Grand jury's scathing casino report sparks state hearings
By Brad Bumsted and Mike Wereschagin,
Published: Wednesday, May 25, 2011
HARRISBURG — The House Gaming Oversight Committee will hold hearings this summer on developing legislation stemming from a blistering grand jury report on casino regulation.
Republican Rep. Curt Schroder, the panel's chairman from Chester County, said the hearings would address numerous recommendations made by the grand jury -- from ending a culture of secrecy to improving hiring practices at the Pennsylvania Gaming Control Board.
A report from a two-year grand jury investigation released Tuesday found that the board charged with regulating the state's casino industry and protecting taxpayers instead protected casino interests, provided patronage jobs for lawmakers to deal out, mollified the politically powerful and thwarted the public's right to know.
The investigation into the control Board, which the state Attorney General's Office initiated, recommended no criminal charges. But it described an agency operating largely in secret and hiding criminal allegations or financial troubles of politically connected casino applicants.
"It's our job to take people and companies that are unsuitable and make them suitable," Michael Schwoyer, the board's former chief enforcement counsel, told three investigators in July 2006, five months before the board awarded 11 casino licenses, according to the grand jury report.
Employees cut 51 pages from the financial suitability report of former North Shore casino owner Don Barden, including damaging information such as the $11.1 million he lost at other casinos during the five years preceding his being awarded the Pittsburgh license in 2006, and the poor performance of his other casinos. Barden, who died last week, had to give up the license when his financing collapsed in 2008.
Board Chairman Gregory Fajt, who was appointed in 2009, issued a statement saying the board has been an "unmitigated success."
"The board has steadfastly and repeatedly said that we did our work well, we have protected the public, and the citizens of Pennsylvania are reaping tremendous dividends from our work," Fajt said. "After this grand jury met for more than two years, there were no arrests, no presentments, no indictments. They found no criminal activity because there was, in fact, no criminal activity to be found."
The report rehashes "old news," Fajt said.
The Tribune-Review reported in October 2007 that internal documents called Barden's bid a "very high risk" and that some employees believed he hadn't been fully vetted.
Among the stable of lawyers tasked with preparing reports on the casino applicants' financial suitability, "virtually every" one told the state grand jury that they couldn't remember anything about preparing the final reports. The person in charge of the reports, Director of Licensing Susan Hensel, "admitted that she did not read the content of the financial suitability reports and that she had no involvement in many key decisions in the licensing process."
"If selective amnesia was a crime, there'd be people going to jail," said Rep. Mike Vereb, R-Montgomery County, a critic of the control board.
The investigation began while Republican Gov. Tom Corbett served as the state's top prosecutor. It continued under his successor, acting Attorney General William H. Ryan Jr.
The General Assembly authorized casino gambling in 2004. The board awarded 11 slot licenses in 2006. Since then, 10 casinos opened.
"Changing investigative reports at the gaming board was as commonplace as apple pie to the average family in Pennsylvania," Vereb said.
Former board member Ken McCabe of Cranberry denied that he was told who should get licenses.
"Nothing was predetermined, at least not in my book, and I think I can speak for (former Commissioner Sanford Rivers, of Churchill)," McCabe said.
Vereb sponsored a bill that would transfer the board's investigative arm, the Bureau of Investigations and Enforcement, to the Attorney General's Office. The grand jury recommends separating the bureau from the rest of the board, too, but said it should be an independent agency.
Other recommendations include criminalizing intentional violations of the Gaming Act, and requiring greater transparency. According to the report, the board used the gaming law's confidentiality provision "as a sword rather than a shield," and exhibited a "desire to conceal, obfuscate and disguise its process rather than to seek transparency and inclusion."
The report says the Legislature's Black Caucus threatened to vote against the Gaming Act unless leaders guaranteed blacks would get a seat on the control board and at least one casino license. According to the report, DeWeese and former Rep. Mike Veon said ex-board member Jeffrey Coy "would be responsive to their needs." Coy could not be reached.
Veon is in prison on unrelated felony convictions. DeWeese could not be reached.
Barden was the only minority to win a casino license.
State Rep. Joe Preston, D-East Liberty, remembered the maneuvering differently.
"We met with the governor as a caucus, which is what we're supposed to do," to ensure minorities got equal consideration for jobs and casino licenses, said Preston, who is black.
Board members weren't interviewed until just a few weeks ago, McCabe said.
"By the time the grand jury got to us, they'd already made up their minds," McCabe said. "It was apparent to me that they didn't want to hear the truth. ... We were taking a lot of things into consideration, versus just one report from one tentacle of our agency, but that didn't seem to matter" to the grand jury.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Military veteran ID cards granted on honor system
- Robert Morris University Polling Institute poll finds value of college in doubt
- Gettysburg wax museum selling historical figures
- UMass latest to deal with rowdy St. Paddy’s parties
- Lawmaker: Responders should carry drug that counteracts opiates
- Oscar-winning director Demme’s ‘Outsider’ art collection set for sale
- Bill would let local police use radar guns
- Allegheny College journalism conference to share story next door
- Doylestown church embraces Zimbabwe couple
- PennDOT to pay team of companies for bridge repairs under single contract
- LCB marketing director to leave