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

Sunday, February 17, 2008
Posted 10:10 PM by

Report: Pa. slots parlor owners, wannabes spent $1.7M lobbying in '07

Now even the total amount of money gambling interests spent to lobby Pennsylvania lawmakers is being kept from public view.Citizens Voice Projects Editor Dave Janoski pulled off a statewide scoop Sunday, revealing in his Wilkes-Barre newspaper that lobbyists for holders and seekers of casino licenses spent nearly $1.7 million last year to influence state lawmakers.

It's a scoop because no one but the lobbyists and the legislators themselves know right now how much money was spent on their behalf. Public release of the total amount spent lobbying by gambling and other interests in the state appears to be purposely obfuscated behind bureaucratic process.

No offense to Janoski, who I worked with for years, but his total does not account for all the nameless middlemen and others who stand to make a killing off gambling here and are lobbying for their chance.

Although the House of Representatives passed a lobbyist disclosure bill on Oct. 24, 2006, and Gov. Ed Rendell signed it into law on Nov. 1 of that year, the total amount of money being spent by gambling lobbyists is still a closely held secret.

There is a lobbying expenditure database posted online. However, you have to know the name of the lobbyist or his/her client in order to get any detailed information out of it. Even if you went through it from "A" to "Z", there's no way to know for sure if you missed someone. Then you have to add all those numbers up.

This is what passes for public disclosure here in Slotsylvania. It's like trying to find a specific tree from within a tall, thick forest.

Previously, lobbying disclosure for the state Senate broke down the total amount of money given by the interests of the lobbyists' clients. While the online database is a step in the right direction, it's nearly meaningless without knowing the total amount spent by similar interests for similar goals.

A notice on the Web site of the state Department of State's Division of Campaign Finance and Lobbying Disclosure says the Lobbying Disclosure Regulations Committee has met for more than a year now - ostensibly to discuss how best to gather and release the information - but didn't publish its proposed regulations until the Jan. 19, 2008, issue of the Pennsylvania Bulletin.

The new regs are now in a 30-day public comment period. Any person with questions or comments may e-mail Louis Lawrence Boyle, deputy chief counsel for the Department of State, at , to state Attorney General Tom Corbett, the regulation committee's chairman, at , or to .

You may want to use those e-mail addresses after you finish reading this.

The rules are largely legalese but basically focus on the filing requirements the lobbyists must meet, not how the information is supposed to be released or in what form.

So why then are total breakdowns by category of lobbyist still being withheld from the public?

The regulations committee adopted interim guidelines on May 30 and the lobbyists have been filing reports for more than a year now.

Although the 2004 law legalizing slot machine gambling banned direct campaign contributions from anyone with gambling interests, it did not bar them from hiring lobbyists who can wine and dine lawmakers and make indirect political donations on their client's behalf.

In 2007, holders and seekers of casino licenses paid lobbyists $1.68 million to represent their interests in the capital, Janoski reports, without citing a specific source. However, he does quote extensively from Craig Christopher, counsel to federally indicted state Sen. Vincent Fumo (D-Philadelphia).

Christopher, who had a hand in drafting the state slots law, said no other state with gambling has barred lobbying from companies with an interest in it.

Then again, probably no other state gave a slots parlor license to a guy like Louis DeNaples. The Dunmore billionaire and federal felon was indicted for lying about his alleged mob ties a little more than three months after opening his Mount Airy casino. He has denied any wrong-doing.

While DeNaples faced a Dauphin County grand jury for months last year, his company, Mount Airy #1 L.L.C, spent $67,375 lobbying lawmakers for "casino gambling" through the Philadelphia firm of S.R. Wojdak & Associates LP.

That was on top of at least $679,375 and possibly more than $1 million in political contributions DeNaples gave to Rendell, Corbett, key lawmakers, judges and party groups to get slot machine gambling legalized and to obtain a slots parlor license between 2000 and 2004.

While I don't doubt Janoski's reporting, I think he has only seen the tip of the iceberg.

In 2006, the last year for which total corporate and lobbying expenses are currently available, gambling interests spent $3.1 million just to lobby the state's 50 senators. That was down from the $4.6 million spent in 2005 and the $4.7 million spent in 2004.

No figures are available for the state House, which has 203 members.

Despite the lack of lobbying disclosure the lobbying disclosure law has wrought, Majority Floor Leader H. William DeWeese introduced House Bill 2121 last summmer which would legalize table games at the slots parlors - in effect, turning them into full-fledged casinos.

