Seminoles have a rags-to-riches story

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Last Updated: 17 years AUTHOR: Sue Reisinger, Seminole Corporate Counsel

Several times last autumn, the Florida Seminoles’ efforts to buy Hard Rock Cafe International Inc. hit a snag. Some tribal leaders balked at spending nearly a billion dollars for the hotel/restaurant/casino franchise; they didn’t want to hear advice from outsiders, such as Wall Street investment bankers, to go ahead with the deal. It was tribe’s general counsel, Jim Shore — the first Seminole to graduate from law school — who saved the day and the deal.

He oversaw the negotiations, worked with the bankers, and supervised the tribe’s outside lawyers. Then he soothed the leaders’ anxiety. For seven months he repeatedly called, visited or emailed the tribe’s five elected council members, answering their questions, easing their doubts, and sharing his vision for the Seminoles’ future. The leaders were “a little bit cautious because we’re talking big bucks here. They had to be satisfied with the numbers,” Shore says.

But in the end Shore and the Seminoles prevailed over 69 other bidders. On Dec. 7 the tribe announced that it had reached an agreement to buy the Hard Rock franchise for $965 million from the London-based Rank Group Plc. Rank’s shareholders approved the sale on Jan. 8, and the deal closed last March. The Seminole Indians gained control of the two Hard Rock casinos on Florida Seminole reservations, plus 124 Hard Rock Cafes in 45 countries, five hotels, two Hard Rock live performance venues, and the Hard Rock brand name.

They also own Hard Rock’s collection of some 60,000 items of rock memorabilia — including Eric Clapton’s guitar and Madonna’s infamous Jean Paul Gaultier bustier.

The Seminoles and Madonna’s bustier? That unlikely pairing is an example of why the tribe calls Shore “The Great Negotiator.” In Shore, the Seminoles have a general counsel who is one of them.

Shore, 61, was raised with six brothers and sisters in a thatched-roof chickee — an open-air home made of cypress logs and palm fronds — on a Florida reservation. At the same time, the Seminoles have a GC savvy enough to oversee the largest deal ever by an Indian tribe. “I can put on a suit and tie and fly to New York to negotiate a deal, and come back and put on my traditional garb and take part in a tribal ceremony,” Shore says.

He makes it sound easy, but nothing has come easy to Shore or the nearly 3,300-member tribe. The Seminoles for years battled a U.S. military that was intent on eradicating them. And Shore has survived his own personal challenges — first a tragic accident that left him permanently blind at age 25, and then an assassination attempt five years ago as he fought to clean up tribal corruption. Critically wounded, he recovered at home under the protection of armed guards.

Today, Shore supervises the tribe’s operations from the Seminoles’ modern headquarters near Hollywood, Fla. Aided by three staff attorneys, he fills an unusual dual role. He is not only general counsel to the tribal government, but is also GC to the tribe’s privately held corporations, which have blossomed during his 25 years as GC. (Last year the tribe earned $500 million from its gambling operations alone, enough to pay each of the tribe members a monthly stipend of $7,000.)

Shore’s office also works closely with government regulatory agencies. But his top priority is sussing out and meeting the needs of his client. “I don’t push for anything,” Shore says, sounding almost like a Fortune 500 general counsel. “I answer [tribal leaders’] questions. They make the decision.”

The Seminoles have a rags-to-riches story.

KEY DATES IN THE SEMINOLES’ ROAD TO RICHES

1812 to 1858

The tribe fights the three Seminole Wars with the U.S. military. Though decimated, the Seminoles refuse to surrender, and a few hundred survivors scatter into the Everglades.

1953 to 1957

The tribe successfully battles a U.S. House resolution to terminate its tribal status and take tribal lands; members gather at the Council Oak to form a new, federally recognized government.

1977

The Seminoles open their first “smoke shop,” offering tobacco products at a discount, because they do not have to pay taxes. It’s the first major commercial use of the tribe’s sovereign status.

1979

The tribe pioneers the concept of Indian gaming by opening the country’s first large-stakes bingo hall.

1980

The tribe hires new law school grad Jim Shore as an in-house attorney; he’s promoted to GC in 1982. Shore was the first Seminole to graduate from law school.

1981 to 1999

The Seminoles, with Shore as lead legal strategist, pursue three landmark federal suits that expand and define the bounds of Indian gaming in America. The tribe wins two of the suits and loses one.

2000

The tribe, with Shore’s guidance, negotiates a deal to develop casino resorts on the Hollywood and Tampa reservations.

2004

The tribe opens the Seminole Hard Rock Cafe and Casinos.

2006

The Seminoles, led by GC Shore, buy the Hard Rock franchise for $965 million, the biggest-ever Native American deal, making the tribe a global player in the gaming industry.

First the tribe fought three bloody wars in the 1800s against the United States, including one against Gen. Andrew Jackson, who tried to eradicate the Indians from Florida. Vastly outgunned, a warrior named Osceola led the Seminoles through seven years of fighting, until he was captured by deceit — during peace talks under a white flag of truce. Osceola died in prison, but his people continued to fight until the U.S. military gave up.

