[Congressional Record Volume 141, Number 62 (Tuesday, April 4, 1995)]
[Extensions of Remarks]
[Pages E779-E782]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                           ARROGANCE OF POWER

                                 ______


                          HON. BOB LIVINGSTON

                              of louisiana

                    in the house of representatives

                         Tuesday, April 4, 1995
  Mr. LIVINGSTON. Mr. Speaker, attached are copies of correspondence 
received by me from the Honorable Fred J. Cassibry, U.S. district 
judge, retired, and now a member of the Louisiana Economic Development 
and Gaming Corp. Judge Cassibry, a Democrat appointee to the bench, was 
an outstanding jurist throughout his 20 years on the bench. He is a 
superlative human being, and he has documented some truly outrageous 
conduct by representatives of the U.S. Justice Department. His concerns 
should be immediately addressed by the Judiciary Committee.

                                    Louisiana Economic Development


                                       and Gaming Corporation,

                                  New Orleans, LA, March 31, 1995.
     Hon. Bob Livingston,
     House of Representatives,
     Rayburn Building, Washington, DC.
       Dear Congressman Livingston: I serve as a member of the 
     Louisiana Economic Development & Gaming Corporation [LEDGC] 
     and I previously served as a United States District Judge in 
     the Eastern District of Louisiana for twenty years. I write 
     to you regarding arrogance of power. In a flagrant and 
     shameless abuse of the authority entrusted to it by the 
     American people the United States Attorney's Office in New 
     Orleans has sought to interject itself into the functions of 
     LEDGC. The conduct was so egregious and obvious that two of 
     Louisiana's largest newspapers editorialized against what was 
     taking place.
       By way of explanation I enclose copies of those editorials 
     together with a copy of my letter to Attorney General Janet 
     Reno. When she did not see fit to intervene as requested I 
     then wrote a letter of complaint to 
     [[Page E780]]  the Office of Professional Responsibility for 
     the United States Department of Justice which is charged with 
     investigating such matters. I enclose copies of those 
     letters. It has now been five weeks since my original request 
     for investigation and three weeks since my follow-up letter. 
     I have received absolutely no reply or response on any kind.
       Thousands of years ago the philosopher Plato in commenting 
     on the nature of government asked the question, ``Who guards 
     the guardians?'' That question is as pertinent today as ever. 
     Society gives tremendous power to the United States 
     Department of Justice, a power which has great potential for 
     abuse. The only recourse given to citizens to check that 
     abuse is that the Department supposedly has an Office of 
     Professional Responsibility to investigate complaints. I find 
     it astounding that when I, as a member of a state board, 
     supported by editorials in two highly respected newspapers, 
     make a formal complaint about Justice Department misconduct 
     to the very office that is charged with investigating such 
     complaints I cannot even get the courtesy of a response.
       Hence, I call upon you as an elected representative of the 
     people of Louisiana for assistance. The facts of the case 
     clearly support the allegations of abuse of power which I 
     have made and I would hope that the Congress would see fit to 
     conduct its own investigation into the tactics of the Justice 
     Department. At very least I request you help in requiring the 
     Justice Department to investigate itself.
       Awaiting your reply, I remain,
           Very truly yours,

                                             Fred J. Cassibry,

                              United States District Judge, (Ret.)
                                              Board Member, LEDGC.
                                  ____

                                    Louisiana Economic Development


                                       and Gaming Corporation,

                                   New Orleans, LA, March 9, 1995.
     Mr. Michael Shaheen.
     Department of Justice, Office of Professional Responsibility, 
         Washington, DC.
       Dear Mr. Shaheen: Your attention is called to my previous 
     letter of February 8, 1995, in which I requested an 
     investigation regarding the actions of certain members of the 
     United States Attorney's Office in the Eastern District of 
     Louisiana. To date I have received no response. However, I 
     did receive correspondence from the Deputy Assistant Attorney 
     General in the Criminal Division, a copy of which is 
     enclosed.
       As you can see from the copies of correspondence I 
     previously sent to you, specifically my letter of January 30, 
     1995 to Attorney General Reno and Assistant Attorney General 
     Harris, I had requested their intervention to secure a 
     postponement of the scheduled grand jury appearances for 
     myself and other members of the Louisiana Economic 
     Development and Gaming Corporation (LEDGC). They did not fit 
     to grant that request. I therefore wrote to you requesting an 
     investigation as to what had transpired.
       It is my understanding that you are charged with the 
     responsibility of investigating allegations of impropriety by 
     members of the United States Department of Justice. I renew 
     my request that you do so. While Mr. Keenan offers his 
     unsolicited opinion that the Assistant United States 
     Attorneys in question acted professionally, it is my 
     understanding that it is your function, not his, to make such 
     determinations.
       I respectfully suggest to you that it simply does not 
     suffice to respond to citizens' complaints, as did Mr. 
     Keenan, by stating that criminal investigations are secret 
     and therefore the actions of the investigators cannot 
     discussed. I assume that all criminal investigations by the 
     Department of Justice are confidential. If that were reason 
     enough to foreclose citizen inquiries and complaints there 
     would be no need for your office to exist. The proceedings in 
     question are not confidential as to you and members of your 
     staff. I do not question the underlying right of the United 
     States Attorney's Office to conduct any investigation it 
     deems appropriate. However, you well recognize that it is 
     possible to conduct legitimate investigations employing 
     improper methods for ulterior motives. The letter sent by the 
     United States Attorney's Office--signed by three assistant 
     United States attorneys--to Bally's attorney and the timing 
     of the subpoenas to the members of the Casino Board, 
     constituted flagrant abuses of prosecutorial power.
       I would appreciate receiving a response from you. If your 
     office is going to investigate my complaints I would like 
     confirmation of that. If you are declining to do so I would 
     at least like a definitive statement from you to that effect 
     so that I can determine what further action I should take.
       Awaiting your reply, I remain,
           Very truly yours,

