Gambling and Political Corruption

GAMBLING AND POLITICAL CORRUPTION


An NCALG White Paper

by Dr. Guy C. Clark

Chairman, NCALG/NCAGE



The corrupting effects of gambling on politics take two forms. Reported, legal campaign contributions on both the state and national level amounted to tens of millions of dollars last year. Many previous anti-gambling candidates changed their votes when faced by opponents who were being heavily funded by gambling interests. Illegal, under-the-table bribes from the gambling industry are harder to corroborate, but are probably also in the tens of millions. Both form a corrupting influence on our political system of major proportions and help to promote the gambling agenda.



CAMPAIGN CONTRIBUTIONS



The Center for Responsive Politics reported that the gambling “industry” in 1999 gave $448,700 to the National Republican Congressional Committee and $847,341 to the Democratic Congressional Campaign Committee. According to the article, Paying the Price in Common Cause, “PAC and soft money contributions from the industry have grown from $2.3 million in 1993-94 to more than $5.6 million in 1997-98. Soft money contributions account for much of this growth, increasing from just under $2 million in 1993-94 to $4.7 million in 1997-98.”



In Illinois, The Sunshine Project, a campaign watchdog organization, found that the gambling “industry” had contributed $1.7 million to state and local politicians in 1995 and 1996. During that time, 123 legislators received at least $500 in contributions. House Minority Leader Lee Daniels received the largest single amount, and the House Republican Campaign Committee received $334,000.1



In California, one card club alone spent nearly $2 million in the last five years on contributions and lobbying at the state level. The Mashantucket Pequot Indian tribe, which operates the Foxwoods Resort Casino in Connecticut, has spent more than $1 million on federal soft money donations since 1993. In the1994 casino legalization battle in Florida, casino interests spent $16 million. In 1996, Arkansas gambling interests spent $6 million and Ohio spent $9 million in campaign contributions. 2



The two eastern Connecticut tribes, owners of the Mohegan Sun and Foxwoods resorts, contributed a total of $60,000 in October, 2001 to Democratic and Republican national political organizations. 3



The connection between the political contributions and the vote is easy to follow in most cases, but New Mexico provides a startling case in point. In the 1996 election season, the tribal casinos contributed about $340,000 to State Senators and Representatives running for office. Articles by reporter Tina Griego in the Albuquerque Tribune titled "New Mexico’s Big Gamble" showed that 44 legislators received over $2,000 apiece, the largest contribution being over $46,000, received by Senate pro tempore president Manny Aragon. Only two of those 44 legislators voted against the tribal compacts. That’s a high return on the investment.



BRIBERY AND EXTORTION BY GAMBLING INTERESTS



In testimony before the National Gambling Impact Study Commission, former Illinois Senator Paul Simon stated that…gambling “…has more of a history of corruption than any other industry.” Public officials in state after state have been indicted and convicted in gambling related illegal activity. An alleged Youngstown mob boss put at least $10,000 into the 1996 election campaign of the Mahoning County sheriff in an effort to protect illegal gambling businesses. 4



From Ohio, “FBI affidavits unsealed Tuesday are loaded with names of local judges, police officers, sheriffs, union leaders, politicians and businessmen who are alleged to be members of or under the control of the local faction of the Pittsburgh Mafia…relating to mob-controlled illegal gambling businesses and other forms of public corruption.” 5



In Florida, Bo Johnson, ex-speaker of the House of Representatives, was charged with seven criminal counts involving extortion and bribery, the largest of which he received from a casino company, and could be sentenced to up to 40 years in prison and be fined up to $1million if convicted on all counts. 6



Representative John Leopold of Maryland stated, “The Senate Majority leader from Washington County was offered a $10,000 bribe to vote for that (slot machine) bill. Another legislator, a State Senator from my county, was also offered $5,000 in cash in an envelope outside the Senate chamber.” 7



