Revenge of the Pequots: How a Small Native American Tribe Created the World's Most Profitable Casino

by Kim Isaac Eisler

Overview

The Mashantucket Pequots have had a long and proud history, enduring for centuries even after colonists and historians believed them to have been exterminated by the British in 1637. By the early 1970s, however, the legacy of their generations rested on the shoulders of a single elderly woman, upon whose death the Pequots' reservation would fall into government hands. Her grandson, Richard "Skip" Hayward, and other relatives responded to her pleas and kept alive the tribe and its land by coming to live on the reservation.

Journalist Kim Isaac Eisler tells in riveting detail how Hayward and others skillfully manipulated laws, court decisions, and political connections to permit the Mashantucket Pequots to found the Foxwoods Resort and Casino in 1992. Located in Ledyard, Connecticut, Foxwoods today is arguably the world's most profitable casino complex, grossing over one billion dollars annually. The Mashantucket Pequots have become staggeringly rich, their tribal membership has swelled, and they are now an influential force in national politics. Their triumph has not been without controversy: Eisler also examines the volatile issue of racial identity among the Pequots and looks at the negative impact of Foxwoods on those who also make their home in the Connecticut woods.

Product Details

ISBN-13:	9780803267459
Publisher:	UNP - Bison Books
Publication date:	03/01/2002
Pages:	267
Sales rank:	392,477
Product dimensions:	5.50(w) x 8.50(h) x 6.00(d)

About the Author

Kim Isaac Eisler, a former staff writer for American Lawyer, is the national editor of Washingtonian magazine.

Read an Excerpt

Introduction: The Call from the President

On October 18, 1994, in the small town of Ledyard, Connecticut, the chief of the richest and most powerful Native American tribe in the United States strode purposefully into the white construction trailer that served as his temporary office and waited while an operator connected him to the White House. At 10:00 A.M., the call went through and an official-sounding voice told Mashantucket Pequot tribal chairman Richard "Skip" Hayward to "stand by, for the president." A moment of American history as significant as this, Hayward figured, was certainly worth waiting for.

At 10:18 A.M., the familiar sound of Bill Clinton's voice came over the line. Their conversation lasted just about thirteen minutes. Clinton began by thanking Hayward for his past generosity, for the chief had recently contributed nearly $500,000 to the Democratic Party to support candidates in the 1994 congressional elections. Hayward told the president how much he had supported his and his wife Hillary's health-care initiatives, and volunteered a little bit of information about the federally designed tribal health-insurance plan. He expressed his hope that the president would support the tribe's request to the Department of the Interior and the Bureau of Indian Affairs for help in building a health clinic for members of his fast-growing Pequot tribe. "We're going to do everything we can to help you," Clinton promised, emphasizing the word "you," in his distinctive Arkansas accent. Hayward also expressed his concern that the president be sensitive about issues of Indian sovereignty and not support any efforts to tax the giant gambling casino that his tribe had recently begun operating. The conversation ended amiably with Clinton's assurances on that score, and the president took the next in his line of calls. Hayward leaned back in exultation.

It was a singular moment for Hayward and his tribe, a moment ripe with historical significance. Direct contacts between American presidents and Indian leaders had been rare and controversial going back to the momentous first visit of Oglala Sioux chief Red Cloud and Brulé chief Spotted Tail to Washington during the administration of Ulysses S. Grant on June 6, 1870. Seven years later, Red Cloud came to Washington again, this time to negotiate with President Rutherford B. Hayes over the establishment of the Pine Ridge and Rosebud Reservations in South Dakota.

In the hundred years since their brutal forced relocation to reservations, American Indians had come to live in abject poverty. Forced into a fenced existence that as historically free-roaming people they did not understand, they watched settlers take more and more of their ancestral lands while they signed treaties they could not read and sold thousands of acres of property for bottles of whiskey that they could not tolerate. Alcoholism, discrimination, and woefully inadequate education steadily stripped American Indians of their dignity, pride, and economic status. The land they were left with was no good for farming, mineral rights were taken away from them, and federal agencies that were supposed to be managing their accounts were stealing from them. The businesses they had tried to start over the years — smoke shops, museum stores, basket-making companies — had largely failed, and over time they had become what the government considered impoverished wards of the state. No wonder that since that meeting in 1870, Indian leaders and American presidents had met on various occasions, almost always to discuss what aid the U.S. government could give the tribes.

