Gaming the System
By his second summer as Pennsylvania’s headman, Governor Ed Rendell had dug himself into a serious political debt. He needed a way out. He needed, as it were, a jackpot.
In 2002, Rendell had won election by making sweeping promises — namely, to reduce taxes and bring business to the state. But he quickly discovered that his reputation as Philadelphia’s mayor didn’t mean much in Harrisburg. His enemies hit harder there — Senator Robert Jubelirer, the top-ranking Republican, got into a legislative spat with Rendell and told him, “Fuck you, Governor. You’re a liar” while his friends stood watching. But he turned it all around in the wee hours of a summer night, with a single political gamble — or, at least, what appeared to be a gamble — on casinos.
As far back as the 1990s, Rendell, as mayor of Philadelphia, had wanted riverboat casinos on the Delaware, but he never flexed quite enough political muscle to make it happen. He made a campaign promise in 2002 to expand legalized gambling, but the idea didn’t get traction until 2003, when, now flailing as governor, he proposed a whopper of a program called the “Plan for a New Pennsylvania.” This new plan aimed to fix schools, reform property taxes, and patch a hole in the state’s budget — largely paid for with gambling proceeds. “This is something the Governor wanted badly,” Jubelirer told me recently. Rendell toured the state promoting the plan, hoping his famous charm and straightforward approach might carry the day. They didn’t, and the program languished.
Rendell’s relationship with one particular man, Senator Vince Fumo, had withered since he took over as governor. They had been political pals in the past, until Fumo had backed Rendell’s opponent, Bob Casey, in the Democratic primary during the election. Naturally, that incensed Rendell. But Fumo is powerful — also corrupt, federal prosecutors now say — and he made a far better friend than enemy. So in May 2004, Rendell met with Fumo in Philadelphia to patch up their relationship. And almost immediately after that meeting, Rendell’s life as governor took a an upward turn.
The project Rendell and Fumo teamed up on following that meeting — bringing casinos to Pennsylvania, and most significantly to the City of Philadelphia — would be, in Fumo’s words, “the most important and dramatic thing we’ve done in state government in 30 years.” The two politicians’ decisions would touch almost every citizen in the Commonwealth, in ways good and bad. This eventually ignited an ardent grassroots resistance to the casinos, and fears that their arrival would trample some of Philadelphia’s most important neighborhoods. But a series of deft political maneuvers kept all the power consolidated with a handful of insiders, and impenetrable to public opinion.
The whole thing started, appropriately, with a piece of midnight intrigue at the Capitol.
THE GOVERNOR’S FORTUNES CHANGED most drastically during the July 4th holiday of 2004, with the saga of a little-known bill that came to be called Act 71. The State House had received the bill earlier that year — just a 33-line document about background checks at horse racetracks around the state. It had stayed in the House for 47 days, was passed, and then moved to the Senate, where it lived on for another 100 days.
On Thursday, July 1st, as the holiday weekend approached — along with the legislature’s summer break — the little 33-line bill underwent an extraordinary rebirth: Its original lines were scratched, and an epic 145-page addition was attached, as engineered by one Senator Vincent Fumo. The formerly innocuous bill now called for full-blown gambling, as envisioned by Rendell: an industry that would change the financial fabric of the Commonwealth of Pennsylvania, bringing as many as 61,000 slot machines to 14 locations, including two spots in Philadelphia.
That day, Representative Paul Clymer of Bucks County stood in the Capitol rotunda talking with another legislator. “My gosh, look at the lobbyists in here,” he said. Pinstriped gambling advocates had flooded the room. “I think they hired every lobbyist in Harrisburg.”
Clymer stood in the rotunda for several minutes, watching the lobbyists enter the Capitol. “I felt like I was in the eye of a storm,” he says. “This was a big push.”
The 145-page attachment and the holiday weekend arrived like the sprint at the end of an Olympic marathon, when previously unseen runners suddenly burst into the public arena. Behind the scenes, in the weeks leading up to the attachment, the Rendell-Fumo cabal had worked to ensure the bill’s passage before it had even been made public.
