We live in the era of Black Lives Matter, where every organization is falling over itself to be politically correct and avoid becoming a target of cancel culture over real or imagined discrimination against people of color.
Associating yourself with an outwardly racist group that threatens to expel members who commit the sin of marrying a Black person is unthinkable, right? Wrong—if you happen to be the city of Norfolk.
Remarkably, the Virginia city is going all-in with plans to award naming rights and a sweetheart, sole-sourced development contract to a Native tribe called the Pamunkey, which Members of the Congressional Black Caucus have chided for racist practices going back two centuries. Months ago, I wrote a column noting that something about Virginia’s gaming bill seemed fishy; the facts that have since come to light show that the deal stinks.
On Nov. 3, voters in Norfolk will decide in a referendum whether to allow a casino to be built on the Elizabeth River. The future casino will purportedly be developed and managed by Pamunkey. Voters are being told that the casino will directly support this small tribe, which has been spending hundreds of thousands of dollars on ads and lobbying. It is curious that nobody, not the media, policymakers or the Pamunkey themselves, are talking about the actual terms of the deal backed by a shadowy Tennessee billionaire named Jon Yarbrough. Voters in Norfolk know almost nothing about Yarbrough, and he intends to keep it that way.
A simple search reveals that Yarbrough was ranked 370 on the Forbes list of 400 wealthiest Americans. Forbes also revealed he gives very little of his estimated $2 billion away, awarding him a philanthropy rating of 1 out of 5.
According to an interview, it is curious then that an out-of-state billionaire suddenly “fell in love” with the Pamunkey tribe. It obviously has a lot to do with the fact that Virginia handed over 40% of its statewide gaming rights to the tribe. There would be nothing wrong with a developer supporting a tribe in a casino venture, provided it was a fair deal for a Native casino. In Norfolk, it will be neither.
A typical Native casino development is built on a reservation. Under federal law, no one but the tribe can own it, and the federal government has the responsibility of protecting the tribe’s interests to make sure they get a fair deal. Through the Indian Gaming Regulatory Commission, the government must approve any agreements with third parties to ensure that the funds go to the overall benefit of the tribe for things such as education and health care.
Usually, the developer working with the tribe is limited to a 5- to 7-year deal, during which time the outside party can earn no more than 30% of income. When the term is up, the developer must exit, with all economic benefits going to the tribe.
Apparently, that just was not enough for Yarbrough. He got the Pamunkey to agree to a commercial (non-Native) ownership structure, stripping the Bureau of Indian Affairs and the National Indian Gaming Commission oversight over the deal to ensure the tribe is treated fairly.
Switching to a commercial casino freed Yarbrough from federal oversight of his pact with the tribe. In the end, the Pamunkey have been used to argue for, and receive, exclusive rights to build a casino in Norfolk. The game plan fast-tracked into place by a litany of lobbyists and accommodating officials eager to make deals guaranteed Yarbrough will reap any real rewards indefinitely while weakening protections for the Pamunkey.
To top it off, the Pamunkey are indebted to Yarbrough for millions of dollars to pay for all those ads and lobbying to support casino gambling in Virginia. Furthermore, according to their horrendously lousy deal, the impoverished tribe being used as a front for the transaction will have to borrow hundreds of millions more from Yarbrough at high-interest rates in order to actually get the casino built.
Industry insiders call this a loan-to-own scheme. Yarbrough gets the tribe so indebted to him for the development costs and makes the interest payments so high that the casino’s entire cash flow goes straight into his pocket.
While the exploitation of a Native tribe—even one that has taken the shocking step of seeking to prevent associating with Black people—is unfortunate, the ultimate losers are the people in Norfolk. Subverting an open, transparent and fair process that enables the best proposal to win, competition has been squelched in favor of a bet that is far from a sure thing.
With literally hundreds of millions of dollars in tax revenues at risk for Norfolk and the Commonwealth of Virginia, you would have thought that a measured and carefully considered approach would have been the preferred course.
Instead, Norfolk is showing once again that those whose interests are backed with money have no problem pulling the levers of power.
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