To this day, Shore points out, “the Florida Seminoles are the only American tribe never to surrender and never to sign a peace treaty.” This legacy of the “white man’s deceit” and the Seminoles’ unconquered spirit set the tone for the tribe’s future dealings with government.

In 1953 the House of Representatives passed a resolution to seize the Everglades farmlands that the tribe had settled. Tribal leaders, including Jim Shore’s father, Frank Shore, gathered under a huge oak tree to talk about how they should respond. The discussions resulted in a compromise, with tribe members voting to form the Seminole Tribe of Florida Inc., a federally recognized corporation.

The Indians adopted a constitution, formed a tribal council government composed of five elected leaders, and accepted some federal regulation in return for keeping their land. The tree where they met became known as the “Council Oak,” and it stands today, next to the tribe’s headquarters.

Born on the Brighton reservation near the town of Okeechobee in 1945, Shore was the son of the tribe’s medicine man, a position of much respect. But the son grew up amid the discrimination then common in the deep South, where many white businesses refused to serve blacks, Jews or Indians.

When Shore finished high school, the Bureau of Indian Affairs sent him to a technical institute for Indians in Lawrence, Kan., to study auto mechanics. When he graduated, Shore came home to a reservation where raising cattle had become the main enterprise. “So I was more cowboy than mechanic,” he says.

That changed in 1970. Shore was driving back to the reservation when his car clipped a passing truck and caromed into a concrete abutment. Wearing glasses at the time, Shore was thrown into the windshield, and shattered glass permanently blinded him.

At his family’s suggestion, Shore went to Stetson University in Florida, where he earned a bachelor’s degree in history; he expected to teach. Then a classmate’s father persuaded Shore to enter Stetson’s law school. “I think the school was hoping I’d flunk out so they wouldn’t have to deal with me,” Shore jokes. There was no formal help for disabled students. So Shore says fellow students read cases to him, and he tape-recorded lectures. Shore dictated his notes on a second tape, which he used to study for exams. (Shore did learn Braille, but says he does not rely on it.)

To this day, friends say, Shore can remember details of conversations months later. Eric Dorsky, a solo practitioner in Davie, Fla., who has worked with Shore for 17 years on litigation matters, says that Shore’s listening ability goes even further. In difficult negotiations, Shore “recognizes what is said and what isn’t said,” Dorsky says. “He hears what people really want, what the real agenda may be, even when it’s not spoken.”

For his part, Shore recalls a tribal elder saying how it must have been God’s great plan for Shore to be blinded in an accident, so that he would go to law school and lead his tribe to prosperity. Shore says he replied: “Couldn’t God have just whispered in my ear?”

The Seminole tribe pioneered Indian Gaming

Shore was thrown into the Seminoles’ legal fray right away. The group had pioneered the idea of Indian gaming by opening the country’s first large-stakes bingo hall on its Hollywood reservation in 1979. Florida law permitted bingo, but imposed a $100 limit on pots. However, the tribe offered prizes worth thousands of dollars, and was counting on its sovereign status to protect it from a legal challenge.

The concept of tribal sovereignty, guaranteed in the commerce clause of the U.S. Constitution, is a murky legal area. In order to do business with the outside world, a tribal corporation usually waives its immunity. But the Seminoles have never waived sovereignty rights regarding the state, and the tribe pressed those rights in three landmark gambling cases between 1980 and 1999.

First, Florida sued to stop the high-stakes bingo games, and the Seminoles won in a 1981 federal decision, citing the tribe’s sovereignty. That opened the way for tribes across the country to develop their own games.

Then the Seminoles sued the state, under the Indian Gaming Regulatory Act of 1988, trying to force Florida to negotiate a gambling pact that would allow the tribe to add Las Vegas-style games such as blackjack and slot machines. And though the state won that battle, because of its immunity to suits in 1994, it lost the war. Without a gambling pact, Shore figured the state had no right to regulate Indian gaming under the act. So the Seminoles immediately added slot machines to their casinos. When Florida sued to remove the slots, the federal court sided with the tribe.

Taking advantage of the court victories, in 2000 then-tribal Chairman James Billie was able to negotiate a deal with The Cordish Co. of Baltimore and its Fort Lauderdale subsidiary, Power Plant Entertainment LLC, to develop two Hard Rock resort casinos. But as the work on the casinos began in 2001, Billie became the target of a federal grand jury investigation amid reports of alleged ties to organized crime. (Also during Billie’s reign, the National Indian Gaming Commission levied millions of dollars in fines against the tribe for illegal contracts he’d made with casino management companies.)

The feds had heard about Shore’s reputation for integrity from other lawyers who had dealt with the tribe, and asked for his cooperation with the probe. He gave it. Shore then sparked a firestorm by advising the tribal council that Billie should go. In a crucial turning point for the Seminoles, its leaders had to choose between its chairman of 20 years, and its trusted general counsel. They chose Shore.

