Face Off A bullying North Dakota alumnus built the school a $100 million rink but tore its campus asunder

Each of the 11,400 seats is leather, the armrests cut from
Valley Forge cherry wood. Granite tiles from India cover the
floors, even in the arena's bathrooms. The chandeliers in the
lobby are Italian, the escalators German, the ceilings finished
in brass. On the club level sits a 26-foot-long, 1926 Mortier
organ from Belgium.

The arena that Las Vegas multimillionaire Ralph Engelstad built
for the North Dakota hockey team is an opulent shrine like
nothing seen before on the plains of the Red River Valley. From
the $2 million scoreboard to the 24-man jacuzzi on the lower
level, Engelstad has created a $100 million monument that his
supporters believe will bring honor and recognition to the state
and its foremost sports team. "Who would have believed it?" asks
Earl Strinden, the former head of the university's alumni
association. "The best arena in the country, and it's in North
Dakota."

Not everyone in the state will be celebrating this Friday,
however, when Ralph Engelstad Arena officially opens with a game
between the Fighting Sioux, who won the 2000 NCAA title and were
runners-up last season, and fellow powerhouse Minnesota. Many on
and off the Grand Forks campus contend that to get the arena,
the university sold its soul to Engelstad, an eccentric
70-year-old real estate and construction magnate once accused of
being an admirer of Nazism. To underscore this point, protesters
last February carried a black coffin to the construction site to
symbolize the death of the school's integrity. By kowtowing to
Engelstad, the university has also alienated its--and the
state's--largest minority group, Native Americans. "This arena
stands for greed and racism," says North Dakota associate
communications professor Lucy Ganje. "This 'gift' has torn the
campus apart."

Few people in Grand Forks (pop. 49,000) have met Engelstad, who
graduated from the university in 1954 but hasn't lived in the
state in 40 years. Few had even heard of him before September
1988, when he donated $5 million for the renovation of the
school's previous hockey arena (which was renamed for him).
Today he is the talk of the state. The son of a salesman from
Thief River Falls, Minn., only 70 miles from Grand Forks,
Engelstad credits what he learned as a student at North Dakota
for much of his success. At 17 he was working at a summer job
unloading boxcars in Grand Forks when he met Ben Gustafson, a
professor, who learned that Engelstad was the goalie from the
Thief River Falls High hockey team and urged him to attend North
Dakota, even arranging for a scholarship. Engelstad left school
after two uneventful seasons as a backup but returned a couple
of years later and completed his degree in commerce.

Engelstad moved to Las Vegas in 1959 and began buying property
with money he had made as a building contractor in Grand Forks.
He boosted his fortune in 1967 when he sold Howard Hughes 145
acres in North Las Vegas for more than $5 million; the land was
used to build the North Las Vegas Airport. Engelstad went on to
open Imperial Palace casinos in Vegas and Biloxi, Miss., and to
construct the Las Vegas Motor Speedway, site of NASCAR races.
Forbes has estimated his worth at more than $400 million.

Engelstad's rise was watched closely by those at North Dakota,
which has few superrich alumni and chronic funding problems
because of the state's small population (642,000) and tax base.
Years of cultivation by Strinden and Thomas Clifford, the
university's president at the time, both of whom call Engelstad
a good friend, paid off with the 1988 donation. However, as they
would quickly learn, every Engelstad gift comes at a price.

During the same month that Engelstad announced his $5 million
contribution, the Las Vegas media reported that he had hosted
parties on Hitler's birthday in 1986 and '88 at the Imperial
Palace, where he kept a large collection of Third Reich
memorabilia on display in what was known as the War Room,
including, among other startling sights, a painting of himself
in a Nazi uniform. Without denying that he had held the parties
and collected Nazi memorabilia, Engelstad issued a statement
saying, "I despise Adolf Hitler and everything he stood for."

