"What's black and white and read all over?"

Tuesday, March 11, 2008
Posted 10:09 PM by

Lobbyists spent $53.5M on N.J. lawmakers in '07

Lobbyists gave just $31,666 in specific gifts to New Jersey lawmakers last year, compared to an estimated $2 million in undeclared gifts to their Pennsylvania counterparts.Lobbyists spent $53.5 million last year trying to sway New Jersey lawmakers, down $1.8 million from 2006, a new state report says.

I'd love to give you comparable numbers for Pennsylvania, but they don't exist. More on that in a bit.

Out of all that money, the lobbyists only passed $31,666 in direct benefits to New Jersey lawmakers, down from $45,500 in 2006 and from $79,509 in 1997, according to the records. Under state law, benefit passing includes meals, entertainment, gifts, travel and lodging.

The biggest recipient of that surprisingly small largesse was Assemblyman Upendra Chivukula, chairman of the Assembly committee overseeing telecommunications and utilities. He accepted $1,126 in gifts last year from lobbyists. All but $280 came from industries he oversees, according to the Associated Press.

Still, Ev Liebman, of the watchdog group New Jersey Citizen Action, told the AP, "It's very troubling when we have a system that allows special interests and their money to dominate the legislative process and to get the kind of access to legislators, particularly powerful legislators, that's simply not available to rate payers, those of us who pay the bills."

Across the Delaware River, Pennsylvania no longer breaks down its total lobbying numbers for the public to inspect thanks to a two-year-old lobbyist disclosure law, which appears to have done more to obfuscate lobbying expenditures than it did to expose them.

Pennsylvania does now have an online database of quarterly expense reports filed by lobbyists, but the regulations on how the lobbyists should fill out the state-mandated forms still are not finalized.

I do know, thanks to an Associated Press analysis of the state data, that lobbyists spent $37 million in Pennsylvania during the first six months of 2007, of which nearly $1 million went to state officials for meals, plane tickets, hotel rooms and other gifts.

Now, multiply that by two and compare it to the $31,666 spent by lobbyists in New Jersey.

What's the difference between the two states? New Jersey's law requires that every gift to a legislator from a lobbyist must be spelled out along with the exact amount of money spent.

Pennsylvania's law does not.

Am I wrong to think the Legislature and Gov. Ed Rendell's administration are selling us out, and to say that we now have the best government lobbying money can secretly buy?

For example, Pennsylvania offered the movie industry this year a 25 percent tax credit on TV shows and films that spend at least 60 percent of their total budget in the Commonwealth. The program's cost is capped at $75 million this fiscal year, which ends June 30.

How did Hollywood qualify for the break? Lobbyists Leslie Merrill McCombs, a former Fox TV reporter in Pittsburgh, and Mike Veon, a once-powerful Democratic state representative from Beaver County, lobbied for it on behalf of Lionsgate, a leading independent film and TV production company based in Santa Monica, Calif.

That isn't what angered state Sen. Jeffrey Piccola, chairman of the Senate State Government Committee, though.

It's the fact that McCombs didn't publicly declare that she was working on behalf of Lionsgate in her quarterly reports until after the tax break was granted. McCombs called it a "technical and brief noncompliance" that was later corrected.

"Clearly, we cannot permit lobbyists to hide what is spent on influencing the Governor and members of the General Assembly," Piccola (R-Dauphin) said in a Sept. 5 written statement. "Accountability is the key to reestablishing the public's trust in government. People who influence the law should not be above it."

Piccola's committee hired private investigators for $120 an hour to probe whether loopholes in the state's lobbying and ethics laws were exploited and to see if Veon violated a state prohibition against former lawmakwers lobbying their colleagues within a year of leaving office.

Veon was voted out of office in November 2006 after being the lone lawmaker in the state to vote against repealing the 2005 legislative pay raise. He filed to lobby on behalf of Lionsgate six months later, but state records say he didn't spend a dime.

