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Pennsylvania

Pennsylvania gambling info stifled, ex-trooper says

| Tuesday, Oct. 2, 2007

HARRISBURG -- The Rendell administration in 2005 imposed what one lawmaker called a "gag order" preventing the Pennsylvania State Police from talking with lawmakers about gambling issues, a former top-ranking state trooper told a legislative panel Monday.

Former Lt. Col. Ralph Periandi, who oversaw gambling enforcement for the state police, said during a hearing of the House Republican Policy Committee that state police could not legally give information gathered in investigations to state gambling regulators.

The 2005 directive kept state police from talking with lawmakers during a period when the lawmakers were considering updates to the 2004 slots law. At the time there was disagreement over what information about slots license applicants police could share with regulators.

Chuck Ardo, a spokesman for Gov. Ed Rendell, said that there was no gag order -- as Rep. Douglas Reichley of Allentown described it -- and that it is commonplace for state agencies to be directed to act through the governor's office so they "speak with only one voice."

At issue is whether a prominent Scranton businessman with a criminal past would have received a gambling license if the state police had been able to share intelligence with the state Gaming Control Board.

A grand jury in Dauphin County is said to be investigating whether Louis DeNaples, who won a license for Mount Airy casino in the Poconos, lied on his application about having ties to organized crime, according to published reports. DeNaples assured the gambling board he has no connection to a reputed crime figure in northeastern Pennsylvania, William "Big Billy" D'Elia. The Morning Call of Allentown has reported a federal grand jury is also exploring DeNaples' statements to the gambling board.

Although DeNaples' name was not mentioned yesterday, GOP lawmakers specifically cited his casino, which is scheduled to open next month.

Asked by Rep. Michael Vereb of Montgomery County whether state police involvement in investigating applicants would avoid the "mess we have on our hands now," an implied reference to the Mount Airy casino in the Poconos, Periandi said "yes." Vereb later said he was referring to Mount Airy.

"There is no tie to organized crime," said Kevin Feeley, a spokesman for DeNaples. "I can't speak whether a grand jury may or may not be operating. But he's been investigated exhaustively. (DeNaples) was found suitable to have a gaming license."

Reichley asked Periandi whether Mount Airy was the only applicant about whom the state police had information that should have gone to the gambling board. "Probably not," said Periandi, who served as state police deputy commissioner of operations from 2003 until March.

With or without state police intelligence, information about DeNaples isn't difficult to find. Entering his name in one Internet search engine, for example, yields more than 15,000 results. DeNaples was mentioned in three Pennsylvania Crime Commission reports between 1983 and 1990. One report cited his 1978 fraud conviction, for which he received a suspended sentence.

Pennsylvania's slots law bars people with felony convictions from owning a casino, unless they completed their sentence 15 or more years ago.

The slots law allowed the gambling board to choose whether state police or its own investigators would do background checks. The board chose its own Bureau of Investigations and Enforcement, Periandi said.

That was "problematic," he said, because the board's investigation unit isn't a criminal justice agency authorized to receive investigative files.

A November 2006 slots law update deemed the unit to be a "criminal justice agency," but that was in name only because gambling board investigators don't have criminal enforcement or arrest powers, Periandi said. It is not authorized to receive "protected information defined as investigative, intelligence and treatment information under state and federal law," he said.

Gambling board investigators and attorneys downplayed any problems with background checks on applicants. Frank Donaghue, chief counsel for the board, said "no specific information" has been identified to gambling investigators that was withheld by a law enforcement agency.

The law enables the board to work effectively with the state police and attorney general's office, said David Kwait, director of the Bureau of Investigations and Enforcement.

Kwait, a former FBI agent, told the legislative panel that the "framework designed and created by (legislators) indeed works well." He said the license investigations were thorough, detailed and productive.

"To this day I am not aware of any law enforcement agency that refused to provide or otherwise withheld information that would have precluded any applicant from being licensed," Kwait said.

Reichley is pursuing legislation that would place the investigations unit under the attorney general and have state police conduct background checks.

The Mount Airy situation is "the clearest example of where there is a statutory shortcoming," Reichley said after the hearing.

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