“The people behind this cut back-door deals,” Clymer says. “This thing was greased and oiled.”
So well greased, in fact, that it ran at top speed in reverse: Since the bill had already passed through the House in its 33-line form, the new 145-page version would flow backward, starting in the Senate first — Fumo’s stomping grounds — and then going back to the House.
There are 50 senators, so a majority vote requires 26. Since the 21 Democratic senators could be counted on, the bill required at least five votes from the Republican side. Rendell and Fumo, as governor and minority chair of the Senate appropriations committee, could loosen — or cinch — the purse strings for projects around the state. And gradually, a few possible Republican votes emerged.
“We were giving out money all over the place,” Fumo acknowledges. “We even gave Scarnati money for some trees or something.”
Joe Scarnati from Cameron County had voted against a previous incarnation of Rendell’s slots vision a year earlier, but had indicated that if the state would release money for state game lands in his district — to the tune of $5 million per year — he’d now vote yes. Don White, a senator from Indiana County, had also voted against Rendell’s previous attempt. But now Rendell promised to release $10 million for an unnamed project in White’s legislative district. John Pippy, from Allegheny County, offered to support the gambling expansion on the condition that his district’s financially shaky Pittsburgh Airport receive a $150 million bailout. Rendell agreed.
The Senate took up the bill within a matter of hours of its reconstitution, and passed it, 30 to 20 — a big win for Rendell and Fumo. But the bill was only halfway home; it still faced Clymer and his anti-gambling colleagues in the House.
The House legislators worked around the clock that night and the next, trying to untangle the gambling bill and all its implications. The lobbyists also worked around the clock, persuading, leveraging, cajoling: If you don’t pass this, they told legislators, the money will just go to New Jersey. So think of the good you’ll do for your district by keeping it here.
About 4 p.m. Saturday, July 3rd, the House started debating the bill. Many representatives took the floor to rail against gambling and the lack of a public referendum on it. Clymer stood and said, “There is a foul odor in the halls of government” — but as in the Senate, the outcome seemed inevitable. Rendell and Fumo had bridged the partisan divide by allying themselves with the House’s leader, Speaker John Perzel, a Republican from Philadelphia; Perzel had long supported slots, and accepted campaign donations from gambling interests. Just after midnight on July 4th, representatives passed the bill, 113 to 88. The whole process, from the scratching of the 33 lines to the final passage, had taken less than 72 hours.
By 3:30 a.m., the bill’s backers threw their arms around each other and swapped high-fives in the Capitol’s rotunda, while Rendell declared victory. In a single deft push, he and Fumo had resurrected his governorship and set themselves atop a political gold mine: Each year, a billion or so dollars in casino tax money would go toward Rendell’s promised programs — better taxes, schools and business — and both of Philadelphia’s casinos would, ultimately, land in Fumo’s district.
Rendell immediately issued a statement titled “Governor Rendell Cheers Passage of Expanded Gaming,” and, rather defensively for a brand-new act, “Governor Will Amend Code of Conduct to Include Anti-Corruption Measures,” ostensibly to keep casino money from pouring into politicians’ pockets. According to the Inquirer, though, between January 2000 and the introduction of the bill, the gaming industry had already pumped almost $6 million into state political campaigns. Fumo and his political committees received more than a quarter million of that, and Rendell about $1.7 million.
And so, in the darkest hours of July 4th, the most democratic of holidays, the colossal bill passed with no public scrutiny, no hearings, and no input from citizens.
That isolated conception — isolated from the average citizen — would set the tone for everything that followed. Act 71 guided the Commonwealth of Pennsylvania, and most especially the City of Philadelphia, toward an almost inevitable gambling industry, and at every turn it remained true to its genesis: a done deal, even before the people knew it existed.
Opponents, as we’ll see, contend not only that casinos were rigged to come to the state in general, but that Philadelphia’s two eventual site winners — Foxwoods and SugarHouse — were just as inevitable, thanks to a mesh of political cronies and big-dollar contributors.