In an e-mail to the Philadelphia Inquirer, Veon said, "I am confident that any review of the facts and the record will find that at no time ... have I lobbied anyone in the House of Representatives."

Meanwhile, McCombs lashed out at Piccola for suggesting she had an inappropriate relationship with Gov. Rendell. The governor has said he is friends with McCombs, her husband and son and has attended Pittsburgh-area sporting events with the family.

All of this was meant as but an illustration. The $75 million tax break is mere chump change by comparison to what's at stake by expanding the state's fledgling slot machine gamling industry so that it includes table games.

I did a cursory examination of the database last month and found that gambling interests spent at least $2.6 million last year to lobby lawmakers and Rendell's administration.

I say at least, because I suspect more money - possibly a lot more - is hidden from public view by virtue of gambling interests hiring one lobbyist, who in turn hired another.

Two final thoughts: Why didn't Piccola refer the movie tax break case to state Attorney General Tom Corbett, whose office has a seven-attorney public corruption unit? After all, Corbett is also leading a committee that's spent the last year drafting the disclosure regulations the lobbyists will follow?

In an unrelated ethics matter, though, Corbett said this week he would not return at least $35,000 worth of campaign contributions from now-indicted slots parlor owner Louis DeNaples. Despite a grand jury investigation last year, DeNaples spent $67,375 last year lobbying for "casino gambling."

Given all that, is there any wonder why there's a lack of leadership on reforming the state slots law in the Legislature?

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Tuesday, February 26, 2008
Posted 9:24 PM by

Preaching to the wrong choir in Slotsylvania

State Sen. Jeffrey Piccola.To state Sen. Jeffrey Piccola, slot machine gambling preys on the poor, breeds destructive behavior and hurts local economies.

So, that's what the Republican from Dauphin County told leaders in the industry while delivering the keynote address today at the 4th annual Pennsylvania Gaming Congress & Mid-Atlantic Racing Forum in Harrisburg.

An outspoken critic of the state law legalizing slot machines in Pennsylvania, Piccola was chosen after Gaming Control Board Chairwoman Mary DiGiacomo Colins withdrew in protest to the event's sponsor, Spectrum Gaming Group of New Jersey.

Fred Gushin, CEO of Spectrum, told The Morning Call of Allentown last year that the control board's licensing of applicants was "an overtly political process instead of an exercise in regulatory control. It was a disaster in the making."

And Piccola hammered that point home to the casino operators and suppliers today, saying, "The process is inherently flawed if the staff that you are relying on for accurate information does not have direct access to the information that it so desperately needs."

He was referring to privately hired investigators who did the background check on now-indicted slots parlor owner Louis DeNaples, but never named him specifically.

The investigators believed DeNaples lied about his relationship with reputed mob boss Billy D'Elia, but couldn't prove it. They alerted the state police, who began investigating DeNaples, but did not tell the board. Nor did the board subpoena D'Elia before issuing a license to DeNaples on Dec. 21, 2006.

DeNaples maintains his innocence. "The facts are that the (bureau) and the board investigated Mr. DeNaples for nearly 2,000 hours before finding him suitable for a license," DeNaples spokesman Kevin Feeley told the Citizens Voice on Monday. "Now after the fact, it's become fashionable to use Mr. DeNaples as a scapegoat."

But Piccola told the crowd of about 100 today, "I'm here to tell you that a legislative response to this present controversy is inevitable. Many of you are going to pay the price if we don't do it over."

Among other proposed reforms, Piccola wants to put the state Attorney General's office in charge of licensing applicants so that office can utilize information in law enforcement hands.

To see a video of his speech in Windows Media Player, click here.


The Pennsylvania Higher Education Assistance Authority decided two weeks ago to suspend loans made outside the state through the Federal Family Education Loan Program, but didn't announce it until this afternoon.

