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Gaming the System
By Matthew Teague
DANIEL HUNTER, THE coordinator of Casino-Free Philadelphia, was one of the 14 arrested in Harrisburg during the search for documents. He’s tall and lean, with a hawkish nose that flares when he talks about casinos. He believes that Rendell and his political allies, having failed to win gambling when the Governor was mayor, found a sneakier way to do it now. “This time around, I think they picked a different strategy,” he says when we meet at a Center City coffeehouse. “Instead of a public process, you come in and you say, ‘It’s a done deal.’”
Further, Hunter and others like him say that a tangle of politics, money and patronage ensured which casinos won spots on the Delaware. I met with Daniel Keating, a mega-builder, SugarHouse partner and Rendell-Fumo contributor (he’s given the duo thousands), at his impressive offices at the Phoenix. I asked whether the process — starting with Act 71 — had been as opaque as Hunter suggested, with no opportunity for public input.
“Public input?” he said, holding up a copy of a report issued by Mayor John Street’s office. It outlined a series of guidelines, such as community interaction, traffic and finances, by which the casinos should be judged. “Look at the public input that went into this,” Keating said.
There’s a problem with that argument.
Last year, the City of Philadelphia finally followed through with recommendations based on those criteria. It ranked each proposed casino: Riverwalk earned 16.5 stars, TrumpStreet got 15 stars, Pinnacle 14, and in a distant loss, SugarHouse 10 and Foxwoods 9.5. But on December 20th, when the Gaming Board announced the two winning sites, they were Foxwoods and SugarHouse. So the report in Keating’s hand — the ostensible public input — meant nothing.
Act 71 had gradually set citizens against government, and city against state. Both casino sites, for instance, are in State Senator Fumo’s district. Both are in Philadelphia City Councilman Frank DiCicco’s district. But while Fumo championed casinos, DiCicco said the sites chosen are “horrendous.”
That distinction points to the difference in DiCicco’s and Fumo’s roles. DiCicco, the local guy — who, in fact, proudly claims never to have lived more than a block away from his current home — must face the consequences of a casino in an unavoidable and immediate way, unlike the state politicians in Harrisburg. Casino advocates say DiCicco flip-flopped — that he once supported casinos broadly, but because of a challenge in this spring’s primary has rallied against them, at least along the river. They say his sentiments aren’t real. But that argument collapses on itself, because what is such a reversal but a de facto accommodation to the will of the people?
None of it matters anyway, according to insiders. They say the casino site selection had more to do with political back-scratching than public will. “Everybody always thought that Foxwoods and SugarHouse were a sure thing,” says one consultant close to the deal who declined to speak for attribution because the stakes — political and financial — are so high. “These guys saw an opportunity to kill several birds with one stone. They could fund programs, stop the money from flowing over to New Jersey, bring in campaign contributions, and make their friends rich. They saw it as win-win-win-win.”
The web of connections between the casinos and the politicians who engineered Act 71 — Fumo and Rendell in particular — is so dense that after a while, it stands up on its own and casts a shadow. The money alone is astonishing: At least $1.9 million from gambling interests, remember, poured into Rendell’s and Fumo’s coffers and political committees leading up to the passage of Act 71. Another example: Representative Bill DeWeese — who appointed one of the seven Gaming Board members — accepted money from major Foxwoods investors, including as late as 2005, when slots alliances were forming.
“Those guys have been pals of mine for years, long before they ever thought about getting involved with gaming,” DeWeese told me. “I’ve known them since time immemorial.”
But the connections only start with money. For example, real estate developer Ron Rubin, an investor in Foxwoods, has been heavily linked with Fumo for years, including in complex land deals up and down the Delaware riverfront. Even more important: One of Foxwoods’ major investors is something called the Silver Family Charitable Foundation, which pledges to help disadvantaged children in the area and was set up by Melissa Silver. She’s the daughter of Lewis Katz, Camden entrepreneur and former principal owner of the New Jersey Nets. And, most important, Ed Rendell’s fellow man-about-town.
It’s the same at SugarHouse. A quick sketch of the closed loop of influence that favored the casino: Fumo and Rendell worked together to pass Act 71. Rendell appointed three of the Gaming Board members, including chairman Tad Decker. According to campaign finance records, Decker has given Rendell more than $113,000 — $100,000 of which was a loan, repaid by Rendell — starting when Decker was managing partner at Cozen O’Connor, a powerful Philadelphia law firm. Decker left the firm when he took the gaming job, but has continued to meet privately with the firm’s president and CEO, Pat O’Connor, a longtime friend. SugarHouse hired the firm two weeks before the winning casinos were selected. Richard Sprague, another powerful local attorney, is a SugarHouse investor, and has for years represented — and here we come full circle — Vince Fumo, mastermind of Act 71.
