Lucky Palace President says Sheriff wasn't 'reasonable'

Federal Courthouse in downtown Montgomery
Federal Courthouse in downtown Montgomery

MONTGOMERY, AL (WSFA) - The fifth day of testimony in the Macon County casino civil trial ended with Lucky Palace President Paul Bracy Jr. still on the stand.

Attorneys took Bracy through an exhaustive analysis of his tax troubles - Bracy says he's working to pay off his back taxes to both the federal and state governments and says his former accountants share a large amount of the blame for misevaluating the worth of past projects. In all, Bracy owes approximately $4.5 Million in back taxes. Bracy was even unaware of a tax lien against Lucky Palace itself. On the stand last week, Macon County Sheriff David Warren told the court that had he known of Bracy's tax issues, he wouldn't have granted licenses to charities wishing to operate bingo through Lucky Palace.

Bracy detailed what he called a complicated relationship with Sheriff Warren. Bracy attached a heavy part of the blame to Sheriff Warren as to why Lucky Palace charities were never granted Class B bingo licenses.

"The sheriff and others manipulated things preventing us from getting a build-out letter which prevented us from starting construction on the building," testified Bracy.

'The charities,' 17 Macon County Charities that applied for bingo licenses for Lucky Palace along with the casino itself allege Sheriff Warren, Milton McGregor and VictoryLand attorneys worked to construct rules to govern electronic bingo that would give VictoryLand a monopoly in the county. The lawsuit also states that the group continued to manipulate those rules through future amendments whenever it looked like Lucky Palace was close to qualifying.

The original rules, drafted by Fred Gray Jr., son of a VictoryLand attorney, along with John Bolton, another VictoryLand attorney, stated that charity bingo licenses would only be granted to charities that wanted to operate at a 'qualified location.' That qualified location had to have a building that Sheriff Warren could inspect and have a value, including capital improvements, of at least $5 Million. Under that expectation, VictoryLand was the only group at the time who could qualify.

Bracy told the court that soon after the first rules were promulgated in December 2003, he went to talk to Sheriff Warren to declare his intentions to seek bingo licenses to operate Lucky Palace. Lucky Palace was officially formed, in a business sense, in February 2004. Four months later the first amendment to the rules was passed stating that any facility wishing to operate charity bingo must have at least 15 charity applications and it upped the required value of the facility to $15 Million.

Bracy said that's when he started working to get a written assurance from Sheriff Warren that should he construct a facility, the licenses would be granted. Under the rules, Lucky Palace would have been required to have a facility already built so Sheriff Warren could inspect it before issuing the 15 minimum charities bingo licenses. Bracy testified that his lenders wanted a written guarantee from Sheriff Warren or the licenses before they would provide the money to purchase additional land and front construction costs.

When Bracy started lobbying Warren for the charity licenses, Lucky Palace had no facility, it owned about 3.5 acres of land - not enough for the facility - but it had options to purchase more land. Bracy himself even purchased a chunk of land intended to be signed over to the use of Lucky Palace. Warren still wouldn't grant Bracy's charities licenses, nor would he sign what Bracy refers to as a "build-out letter." That letter would have been the written guarantee Bracy's lenders wanted before forking over the funds to actually build the facility.

Attorneys pointed out that ultimately, Bracy's land was never signed over, the land options were never explored and the land that had already been purchased through a financing plan went into foreclosure. Bracy says that's because of his difficulty with Sheriff Warren that led the stall on the project.

"I thought it was reasonable for us to go to the sheriff to explain why we should get the licenses before the structure was built," explained Bracy.

Bracy then explained that when he couldn't get what he 'needed' from Warren, Lucky Palace threw support behind a different candidate to oppose Sheriff Warren in the 2006 elections. Lucky Palace and its lenders hoped that 'their candidate,' current Shorter Police Chief Sandor Maloy, would be more 'reasonable' and help re-write the rules to help Lucky Palace. Bracy testified that he put money in a PAC, somewhere in the ballpark of $150,000, to help Maloy's campaign.

"I tried to replace Sheriff Warren because of the struggle I had with getting a build-out letter," said Bracy. "I thought it was the reasonable thing to do."

Ultimately, Maloy was defeated by Warren. Bracy added they never technically had an agreement with Maloy to re-write the rules. They just hoped Maloy would have been more 'reasonable.'

Bracy told the court that after repeated attempts to get Sheriff Warren's cooperation, Warren allegedly told him that to get what he wanted, Bracy would have to sue him.

Bracy did just that.

The lawsuit was filed on December 18, 2006. Lucky Palace and the charities are suing for lost profits due to alleged conspiracy, violations of the Racketeer Influenced and Corrupt Organizations Act, better known as 'RICO' as well as violations of the Equal Protection Clause of the Fourteenth Amendment of the U.S. Constitution.

"The lawsuit was to see that justice was done in hopes that we would prevail in getting a license to compete," said Bracy before adding that he hopes Lucky Palace will eventually come to fruition.

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