The agency will soon send out notices to colleges and universities that it will suspend in-state loans effective March 7, acting president and chief executive officer James Preston told lawmakers.

"Right now, it's not profitable for us at all to finance (FFELP) loans," Preston told a House committee during a hearing on the agency's budget. He cited the subprime mortgage mess and chaos in the bond market for making the loans too expensive.

Instead, the agency will steer prospective borrowers to banks that are still participating in the $50 billion program. PHEAA provides federally subsidized, low-cost student loans to about 500,000 Pennsylvania students annually.

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Friday, February 15, 2008
Posted 8:44 PM by

Three for follow-up Friday

I hope this will become a continuing feature on The Daily Rant on Fridays, so I can empty my mind and my notebook of some incremental changes in stories I'm following.

Tad Decker finally gets it!

Tad DeckerIn a letter to the editor of The Philadelphia Inquirer on Thursday, former Slotsylvania Gaming Board Chairman Tad Decker once again blames the state police for failing to turn over a transcript of an FBI wiretap before he and others unanimously approved a license for now-indicted slots parlor owner Louis DeNaples.

"By letter of Dec. 20, 2006, state police Commissioner Col. Jeffrey Miller advised the board that it was in a position to determine the suitability of all applicants, including Louis DeNaples, even though the state police now admit it knew at the time this statement was untrue," Decker wrote. "The state police's misrepresentation violated the act and its agreements with the board and the governor's office and did a terrible disservice to the commonwealth's citizens."

Decker later told the Associated Press, "Because of what (the state police) did, it was an embarrassment of issuing a license to someone who potentially - potentially - may have done something wrong in the process."

DeNaples now faces eight counts of perjury after a Dauphin County grand jury found that he lied to both them and the gaming board about his alleged ties to organized crime.

"Their own agents thought he was lying," Bruce Edwards, president of the Pennsylvania State Troopers Association, shot back in an article in today's Pittsburgh Tribune-Review.

Personally, I don't care what the state police letter said or about its pissing match with the control board, which hired private investigators instead of letting troopers handle the background investigations of slots parlor license applicants.

There was plenty of anecdotal evidence in the public domain (namely DeNaples' 1976 federal felony and his name appearing in Pennsylvania Crime Commission reports) tying DeNaples to reputed and indicted Northeastern Pennsylvania mob boss Billy D'Elia. DeNaples also gave at least $115,000 in political contributions to Decker's "close friend," Gov. Ed Rendell.

That alone should have given Decker and the rest of the board pause before they embarrassed the state.

By the way, it was Rendell who appointed Decker, a Philadelphia attorney, to both the board and the chairmanship and it was Rendell who later defended him against allegations that Decker too had a conflict of interest with another slots parlor applicant.

In other Slotsylvania casino news:

  • New Philadelphia Mayor Michael Nutter told reporters Friday that his city budget does not count on any revenue from any of the seven slots parlots now operating within the state.

    "We know it's out there," Nutter said. "It's not in our pocket so we're not counting it."

    That's prudent plannning Mr. Mayor and I applaud you for it, even though part of that money is supposed to be used eventually to lower Philly's wage tax.

  • State Senator Jeffrey Piccola (R-Dauphin County) will deliver the keynote address at the 4th annual Pennsylvania Gaming Congress & Mid-Atlantic Racing Forum, February 25-26 at the Whitaker Center and Harrisburg Hilton.

    Piccola, a member of the senate's Community, Economic and Recreational Development Committee, unsuccessfully threatened to shut down the state amid budget talks last year while trying to reform the slots parlor law.

    Mary DiGiacomo ColinsGaming Board Chairwoman and former Philly judge Mary DiGiacomo Colins was supposed to deliver that address. However, she withdrew after the CEO of the event's sponsor, Fred Gushin of Spectrum Gaming Group of New Jersey, openly criticized the board's licensing process.

    Gushin told The Morning Call of Allentown in September that the control board's licensing of applicants was "an overtly political process instead of an exercise in regulatory control. It was a disaster in the making."

