MILWAUKEE - Regulators are looking into a contract struck by a former aide to Tommy Thompson and his partner, who would share $46.5 million if a casino is built in Kenosha, a newspaper reported.
Police also are probing whether Thompson knew about the agreement, two Milwaukee newspaper columnists reported in Sunday's edition.
William McCoshen, 36, and his lobbying partner, Eric Petersen, 34, would split the money with the estate of Petersen's mentor, Jim Wimmer, the report said.
The three own Madison Consulting LLC, according to records in Wimmer's probate file.
Regulators in four states are looking into a secret agreement between Madison Consulting and the managers of the proposed casino, the newspaper said.
Sources told the columnists that the regulators recently talked to FBI agents about the contract.
"Part of good police work is looking for flags," said Indiana State Police Maj. Mark Mason. "This raised a red flag."
Investigators wonder whether Thompson knew about the deal while he was quietly helping to move the casino project along.
Menominee tribal leaders said they were shocked when they found out last fall how wealthy their casino would make the Madison lobbyists.
"I was absolutely floored that a contract of that size … was not made available to the tribal legislature," said Sylvia Wilber, a member of the Menominee legislature.
But Robert Boyle, a key partner in the company that brought Madison Consulting into the casino deal, said the amount is not out of line and would be paid only if the casino wins approval.
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The project now is considered a longshot, largely because Thompson's successor, Gov. Scott McCallum, has vowed to oppose an expansion of gambling in the state.
Under the contract with Madison Consulting, the company would receive $4.5 million if the state and federal government allow the Menominee tribe to buy Dairyland Greyhound Park. Once the casino opens, Madison Consulting would collect $6 million per year for seven years to provide lobbying advice to the casino's operators.
The Menominee's Washington, D.C., lawyers noted in a memo to tribal leaders last fall that Madison Consulting had close ties to Thompson.
"They assisted in getting the governor's support for the project, beginning at least as early as 1997," attorneys Jerry Straus and Michael Roy wrote.
Nii-Jii Entertainment, the non-Indian company that is financing and hopes to manage the casino, said in a memo to its investors last December that the firm would provide advice to the company and the tribe in obtaining governmental approval for the casino.
A spokesman for Thompson, who now is the U.S. health and human services secretary, said the former governor knew nothing about the contract until the columnists asked about it last week.
McCoshen, Petersen or Wimmer never lobbied him on the project, and the contract played no role in the governor's actions when dealing with the Kenosha project, Tony Jewell said.
McCoshen and Petersen did not return repeated calls placed by the columnists seeking comment.
McCoshen was Thompson's chief of staff from 1992-94, ran Thompson's third re-election campaign and was his state commerce secretary until 1998.
Regulators in Wisconsin, Missouri, Indiana and Illinois started looking at Nii-Jii in January, sources told the newspaper.
The other three states are interested because they oversee the operations of Argosy Gaming Co., which signed a deal with Nii-Jii last year to help finance and run the proposed Kenosha casino. Argosy operates casinos in those states and two others.
Gaming regulators can take away an operator's license for associating with firms or people they consider undesirable.
Nii-Jii initially signed the consulting contract with Wimmer and Petersen in September 1997, less than two months after Madison Consulting was incorporated.