State Sen. Sean Logan (D-Allegheny County) proposed in Senate Bill 658 to shut off the spigot of millions of dollars being spent annually by gambling interests to influence state lawmakers. But his bill hasn't made it out of committee since it was introduced nearly a year ago.

Now, here's the really scarey part.

"Lobbyists employed by gaming companies say tax laws, liquor laws and even Pennsylvania's new Open Records law, which expands public access to government documents, are of interest to the industry," Janoski wrote.

"There is an immense level of detail and private information provided in the licensing process. Our interest in (the Open Records law) was protecting that type of personal information," said Eric Schippers, vice president for government and public affairs for Penn National Gaming Inc.

Penn National opened the Hollywood Casino at its horse track in Dauphin County last week. It spent $238,458 on lobbyists in 2007, Janoski wrote.

To say I hate the lobbying disclosure law with the heat of a thousand suns, is to put it mildly. It was rammed through using some of the same tricks employed to pass the 2004 slots law and the now-repealed 2005 legislative pay raise.

Even when the new regulations are finally enacted, they won't require lobbyists to say specifically which lawmakers were lobbied and how much was spent on each. The lobbyists merely have to state the total amount of money spent on behalf of their client each quarter and briefly why - and even then only if it was more than $2,500.

To delay publicly releasing total lobbying expenditures by category until the new regulations for the law are complete - or even worse, not at all - is just adding further insult to injury to an already bruised, battered and bloodied body politic.

It's one of the reasons why I now call this state Slotsylvania, for we have the best government money can buy in secret.

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Monday, February 11, 2008
Posted 11:13 PM by

Who pays the cost for hiding public records in Pennsylvania?

Read this entire blog post and find out from just one example!

PHEAAHere's some irony and a valuable lesson for you.

On Monday, the same day the state House "publicly debated" and approved an update to the state's weak 50-year-old Open Records law after ironing out its kinks behind closed doors for days, the Associated Press reported that a judge ruled the Pennsylvania Higher Education Assistance Authority (PHEAA) must repay three media outlets $48,000 in legal fees for refusing reporters records that were supposed to be public under the old law.

Commonwealth Court Judge Doris Smith-Ribner ruled Friday that PHEAA acted willfully and with wanton disregard to the state's Open Records law - otherwise known as the Right-to-Know Law - in a battle over spending records, including those about PHEAA's lavish board retreats.

The judge found there was no legitimate reason for PHEAA to delay access to the records for 20 months, which the quasi-public student loan and grant agency claimed were "trade secrets."

Yawning yet? Wait. It gets better from here, much better. I promise.

Just who are these no-accounts, these trough hogs, these abusers of public trust on PHEAA'S board who spent hundreds of thousands of dollars at posh resorts between 2000 and 2005 - money that could have helped worthy students pay for college?

Why they're some of the same state representatives who suddenly voted tonight - a full day earlier than expected - to send the Open Records bill back to the state Senate, where much of a 13-month delay previously occurred.

In case you didn't know, the PHEAA board is made up mostly of state lawmakers, including: Rep. William F. Adolph Jr. (R-Springfield), its chairman; Sen. Sean Logan (D-Monroeville), its vice chairman; Rep. Ronald I. Buxton (Harrisburg), Rep. Ronald I. Buxton (D-Harrisburg), Sen. Jake Corman (R-Bellfonte), former state Sen. J. Doyle Corman (Jake's father), Rep. Craig A. Dally (D-Nazareth), Sen. Andrew E. Dinniman (D-Exton), Sen. Jane M. Earll (R-Erie), Sen. Edwin B. Erickson (R-Newtown Square), Rep. Dan Frankel (D-Pittsburgh), Sen. Vincent J. Fumo (D-Philadelphia), Sen. Vincent J. Hughes (D-Philadelphia), Rep. Sandra J. Major (R-Montrose), Rep. Jennifer L. Mann (D-Allentown), former Rep. Roy Reinard (Holland), Rep. James R. Roebuck Jr. (D-Philadelphia), state Banking Secretary A. William Schenck III, Rep. Jess M. Stairs (R-Acme), Sen. Robert M. Tomlinson (R-Bensalem), and state Education Secretary and ex-officio Penn State trustee Gerald L. Zahorchak.

How bad do things have to get before Gov. Ed Rendell declares publicly, "It's a disaster. We have to totally re-evaluate PHEAA. I think we have to clean house and establish a new culture."

(I could say the same thing about the entire Legislature, the state Supreme Court and the governor himself, but I digress.) Rendell's threat to PHEAA came March 14, 2007.

In response, the PHEAA board issued a press release March 22, vowing it would change.

