Corruption Investigation

Casino donation probe is costing state
By TOM WITOSKY
The investigation into the legality of a $25,000 contribution to Gov. Chet Culver's re-election campaign by Fort Dodge casino interests intensified in July.

Invoices filed with the state by special prosecutor Larry Scalise show he spent 39.8 hours on the investigation in June and 63 hours in July, compared with 44 hours in May.

Scalise declined to comment on the status of the investigation.

Members of the state's Executive Council are expected today to approve the payment of $8,224 in legal bills submitted by Scalise for his work on the investigation during June and July.



That would raise the total amount spent on Scalise's legal services to $11,728.

Scalise, who was appointed to the prosecutor's position after Attorney General Tom Miller decided his staff would have the appearance of a conflict of interests, is attempting to determine whether there should be criminal prosecution of any of the parties involved for donating or accepting the contributions made last fall.

If so, Scalise could file charges or present the case to a grand jury.

Scalise's invoices indicate he is centering his investigation on whether Peninsula Gaming of Dubuque paid money to three Webster County casino supporters with the intention that the money be contributed to Culver's re-election campaign.

The bills show Scalise has spent most of his time meeting with investigators from the Iowa Division of Criminal Investigation, as well as analyzing and reviewing various material collected in the investigation.

It is illegal in Iowa to make or knowingly receive a political contribution in the name of another person or interest group.

Peninsula, the Fort Dodge casino group and Culver have said they did nothing wrong.

Peninsula Gaming had agreed to finance 80 percent of the proposed Fort Dodge casino project if it had been approved.

The state Racing and Gaming Commission rejected the bid in May after intense lobbying by Fort Dodge residents in support of a license.

DCI agents noticed that the company had paid Steve Daniel, James Kesterson and Merrill D. Leffler, partners in Webster County Gaming, $25,000 last fall, and that the three had combined to contribute that much to Culver.

Daniel has said he and his partners were paid by Peninsula for helping lead the company to the Fort Dodge project and for handling local duties in the application process.

He has said they contributed to Culver because of his support for northwestern Iowa.

Peninsula officials have said their payment to the Webster County group was meant to defray legal costs incurred in the effort to get the casino project approved.

Guy Cook, a Des Moines attorney representing Peninsula, acknowledged he met with Scalise for about an hour June 16.

"I advised him of my representation of Peninsula Gaming and that we stood ready to cooperate with the investigation," Cook said, adding that he had a general discussion with Scalise about the situation. "Part of my discussion was that there was no wrongdoing on the part of Peninsula Gaming."