Does the Mohegan Tribe Really Need a $54 Million Government Loan?

Considering that the Connecticut-based Mohegan Indian tribe owns the Mohegan Sun Casino, which ranks among the most successful gambling operations on the East Coast, you'd think that the tribe would have the wherewithal to build a community center and tribal government building. The tribe, apparently, believes otherwise and the United States Department of Agriculture agrees – to the tune of a $54 million loan, which comes on top of another $20 million in loans from the USDA.

With the support of six out of seven members of Connectichut's Congressional delegation, the USDA recently approved to loan the money to the Mohegans as part of a rural development program aimed at communities of fewer than 20,000. The loan, offered to communities that have had problems in obtaining credit, is designed to be repaid with interest.

A source close to one of Connecticut's congressional representatives explains that the loan will be applied to a stalled out construction project. Apparently the tribe lost construction financing in 2009 and was unable to continue work on the completion of its community center and government building.

The need for government assistance comes in spite of that fact that Mohegan Sun generated in excess of $1.3 billion in gross revenue last year and $53.6 million in casino profits. The Mohegan Tribe declined to comment.

Nevertheless, with 20% unemployment in the Connecticut construction industry, a spokesman for Senator Chris Dodd (D.-Conn) explains, "Senator Dodd supports the Mohegan Tribe's loan application in the same manner and for the same reasons he supports federal assistance to other Connecticut projects -- creating and preserving local jobs."

According to a Mohegan press release: "The construction is expected to create 114 direct jobs. Federal officials estimate the project will create 1,239 indirect jobs through vendors and subcontractors in the region."

A spokesman for the USDA, contacted this morning, did not respond, specifically, as to why the Mohegans were chosen and other communities were passed up. However, the fact that the Mohegan Tribe owns a successful casino clearly puts it in a position to pay back the loan in a timely fashion. Via a prepared statement, the USDA spokesman said. "[The building] will house health, education, community programs, a library, and Tribal court - critical infrastructure needed to keep rural communities strong throughout the country."