Corruption at Pennsylvania Gaming Control Board

From our friends at Stop Predatory Gambling [worth clicking on the link to read the additional source information.] :

Corruption at Pennsylvania Gaming Control Board
by Nathaniel
Yesterday, a grand jury responded to alleged corruption at the Pennsylvania Gaming Control Board by recommending a major overhaul of personnel and procedures at the Board and strengthened casino regulations. It also suggested dramatically reducing the number of secret meetings the Board holds.

The former communication director for the Board testified to the grand jury that at least five people who were hired because of their political connections “ended up getting arrested or investigated for conduct that he ultimately had to try to explain to the public.”

The grand jury’s report stated that the Board “failed to thoroughly protect the public from unlawful gaming practices; failed to maximize potential new revenue to the commonwealth to support property tax relief … and otherwise engaged in activities which eroded, at a minimum, this grand jury’s confidence in the system.”

Sadly, this is just one of many examples of political corruption that occur when state governments decide to partner with the predatory gambling industry.

Read the full news story below:

Pa. grand jury calls for overhaul of casino laws
By Mark Scolforo, May 25, 2011
Associated Press

HARRISBURG, Pa. — Pennsylvania’s casino regulations should be strengthened and personnel and procedures at the Gaming Control Board should be overhauled, a grand jury said in a report issued Tuesday.

The grand jury spent two years investigating how licenses were awarded to casinos, but the probe has not led to any criminal charges and the jury did not recommend them.

But the panel’s 102-page report was highly critical of how agency lawyers, administrators and board members handled their duties. It made 21 recommendations, among them that the board needs more experienced employees, particularly among its lawyers, and should sharply limit the number of secret meetings it holds.

The board “failed to thoroughly protect the public from unlawful gaming practices; failed to maximize potential new revenue to the commonwealth to support property tax relief … and otherwise engaged in activities which eroded, at a minimum, this grand jury’s confidence in the system,” the report said.

The licensing process “became pre-occupied, fixated and singularly focused” on fairness to applicants “at the expense of adequately protecting the citizens of the commonwealth.”

Much of the grand jury findings explored the process by which the board granted licenses to casinos in Erie and the Poconos, pointing out problems in how background investigations were conducted and the close relationship that sometimes existed between the applicants, legislative leaders and the casino agency.

Former board communications director Nick Hayes testified that at least five people who were hired because of political connections “ended up getting arrested or investigated for conduct that he ultimately had to try to explain to the public.”

The board responded to the grand jury report with a statement that called its efforts an “unmitigated success.”

“After this grand jury met for more than two years, there were no arrests, no presentments, no indictments,” board chairman Greg Fajt said. “They found no criminal activity because there was, in fact, no criminal activity to be found.”

Fajt said the board provided 2.7 million pages of documents to the attorney general’s office, which ran the jury, and spent more than 4,000 man-hours to comply with the probe.

Investigative grand reports are often used by prosecutors as probable cause affidavits in filing charges, but that did not occur in this instance. Prosecutors make final decisions about charges, and attorney general’s office spokesman Nils Frederiksen declined to say whether any might result from the gaming investigation.

“As for whether your definition of an outstanding success is that nobody’s been arrested, that’s a very interesting definition of success,” Frederiksen said. “If that’s your definition of success, what’s your definition of failure?”

The grand jury recommended that an outside agency conduct annual audits and inspections of the gaming board and said clear rules are needed to prevent board members from applying for or holding slots licenses.

It found violations of nondisclosure rules, hiring restrictions and nepotism prohibitions.

“The Pennsylvania Crimes Code and related criminal statutes are inadequate to the job of combatting public corruption,” the Pittsburgh-based panel wrote.

It said the board’s Bureau of Investigations and Enforcement should be established as an independent law enforcement agency and that all employees should have to wait four years after leaving employment before they could work for a gaming entity or any firm that represents or conducts business with a gaming entity.

The board conducted significant business behind closed doors, the jury found, a practice that undermined the public’s trust in its decisions and kept people from voicing their opinions.

The 2004 gambling law led to the establishment of 10 operating casinos that have so far generated more than $5.1 billion in fees and taxes, according to the board.