I MET FOR LUNCH this spring with two Foxwoods casino bosses, who arrived at the restaurant flanked by as many public relations handlers. The handlers, though, sat smiling and silent through most of the meal: Nobody can outsell casino executives when they’re on a roll.
“It’s not just a gambling mecca,” said Dave Coskey, Foxwoods’ Philadelphia coordinator at the time. “There will be restaurants. Entertainment. Shopping.”
A moment later he added, “We’ve proposed a garage that’s actually larger than it needs to be, for us.”
And traffic wouldn’t slow down because of the casino, he said. It would speed up.
Coskey and Jim Dougherty, Foxwoods’ director of operations, are both big, likeable guys with strong Philadelphia connections, who look like Eagles fans wearing expensive suits. They seemed purpose-built for their task: to wedge a casino onto Philadelphia’s waterfront without stirring up the rabble in the surrounding neighborhoods.
“A group that I met with from South Philadelphia — literally, you could throw a stone from their house and throw it into our site — and they were very, very nice,” Coskey said cheerfully, “but a little hostile.”
Opponents and proponents argue over what sort of impact gambling will have on Philadelphia, but everybody agrees that impact will be massive: Between Foxwoods in the south and SugarHouse in the north, more than 10 million people will visit the casinos each year, generating three-quarters of a billion dollars in revenue. Just building the sites themselves will cost more than a billion dollars.
It’s an unprecedented endeavor: Philadelphia will be the largest city in America to open casinos. But Coskey and Dougherty are gambling industry veterans; they’re confident.
Coskey (who has since become the vice president for marketing for the Borgata casino in Atlantic City) helped bring casinos to Mississippi, back in the early 1990s. I told him that I grew up in Vicksburg, on the Mississippi River, which for the prior century or so had been known as a crucial Civil War site. The whole town, like Philadelphia, is a historical treasure. But after 1993, when riverboat gambling arrived, any mention of Vicksburg brought forth an inevitable response: “Been to the boats?” Gambling had swallowed up the town’s identity. I asked Coskey whether casinos in Philadelphia would eventually overshadow the city’s reputation as, for instance, the home of the Liberty Bell.
Coskey laughed. “My background is marketing,” he said. “So gosh, that would be great, if you could build up your brand that much.”
So the gambling industry isn’t just enormous, but carnivorous — casinos will eat Philadelphia if they can, and some people worry that they’ve got the money to do it. “I’d say that’s a pretty legitimate complaint,” says a staff member of one legislator involved in the deal — a pro-gambling legislator. “It’s even got a name — ‘gambling creep.’ Today it’s slots, but tomorrow … ”
Despite the stakes, slots arrived here in the quietest way possible. There was no public say in the decision to bring gambling to Pennsylvania, and the law, once passed, ensured that local feelings wouldn’t get in the way.
ACT 71 DICTATED THAT SEVEN PEOPLE would oversee the expansion of gambling in Pennsylvania: four chosen by various members of the state legislature, and three — including the chairman — chosen by Governor Rendell. No gambling experts would preside, and no mayors from the cities in question.
They convened for the first time in December 2004 and, after some initial housekeeping, set about the business of picking among the state’s rich suitors. They would license two in Philadelphia, and one each in Pittsburgh, Bethlehem and the Poconos.
Soon, five potential Philadelphia casinos emerged: TrumpStreet, Pinnacle, SugarHouse, Riverwalk and Foxwoods.
On its face, the list of investors seemed like a surprising roll call of local and national celebrities — music mogul Quincy Jones, ex-Phillie Garry Maddox, Temple basketball coach Dawn Staley — but they only held small stakes. The real power behind the casinos offered no surprises: local bosses, partnered with out-of-state, big-money gambling outfits. Some had more muscle than others, and here they are, in a rough ascending order of political pull:
Pinnacle was by far the worst connected of the five sites. A Las Vegas company called Pinnacle Entertainment provided backing, along with Robert Johnson, founder of BET.
Riverwalk was proposed by Planet Hollywood, which brought the glitz of names like Stallone and Schwarzenegger. Riverwalk also claimed more minority investors than any other casino, and they were well connected, but to the wrong people: They enjoyed the favor of city officials, but as became clear later, the city’s influence meant little, if anything.