Max Osceola Jr., a Seminole council member for 22 years, says he did not think of it as choosing between leaders. “Jim [Shore] gave us the pros and cons,” Osceola recalls. “And it was a matter of choosing what was right for the tribe.”

So the council suspended and later fired Billie and his close associates for financial irregularities. With Billie gone, Shore brought in outside consultants to clean up the tribe’s gambling operations. The move pleased the feds, but clearly annoyed others.

Assassination attempt on Shore

As Shore rested at home one evening in January 2002, someone shot him three times in the arm and chest through a patio door and left him for dead.

Critically wounded, he managed to call 911. Police called it a mob-style hit. Police questioned Billie, but the assailant was never found. Shore eventually recovered, and Billie was never charged with any wrongdoing. Billie later apologized to the tribe for his mishandling of funds.

The tribe, with Shore’s guidance, forged ahead in 2002 with the proposed Hard Rock developments. When the Seminoles opened the 86-acre Hollywood resort in 2004 with its hotel, restaurants, retail shops, four-acre water park and 130,000-square-foot casino, they took Indian gaming in America to a whole new level.

Three years later, they would take Seminole entrepreneurship onto a global stage. (The Hollywood site recently achieved some worldwide notoriety for a very different reason; it’s the same Hard Rock hotel where actress Anna Nicole Smith died in February.)

Exactly how and why the Seminole tribe bought the entire Hard Rock franchise is shrouded in secrecy.

That’s because, in part, of a confidentiality agreement between the tribe and the Rank Group, and in part because the tribe’s internal discussions are usually kept private. What is known is that the deal dwarfs other Indian enterprises.

The trend today is for tribes to diversify by investing gambling profits in off-reservation enterprises such as grocery stores, gas stations and real estate, according to Steven Gunn, an expert in American Indian law. But Gunn, a professor at Washington University in St. Louis School of Law, adds, “What is unique about what the Seminoles are doing is its scale.”

A deal of such magnitude would have frightened off many people. But James Allen, head of Hard Rock’s gambling operations, says Shore “was the direct opposite. He felt the tribe has always been a leader, and this was another challenge.”

Allen says he came up with the idea to buy Hard Rock. He figured the tribe could use what it was paying the restaurant chain in licensing fees — about $17 million a year, according to court records — to buy the franchise.

Allen says that when he took the idea to Shore, the GC jumped on it. Then Allen and Shore put together a team of industry lawyers from Greenberg Traurig and financial experts from Piper Jaffray Companies. Their plan called for financing the deal through private equity and bonds. Shore says he evaluated the Hard Rock proposal “up and down and sideways” before taking it to tribal leaders. “I wanted to make sure it was good for the tribe,” he says.

Then Shore met privately with each council member, reassuring them “that it was something we could handle, management-wise and financially.” He took Allen to council meetings to answer any detailed questions.

Gary Epstein, the Seminoles’ lead outside counsel on the Hard Rock purchase, says Shore was the point man between the lawyers, the bankers and the tribal council. Miami-based Epstein, who chairs the national corporate law group for Greenberg Traurig, says he was impressed with Shore’s ability to absorb reams of complex information and distill it for the tribal council. “It is clear that he enjoys the incredible confidence of the tribal council and that his opinion carries great weight,” Epstein says.

Shore and the Seminoles are not without their critics.

The developers of the two Hard Rock casinos have accused the tribe of greed and duplicity, saying the Seminoles are trying to break a long-term consulting contract between them and the tribe. The Seminoles have filed a legal action asking to have the Billie-negotiated consulting contract declared invalid because it includes a proprietary interest in the tribe’s gaming operations, which is contrary to federal law.

Marty Steinberg, attorney for the developers and managing partner at Hunton & Williams’s Miami office, says the Seminoles are trying to get out of the consulting contract after only six years. The contract, Steinberg says, would give the developers 30 percent of a decade’s worth of gaming profits and 30 percent of nongambling profits for 25 years — clearly a windfall the Seminoles don’t want to pay.

With that case still pending in federal court in Miami, the developers have put more pressure on the tribe. In January they sued the Seminoles and Hard Rock in Florida state court, alleging collusion and bid rigging in the purchase of the franchise. The Seminoles, Hard Rock, and its parent, the Rank Group, have all denied the allegations.

Seminoles are going to buy back Manhattan

Despite these legal challenges, the future looks full of dollar signs for the Seminoles. Shore says the tribe is already considering expansion plans, and that other Native American groups have shown interest in hosting their own Hard Rock casinos. With all that new cash pouring in, Shore dreams of a tribe one day teeming with members who are college-educated, especially in medicine, business and finance.

Until then, Shore sees the Hard Rock deal as a victory for all Native Americans. That point became clear when Shore arranged the December press conference announcing the purchase not in Florida, where both the tribe and Hard Rock are based, but at the high-profile Hard Rock Cafe in New York’s Times Square.

“Our ancestors sold Manhattan for trinkets. Today, with the acquisition of the Hard Rock cafes, we’re going to buy Manhattan back, one hamburger at a time,” Osceola, the tribal council member, said at the press conference. In the background, savoring the moment, stood Shore.