  • Monthly casino revenue was down 10 percent in January in Atlantic City, marking the 12th month out of the last 13 that revenues have fallen, the Associated Press reported this week. Last year was the first in the 30-year history of A.C. casino gambling that revenues decreased from the previous year.

N.J. student loan agency gets a monitor, freespending PHEAA doesn't.

New Jersey Attorney General Ann Milgram has appointed an independent monitor to watchover the state's Higher Education Student Assistance Authority after a state investigation found troublesome lending practices, including the steering of students to Sallie Mae loans.

HESAA and 41 New Jersey colleges have also agreed that their financial aid officers will no longer take gifts from loan companies. Milgram said gifts in the past have given some lenders an unfair inside track.

No one knows if that is happening across the river, but we may know by June when state Auditor Gener Jack Wagner is expected to complete his first-ever audit of the Pennsylvania Higher Education Assistance Authority.

PHEAA has spent millions over the years rewarding its executives with hefty bonuses, expensive trips for its lawmaker-dominated board and even renting all of HersheyPark for a day. Yet, despite Rendell calling it "a disaster" and threatening to privatize the authority, only internal changes have been made.

Pink pig dreams deflated.

Gene StilpGovernment reform activist Gene Stilp, who became famous for floating a giant inflatable pink pig in Harrisburg after the 2005 legislative pay raise, has ended his candidacy for the 104th state House seat in Dauphin County, citing personal reasons.

Last Friday, Stilp, 57, of Middle Paxton Township, said "emerging family health issues" would keep him from devoting the necessary time to his campaign to unseat incumbent state Rep. Sue Helm.

My thoughts are with him and his family.

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Saturday, February 09, 2008
Posted 4:59 PM by

Have lobbying and partisanship trumped public protection in Slotsylvania?

There's slots of bills pending to change Pennsylvania's fledgling gambling industry, including one that would stop their millions of dollars in lobbying.There are plenty of bills pending in Pennsylvania's Legislature that would have reformed the state's slot machine gambling law before the indictment of slots parlor owner Louis DeNaples last week.

None of them have yet to see the light of day, much less been voted upon.

And if ever two guys needed to be stuck in an elevator together to find common ground for the public good, it's state senators Jeffrey Piccola and Sean Logan.

Logan (D-Allegheny) voted for the law legalizing slot machine gambling (Act 71) in 2004, but introduced a bill on March 22, 2007, to stop the state's fledgling gambling industry from lobbying lawmakers and to prevent lobbyists from serving as a pass-through for outlawed campaign contributions.

In effect, Senate Bill 658 would shut off the spigot of millions of dollars being spent annually with no public scrutiny to influence legislators into expanding legalized gambling (see H.B. 2121) and who knows what else.

However, Logan's bill has gone nowhere since it was introduced, remaining stuck in the Senate's Community, Economic and Recreational Development Committee.

Piccola (R-Dauphin), a former majority caucus administrator and whip, is a member of that committee and is no fan of the state's industry-written and hastily-passed slots law either - at least the way it exists currently.

Piccola voted against the slots law in 2004 and was one of 13 senators who fought in August 2006 for a package of 21 bills that would have: prohibited public officials and their families from holding any ownership interest in casino-related firms, created an entirely new Gaming Control Board with only five members appointed by the governor and confirmed by the senate, banned the board members from having any other salaried jobs, and rejected any slots license applicants who have felony criminal records (the 2004 slots law forgives convictions before 1991).

The senators urged the control board not to approve any more licenses - including one for DeNaples, a Dunmore billionaire who admitted a federal felony in 1978 - until their reform measures were heard. Some of them, including Piccola, even threatened to shut down the state government and all active casinos during budget wrangling in July 2007 to get their bills enacted.

They failed.

Piccola has since called DeNaples' indictment for lying to the control board about his allleged mob ties "a black eye on Pennsylvania" while standing on the floor of the Senate.

