, and many believe it will be difficult to raise the more than $50 million needed to give the convention center its needed makeover.
• Finally, there is considerable dissension among the Senecas themselves over the choice of both C.R. Klewin and Mickey Brown. No Seneca Council vote was taken on either decision, and many Senecas feel they are being pushed into deals by the newly created Seneca Gaming Corp. in order to beat the Nov. 2 deadline that will mark the exit of Cyrus Schindler as tribal President.

Of all the problems facing the construction firm, none is more serious than the allegations made in the federal racketeering indictment of Ganim. Authorities allege that, between February and September, 1997, C.R. Klewin entered into an agreement with a marketing firm, Harbor Communications, in what amounted to a bid-rigging scheme relating to the construction of the Harbor Yard minor league baseball stadium in Bridgeport.

According to the indictment, C.R. Klewin agreed to pay $350,000 to Harbor Communications in return for the construction contract, with a share of that money to be passed through intermediaries to the mayor's accounts. Records show two payments, totaling approximately $35,000, were actually made by the firm.

The case is set to go to trial early next year. Interestingly, Mayor Ganim was also involved in efforts to bring Indian gaming -- under the auspices of the Paugussett tribe -- to downtown Bridgeport. The scheme never came to fruition and it is unknown what, if any, role C.R. Klewin and Mickey Brown played in the affair. The Paugussett tribe is recognized by the State of Connecticut but not by the federal government. A court case to gain that recognition --essential to establishing a casino -- is ongoing.

The company's involvement in the building of the Foxwoods casino led to a number of lawsuits, including a workman's compensation case in which the Pequot Indians, operators of the facility, claimed that sovereign immunity excused them from paying on claims filed by injured construction workers.

Another court action involving C.R. Klewin occurred in 1997, when Paul Setterstrom, a construction worker, was assaulted by another worker at one of the company's work sites. The suit was dismissed when the court found the altercation wasn't a result of Setterstrom's employment.

And shoddy construction at Foxwoods was alleged in a 1999 suit filed by Joseph Apicelli, a bartender at the casino, who said he sustained serious injury when he tripped and fell over a drain pipe that had been installed five to eight inches off the ground behind the bar.

Seneca Gaming Board consultant Mickey Brown, who formed his association with C.R. Klewin during the building of Foxwoods, has also seen his share of controversies. Resigning from Foxwoods in 1997 amid allegations of insider stock trading, he formed Manhattan Cruises, a gambling operation that came under the scrutiny of the U.S. Attorney's office in Manhattan. The casino ships, which were sailed out of Brooklyn's Sheepshead Bay, were closed down.

Late in 1998, Brown showed up in Western New York, announcing he would have a Seneca casino up and running in Niagara Falls by Memorial Day, 1999.

It never happened.

Some here question whether Brown is even interested in seeing a casino open in Niagara Falls.

"He's from Atlantic City, he's got his office in Atlantic City," said one source close to the negotiations. "The last thing the big guys in Atlantic City want to see is more gaming in New York State."

Niagara Falls Reporter

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August 13 2002