TrumpStreet, of course, featured Donald Trump, along with local investors like Pat Croce, former 76ers owner, and Brian Tierney, publisher of the Inquirer and Daily News.
SugarHouse’s investors were members of powerful families, like those of Neil Bluhm, a Chicago billionaire, and of Richard Sprague, an influential Philadelphia attorney; the extent of Sprague’s significance would become clear later.
About a third of Foxwoods is controlled by the Mashantucket Pequot tribe from Connecticut. But its most important investors are local: the family trust of Ron Rubin, a local developer; Ed Snider, head of Comcast-Spectacor, which owns the 76ers and Flyers; and, most important, the family of Lewis Katz, prominent local Democratic fund-raiser. (He personally donated $10,000 to Fumo in 2002.) Katz means more to Governor Rendell than just funds; the two are close, and spend a lot of time together out and about.
The operators, once assembled, jostled for sites around the city. Act 71 included a provision that no casino could be established within a 10-mile radius of any existing gambling halls, which include racetracks at Harrah’s in Chester to the south and Philadelphia Park in Bensalem to the north. That narrowed the available land to a thin strip across the city, and — in a pointed reminder of Ed Rendell’s original vision — the riverfront.
TrumpStreet proposed a site in the city’s northwest. The others all lined the river, from north to south: Pinnacle, SugarHouse, Riverwalk and Foxwoods.
The problem, of course, was that Philadelphia doesn’t look like Connecticut’s woodlands or Nevada’s deserts. There’s not a comparable site anywhere in the nation: Other gambling cities either have nowhere near Philadelphia’s population, or are like Las Vegas or Atlantic City, where gambling is the reason they exist. Philadelphia, though, is full of streets and cars and people and houses and shops and schools. So where, in all that, could the casinos fit without stomping on local toes?
I VISITED FOXWOODS’ CURRENT CASINO, near Mystic, Connecticut, to get a sense of what’s in store for Philadelphia.
It’s in a rural area — the closest airport is about an hour away — and to get there, I drove through pastureland that probably looked much the same when its sole residents were the Mashantucket Pequots, who were only a tribe then, and not casino proprietors.
In the lull of the idyll, I rounded a wooded bend, Dorothy-like, and saw the Emerald City standing over the landscape. It loomed endless and green and bright, but mostly endless: eight million square feet, 30 floors tall in places and nearly a mile from one end to the other. The philosophy is clear: Bigger is better.
As I pulled into the gleaming garage, I saw no gates in or out, and as a Philadelphian, I felt an unfamiliar thrill: free parking. The casino’s interior also resembled the Emerald City, a town within a town. The glitz reached a crescendo on the slots floors: blinging and bleeping, flashing and chirping.
The grip of the slots floor is incomparable to any other experience in America today. Drugs can’t compare, because they only offer the thrill of sensation, where slots offer the possibility of actual enrichment. Even man’s eternal nemesis, sex, can’t compare, because the slots floor’s appeal cuts across genders, ages, races and creeds. On Foxwoods’ slots floor, the one immobile, silent feature of the room was the people themselves: They sat hunched with index fingers fixed to “spin” buttons, and many were literally plugged into the machines, thanks to a new slots innovation: A small bungee cord ran from their shirt pockets to a card in the slot machine that recorded their betting totals, qualifying them for comps — they were mainlining the thrill of slots. Which can take over a person: A few months ago, a pregnant woman in Atlantic City noticed pains while she played the penny slots. She eventually told a security guard, who thought she was joking. A few minutes later, she delivered her son on the floor; she had played penny slots through most of her labor.
Casinos work on states the same way they work on individuals: Lobbyists, traffic planners, entertainers, chefs and vendors are the civic equivalent of the sashaying lady who offers gamblers free drinks — only these comps are on a grand scale. They extend serving trays loaded with entertainment, shopping, giant tax payments and free traffic upgrades.
