Both MGM and Penn National are salivating to invade Springfield, Massachusetts.
Politically connected firms hit
jackpot in Maryland casino fight
Eva Russo/FOR THE WASHINGTON POST -
GREENBELT, MD - OCTOBER 19: Ruth Wright, of Mitchellville, MD, encourages
a “no” vote on Maryland Question 7, which voters passed 52 percent to 48,
following the most costly campaign in state history. It sets the stage for MGM
to seek approval to build an $800 million casino at National Harbor in Prince
George's County.
In a matter of weeks leading up to Election Day,
a tight circle of Washington’s biggest media-buying firms with close ties to top
Democrats and Republicans cashed in on the fight over whether to build a casino
on the edge of the nation’s capital.
In total, gambling interests spent more than $90 million at a rate of over $1
million a day, making the Maryland ballot measure fight one of the costliest in
U.S. history. With huge sums of money to spend, and not a lot of time to do it,
those for and against the measure turned to a handful of politically connected
firms to help them get their message across.
As they waged a campaign for the White House, GMMB, the DCI Group and Mentzer Media Services, three of the largest media buyers
for President Obama and for super PACs supporting Mitt Romney, bought air time
for Question 7, as it was known.
In the end, voters approved the plan, which will allow not only a casino,
most likely at National Harbor, but also table games such as blackjack and
roulette at the state’s five previously approved slot-machine sites.
Those firms weren’t the only ones who benefitted financially from the
unprecedented spending in Maryland. Former aides and campaign staffers of Senate
Majority Leader Harry M. Reid (D-Nev.) performed work for the pro-casino side of
the fight, which was funded in large part by MGM Resorts, which is angling to
build a Las Vegas-style casino and hotel that could tower over the
southern end of Washington’s skyline.
Reid has an especially close relationship with MGM. The senator and the
company have swapped employees, while Reid has interceded with Wall Street banks
on MGM's behalf and company executives are Reid’s biggest campaign
contributors.
Those with ties to Maryland Gov. Martin O'Malley (D) benefited as well. The
public affairs firm of O'Malley's former communications director and the brain
trust of his 2010 reelection campaign reunited to help push the gambling
expansion.
As often happens when gambling rights are at stake, the deluge of money from
casino interests spilled far beyond the political class:
Nearly a half-million dollars went to the Washington Redskins for what a
company spokesman said was advertising. Campaign filings show a payment of
$450,000 went from the pro-casino side to the NFL team the day before it publicly endorsed the casino measure.
On the front lines, armies of door knockers and outspoken community leaders —
including the mayor of Forest Heights, the small Prince George’s County
community to the north of the likely casino site — were also paid.
And as in other states where church groups have been involved, a coalition
that organized rallies and gatherings of African American clergy who urged a
“no” vote partnered with a nonprofit group that took in $200,000 from the
opposition campaign, public records and the campaign filings show.
“It sort of took on a life of its own,” said Alan Feldman, senior vice
president for MGM Resorts International, which spent nearly $41 million to
support the ballot measure and has proposed building an $800 million casino and
resort at National Harbor. “What made this so expensive, Feldman added, “was
such a well-funded opponent.”
That opponent was Penn National Gaming, operator of Hollywood Casino at
Charles Town Races in West Virginia, a favored destination for Washington-area
gamblers that could take a substantial hit if another casino opens in Maryland.
Over nearly three months, Penn ponied up $42 million for a scathing campaign
waged mostly on television.
As Penn and MGM upped the ante, every campaign fundraising record in Maryland
shattered. By Election Day, the spending eclipsed the amount that Republicans
and Democrats combined spent on every currently held elective office statewide,
or the cumulative amount spent seeking control of the governor’s mansion since
1998.
It also put the Maryland measure in the stratosphere of spending alongside
California’s costliest-ever ballot fights over taxes and same-sex marriage.
GMMB, Mentzer and the DCI Group placed over $50 million in advertising for
and against the ballot measure through Oct. 21. Campaign reports detailing
spending since then are not yet public, but campaign sources say much of the
more than $30 million spent in the closing weeks also went to the three firms to
purchase ads. The firms take a commission believed to range between 3 and 15
percent.
Without knowing the exact commission or the total amount spent on
advertising, it is not possible to ascertain precisely how much the companies
profited.
Coincidentally, the two sides say, their efforts also broke down largely
along party lines, with Democrats working for MGM and Republicans with Penn.
GMMB, which has bought $300 million worth of advertising this year on behalf
of President Obama, received nearly $22 million by Oct. 21 to do so for the
ballot-issue committee supported by MGM.
Jim Margolis, a top strategist for Obama, said he was the GMMB partner who
worked on the gambling measure.
Two other GMMB strategists working on the initiative have ties to Reid: Jon
Summers, Reid’s former communications director, and Anson Kaye, who worked on
Reid’s 2010 reelection campaign at GMMB.
Margolis also worked on Reid’s 2010 campaign as a media consultant. He said
he met MGM chief executive Jim Murren during the 2010 race when Murren appeared
in an ad for Reid praising his efforts to save the company’s CityCenter project
in Las Vegas, which was having trouble securing credit during the height of the
housing crisis.
The pollster that the campaign hired also had long-standing ties to Reid,
O’Malley and MGM.
Mark Mellman was paid $364,000 for polling. He, too, worked on Reid’s 2010
campaign, and under O’Malley, the Democratic Governors Association has increased
its business to Mellman tenfold.
One of the campaign’s top consultants, Craig Varoga, of the super PAC Patriot
Majority, was another common denominator between Reid and O’Malley. Varoga ran
an independent expenditure campaign to re-elect Reid in 2010, the same year he
was chief strategist for O’Malley’s reelection bid. He also ran Maryland’s first
campaign to legalize slot-machine gambling in 2008.
Kearney O’Doherty, the Baltimore firm of Steve
Kearney, O’Malley’s former policy and communications director, had its entire
office working on the campaign.
Kearney was instrumental in getting the measure to the ballot in the first
place, working at an August special session of the legislature for Peterson
Cos., developers of National Harbor, as well as MGM.
For its messaging, the committee backed by Penn, which is fairly bipartisan
in its campaign contributions, hired Mentzer and DCI group, both prominent
Republican consultants.
Mentzer, which was paid $14 million, has placed $100 million worth of
advertising this year for American Crossroads, a conservative super PAC, and
Restore Our Future, a group backing Romney and others.
The committee’s contract with DCI, which paid $13.5 million, amounted to a
repeat of the winning partnership that Penn had used twice in recent Midwestern
elections to suppress competition from rival gambling interests and expand its
own casino footprint.
Neither a spokeswoman for Penn nor Brian Mentzer returned calls seeking
comment; DCI declined to comment.
While nearly all of its spending through Oct. 21 went through DCI and
Mentzer, the Penn committee did spread around hundreds of thousands of dollars
to bolster grass-roots opposition in Prince George’s County.
It hired Jacqueline Goodall, the part-time mayor of Forest Heights, who said
she was otherwise unemployed and looking for work, to be a spokeswoman for the
opposition.
Penn also gave $200,000 to Family Faith Future, according to campaign
reports. The group has ties to a Baptist congregation in Bowie whose pastor
opposes gambling as well as to the Collective Empowerment Group, a coalition of
black churches that sponsored anti-gambling rallies and which traces its roots
to a banking coalition of black churches in the county.
One of the group’s founders, Melvin Forbes, sought a meeting with Post
reporters last month to lay out a case against the gambling measure.
Last week he said he did not know the group had gotten any money from
Penn.
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