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Tribes seek Expanded Economies with Mortgages, LNG and Racinos

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SALAMANCA, N.Y. - It's not just casinos any more. A mortgage program, a
racetrack deal and even a liquefied natural gas terminal stand out in
recent economic news from Indian country.

SENECAS LAUNCH MORTGAGE PROGRAM

Eagerly awaited mortgage financing for Seneca Indian Nation members is now
under way. The $10 million Seneca Nation Mortgage Program officially began
accepting applications June 30. Endowed with a portion of the proceeds from
a new $300 million bond issue, the program is designed to spread home
ownership on the Seneca territories, where banks traditionally have been
reluctant to lend money.

(Because land on reservations is held in trust for tribal members and can't
be sold to non-Indians, banks are unable to secure their loans with
agreements that would give them title to the property in the event of
non-payment, their traditional means of backing up home mortgages.)

Rickey L. Armstrong Sr., president of the Seneca Nation, said, "For
generations our people have been unable to obtain mortgages. Now, in a step
toward self-sufficiency, the government is able to take care of our own
people and offer an opportunity for home ownership. The homes purchased or
built with these mortgages will mark the beginning of a new way of life and
a legacy for our future."

The program will offer guidance through the application process and will
also provide counseling for any Senecas who do not receive initial
approval. Anita Ray, the program's acting administrator, said, "Many
Senecas are unfamiliar with the concept of being a home owner because
they've never had the chance to experience the process.

"The goal of the program is to not only empower today's Seneca with the
ability to buy and maintain a home, but make sure tomorrow's Seneca
realizes that home-ownership on Nation territory is now the norm and no
longer the exception."

Ray, a 20-year veteran of banking, is a member of the Mortgage Program's
board of directors, along with three banking professionals, Lyman Buck of
Key Bank, Jeff White of Evans National Bank and Rich Yeager of Cattaraugus
County Bank. The board also includes four Seneca representatives, Joseph
Gorenflo and Renita Thompson-DiStefano from the Cattaraugus Territory and
Maribel Pintup and Opal Frank from the Allegany Territory.

The board will analyze the data applicants submit for a mortgage and vote
on approvals.

The program is expected to open a new office on Main Street in Salamanca,
capital of the Allegany Territory, later this summer. It will also hold two
public information sessions in coming weeks.

PENNSYLVANIA RACING LURES FOXWOODS

Indian casinos were frozen out of the new slot machine law in Pennsylvania,
signed over the Fourth of July holiday by Gov. Ed Rendell, but at least one
tribal powerhouse is looking at a back door into the lucrative new market.
Foxwoods Development Corp., an arm of the Mashantucket Pequot Tribal Nation
in Connecticut, has formed a partnership with a group of Pennsylvania horse
breeders with an eye toward setting up a racino at one of the state's
racetracks.

Plans are still tentative. Bruce MacDonald, the Mashantucket Pequot
spokesman who specializes in Foxwoods Casino Resort news, said its business
team was still analyzing the Pennsylvania law and had no immediate
announcement. Earlier Foxwoods President William Sherlock told Indian
Country Today that if a suitable bill received the governor's signature,
the partnership planned a racino in which Foxwoods Development would
supervise the slot machines and the Pennsylvania horsemen would run the
racing. He would not say which of the state's seven racetracks it would
seek to buy.

The new law authorizes 61,000 slot machines in the state at 145 sites,
including seven racetracks. Rendell, a Democrat, pushed the idea of slot
revenues to reduce state property taxes during his 2002 election campaign.
He hopes that the $3 billion in estimated revenue from the slots would
allow a 20 percent tax cut starting in 2006. The state would get 34 percent
of the revenue and licensees would keep 48 percent.

A version of the bill foundered last year on a provision setting aside a
slot license for tribes willing to waive land claims in the state. The
Delaware Tribe of Indians of Bartlesville and the Delaware Nation of
Andarko, both in Oklahoma, claim a site in Easton, Penn., near the New
Jersey border, now occupied by the Crayola crayon factory. This year's bill
dropped any explicit provision for tribal gaming.

The Mashantuckets, like their near neighbors the Mohegan Indians, have a
lively interest in investing in racinos, rapidly emerging as a new venue
for slot machines or video equivalents. Foxwoods Development previously
partnered with the Penobscot and Passamaquoddy tribes of Maine in a bid for
the Bangor Raceway, which was authorized to add slots last year by a
statewide referendum. The tribes dropped the effort after the State Harness
Racing Commission brusquely refused to consider their bid.

PASSAMAQUODDYS PLAN GASWORKS

After stinging rebuffs to gaming plans, the Passamaquoddy tribe at Pleasant
Point Indian Reservation on the "down East" Maine coast, is now looking at
setting up an ocean terminal for liquefied natural gas (LNG). In June the
tribal government at Pleasant Point, also known as Sipayik, signed an
agreement with Quoddy Bay, LLC., a Tulsa, Okla. energy broker, to develop
plans for a $300 million terminal to receive the super-cooled gas from
overseas and feed it into a major natural gas pipeline supplying southern
New England.

The proposal is still speculative, with no public involvement from a major
energy company, but it is already rousing controversy among environmental
groups. Opponents charge that LNG terminals are vulnerable to accidents or
terrorist attack, because of their highly-volatile contents. Other coastal
communities in Maine have flatly rejected the proposal.

The Pleasant Point reservation, one of two Passamaquoddy governments, has
been receptive, however, looking for a solution to intense poverty and an
estimated 50 percent unemployment rate. Proponents say the terminal could
generate $4 million a year and up for the tribe, with permanent employment
for 60 workers, if it comes to pass. It would download about one tanker a
week from LNG exporters such as Algeria and feed the gas into the Maritimes
and Northeast Pipeline from Canada. Proponents say support from the
Passamaquoddy government would attract a major energy company investor.

Although the Maine Indian Claims Settlement Act deprives the 200-acre
Pleasant Point reservation of sovereign immunity, the government in theory
at least has legally enhanced standing with state regulatory agencies. Gov.
John Baldacci has endorsed the plan, after opposing tribal attempts to
build an economic base through gaming.