Clifford formed a delegation of university representatives and
sent it to Las Vegas to determine if Engelstad's actions
warranted rejecting the $5 million. After a tour of the Imperial
Palace (including the War Room) and a short discussion with
Engelstad, the group returned to Grand Forks. Less than a week
later Clifford announced that the school had determined that
Engelstad had no neo-Nazi sympathies and had merely exhibited
"bad taste." Four months later, though, after an investigation
by the Nevada Gaming Control Board of Engelstad's reported
honoring of Hitler, that state's Gaming Commission fined him
$1.5 million and placed restrictions on his gaming license. The
control board found evidence suggesting that bumper stickers
reading HITLER WAS RIGHT had been printed at the Imperial
Palace. "Had we had some of the evidence that came out later at
the time we toured, at the least we would have asked to look
into the matter further," says Barry Vickrey, former associate
dean of the law school, who was part of the university delegation.

The school had done more than take $5 million; it had also set a
precedent for how it would handle the reclusive, often prickly
Engelstad (who did not respond to SI's interview requests). Says
Norm MacPhee, a former member of the alumni association board,
"We do a little dance to his tune because he's got a lot of
money."

Engelstad has not been reluctant to call the tune. When longtime
Fighting Sioux hockey coach John (Gino) Gasparini, a friend of
Engelstad's, resigned under pressure in April 1994 after three
straight losing seasons, Engelstad reportedly responded by
sending a letter to university president Kendall Baker in which
he stated that he would withhold "hundreds of millions" in
donations as long as Terry Wanless remained the athletic
director. It wasn't the first time Engelstad had sounded off
over changes to the hockey program. In '92 Baker announced that
the team's logo, which resembled the Chicago Blackhawks', would
be replaced with the more abstract Indian-head design that other
Fighting Sioux teams had used since '76. Engelstad led a failed
drive by former North Dakota hockey players to have the old
symbol restored.

According to a source close to the university administration,
Engelstad let key school officials and boosters know that he
wanted Wanless and Baker ousted. Word spread around Grand Forks
that before he would give the school more money, Engelstad not
only wanted Baker and Wanless removed but also wanted guarantees
that the Indian-head logo would be reinstated for hockey and the
Fighting Sioux nickname retained.

Engelstad got everything he sought. In August 1998, Wanless
announced he would resign at the end of the upcoming school
year. Less than three weeks later Baker did the same. In
December '98, Engelstad announced his $100 million gift, one of
the 10 largest donations ever made by an individual to a U.S.
university; $50 million was earmarked for the hockey arena and
$50 million for unspecified other uses.

That Engelstad's announcement followed the departures of Baker
and Wanless "is merely a coincidence," says Strinden, but others
can't help but link the events. "The evidence was compelling,"
says Jim Antes, a psychology professor and former member of the
school's athletic committee. "Nothing surprises me anymore about
how the university is influenced by this man."

Shortly after helping announce Engelstad's $100 million
donation, Strinden commissioned a Native American artist to
design a new logo for the hockey team and for the new arena. On
behalf of the alumni association, Strinden presented it to the
university as a gift. New school president Charles Kupchella
accepted and unveiled the logo--which resembles the original
Indian-head image--in November 1999. Many Native Americans in
the state, as well as students and faculty, were enraged. "I
don't think [Kupchella] understood how sensitive an issue this
was," says Ganje.

The reaction led Kupchella to temporarily shelve the new logo
and form a committee to study the issue. Nine tribes from North
and South Dakota had previously urged the university to stop
using the Fighting Sioux nickname and symbol, and after
Kupchella heard the committee's report last November, he seemed
to be leaning toward doing just that. In a Dec. 16 e-mail to
William Isaacson, chairman of the state board of higher
education, Kupchella wrote: "I see no choice but to respect the
request of the Sioux tribes...to do otherwise would be to put
the university and its president in an untenable position."

