State Set Scene for Future Corruption

Hack-O-Rama here we come!


New commission given sweeping oversight of casinos
By Associated Press

BOSTON — When Gov. Deval Patrick signs a new gambling bill into law, control over the three planned casinos and one slots parlor will quickly shift from state lawmakers to an as-yet-unnamed five-member commission, whose members will all make more than $100,000 a year.

Top lawmakers said they deliberately set out to give the commission as much leeway as possible to regulate the new industry.

"You have to have someone to give the authority to, to make those difficult ... decisions," said House Speaker Robert DeLeo, D-Winthrop, a strong supporter of expanded gambling.

"I think it’s best left for an independent commission to take a look at who’s qualified to have one of these facilities, to make sure that the people who are operating them have not only the fiscal management to do so, but they pass all of the necessary qualifications," he added. [And take their queue from the Speaker?]

The law gives the commission sweeping powers to:

— Approve or deny casino licenses.

— Inspect financial reports.

— Hire and fire commission employees.

— Conduct investigations.

— Impound slot machines and other gambling equipment.

— Issue subpoenas.

— Act as trustees for gambling-related trust funds.

The commission will also have the power to levy and collect assessments, fees and fines associated with the casinos and provide assistance to the governor in negotiating a compact with a federally recognized Indian tribe. In return, the full-time commissioners will receive six-figure salaries.

Under the bill, the chairman of the commission will receive a salary equal to that of the state secretary of administration and finance — $150,000 — while the remaining four commissioners will receive $112,500 each, or three-quarters the salary.

Patrick, whose earns about $140,000 as governor, is expected to sign the bill as early as Tuesday.

The commissioners are appointed by three of the state’s top elected officials.

Patrick, Attorney General Martha Coakley and state Treasurer Steven Grossman, all Democrats, will each name one member to the commission. The remaining two members will be appointed by a majority vote of the governor, attorney general and treasurer.

Patrick’s pick will serve as commission chairman.

Members of the commission will serve five-year terms and can be appointed to a second term. No more than three can be from the same political party. The governor can remove a member only for specific reasons including malfeasance, conviction of a felony or neglect of duty.

Casino critics say the bill stacks too much clout in the hands of the commission.

"We and all citizens, including legislators ... should be very concerned about the sweeping powers of this new bureaucracy," Kathleen Conley Norbut, a longtime critics of casino gambling, said in a statement.

"We proposed development of a ’watchdog’ group that would monitor the establishment and growth of the industry, as well as the concentrated powers of the commission. This is something that is still needed," she added, saying lawmakers "intentionally have washed their hands of future responsibility."

The bill places restrictions on the outside activities of commissioners.

The commissioners are expected to work full time for the board and are barred from owning any stock in a business that holds a casino license or from providing any professional services to any regulated firms. Commissioners are also barred from wagering in a casino except as part of the job.

While state lawmakers prohibited one another from working for a casino for at least one year after leaving public office, commissioners are held to a three-year "cooling-off" period after leaving the board.

The lengthy bill goes into great detail about just what authority the commission wields. The most critical is the power to "determine which applicants shall be awarded gaming licenses."

The bill appears to leave little room to appeal that decision once it is made, short of going to court.

"The commission shall have full discretion as to whether to issue a license," the bill states. "Applicants shall have no legal right or privilege to a gaming license and shall not be entitled to any further review if denied by the commission."

Under the bill, one casino will be in each of three broad geographic locations across the state. It will be up to the commission to weigh each proposal and pick the one they think is the best — or to deny all proposals if none meet their criteria.

The commission also has the authority to suspend or revoke a license for specific reasons, including breaching a condition of the license or if a licensee commits a felony.

Picking the winning casino bidders is a choice that could be extremely lucrative — to the state and the casino company.

Each winning casino firm must show it has enough money to pour at least $500 million into a gambling facility while also covering a licensing fee of at least $85 million. For the slots parlor, the winning company will have to show it can spend $125 million developing the facility and also cover a $25 million fee.

Overseeing it all is the commission, empowered to weigh not just a company’s financial stability, but also its "integrity, honesty, good character and reputation."

The commission’s power doesn’t stop there.

The board will also have its own law enforcement agency — an "investigations and enforcement bureau" that will be the primary enforcement agent for regulatory matters.

The commission even has power to regulate casino "junkets" designed to lure those willing to bet at a higher level in exchange for the casino picking up the cost of transportation, food and lodging.

To cover the costs of the commission, the bill establishes the Massachusetts Gaming Control Fund. The commission is named the trustee of the fund and is empowered to use the money to pay for the operational expenses of the commission.

The money for the fund comes in part from certain fees levied on the industry — including an annual license fee of $600 for each slot machine and a nonrefundable application fee of $400,000 for each casino proposal.