Fumo has since become mired in a sweeping federal probe that alleges widespread, multimillion-dollar fraud and corruption. Prosecutors have moved that Sprague should not represent Fumo because of their “ethical tangle.” Fumo’s spokesman, Gary Tuma, says of Act 71 and Fumo’s role in it, “People have the misperception that this fell together in the last hour. This was a process that played out over about 15 months,” and included negotiations by Republicans and Democrats in the House and Senate. “The final version was decided a couple of months before the vote. There were only a few details left. That’s all.” But then again, that final version — a massive bill that would change the lives of many Pennsylvanians, for good or bad — didn’t make it into the public eye until a matter of hours before the vote.
Daniel Hunter, the Casino-Free Philadelphia coordinator, said the interwoven relationships “suggest a corrupted system.” Certainly, there’s no proof of illegal activity, but given the interconnections, the question of backroom deals remains. Favor-trading and sweetheart arrangements are Philadelphia traditions among the city’s handful of powerful personalities, of course. That’s why insiders knew from the outset that Foxwoods and SugarHouse — Rendell’s guys and Fumo’s — could look forward to wealth almost beyond measure.
I spoke with Tad Decker, to ask about that web of relationships and perceived conflicts of interest, particularly pertaining to SugarHouse.
“I recused myself on the vote,” he said.
“You recused yourself from the vote,” I said, “but for a couple of years you had been in on the deliberations.”
“Right. And my firm — my old firm — only started representing them about two weeks before the vote. Not before us, but in a financial capacity,” he said.
“But in the meantime, you were meeting privately with Patrick O’Connor.”
Decker’s voice rose. “He’s my friend — I go to dinner with him once in a while. He doesn’t represent them. The firm does!”
I asked him if he thinks that appears to be a conflict of interest.
That set Decker off — he had clearly heard the question before. “Why don’t you say that publicly, put it in your article, and I’ll sue your ass off!”
Minutes later, he calmed down. “Don’t misunderstand,” he said. “I’m not mad at you for asking tough questions.”
Decker went on to say that he no longer has any stake in Cozen O’Connor, but he wouldn’t rule out the possibility of returning to the firm when he’s done at the Gaming Board. And he emphasized that while he did meet with O’Connor socially, they never discussed the casino selection.
Any allegation that the decisions were railroaded through, he said, are “silly.” But one insider says that Decker’s decision to walk out of the room while the board voted on SugarHouse was “bullshit drama” that highlighted the casino. An attorney who worked for a casino that lost its bid — and who declined to speak for attribution — says, “He should have abstained from any discussion related to all Philadelphia casinos. Not just the one where he had connections.” That is, Decker’s abstention didn’t blinker board members to SugarHouse. It steered them toward it.
The final selection of the SugarHouse and Foxwoods locations is a study in inevitability:
The board members first divided the casino sites into three groups: TrumpStreet in the northwest; Pinnacle, SugarHouse and Riverwalk on the river north of the Ben Franklin Bridge; and Foxwoods on the river south of the bridge.
Trump had situated his casino in a depressed neighborhood — thinking that it would spiff things up a bit — but the board ruled that no gamblers would want to visit such a place. So Trump never had a hope.
The board voted on SugarHouse — with Decker abstaining — and awarded it a site. The Fumo-Rendell-Decker-Sprague-Fumo loop held fast.
So then the board was forced — forced — to give Foxwoods the second site, according to the board’s report: “In the Board’s view, if the Board approved one of the North Delaware Avenue locations for a license, then the Board is constrained to eliminate the other two locations in the same general vicinity for reasons of traffic management” on the avenue.
The inevitable, tumbling-domino nature of the choice — the site-chose-us stance — led many observers, from neighborhood residents to state politicians, to think what Decker calls “silly” thoughts about railroading.
Maybe those thoughts are wrong. The trouble is that such a closed process — exemplified and guided by Act 71 — makes it impossible for people to know exactly who influenced the decisions. And with so much at stake, many people assume Vince Fumo and Ed Rendell controlled the outcome.