On Wednesday, the same day DeNaples was arraigned on the perjury charges, Piccola announced he will try again to reform the slots law.

Although his new bills have yet to be introduced, this time they appear far less sweeping. His proposed changes now include:

  • opening all portions of the application process relating to character and integrity of applicants, principals, and key employees to public scrutiny.

  • transferring the Gaming Board's Bureau of Investigation and Enforcement to the Office of the Attorney General (a move the state police commander has said won't make any difference)

  • requiring all applicants to make Freedom of Information Act requests regarding their criminal file and providing all documents obtained to the Bureau of Investigation and Enforcement.

If Piccola wants to be seen as a true reformer, then why hasn't Logan's bill made it out of his committee? Is the fact that Logan is a Democrat, and Piccola is a Republican, the reason?

The chairperson of that committee is state Sen. Jane Earll (R-Erie), a former candidate for lieutenant governor who voted in favor of the slots law in 2004 but told Project Vote Smart that she is against expanding it to include riverboat gambling.

Earll stopped an effort last October to put state police in charge of slot licensee background investigations, saying, "I don't see any glaring problems that have been brought to light by today's testimony that we need to rush to fix."

Her refusal to act came after the FBI informed the control board that it wasn't a law enforcement agency and therefore could not see the information bureau agents had collected on DeNaples, according to the Pittsburgh Tribune-Review.

Logan's bill is not the only reform-minded measure stuck in Earll's committee. Also pigeonholed there is S.B. 856, which merely adds "former candidates" to the list barred from receiving direct campaign contributions from gambling interests.

I don't know how much money Earll has accepted in campaign contributions from gambling interests. The state's online database lists 1,177 contributions to her since Jan. 1, 2000, but many of the contributors's occupations and employers have been left blank.

She did receive a total of $875 from William J. Bleill, a consultant for First Presque Isle Corp. I don't know what relationship, if any that company has with MTR Gaming Group Inc., the parent company of Presque Isle Downs & Casino near Erie. Earll also accepted $175 from Edson R. Arneault, president, CEO and chairman of MTR.

Earll's committee is similarly stymieing:

  • S.B. 113, which would require the control board to take a public vote among all seven members - not just a supermajority consisting of the governor's appointee and four legislative appointees - on whether to take enforcement actions against a slots parlor license holder.

  • S.B. 423, which allows slots parlors to issue rewards cards to frequent gamblers, but also requiring each casino to issue monthly statements that list patrons' gaming winnings and losses.

  • S.B. 855, which requires all Gaming Control Board appointees to be confirmed by the Senate.

  • S.B. 600, which bars the Gaming Control Board from hiring relatives, requires all prospective board employees to submit their "complete criminal history" and to take a drug test, and subjects all control board employees "who, while on duty or off duty, engages in scandalous or disgraceful conduct which may bring the service of this Commonwealth into disrepute" to prompt disciplinary action and immediate suspension.

  • S.B. 1031 and S.B. 1032, which would prohibit the location of a slots parlor within 1,500 feet of a school, church or home.

None of those measures are nearly as controversial as S.B. 683, which state Sen. John Rafferty Jr. (R-Montgomery County) introduced on March 23, 2007. It would require a binding referendum be approved in any municipality where a slots parlor has been proposed.

Yet, none of those bills have moved out of Earll's committee in nearly a year.

Stumbling blocks toward reform are not limited to the state Senate and are not only being erected by Republicans.

On Jan. 30, 2007, state Rep. Michael O'Brien (D-Philadelphia) introduced House Bill 14, which like Sen. Rafferty's bill, would require approval of a slots parlor in a local binding referendum. It has been stuck in the House Committee on State Government ever since.

Bottled up in the House Committee on Gaming Oversight since March 6, 2007, is H.B. 567, which would prohibit further gambling expansion without the approval of a statewide referendum or by a two-thirds vote of the General Assembly.

