Why did $54 million in Porkulus go to one of the most successful Indian casinos?

Hey, we knew that electing an untested executive to the presidency was a big gamble, didn’t we?  We also knew Democrats gambled big with Porkulus that their agenda of liberal hobby-horse spending would coincide with an economic recovery.  Unfortunately, neither gamble paid off, but one casino managed to hit it big with Porkulus and Barack Obama, thanks to Chris Dodd:

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With the support of Sen. Chris Dodd, D.-Conn., the federal government has awarded $54 million to Connecticut’s politically well-connected Mohegan Indian tribe, which operates one of the highest grossing casinos in the U.S.

The tribe runs the sprawling Mohegan Sun casino, halfway between New York City andBoston, which earned more than $1.3 billion in gross revenues in 2009. Each tribe member receives a cut of the profits, a number a tribal official said was “less than $30,000” per capita per year. The stimulus money is a loan from a U.S. Department of Agriculture rural development program that is meant to help communities of less than 20,000 people that have been “unable to obtain other credit at reasonable rates and terms and are unable to finance the proposed project from their own resources.”

Yeah, but everyone was getting this, right?  The Mohegans just got their fair share, I’m sure.  Or, perhaps not:

The $54 million loan represents more than one-third of the $167.8 million allocated by the USDA in the latest wave of stimulus funding for its rural development program.The loan is just part of $74 million in loans directed to the Mohegans by the USDA for the construction of a community center and tribal government building.

USDA officials said that part of their consideration in moving forward with the project was the tribe’s continued challenge in obtaining credit because of the ongoing economic crisis.

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The Indian tribe making over $1.3 billion in receipts from its casino wound up with a third of the entire outlay from the USDA’s rural development program?  And how exactly does an entity earning $1.3 billion  from a casino, with $53.6 million in profit have trouble getting credit?  They clearly have assets in their community for collateral.

The “cut of the profits” argument is misleading as well.  The tribe members get a little less than $30K per year in profit sharing.  Many of them presumably work at the casino itself and earn salaries for their work apart from the profit sharing.  The casino arguably should generate a secondary support economy in their community as well.

This looks much more like a politically-connected decision to channel federal dollars to the influential Mohegans, in order to get some of it back in political support.

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David Strom 5:20 PM | April 19, 2024
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