Fiscal troubles lead to Cabazon shake-up

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SACRAMENTO, Calif. - A little more than a month after disbanding its public
safety departments, the Cabazon Band of Mission Indians continues its
shake-up and has fired its top three executive officers.

Chief Executive Officer Mike Nichols, Chief Operating Officer Duff Wenz and
Public Affairs Director Greg Cervantes were all ousted from their positions
and, according to press reports, escorted out of the tribal administration
building.

Though the move is an apparent result of recent financial problems,
officials insist that Cabazon is not teetering on the edge of fiscal
insolvency and contend that they will not declare bankruptcy in the near
future.

The shake-up does not affect the tribal council. By coincidence the tribe
had elections scheduled for May 7, just a few days after the ouster of the
three officials which saw the reelection of Chairman John James, a post he
has held for 16 years.

Though the full extent of the tribe's financial problems are not yet known,
even by tribal officials, published reports indicate that the tribe is at
least temporarily shelving some large-scale projects that were intended as
compliments to its Fantasy Springs Casino.

Contrary to recent press reports, the tribe does not plan to liquidate its
assets. Earlier reports indicated that the tribe was planning to sell off
its now-decommissioned police cars as well as fire fighting gear and other
equipment from its now-defunct public safety department.

Cabazon Second Vice Chairman Marc Benitez said those earlier reports of
asset liquidation were the result of "sound bites that the press just ran
with."

However, Benitez contended that the former officials were ousted because of
"spending patterns by management" that were resulting in a money crunch.
Though not serious enough to warrant bankruptcy, Benitez said that it will
take the tribe "at least a year" to right its finances.

Benitez said he was confident that the tribe's Fantasy Springs Casino will
provide enough revenue to weather the storm and should ultimately bring in
enough cash flow to restore what he characterized as previous spending
concerns.

Benitez claimed that tribal officials began to notice the fiscal problem
when the tribe disbanded its police and fire departments. The move was
considered a surprise, especially since the tribe had helped spearhead an
effort to cross-deputize tribal police statewide and had actively worked
with the state Department of Justice toward that goal.

"That crisis was our wake-up call, and the tribe took action," said
Benitez.

It is too early, said Benitez, for the tribe to ascertain whether it will
restore its public safety departments and was unsure whether it would be an
issue on the table in the future.

Though Benitez did not provide specifics of the tribe's financial problems,
various news sources, including Indian Country Today, have reported that
Cabazon is currently under investigation by the Internal Revenue Service.

The federal government apparently has questions over the tribe's spending
of a $145 million tax-exempt bond, which was supposed to be used for
essential government services. The IRS is looking into whether Cabazon
officials had used the money for these purposes.

Attempts to reach Nichols and Wenz were unsuccessful and calls to Cervantes
were not returned.

As is usual in Indian country there are family ties in top-tier positions
at Cabazon. However, Cabazon has some of the more prominent, pioneering
names in American Indian gaming.

James' daughter is Brenda Soulliere, who was a two-decade tribal councilman
and is also a former chairman of the California Nations Indian Gaming
Association, the largest tribal gaming lobby group in the state.

Soulliere was a candidate in the recent elections for her old position of
vice chairman but did not win.

Ousted CEO Nichols' father was the tribal financial officer a few decades
ago.

It was during that same period that Cabazon successfully sued for the right
to conduct gaming on their lands that indirectly led to the Indian Gaming
Regulatory Act of 1988. James, now 72, was also at the helm during this
historic period.