Say Yes to New Hampshire. Say NO to Casinos.

14- Political Dominance, Then Corruption

Political and Legal Damage

14. Letting big gambling in means political dominance, then corruption.

In October, 2010, the US Justice Department charged four state senators (both parties), a legislative staffer, two casino owners, and five lobbyists from Alabama in a massive vote-buying scheme intended to legalize slot machines in Alabama.

“The alleged criminal scheme was astonishing in scope … The defendants’ corrupt conduct infiltrated every layer of the legislative process in the state of Alabama,” said Assistant Attorney General Lanny Breuer. A gambling lobbyist caught by the DOJ investigation plead guilty to offering a state senator $2 million in exchange for a single vote to legalize slot machines.

A May, 2011 Pennsylvania grand jury report found that the state’s gambling regulator “neglected or wholly ignored” its duty to protect the public from financially-shaky casino operators and from casino operators with organized crime backgrounds, and failed to maximize revenues promised for local property tax relief.

The PA Independent reported that Pennsylvania’s gambling regulator, “… was influenced by political leaders from both sides of the aisle in the General Assembly.  Those leaders — particularly state Rep. Mike Veon, then-House Minority Leader and former House Speaker Bill DeWeese — regularly sent lists to the Gaming Control Board of people “recommended” for employment.

Veon is serving a six-year prison sentence for public corruption, and DeWeese is under indictment on similar charges. The report also singled out former state Senate President Bob Jubilerer and Senate Minority Leader Bob Mellow for apparently meddling in GCB affairs. Mellow and Jubilerer have since left the Senate, and Mellow is under investigation by the FBI.”

Casino Free Philadelphia lists known corruption associated with casinos in this article.

The Pew Research Center reports that economists Douglas M. Walker and Peter T. Calcagno found that corruption convictions increased after casinos were legalized.

The head of the FBI’s Boston office said recently that he’s concerned the expansion of casino gambling might lead to an increase in public corruption and financial and organized crime.

To fully understand the potential of corruption, read this editorial by Natalie Rogol, a research fellow with the Commonwealth Foundation, a Pennsylvania public policy research institute, recounting the exaggerated revenue promises and rampant corruption that mark the first five years of casinos in Pennsylvania.

New Hampshire has a history of weak gambling regulation. The New Hampshire state auditor found in 2005 that the Pari-Mutuel Commission (now, the Racing & Charitable Gaming Commission) was stained by a multi-year pattern of self-dealing, evasion of legislative budget authority and sloppy recordkeeping (full report coming soon). In 2005, the NH PMC failed to detect a $200 million, multi-year Gambino crime family illegal gambling and money-laundering operation at the Belmont track. Again, in 2009, the Racing & Charitable Gaming Commission failed to prevent the bankrupt owners of the Hinsdale track from taking money from customer gambling accounts.

The New Hampshire legislature experimented disastrously with exactly this type of dangerously close, corrupting set of relationships with the Boston & Maine railroad monopoly in the 1880s. See: Senator William Eaton Chandler, Book of Bargains, 1891, pp 44-55.

Pervasive corruption of the New Hampshire legislature by the railroad monopoly culminated in passage of the anti-monopoly provisions of Part II, Article of the New Hampshire constitution in 1903.

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