But in 1994, for the first time in the history of Native American relations, it was not a tribe that was seeking federal help, but the president of the United States asking to be the beneficiary of Indian wealth. In the preceding year, Hayward had already sent, on behalf of his tribe, some $215,000 in legal but unregulated so-called soft money to help president Clinton's party repay the campaign debts incurred in the 1992 election. In a January 5, 1993, confidential memo from an official of the Democratic National Committee, Hayward was listed as one of the party's "top ten supporters," with an accompanying memo that he should be the recipient of what would become one of those controversial overnight stays in the White House Lincoln Bedroom. The memo, written by Democratic national finance chairman Terry McAuliffe, listed Hayward third on a list of ten of the country's best-known industrialists. "If there are any opportunities to include some of our key supporters in some of the President's activities, such as golf games, morning jog, e.g., it would be greatly appreciated," McAuliffe wrote. After the memo was written, Hayward and his Chippewa wife, Carol, a former Interior Department employee, became frequent guests at private breakfasts and dinners with the president and key administration officials. On the day before his call to Clinton, Hayward had signed a check for $50,000 to the Democratic National Committee. A short time after the call, on November 4 and November 21, he wrote two more checks for the same amount and over the next year contributed another $100,000. Hayward no doubt wrote these checks with the hope that the Clinton administration would respond favorably to his tribe's request to annex 165 acres of rural farmland that it had bought adjacent to its reservation in Ledyard. The property included a lake and an old Boy Scout camp that the tribe hoped to turn into a golf course, spa, and boating area. And in late 1994, Interior Secretary Bruce Babbitt approved the annexation despite vocal opposition from three neighboring towns concerned about crass development and worried that adding the land to the rest of the reservation — which was held in a tax-free trust by the federal government — would take the property off the local tax rolls.

After the 1994 phone conversation with the president, Hayward's then 175-member Mashantucket Pequot tribe would send nearly $800,000 in cash to the Democratic Party. They hedged their bets after Republican congressional victories of 1994 by giving $190,000 to the Republican Party, a decision that only infuriated House Speaker Newt Gingrich, who told colleagues that as long as the disparity between what they gave to the parties was so large, the Pequots would not have much clout with him.

In that crucial year of 1994, Hayward's largess would have immediate and tangible results. He would have a meeting with Democratic National Committee chairman David Wilhelm, one of Clinton's closest confidantes. A few months after the contributions, as President Clinton's reelection effort neared, Chief Hayward met with Clinton strategist Harold Ickes, then the White House deputy chief of staff. "There is a lot of money in Indian Country," a White House lawyer wrote in a note about the meeting. This was not a message lost on the president.

In the months before his first election, Clinton had been extremely skeptical about the beneficial effects of allowing Indian tribes to own and operate gambling casinos. As the leader of the National Governor's Association, the Arkansas governor had led his organization's opposition to expansion of Indian gambling. His views were reflected in a speech he made at a town meeting in San Diego in May of 1992. Candidate Clinton expressed disdain for Native American casinos, saying that while "reservations have been kept dependent too long, gambling is a lousy basis for an economy." But after consultation with political advisers and fund-raisers, Clinton began to see the error of his position. Seven months after his election, on August 4, 1993, Clinton gave a rare interview to a small paper called Indian Country Today, in which he extolled the benefits of Indian gaming as if the speech in San Diego had never happened. "Gaming is a positive economic development tool for Indian tribes," Clinton asserted. This interview was one of the first signals of the president's increased effort to raise campaign funds from the tribes. And he had clearly been advised that the operative word was not "gambling" but "gaming."

So began a trend, with the government catering to Native American needs for its own financial and political gain. And the Mashantucket Pequots, owners of the world's most profitable casino — just north of Hayward's office in the woods of southeastern Connecticut — were at the center of it all.

In one of the greatest about-faces in American history, this obscure Indian tribe, which in 1994 had been federally recognized for only ten years and numbered fewer than 200 people, had nothing if not plenty of cash.

The Pequots' Foxwoods High Stakes Bingo and Casino, one of the most successful cash-producing enterprises in the world, rose incongruously and unexpectedly from the forest that surrounded most of Ledyard, a village some 12 miles southeast of Norwich, Connecticut, and about an equal distance west of the Rhode Island border. Nestled a dozen miles off any main road, Foxwoods, which opened in 1992, had become an entertainment complex with four hotels, two giant casinos, a nest of restaurants and buffets, a state-of-the-art museum, and extensive shopping areas. Its distinctive white and teal color scheme rose high over the forest line and could be seen for miles, not a mirage in the desert but a visage in the woodlands. Virtually every day, some 25,000 visitors would elbow each other onto the grounds, anxious to pour dollars into the tribe's slot machines, and blackjack, craps, and poker tables. On some days, such as New England's Patriot's Day, the casino seemed to reach the point of implosion. Its parking lot, longer than three football fields, would be overwhelmed with vehicles from Boston, New York, and Canada. Spots were so prized that drivers would hover near the casino exits, then give people a ride to their car in exchange for their parking place. Noise and exhaust from buses were now the norm in what was once one of the most rural and quiet corners in America. Some twenty years earlier, hippies from New York had drifted to this area to find privacy and solace, making their homes in small towns like Ledyard, North Stonington, and Preston. Previously, there had been nothing to attract adventure-seeking tourists to stop here. Thousands of New Yorkers, Philadelphians, and Washingtonians making the journey to and from Cape Cod via I-95 in the summer could travel the same highway for decades and never find a reason to wander any farther off the road than the popular Mystic Aquarium on the coast. If one ventured north of the big fish tank, the roads became winding, leafy ways, mysterious and often unmarked. There were few gas stations and no chain or convenience stores. The thought of a McDonald's, Burger King, or Wal-Mart was ludicrous.