Last Dec. 20, however, Engelstad weighed in. In a letter to
Kupchella, with copies to members of the state board, he
threatened to stop construction of the arena (on which he said
he had already spent $35 million) and let the structure rot if
Kupchella didn't approve the logo and endorse the nickname. The
next day the board took the decision out of Kupchella's hands
and voted to keep the name and adopt the new logo. John Korsmo,
a board member at that time, says his group felt compelled to
save Kupchella from "a no-win situation."

Engelstad completed the arena but has yet to actually hand it
over to the university. One of his companies, Ralph Engelstad
Arena, Inc., owns and operates the facility, which it leases to
the school for one dollar a year. (There is a one-year renewable
lease.) Engelstad in turn paid one dollar to lease the land from
the university for 30 years. Strinden and others say Engelstad
has pledged to give the arena to the school "after two years or
so," but opponents worry that Engelstad will hold on to the
facility as leverage against his alma mater.

Because the arena ended up costing twice the original estimate,
not a penny of Engelstad's $100 million pledge will be left for
academic or other purposes. Faculty members accuse Engelstad of
intentionally overspending to punish them for their opposition
to the Fighting Sioux nickname and logo. They point to the
arena's many extravagances, including the 400-foot hedge that
spells out FIGHTING SIOUX for planes flying overhead, the
10,000-square-foot weight room and the electronically controlled
vents in each player's locker. "How much was spent on spite?"
asks Ganje. "How much of what he added is him saying, 'You will
get none of my money'?" Opponents also say that the reason
Engelstad plastered the Indian-head logo all over the arena--it
appears more than 1,000 times--was to rub his success in their
faces.

The biggest beneficiary of the arena, of course, is coach Dean
Blais and his hockey program, which has had 35 players drafted
by the NHL. Several of those players have toured the arena and
told Blais that it is better than any pro facility. Recruits are
awed by it. "We've had kids walk in and stand at center ice and
commit right there," Blais says. "That was before it was even
finished." The arena seats 5,333 more than the old rink, and
Blais proudly notes that half the season tickets for 2001-02
have been sold to people outside the Grand Forks area. "More
people are getting to enjoy Sioux hockey," he says.

Not coincidentally, Ganje and others scheduled a conference on
Native American team names and logos for this week in Grand
Forks. The gathering was to end with a protest on the arena's
opening night, but even as they prepared to voice their
disapproval outside the building that some call Fort Engelstad,
they knew that few university officials were likely to listen.
Jim McKenzie, an English professor, said last week that a friend
in the alumni association had helped him understand the school's
stance. "Why can't you people lay low for a while?" the friend
asked. "Wait until [Engelstad] dies. Then the name and logo can
be changed."

Why must they wait? "No one talks about it openly, but everyone
hopes the university can get more from Engelstad, perhaps the
biggest donation in history," says McKenzie. "They are talking
about a half-billion dollars. The bottom line is, this school
won't do anything to jeopardize that."

COLOR PHOTO: PHOTOGRAPH BY RICH FRISHMAN CENTER OF ATTENTION At practice, players got a close look at one of the arena's more than 1,000 Indian-head logos.

COLOR PHOTO: JACKIE LORENTZ/GRAND FORKS HERALD GRAVE OUTLOOK In a symbolic march on campus, protesters linked Engelstad (bottom)to the death of the university's integrity.

COLOR PHOTO: JOHN STENNES/GRAND FORKS HERALD [See caption above]

TWO COLOR PHOTOS: RICH FRISHMAN (LOGOS) ABOUT FACE After dropping one logo (left) for a less explicit one, the school returned to an un-P.C. look, as spelled out by Engelstad.

COLOR PHOTO: ERIC HYLDEN/GRAND FORKS HERALD [See caption above]

The school determined that Engelstad's Nazi relics and
Hitler-themed parties were merely "bad taste."

"I don't think [Kupchella] understood how sensitive an issue
this was," says Ganje of the logo.