On April 20, the board issued another press release saying it had adopted a code of ethics that "formalizes longstanding policies and practices that have helped PHEAA's public service mission to always stay focused, first and foremost, on the students' best interests in all business dealings."

But on Aug. 24, Rendell again threatened to privatize the agency - or, at the very least, restrict how it spends money and consider replacing board members - after the board handed out bonuses as high as $180,857 to top PHEAA executives.

On Oct. 10, PHEAA CEO Dick Willey resigned in disgrace - two months earlier than he planned - and less than a week after preliminary findings of the first-ever state audit of PHEAA showed the board had given out $7.5 million in executive bonuses in just three years.

State Auditor General Jack Wagner also found that PHEAA had rented Hersheypark for a day in April, providing free rides and food for employees and their guests, at a total expense of $108,000. The deal to lease the amusement park was signed just one day after PHEAA's board issued its news release promising to tighten expenses.

Senator Logan, vice-chairman of PHEAA's board, claims the board members knew nothing about the staff outing and admits he demanded Willey resign immediately.

I couldn't find an explanation for why Logan simply didn't call an emergency meeting of the board and fire Willey's ass on the spot, because he didn't just walk away empty-handed.

Willey took his $370,000 annual pension with him. His predecessor, PHEAA founder Michael Hershock, retired from the authority at the end of 2002 with a $222,173 yearly state pension plus a $321,409 lump sum payment. Yet, he was also still drawing a $147,000 salary from PHEAA in 2006, the Pittsburgh Tribune-Review found.

How did the board react to all this?

In October it started cutting back - on its own mission - by reducing the number of grants given to full-time students and for financial aid to adults taking job-training classes. It blamed a new federal law governing student lenders and unsettled financial markets for a projected $44.4 million reduction in spending on the aid programs in 2008-09, down from $105.8 million this year.

The board then issued a press release on Jan. 24 claiming PHEAA is now in "99.5% compliance with new, stricter spending policies."

That led Senator Fumo - who also happens to be under federal indictment for allegedly extorting $17 million from PECO Energy for a non-profit group in his district and then allegedly covering it up - to vehemently claim penny pinching by the PHEAA board was now hurting its efforts to gain funding for student loans and grants.

"I think the auditor general should be ashamed for trying to run a political campaign on the backs of the students of this commonwealth," Fumo charged.

Wagner, who is seeking re-election this year and is considered a potential candidate for governor in 2010, denied Fumo's allegation without laughing too loudly. His audit won't be complete until June.

This now bring us all the way back to that $48,000 the judge ruled PHEAA now owes to Pittsburgh TV station WTAE-TV, the Patriot-News of Harrisburg and the Associated Press.

Under the old law, PHEAA's board members cannot be held individually liable for their decision to deny the public records which sparked the 20-month legal fight and the resulting investigations. But the board was legally able to sue reporters seeking the information personally in hopes of blocking their requests.

Instead, the money to repay the media's legal costs will likely come out of PHEAA's operating budget - hurting students even more - or from errors and omissions insurance, if the board had the wisdom to take out such a policy.

I've long advocated that any change in the Open Records law must hold public officials personally liable for such denials so taxpayers don't get stuck with the bill or paying higher insurance premiums for governmental agencies.

But guess what the new Open Records bill - Senate Bill 1 - doesn't say?

S.B. 1 could be on Gov. Ed Rendell's desk by the end of the day tomorrow, even though Common Cause of Pennsylvania has withdrawn support for it, arguing the bill is too weak and has a built-in conflict of interest.

Pennsylvania Newspaper Association lobbyist Deb Musselman told the AP her organization was withholding judgment, particularly because of a last-minute addition that would deny access to records identifying the names, home addresses or dates of birth of children 17 or younger

Although legislative records would be fully covered under the Open Records bill for the first time, the reason House leaders could meet in secret over the last five days to discuss changing the bill is that the Legislature is still the only state agency exempt from the state's 34-year-old Open Meetings Act or Sunshine Law while meeting in caucus.

That's progress, Pennsylvania-style, folks.

Or as Patriot-News Executive Editor David Newhouse told the AP, "We can only hope that the new Right-to-Know Law will make it so the average citizen doesn't have to pay $50,000 and take a case to the Supreme Court to get information that they have a right to in the first place."

One final thought.

Given the revelations contained within the 13,470 pages of records the three media outlets had to sue PHEAA in appellate courts to obtain, all they've won so far is their money back, no real public thanks - and possibly a three-way share in a Pulitzer Prize.

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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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