May 21, 2003 - Federal prosecutors are investigating a possible kickback scheme in the recently completed $1 billion expansion of the Mohegan Sun, issuing a grand jury subpoena to the former Mohegan tribal chairman who brokered key deals between the tribe and its financial backers. 

Roland J. Harris was called to appear before a federal grand jury in Hartford, his attorney confirmed yesterday. Steven L. Segilman said Harris is "one of a number" of people who have been ordered to provide information in the ongoing investigation. Segilman declined to comment further. 

When Harris was tribal chairman, a surveying company he owned received almost $1 million in fees for work in the expansion of the Mohegan Sun. Later, after selling the company, Harris continued to receive a sizable monthly "consulting fee" from the firm that purchased his company. That firm, McFarland-Johnson Inc. of New York, continued to win surveying jobs at the casino, while Harris remained chairman. 

Thomas Coughlin, chief executive officer of McFarland-Johnson, said yesterday that his company received a subpoena about two weeks ago and has complied with its orders. In a 2001 interview, Coughlin declined to say how much Harris was paid in consulting fees. 

Harris, who did not return a telephone call yesterday, has denied wrongdoing in the past. He was recruited as tribal planner in 1994, just as a group of businessmen led by South African casino mogul Sol Kerzner began plans for the original Mohegan Sun. At a time when the tribe was struggling to make ends meet, Kerzner's group put Harris on a $75,000-a-year salary. 

In 1995, Harris became tribal chairman and consolidated tribal power in the chairman's office during his six-year tenure. 

Harris later approved the deal that gave the Kerzner group a share of the casino's future profits, estimated in 2000 to be worth about $1 billion. The casino today is one of the largest and most successful in the world. 

Ray Lin, a lawyer for the company that includes Kerzner and Connecticut businessman Len Wolman, declined to comment yesterday on the investigation. 

The grand jury subpoenas mean the investigation, which began months ago with interviews conducted by agents of the Bureau of Indian Affairs, is intensifying under US Attorney Kevin J. O'Connor. A grand jury, after hearing sworn testimony of witnesses and examining records obtained under subpoena, may vote to indict any target of an investigation. 

Harris's dealings, and the terms of the agreement with Kerzner, were first reported in a series of stories in The Boston Globe two years ago. The existence of a grand jury investigation was first reported yesterday in the Hartford Courant and The Day of New London, Conn. 

Harris was defeated as tribal chairman in 2000 and replaced by Mark Brown, whose office declined to comment yesterday. The tribe hired two law firms to investigate Harris's business dealings, which led a tribal ethics committee to reprimand Harris. Some tightening in contract and bidding policy also followed. 

Tribal sources yesterday said they did not understand the timing of the current investigation, coming two years after Harris's business dealings were first publicly revealed. Two tribal sources said some Mohegans in leadership roles felt dissatisfied with the internal investigation of Harris. 

The tribe agreed to pay Kerzner and Wolman a cut of future profits through 2014 in order to obtain the right to build the now existing hotel at the casino site. Carlisle M. Fowler, the tribe's former treasurer, said in an interview in 2001 that he and others questioned why the tribe was willing to pay so much for the hotel rights, especially when it believed it had never relinquished those rights. 

Fowler and others revealed that key players in making that deal, including Harris, were paid sizable salaries by Kerzner and Wolman when the two men purportedly obtained the hotel rights. 

Since then, federal regulators have taken steps to ensure that Indian tribes, and not their financial backers, get most of the profits from casinos. 

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(c) 2003, The Boston Globe. Distributed by Knight Ridder/Tribune Business News.