Salinan Tribe applies for federal recognition
December 15, 2011
The local Salinan Indian Tribe has again applied for recognition from the federal government. [Tribune]
Last week, the tribe sent 920 pounds of documents to the federal government supporting the tribe’s request.
Chris Molina, a spokesman for the Salinan Tribe of San Luis Obispo and Monterey counties, told the Tribune, the tribe is “seeking to ‘recapture’ its history and heritage” through federal recognition. He said that opening a casino is not on the radar at this time, but something that could occur in the future.
In 1993, the Salinan Tribe first petitioned the U.S. Department of the Interior for federal recognition. Without federal recognition, federal laws prohibit tribes from owning and running an Indian gaming casino or receiving federal funds for health centers and education.
Molina approached the tribal council in early 2003 with assurances that four venture capitalists who went by the name of PMA could “fast track” its plans for recognition, but they would have to sign a confidentiality agreement that not even the tribe’s attorney would be permitted to read before they could hear the PMA proposal.
North County developer Kelly Gearhart was one of the members of PMA, along with attorney Grigger Jones, Molina and Dan Phillips. The members of PMA and the tribal officials entered into a contract to fast track the tribe’s application for federal recognition with the goal of eventually building a large Indian gambling casino on the northeast side of Paso Robles.
Molina said that the tribe’s legal firm at the time, Sacramento-based Monteau & Peebles, was “politically correct under the Clinton administration,” but was incorrect under the Bush administration, according to tribal confidential documents provided to CalCoastNews by Tribal members.
In March 2003, Molina introduced Tom Tellefsen and attorney Jerry Levine to the tribal council as two men who could shorten the timeline for federal recognition from 20 or more years to a few months because of their ties to the Bush administration, according to tribal documents.
Molina assured the tribal council that Levine was there to represent the tribe and not PMA, even though PMA would cover all attorney fees, according to the minutes of a March, 2003 council meeting. It was an assurance the tribal leaders said he failed to follow through on.
Within the next few months, Levine met with the partners of PMA several times behind the backs of the tribal council. Levine would later inform the council that Molina had said that tribal council members were aware of their meetings, according to the Tribes’ Molina File.
Molina continued to deny that either he or his partners had spoken to Levine.
“We haven’t spoken to him (Levine) or had any contact with him either,” Molina said at a June 4, 2003 tribal council meeting.
At the same meeting, tribal council members Gary Macagni and Dan Phillips told Molina that they were canceling their agreement to obtain federal recognition through PMA.
“By not telling us about the meetings and by intentionally not telling us when we questioned you shows dishonesty on your part,” Macagni said to Molina, according to transcripts of the meeting.
In October, 2003, PMA changed its name to Pejihota Consultants LLC and had Joe Diehl of the San Luis Obispo law firm of Diehl and Rodewald file a lawsuit against the Salinan Tribe, claiming fraud, breach of contract, and intentional misrepresentation for canceling their agreement to give Gearhart, Molina, Jones and Phillips a cut of future casino revenue in exchange for helping the tribe receiving federal recognition. The suit asked the tribe to return $20,000 in expenses as well as $2.5 million for lost revenue to Pejihota.
The tribe later agreed to reenter into an agreement with Pejihota Consultants LLC.
The LLC members expected to reap 40 percent of all gaming proceeds for a period of seven years with an option to extend for an additional seven years. For all other developments, the LLC members were expected to receive 50 percent of proceeds for 25 years with a 25 year extension option, according to the business plan of the Salinan Tribe and PeJiHoTa LLC.
After several years of failing to receive federal recognition through presidential approval, Gearhart began flying his jet to Sacramento in an attempt to get state legislators to help expedite federal recognition.
In 2008, Gearhart’s empire was crumbling. He stopped making loan payments and federal and state investigators had mounted investigation into charges of organized crime against Gearhart and a handful of his associates. In October of that year, he signed his interest in Pejihota over to his partners Jones, Molina and Phillips.
In February, 2009, Gearhart, formerly Atascadero’s Citizen of the Year, filed for Chapter 7 bankruptcy protection in Ohio, claiming $6.5 million in estimated assets and $45.1 million in estimated debts. Gearhart failed to mention his involvement in the Pejihota LLC in his bankruptcy filing as required by law.
In June, 2009, Ohio Federal Bankruptcy Trustee Harold A. Corzin filed a fraud complaint against Jones, Molina, Phillips and the group’s Pejihota LLC for allegedly hiding assets for Gearhart with the “intent to hinder, delay, or defraud creditors.”
Responding to the trustee’s filing, the defendants denied allegations that they intentionally caused damages to the creditors of the Gearhart bankruptcy. The group stated that its business venture “had no value” at the time Gearhart resigned as a member of Pejihota LLC, according the defendants joint answer to the complaint filed.
In July, 2010, Ohio Bankruptcy Court Judge Marilyn Shea Stonum ordered Jones, Molina and Phillips to pay the bankruptcy trustees $20,000 to cover their costs of investigating Pejihota, to provide the trustees one fourth ownership in Pejihota with the right to buy back the trustee’s interest in the project by reimbursing Gearhart’s investment into Pejihota, $646,190.
The court noted there was the likelihood that Pejihota and the Salinan Indian Tribe would eventually succeed at gaining federal recognition for the tribe.
Pejihota and the Salinan Tribe’s plans call for building a 250,000-square-foot gaming casino, homes for about 400 people, a school, a hospital and a “green” energy plant on 2,500 areas they plan to purchase in either North San Luis Obispo County or South Monterey Counts, according to their business plan.