Peninsula Gaming Escaped Prosecution

Attorneys attack prosecutor payments
Having casino company pay isn’t right, they claim in Daniel case filings
By BILL SHEA, Messenger staff writer , Messenger News

Peninsula Gaming, the company picked to run a proposed Fort Dodge casino, and its top two executives appeared to be in legal trouble as 2010 drew to a close.

Special Prosecutor Lawrence Scalise filed criminal charges in October of that year against the Dubuque company; Brent Stevens, its chief executive officer; and Jonathan Swain, its chief operating officer; in connection with a contribution to the re-election campaign of former Gov. Chet Culver by Steve Daniel, a Fort Dodge man leading the effort to bring a casino to his town. Daniel, Webster County Entertainment and Davenport attorney Curtis Beason were also charged in the case.

The legal fortunes of Peninsula Gaming, Stevens and Swain have since improved. All charges against them have been dismissed, and the company is now paying for the ongoing prosecution of Daniel, Webster County Entertainment and Beason.

That arrangement is now the target of a fresh offensive by defense attorneys seeking to get the special prosecutors disqualified and the charges against the remaining defendants thrown out.

Daniel's attorney, Monty Fisher, of Fort Dodge, and Beason's attorneys, Leon Spies, of Iowa City, and Mark Weinhardt and William Ortman, of Des Moines, have filed motions in Polk County District Court claiming the payment arrangement violates ethics rules.

''Allowing the well heeled defendant, PGP (Peninsula Gaming), to escape prosecution by agreeing to pay for the prosecution of others violates not only the plain language of the ethical rules as argued by defendant Beason, but also clearly violates the spirit of the rules and the entire administration of a fair and impartial justice system,'' Fisher wrote in a motion filed Thursday.

The payment arrangement is outlined in a May 12, 2011, letter to Scalise from Guy Cook, the Des Moines attorney representing Peninsula Gaming. In the letter, Cook writes that the charges will be dismissed and adds ''finally, Peninsula Gaming will pay the costs of the prosecution of the charges previously brought through conclusion of this matter.''

On May 13, 2011, the prosecutors dropped the charges against Peninsula, Stevens and Swain.

Scalise's law firm, Coppola, McConville, Coppola, Hockenberg & Scalise, of West Des Moines, has been paid more than $100,000 so far for his work as a special prosecutor.

''The state of Iowa is not going to end up having one penny paid out to us that has not been reimbursed, so the taxpayers aren't footing the bill,'' Scalise said during a Nov. 17, 2011, hearing.

The charges against all the defendants in the case were filed on Oct. 11, 2010, following a probe by the Iowa Division of Criminal Investigation.

Daniel and Webster County Entertainment are scheduled to go on trial in Des Moines beginning Jan. 23 on charges of making a campaign contribution in the name of another and willful failure to disclose a campaign contribution. Beason, who is charged with failure to disclose a campaign contribution and obstruction, is also scheduled to go on trial that day.

The trial may be delayed, depending on what Polk County Associate District Court Judge William Price does with the six motions filed by the defense attorneys. Each of those motions addresses a different aspect of the legality of the payment arrangement between Peninsula Gaming and the special prosecutors.

A call seeking comment from Scalise wasn't returned Friday. A staffer in his office said he was meeting with Attorney General Tom Miller about a different issue.

Scalise and fellow Special Prosecutor Richard McConville claim that Daniel funneled campaign cash to Culver on behalf of Peninsula Gaming when he made his donation in November 2009.

During a pre-trial hearing in November 2011, Scalise said that Beason was the ''director, architect and orchestrator of the entire program to disguise the true source of the dollars.''

Attorneys disagree on how much money was donated. Scalise and McConville have said the amount was $25,000. Fisher has said the total was $11,000 paid in increments of $4,500, $4,500 and $2,000.

The prosecutors say the donation was made shortly after Peninsula Gaming paid Webster County Entertainment, a group led by Daniel, a $25,000 consulting fee. According to Scalise, within days of the $25,000 being deposited in the Webster County Entertainment account, checks were written to Daniel, Jim Kesterson and Merrill Leffler Jr. Kesterson and Leffler are Fort Dodge men who were partners with Daniel in Webster County Entertainment.

Scalise said the three men promptly wrote checks to Culver's re-election campaign.

Kesterson and Leffler were never charged with any crimes.

The effort to create the Diamond Jo Fort Dodge casino ended in May 2010 when the Iowa Racing and Gaming Commission declined to issue the needed license.