After TrumpStreet lost its bid, Donald Trump didn’t blame the Gaming Board, when he spoke to the Inquirer:
“That was the Governor’s decision, and he has to live with it,” said Trump, who in the end realized what really separated the winners and losers. Trump had by then personally given tens of thousands of dollars to Rendell’s political campaign, but didn’t have the relationships with Rendell and Fumo that the winners did. “That’s how I feel about it,” Trump said. “He has to live with it.”
Further, Hunter and others like him say that a tangle of politics, money and patronage ensured which casinos won spots on the Delaware. I met with Daniel Keating, a mega-builder, SugarHouse partner and Rendell-Fumo contributor (he’s given the duo thousands), at his impressive offices at the Phoenix. I asked whether the process — starting with Act 71 — had been as opaque as Hunter suggested, with no opportunity for public input.
“Public input?” he said, holding up a copy of a report issued by Mayor John Street’s office. It outlined a series of guidelines, such as community interaction, traffic and finances, by which the casinos should be judged. “Look at the public input that went into this,” Keating said.
There’s a problem with that argument.
Last year, the City of Philadelphia finally followed through with recommendations based on those criteria. It ranked each proposed casino: Riverwalk earned 16.5 stars, TrumpStreet got 15 stars, Pinnacle 14, and in a distant loss, SugarHouse 10 and Foxwoods 9.5. But on December 20th, when the Gaming Board announced the two winning sites, they were Foxwoods and SugarHouse. So the report in Keating’s hand — the ostensible public input — meant nothing.
Act 71 had gradually set citizens against government, and city against state. Both casino sites, for instance, are in State Senator Fumo’s district. Both are in Philadelphia City Councilman Frank DiCicco’s district. But while Fumo championed casinos, DiCicco said the sites chosen are “horrendous.”
That distinction points to the difference in DiCicco’s and Fumo’s roles. DiCicco, the local guy — who, in fact, proudly claims never to have lived more than a block away from his current home — must face the consequences of a casino in an unavoidable and immediate way, unlike the state politicians in Harrisburg. Casino advocates say DiCicco flip-flopped — that he once supported casinos broadly, but because of a challenge in this spring’s primary has rallied against them, at least along the river. They say his sentiments aren’t real. But that argument collapses on itself, because what is such a reversal but a de facto accommodation to the will of the people?
None of it matters anyway, according to insiders. They say the casino site selection had more to do with political back-scratching than public will. “Everybody always thought that Foxwoods and SugarHouse were a sure thing,” says one consultant close to the deal who declined to speak for attribution because the stakes — political and financial — are so high. “These guys saw an opportunity to kill several birds with one stone. They could fund programs, stop the money from flowing over to New Jersey, bring in campaign contributions, and make their friends rich. They saw it as win-win-win-win.”
The web of connections between the casinos and the politicians who engineered Act 71 — Fumo and Rendell in particular — is so dense that after a while, it stands up on its own and casts a shadow. The money alone is astonishing: At least $1.9 million from gambling interests, remember, poured into Rendell’s and Fumo’s coffers and political committees leading up to the passage of Act 71. Another example: Representative Bill DeWeese — who appointed one of the seven Gaming Board members — accepted money from major Foxwoods investors, including as late as 2005, when slots alliances were forming.
“Those guys have been pals of mine for years, long before they ever thought about getting involved with gaming,” DeWeese told me. “I’ve known them since time immemorial.”
But the connections only start with money. For example, real estate developer Ron Rubin, an investor in Foxwoods, has been heavily linked with Fumo for years, including in complex land deals up and down the Delaware riverfront. Even more important: One of Foxwoods’ major investors is something called the Silver Family Charitable Foundation, which pledges to help disadvantaged children in the area and was set up by Melissa Silver. She’s the daughter of Lewis Katz, Camden entrepreneur and former principal owner of the New Jersey Nets. And, most important, Ed Rendell’s fellow man-about-town.
It’s the same at SugarHouse. A quick sketch of the closed loop of influence that favored the casino: Fumo and Rendell worked together to pass Act 71. Rendell appointed three of the Gaming Board members, including chairman Tad Decker. According to campaign finance records, Decker has given Rendell more than $113,000 — $100,000 of which was a loan, repaid by Rendell — starting when Decker was managing partner at Cozen O’Connor, a powerful Philadelphia law firm. Decker left the firm when he took the gaming job, but has continued to meet privately with the firm’s president and CEO, Pat O’Connor, a longtime friend. SugarHouse hired the firm two weeks before the winning casinos were selected. Richard Sprague, another powerful local attorney, is a SugarHouse investor, and has for years represented — and here we come full circle — Vince Fumo, mastermind of Act 71.