But by 1995, Route 2, which roughly paralleled a section of I-95 about 20 miles to the north, was a constant rumble of buses and cars crammed with boisterous out-of-towners heading to or from the casino looking to buy a quick snack with $100 bills, currency that most local merchants had rarely seen, much less made change for. Refrigerated supply trucks from New York and Boston joined the procession in the early morning as uniformed guards and tribal policemen waved vehicles through a maze of hotels, casinos, and restaurants. By late 1998, some 33.6 million rolls of the craps dice later, the casino had been teeming nonstop for seven full years. Gamblers were pouring an estimated $700 million a year into the tribe's slot machines, averaging $80,000 per hour. George Washington's shiny silver face was being swallowed up by the Indians' slot machines at a rate of 7.6 million coins per day. The slots had even pushed Hayward out of his office in the tribe's main building, which was why he had called the president from a trailer. Eventually, a new $30-million city hall and community center would replace the trailers.

But with the popularity of Foxwoods came problems — both for the casino and the town. The lines at the casino's understaffed buffet extended for hours during lunch and dinner. The casino had long ago sopped up all the available labor in the New England market, with dealers and pit bosses driving in each day from Providence, Boston, and even towns as far away as New Hampshire. There was such a shortage of workers that the Pequots had to create their own "academy" to train potential employees, since the local high schools did not offer vocational training in dealing craps and blackjack. Not that the tribe didn't try to encourage them. Every year, the Pequots would make a massive donation of used cards and dice to the public school system. "To help kids in math," the school board insisted, accepting the gifts.

Services offered by casinos in Las Vegas or Atlantic City, like keno runners who took bets from customers for the ubiquitous bingolike numbers game, were often hard to find at Hayward's casino. All the pretty, long-legged local girls they could find to dress up in skimpy Indian costumes were already cocktail waitresses, dealers, or cashiers. In a region where unemployment had been unacceptably high for nearly two decades, there simply weren't enough bodies to fill the casino's voracious appetite for personnel. If you wanted to make a keno bet, it was do-it-yourself. Poker dealers were kept at their stations until their eyes were red and bleary and their fingers raw from scraping the edges of the cards. Roulette spinners whirled wheels until they were dizzy. The reservation didn't have to worry about violating labor laws, since it claimed exemption from most of them. The labor crisis was even worse outside the casino. Some shopkeepers, who had wondered hopefully what all those rumbling buses might mean for them, watched in horror as their hourly workers deserted in droves. Small business owners were left without cooks or counter workers, without salespersons or gas station attendants, without hairstylists or bookkeepers.

Suddenly, in what had once been one of the quietest patches of America, crimes were being committed that had been unheard of in the past. In their frenzied rush to the slot machines and blackjack tables, parents left their children and dogs locked in their cars, sometimes for hours. One New York City man left a five-year-old girl and a nine-year-old boy in his car for over two hours, with the motor running. A twenty-eight-year-old Massachusetts woman left four children ranging in age from two to seventeen alone for seventeen hours, while she lost the family grocery and rent money pulling slot handles. The police report indicated that she "occasionally" brought food and drink to the car for the children, who were locked inside from 9 A.M. on a Sunday until 2 A.M. Monday. Like many, their mother simply ignored the signs put up by the tribe in the parking lot stating that people leaving children in cars would be prosecuted. The towns' jails filled on account of drug and cocaine possession arrests, not merely of the tourists but also of nouveau riche tribe members suddenly swimming in cocaine and marijuana. In a three-month period in 1998, Connecticut State Police counted 340 crimes in tiny Ledyard, most of them drug or disorderly conduct crimes. Between 1990 and 1996, traffic counts on I-395 in Norwich increased from 37,000 to nearly 50,000 vehicles a day. On I-95, traffic doubled, swamping state police with at least two serious accidents to handle every day. On tree-lined Route 2, the busiest and closest road to the casino, many of the splendid oaks now showed fender-level gashes where cars had plowed into the forest.