Consider Foxwoods: It picked what appeared to be the worst-situated of the sites, on an empty lot on Columbus Boulevard in South Philadelphia. It’s a traffic nightmare already. Traffic is in some ways the single most important aspect of a casino’s site, because if traffic is slow, shoppers of all sorts — not just gamblers — will stay away. Frank DiCicco, the area’s city councilman, says the delicate ecosystem of Philadelphia’s neighborhoods — particularly the retail shops that keep a place vibrant — won’t survive the casinos due to the traffic. “Something’s going to break,” DiCicco says. “It’s going to be the casinos or the retail.”
The trouble with Columbus Boulevard is simple. It’s popular, too narrow, and clogged by a terrible stoplight scheme. But in phase one of the project alone, Foxwoods plans to make $5 million in traffic improvements, and Dave Coskey had told me that traffic wouldn’t slow down on Columbus Boulevard. On the contrary, incredibly, he said that after the estimated 5.8 million casino visitors show up, “Traffic will flow 32 percent better than it does today. At the worst possible peak times.”
The miracle of heavier-but-faster traffic is another grand-scale comp. Just like smoother roads, lower taxes, better schools, economic development and more.
They’re all comps paid, small and large. So what is the cost?
IN APRIL 2003, DURING GOVERNOR RENDELL’S FIRST and more public push for slots in Pennsylvania, an economist from the University of Illinois (he has since moved to Baylor) testified before the State Senate and House finance committees. Earl Grinols is sought around the world for his independent gambling research, and he says he has no moral feelings about gambling: It’s just numbers.
And the numbers, he says, don’t add up. The problem is that casinos don’t generate new money; they shuffle money around. Tourists might bring in some new cash, but the typical gambler, according to Jim Dougherty of Foxwoods, comes in from “a 25-to-50-mile radius, tops.” And as the casino shuffles around that local money, it takes a profit without manufacturing a product.
But wait, some might say. The casinos produce entertainment. Grinols acknowledges that yes, some people may gamble only for the recreation, for the drinks and the music, and the excitement of the bells and lights. Those people, theoretically, feed money into slots with no expectation of seeing it again. But realistically, most people put money into a slot machine because they hope it will spit out more — that’s the whole idea of a slot machine. Economists call this behavior “directly unproductive profit seeking.” Most people call it money for nothing.
On a community scale, casinos are just larger versions of a slot machine: They’re calibrated to take in more from a community than they give out. They give out a certain amount for jobs, entertainment, free perks, charitable donations, community improvements — but they always draw out that amount plus a profit. Otherwise, they couldn’t survive.
If player losses were the only cost, one could say casinos only cost the suckers — like a movie theater that charges 10 bucks for five bucks’ worth of bad movies — so hey, it’s capitalism. But Grinols says the true costs are much, much higher.
Some of the costs are obvious, because they happen on the street: the cost of crimes like traffic violations, burglary and prostitution, which create a need for more police. But the economist says casinos make 30 to 50 percent of their money on losses by “problem gamblers,” and problem gamblers create deeper, more expensive problems, like increases in divorce, bankruptcy, suicide, white-collar crime and lost work time. “There’s a rise in stress-related sickness, anxiety and depression,” Grinols says. “The cost is enormous.”
In the end, he says, for every dollar of benefits casinos bring to Philadelphia, they will cost us more than three.
THE GAMING CONTROL BOARD — the seven-member body now chaired by a Rendell appointee named Tad Decker — published local impact reports on the five proposed casino sites on March 10th of last year.
In accordance with Act 71, the public had 21 business days to sift through and interpret the enormous proposals — hundreds of pages including financial reports, traffic schemes, architectural blueprints, floor plans and more. At the end of this review period, the board heard three days of public comments, allowing three minutes per individual. (Legislative groups and community organizations were allotted more time.)
No citizen could have sorted out and responded to the plans in the time allowed — or even hired lawyers to do so — and the board’s aggressive stance angered people in the proposed neighborhoods. Resistance groups started to form, the largest of which is Casino-Free Philadelphia, which received a $10,000 grant from Philadelphia Foundation, a charity. More officially, Philadelphia’s City Council passed a resolution requesting more time for public comments. The request was denied.