Nineteen Arizona legislators and lobbyists were caught on videotape, with the legislators promising to vote for gambling bills after receiving cash from the lobbyists. 8 One legislator was convicted of conspiracy, and six ultimately accepted plea bargains. 9



In Missouri, the House Speaker of 15 years resigned in 1996 after a federal investigation produced charges of gambling-related deals. As reported in newspaper accounts, the ex-speaker demanded that a gambling company funnel payments of $16 million to the ex-speaker’s business associates and friends in order to obtain a state casino license. 10



In South Carolina, Rep. Paul Derrick took $1,000 for his vote on a pari-mutuel betting bill, Assistant U.S. Attorney Robert Meyer told jurors today at Derrick's retrial in the Operation Lost Trust investigation. Derrick was "caught red-handed on videotape, taking a bribe for his vote," Assistant U.S. Attorney Robert Meyer said. Derrick was "part of a core group of legislators in the House of Representatives who were ready to sell their votes and their support for cash," according to Meyer. 11 Seventeen South Carolina lawmakers had previously been convicted of or pled guilty to similar charges in 1992. 12



In Kentucky, Operation Bobtrot, an investigation into bribery surrounding the state’s horse racing industry, resulted in the conviction or plea-bargaining of 15 state legislators. 13



Louisiana seems to top the lot with blatant corruption at all levels of government. More than a dozen state legislators were investigated on bribery charges in a two-year FBI operation.14 Gambling board member Ecotry Fuller was indicted by a federal grand jury Wednesday on 12 felony counts of mail fraud, wire fraud, perjury and conspiracy.15 After escaping felony convictions in several previous corruption trials, ex-governor Edwin Edwards was convicted on May 8, 2000 for the first time, “on charges he extorted hundreds of thousands of dollars from businessmen applying for riverboat casino licenses.”16



The expansion that has occurred in legalized gambling across the U.S. in the past few decades has not been a result of a popular demand for more gambling. The expansion has occurred because the gambling “industry” pays state legislators, governors and other public officials for their votes, either with campaign contributions or by bribery and extortion. The gambling “industry” has pushed and pushed government at all levels, and passes out the money to buy friends and supporters. The gambling industry owns several state legislatures, and is an enormously corrupting influence in dozens of others. The U.S. Congress is becoming more and more susceptible to the enticements offered by the gambling industry.





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1 Dave McKinney, March 17, 2001 Illinois sun-times

2 “Heavy Betting Nation-wide Gambling Political Contributions: a Mother Jones special investigation” June 9, 1999

3 Connecticut Post. Tuesday, December 04, 2001.

4Plain Dealer December 17, 1997

5 Tribune Chronicle, Warren, Ohio Jan 10, 1998

6 By Mike Oliver “Ex-speaker, wife to surrender today”, The Orlando Sentinel, January 22, 1998

7 John Leopold, Maryland State Representative, before National Gambling Impact Study Commission, August 20, 1997

8 Sally Ann Stewart, “New Tarnish on Arizona’s Image; Bribe Case Has State ‘in Shock,” USA Today, February 13, 1991, p. 6a.

9 John Pacenti, “Walker Found Guilty of Conspiracy in AzScam,” Associated Press, November 5, 1992

10 Joe Stephens, “Powerbrokers Await Windup of Grand Jury,” Kansas City Star, October 11, 1996, p. A1

11 Bruce Smith AP in The State, May 25, 1999

12 “Former State Representative Sentenced to Prison for Selling Votes,” Associated Press, April 24, 1992.

13 Bill Estep, “BOBTROT Leaves Legacy of Ethics Rules,” Lexington Herald-Leader, August 2, 1995

14 Jim Yardley, “Don’t Bet on Gambling; Louisiana Bribery Suspected,” Atlanta Journal and Constitution, September 5, 1995

15 “Indictment casts pall over gambling”, The Advocate, 8/6/99

16 Natalie Gott, “Former four-term Louisiana governor convicted of racketeering,” Associated Press, May 9, 2000,