The chairman of the Gaming Oversight committee is Harold James (D-Philadelphia), who has been singled out for criticism by House Republicans for failing to move H.B. 1450. That bill would put the state police in charge of doing slots parlor licensee background checks (even though, again, the state police commander has said it won't make any difference).

James voted for the 2004 slots law. It was impossible to tell from the state's online database whether he received campaign contributions from gambling interests. It lists 337 contributions since Jan. 1, 2000, but many of the occupations, employers and even names have not been completed.

James' committee is also holding up:

  • H.B. 482, which would cut the pay of Gaming Control Board members to $64,178, except the chairman who would get $66,810. Currently, board members are paid $145,000 and the chairman gets $150,000. (There is currently no law or bill pending on what the board can pay its employees.)

  • H.B. 909, which would require an audit if a slots parlor fails to generate 85 percent of its anticipated revenue in a year.

  • H.B. 1181, which would reduce the potential number of stand-alone casinos from five to three.

  • H.B. 1477, which would prohibit the location of a slots parlor within 1,500 feet of a school, church or home.

  • H.B. 1715 and H.B. 1975, which would require $1.5 million to $3.5 million be transferred annually from the Pennsylvania Gaming Economic Development and Tourism Fund into the Compulsive and Problem Gambling Treatment Fund.

None of those measures are nearly as controversial as H.B. 2121, which would expand the state's definition of legalized gambling to include table games - including roulette, baccarat, blackjack, craps, big six wheel, mini-baccarat, red dog, pai gow, poker, twenty-one, acey-ducey, chuck-a-luck, fan-tail, panguingui, chemin de fer, sic bo, and any variations or composites of such games - in effect turning the slots parlors into full-fledged casinos.

The table games bill was introduced July 14, 2007, by Majority Floor Leader H. William DeWeese and immediately garnered 19 Democratic supporters. They include state representatives: James Wansacz (D-Lackawanna County), Thomas Caltagirone (D-Berks County), Todd Eachus (D-Luzerne County), Florindo Fabrizio (D-Erie County), Dan Frankel (D-Allegheny County), Michael Gerber (D-Montgomery County), R. Ted Harhai (D-Fayette County), Patrick Harkins (D-Erie County), John Hornaman (D-Erie County), Deberah Kula (D-Fayette County), Frank Louis Oliver (D-Philadelphia County), John Pallone (D-Armstrong County), Eddie Pashinski (D-Luzerne County), Dante Santoni Jr. (D-Berks County), Frank Andrews Shimkus (D-Lackawanna County), John Siptroth (D-Monroe County), Majority Caucus Administrator Dan Surra (D-Clearfield County), Jesse White (D-Allegheny County), and Edward Wojnaroski Sr. (D-Cambria County).

House Bill 2121 would turn Pennsylvania's slot parlors into full fledged casinos.DeWeese has accepted 4,401 campaign contributions from individuals and political action committes since Jan. 1, 2000. Again, it's unclear from the state's online database how many came from gambling interests because many of the employers and occupations have been left blank.

Like the rest of the bills pending before the Gaming Oversight committee, DeWeese's table games bill has been tabled since it was first introduced.

But given the continued flow of lobbying money and in-direct campaign contributions to lawmakers, which bill do you think will pass first?

I can tell you this, DeNaples, who has said he never placed a bet in his life, predicted in 2006 that table games would be a reality within two years.

Finally, one slots gambling-related bill was introduced this week by state Rep. RoseMarie Swanger (R-Lebanon) after Gov. Ed Rendell announced a state funding package designed to help lure a professional soccer team to the city of Chester .

H.B. 2225 would prohibit any money in the Gaming Economic Development and Tourism Fund from beng used for multipurpose recreational facilities or sports facilities.


For more about Louis DeNaples and to read my complete take on this long-predicted Slotsylvania snafu, click here.

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