Through last summer, well after the public’s chance to examine the proposals ended, the casino operators changed and added to their proposals. TrumpStreet, for instance, went so far as to add 12 acres to its proposal. Neighborhood groups requested a chance to review the new versions, and were denied.
In October of last year, Casino-Free Philadelphia faxed a threat to the Gaming Control Board and Governor Rendell: If the board didn’t release the new casino plans by noon on December 1st, activists would execute what they called a “citizens’ document search.”
The nature of Act 71 — the bait-and-switch, hidden from public scrutiny — had finally collided with the public’s desire to know what on earth its government was up to. And on December 11th, the group acted on its threat.
Meredith Warner started it. She’s a resident of Fishtown, SugarHouse’s proposed neighborhood. She and other members of Casino-Free Philadelphia had packed into the lobby of the Gaming Control Board’s building in Harrisburg. Warner and another neighborhood resident, Jethro Heiko, stood holding what they called search warrants.
“On behalf of citizens across the state,” Warner read, “we are here to demand the casino planning documents from the Pennsylvania Gaming Control Board.”
Heiko read next: “We have consistently said transparency rests on two rights — the right for public information, and the right to give meaningful input.”
Having announced their intentions, Warner and Heiko walked toward the board’s offices. A number of employees stepped in to block them, while others shut a pair of glass doors. The crowd started to chant: “Let them through! Let them through!”
Before long, the Harrisburg police showed up, and the Reverend Jesse Brown of Philadelphia stepped forward in his dark suit and high collar. “We wanted to see what the gaming officials are,” he said to the officers. “We came to talk to them.” Brown and 13 other group members were promptly arrested and charged with disorderly conduct.
In January, the “Philadelphia 14” came before Harrisburg district judge Joseph Solomon. He swiftly pronounced them not guilty, and further, he smacked the Gaming Control Board from his bench for “not working for the citizens of the Commonwealth.”
I called Solomon to ask about his reasoning. “The law says they can’t disrupt the public for an illegitimate reason,” the judge said. “I found they had a legitimate reason. Those were public documents.”
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.”
THE CITY OF PHILADELPHIA never did get a word in edgewise about its casinos. It did try, though.
In December 2006, just days after the group of Philadelphians tried to search the Gaming Board’s office for documents, Mayor John Street announced to the board that the city had some preferences regarding the casinos. Those preferences, of course, ranked Foxwoods and SugarHouse last. In answer, the board’s spokesman delivered an incredible verbal slap to both Street and the city he represented: “The time expired for public comment.”
Later, pushed by groups like Casino-Free Philadelphia, City Council voted unanimously to let the people of the city make their own decision, by placing a referendum on gambling on the May ballot. The Gaming Board sued the city, demanding that it drop the referendum. The state Supreme Court granted a temporary injunction to block it.
The city had no right to create a referendum, according to the board, because Act 71 supersedes the city’s authority. Meanwhile, as the Democratic primary approached, City Council pursued zoning bills designed to stop construction of casinos.
Gambling works on two principles: stakes and odds. There was never any question whether the stakes, in the Commonwealth of Pennsylvania, were high. They’re dollars measured in billions, enough money to forever change our political and financial landscape.
Meanwhile, Rendell and Fumo — in tandem with the casino operators themselves — worked to make sure the odds were good, and in some cases inevitable. They took money from casinos, traded casino money to other legislators in exchange for votes, and shut out the public at every turn. Legality and illegality became concepts for common people, not the powerful: You never have to cross the line, so to speak, if you’re the one who drew it in the first place. In the meantime, Daniel Hunter and Casino-Free Philadelphia said that even after all legal measures are exhausted, they’ll fight the casinos. As the activists proved by storming the Gaming Board’s lobby, they’re unafraid of confrontation or even arrest; Hunter said that when bulldozers show up on the riverfront, his organization’s members will be there, lying in the dirt.
If the group is successful, it will have beaten the odds. Because in the world of casinos, there is one iron-clad, immutable rule: You may get ahead temporarily, you may enjoy the free drinks, you may even make a score.
But in the long run, the house always wins.
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