By 1997, just five years after the opening of the casino, personal bankruptcy filings in New London County, where the casino was located, quadrupled, mostly for abusing plastic. Explained one busy bankruptcy attorney: "The casino has a credit card swipe machine every five feet." When the machines would no longer dispense cash, gamblers were given to desperation. In March 1996, when thirty-eight-year-old Laura Grauer of Stamford, Connecticut, had gone through all her credit cards and all her cash, the married mother of a teenage daughter walked into the nearby Thames River and drowned herself.

Who was this nouveau riche Indian tribe that was turning a sleepy part of New England upside down? The legacy that Richard Hayward now clung to, the mantle of Pequot history, was crucial to his multimillion-dollar endeavor. As the result of a long line of controversial Supreme Court decisions, only genuine Indian tribes could legally operate casinos in Connecticut. There had once been Indians called the Pequots. Of that, there could be no doubt. But were Hayward and his family really their descendants? Some suggested that they were closer to being "Casino-Americans," opportunists who had manipulated American laws to create their own nation and then their own casino. It was this suspicion that nagged at the residents of Ledyard and Preston. Many of them had known Hayward and his family for many years. His father had been a Navy seaman; his paternal grandmother and great-grandmother had been active in the Daughters of the American Revolution. Hayward, his two brothers, and his six sisters had attended public schools both in Ledyard and in nearby Rhode Island, where his father was stationed. People had known them all their lives, and they had never identified themselves as "Indians" before. Why were they Indians now? And how, by 1998, had the Haywards become the most powerful family in the state, earning more than $1.5 million a year in salary, enjoying dinners with the president, negotiating to buy National Football League franchises, receiving honorary degrees from the most prestigious universities, and swallowing up farms, houses, historic inns, and landmarks that had been in private Yankee hands for three centuries?

The small reservation where the casino now stood had been around for as long as local residents could remember. But no one was exactly sure if the people who lived on it were truly related to the proud Pequots of four centuries ago. Suddenly, this question was at the forefront of everyone's conversations. Something had happened in Connecticut that changed the lives of those who lived here. As remarkable as these transformations were, the story behind them was even more incredible.

Copyright © 2001 by Kim Isaac Eisler

Table of Contents

	Introduction: The Call from the President	13
I.	Beginnings	23
1.	The Pequots Meet the English	25
2.	The Rise and Fall of Mashantucket	46
II.	Battling the Odds	61
3.	Tom Terrific	63
4.	Bingo Billie	89
5.	A Tribe Wins at Poker	108
III.	Jackpot!	121
6.	"Dances With Wolves"	123
7.	The Land Bridge to Asia	141
8.	The Bells Begin Ringing	165
IV.	Cashing In	183
9.	Grand Plans and Growing Pains	185
10.	Turnabout Is Unfair Play	193
11.	The Battle of Old Blue Eyes	204
12.	The Pequots Lose a Bet	216
13.	Hail to the Chief	230
	Acknowledgments	243
	Source Note and Bibliography	245
	Index	253

Editorial Reviews

In Revenge of the Pequots, Kim Isaac Eisler tells the riveting, almost unbelievable tale of Richard "Skip" Hayward, chairman of the Mashantucket Pequot Tribe, who defied governors and powerful gambling figures including Donald Trump to create the enormously profitable Foxwoods Resort Casino. Eisler explores in rich detail this latest of the Indian wars.

Business 2.0

In this well-paced legal and political saga, journalist Eisler (A Shark Tank; A Justice for All) recounts the deft maneuvering by Connecticut's tiny Pequot tribe in its fight to establish Foxwoods, now the most profitable high-stakes casino in the world. European accounts from the early 16th century describe the Pequots (meaning "destroyers") as "the most numerous, the most warlike, the fiercest and the bravest of all the aboriginal clans of Connecticut." After major defeats at the hands of the English and the Dutch, the tribe was declared dissolved in 1638, although some diehard Pequots retained their identity despite their declining numbers. By the 1970s, they had dwindled to some 55 souls, mostly living below the poverty line, when tribal chairman "Skip" Hayward lined up some legal-aid lawyers and, in effect, declared war with modern legal tools (including contributions of "soft money" to the Democratic National Party, which gained them the direct support of President Clinton). The cast of characters includes Connecticut Sen. Joe Lieberman, Newt Gingrich, John McCain and Donald Trump. Packaged with a flashy, attention-grabbing cover, this climactic revenge narrative--which turned southeastern Connecticut's economy upside down, with employees leaving local businesses in droves for the chance to work at Foxwoods while the Pequots donated cards and dice to the local school systems in the hopes of turning kids into future employees--reveals that, like it or not, the Native American is a "Casino-American," and that it's a brave new world. (Feb. 16) Copyright 2001 Cahners Business Information.

Publishers Weekly - Publisher's Weekly