Fumo has since become mired in a sweeping federal probe that alleges widespread, multimillion-dollar fraud and corruption. Prosecutors have moved that Sprague should not represent Fumo because of their “ethical tangle.” Fumo’s spokesman, Gary Tuma, says of Act 71 and Fumo’s role in it, “People have the misperception that this fell together in the last hour. This was a process that played out over about 15 months,” and included negotiations by Republicans and Democrats in the House and Senate. “The final version was decided a couple of months before the vote. There were only a few details left. That’s all.” But then again, that final version — a massive bill that would change the lives of many Pennsylvanians, for good or bad — didn’t make it into the public eye until a matter of hours before the vote.
Daniel Hunter, the Casino-Free Philadelphia coordinator, said the interwoven relationships “suggest a corrupted system.” Certainly, there’s no proof of illegal activity, but given the interconnections, the question of backroom deals remains. Favor-trading and sweetheart arrangements are Philadelphia traditions among the city’s handful of powerful personalities, of course. That’s why insiders knew from the outset that Foxwoods and SugarHouse — Rendell’s guys and Fumo’s — could look forward to wealth almost beyond measure.
I spoke with Tad Decker, to ask about that web of relationships and perceived conflicts of interest, particularly pertaining to SugarHouse.
“I recused myself on the vote,” he said.
“You recused yourself from the vote,” I said, “but for a couple of years you had been in on the deliberations.”
“Right. And my firm — my old firm — only started representing them about two weeks before the vote. Not before us, but in a financial capacity,” he said.
“But in the meantime, you were meeting privately with Patrick O’Connor.”
Decker’s voice rose. “He’s my friend — I go to dinner with him once in a while. He doesn’t represent them. The firm does!”
I asked him if he thinks that appears to be a conflict of interest.
That set Decker off — he had clearly heard the question before. “Why don’t you say that publicly, put it in your article, and I’ll sue your ass off!”
Minutes later, he calmed down. “Don’t misunderstand,” he said. “I’m not mad at you for asking tough questions.”
Decker went on to say that he no longer has any stake in Cozen O’Connor, but he wouldn’t rule out the possibility of returning to the firm when he’s done at the Gaming Board. And he emphasized that while he did meet with O’Connor socially, they never discussed the casino selection.
Any allegation that the decisions were railroaded through, he said, are “silly.” But one insider says that Decker’s decision to walk out of the room while the board voted on SugarHouse was “bullshit drama” that highlighted the casino. An attorney who worked for a casino that lost its bid — and who declined to speak for attribution — says, “He should have abstained from any discussion related to all Philadelphia casinos. Not just the one where he had connections.” That is, Decker’s abstention didn’t blinker board members to SugarHouse. It steered them toward it.
The final selection of the SugarHouse and Foxwoods locations is a study in inevitability:
The board members first divided the casino sites into three groups: TrumpStreet in the northwest; Pinnacle, SugarHouse and Riverwalk on the river north of the Ben Franklin Bridge; and Foxwoods on the river south of the bridge.
Trump had situated his casino in a depressed neighborhood — thinking that it would spiff things up a bit — but the board ruled that no gamblers would want to visit such a place. So Trump never had a hope.
The board voted on SugarHouse — with Decker abstaining — and awarded it a site. The Fumo-Rendell-Decker-Sprague-Fumo loop held fast.
So then the board was forced — forced — to give Foxwoods the second site, according to the board’s report: “In the Board’s view, if the Board approved one of the North Delaware Avenue locations for a license, then the Board is constrained to eliminate the other two locations in the same general vicinity for reasons of traffic management” on the avenue.
The inevitable, tumbling-domino nature of the choice — the site-chose-us stance — led many observers, from neighborhood residents to state politicians, to think what Decker calls “silly” thoughts about railroading.
Maybe those thoughts are wrong. The trouble is that such a closed process — exemplified and guided by Act 71 — makes it impossible for people to know exactly who influenced the decisions. And with so much at stake, many people assume Vince Fumo and Ed Rendell controlled the outcome.
After TrumpStreet lost its bid, Donald Trump didn’t blame the Gaming Board, when he spoke to the Inquirer:
“That was the Governor’s decision, and he has to live with it,” said Trump, who in the end realized what really separated the winners and losers. Trump had by then personally given tens of thousands of dollars to Rendell’s political campaign, but didn’t have the relationships with Rendell and Fumo that the winners did. “That’s how I feel about it,” Trump said. “He has to live with it.”
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