Sunday, May 20, 2007

Did Chicago and New York Mobsters Make a Move into Wisconsin?

Friends of ours: Meyer Lansky
Friends of mine: Morgan Murphy

Wisconsin State gaming officials raised serious questions over whether to grant Kenosha businessman Dennis Troha a gaming license so he could develop a proposed Indian casino at the old Dairyland dog-racing track in that city, according to documents released Friday.

The more than 1,000 pages of documents, which were part of a background investigation of Troha's now-defunct Kenesah Gaming Development LLC, show that state officials were aware of Troha's alleged links to organized crime and his past efforts to sway top state politicians into approving an earlier casino plan at the same dog track site. But a 46-page summary report on the documents stopped short of determining the accuracy of those allegations or recommending whether Troha should be granted the license.

Instead, as Gaming Administrator Robert Sloey noted in a cover letter releasing the report, Troha withdrew his request for the gaming license before the state could prepare a final report.

"Consequently, the report does not represent (any) conclusions drawn by the (Gaming) Division," Sloey wrote.

In a statement, Troha spokesman Jeff Fleming called the report "a compilation of every unsubstantiated innuendo and rumor. The contents of the report have not been verified or subjected to the routine review that the state would ordinarily conduct before making formal findings.

"Because of the circumstances, it is neither fair nor practical for Mr. Troha to respond to specific statements in the report," Fleming said.

Troha was indicted in March on federal fraud charges for allegedly funneling more than $200,000 in illegal campaign contributions to Gov. Jim Doyle through several family members. Federal prosecutors allege that he gave the money in an attempt to win Doyle's approval of the $800 million casino project. Troha has denied any wrongdoing.

The records show that Troha invested at least $13 million of his own money into the project, which was also being funded by the Menominee tribe of Wisconsin and the Mohegan tribe of Connecticut. The two tribes bought out Troha's share of the project shortly before he was indicted.

Evan Zeppos, a spokesman for the Menominee, said he believes the report will not affect federal or state action on the project, but it could be used by casino opponents to try to build political opposition.

While the report did not recommend whether to grant Troha and his Kenesah firm a gaming license, Division of Gaming investigator Patrick O'Hern questioned Troha's role in the project based on the following "issues":

* Troha's role in an earlier effort by Nii-Jii Entertainment Inc. in the 1990s to develop an Indian casino at the site.

Troha was a partner in the project, which was headed by former U.S. Rep. Morgan Murphy of Illinois and businessman Joseph Madrigano. Murphy later came under federal investigation and had to abandon the project because of his partners' alleged ties to the Chicago mob.

In an interview with state investigators, Troha described himself as an "insignificant participant" who "gave Morgan Murphy the benefit of the doubt" because Murphy "seemed to be a nice guy ... (who) didn't seem to be anybody that would be involved in anything improper."

O'Hern said that other records, including testimony in a civil trial by other casino investors against Murphy, indicated Troha's role was much more significant, but did not reach any conclusions as to how significant that role was.

* Troha's "history of having business partners with ties to organized crime."

In the late 1980s, Troha was a partner in another firm seeking to manage the Dairyland dog track. Other investors in that firm were alleged to have been close associates of New York mobster Meyer Lansky. The report also recounted Murphy's alleged ties to the Chicago mob.

* Troha's reputed involvement "in using improper methods to influence public officials in order to obtain approvals needed to operate a gaming enterprise."

In the first such case, Troha and other business partners allegedly retained veteran lobbyist M. William Gerrard in the 1980s in order to get then-Gov. Tommy Thompson's to approve their management of the Dairyland dog track.

Troha, according to the report, allegedly asked Gerrard to see whether Troha could hire a Racing Board member to act as an attorney for Troha's trucking company. Troha also met with Thompson's top aides, including then Administration Secretary Jim Klauser and Thompson aide Nick Hurtgen, before the Racing Board acted on Troha's request. The Racing Board ultimately rejected that proposal.

In the second case, the Nii-Jii project was shut down after it was reported that several of Thompson's closest confidants would have received shares of stock in the project worth more than $46 million. "Given Mr. Troha's significant level of activity in Nii-Jii matters, he could have known of this deal long before it hit the papers," the report stated.

The company also allegedly gave "gifts" of shares in Nii-Jii to Hurtgen's wife and other top officials in a manner "singularly characteristic of influence peddling."

* Troha's record of "bad business practices on several occasions." These endeavors included the failed Nii-Jii project in which other Kenosha investors lost hundreds of thousands of dollars. The investors ultimately filed a class-action lawsuit against Murphy and other project leaders.

The report found that Troha also had disputes with the Teamsters union over his Kenosha-based trucking company over union representation of his drivers. The Teamsters claimed that Troha sought to circumvent union contracts "by transferring work to non-Teamster companies in a kind of shell game.'" And the report also stated that Troha's "right-hand man in the company's Kentucky location" was alleged to have told a subordinate to commit perjury in a wrongful death lawsuit brought by one of the company's employees.

* A "lack of due diligence" by Troha in some of his business dealings. Those failings include claims that Troha failed to learn about efforts by other partners in the 1980s dog track racing venture to bribe a member of the Wisconsin Racing Board.

* A failure to disclose previous law-enforcement contacts relating to the Dairyland dog racing application and the Nii-Jii venture on his application for the Kenesah license.

Thanks to David Callender

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