                                             Fred J. Cassibry,

                              United States District Judge, (Ret.)
     Board Member, LEDGC.
                                                                    ____

                                    Louisiana Economic Development


                                       and Gaming Corporation,

                                New Orleans, LA, January 31, 1995.
     Hon. Janet Reno,
     Department of Justice, Washington, DC.
       Dear General Reno: Following up my correspondence to you of 
     January 30, 1995, enclosed you will find an editorial that 
     appeared in the Baton Rouge Morning Avocate, one of the 
     leading newspapers in our state. I again request your prompt 
     response to my request. Since I will be at the federal grand 
     jury you can get a message to me by calling the Attorney 
     Conference Center at the federal court at (504) 589-6111.
       Thanking you for your prompt attention to this matter and 
     awaiting your reply, I remain.
           Very truly yours,

                                             Fred J. Cassibry,

                              United States District Judge, (Ret.)
     Board members, LEDGC.
                                                                    ____

                                    Louisiana Economic Development


                                       and Gaming Corporation,

                                New Orleans, LA, January 30, 1995.
     Hon. Janet Reno,
     Department of Justice, Washington, DC.
       Dear General Reno: I address this letter to you because I 
     have been advised that the United States Attorney for the 
     Eastern District of Louisiana, Mr. Eddie Jordan, has recused 
     himself in the matter about which I am requesting assistance, 
     I have been further informed that in light of Mr. Jordan's 
     recusal all decisions in the matter have been referred to 
     First Assistant United States Attorney Jim Letten. Since it 
     is the conduct of Mr. Letten, in part, about which I complain 
     I am required to write to you directly. Because this matter 
     relates to a criminal investigation being conducted by the 
     United States Attorney's office I am also sending a copy of 
     this letter to the Assistant Attorney General in charge of 
     the Criminal Division, Ms. Joann Harris.
       By way of background, I am a retired United States District 
     Judge having served over twenty years in the Eastern District 
     of Louisiana. A little over a month ago I was asked by the 
     Governor of the State to serve on the Louisiana Economic 
     Development and Gaming Corporation (LEDGC) which regulates 
     the landbased casino in New Orleans. The Harrah's Corporation 
     has been awarded the contract to run the casino and the Board 
     is presently in the process of evaluating an application by 
     Bally Gaming, Inc. to be the supplier of slot machines and 
     other gaming devices to be used in the casino.
       The President of LEDGC, Mr. Wilmore Whitmore, declined 
     Bally's application based upon its poor performance in 
     monitoring the sale of its video poker machines in the State 
     of Louisiana. A copy of the President's ruling is attached 
     for your ready reference. A memorandum supporting his 
     decision is also enclosed. Under the laws of our state Bally 
     has the right to appeal the President's decision to the full 
     Board.
       As an individual member of the Board I was predisposed to 
     support the President's decision. The United States 
     Attorney's office for the Eastern District of Louisiana had 
     indicted seventeen (17) persons that it alleged had ties with 
     organized crime, specifically the Genovese LCN family in New 
     York, who were distributing Bally video poker machines in 
     Louisiana. Bally Gaming had loaned in excess of $25 million 
     dollars to these individuals who in turn were skimming the 
     profits off the machines, thereby defrauding Bally and the 
     State of Louisiana. The companies through which they were 
     operating, Worldwide Gaming of Louisiana (WGC) and Louisiana 
     Route Operators (LRO), went into bankruptcy. The President of 
     Bally Gaming, Inc. Mr. Alan Maiss pleaded guilty to a felony 
     arising out of these transactions. Our regulations require 
     that a company seeking to do business with the casino prove 
     by clear and convincing evidence a record of prior 
     reliability. I certainly could understand the President's 
     decision that Bally Gaming, Inc. did not satisfy that burden 
     of proof.
       The attorneys for Bally had no credible rebuttal to the 
     President's decision and to the contrary expressed an 
     inability to even discuss the allegations because of the 
     pending federal prosecution. The primary argument submitted 
     by Bally's attorneys to the President was that the United 
     States Attorney's Office felt that Bally's had been a 
     ``victim'' and therefore was not a knowing party to what had 
     taken place. The President in arriving at his decision never 
     questioned whether Bally was a victim, but correctly pointed 
     out that it had at best been extremely negligent in allowing 
     itself to have become partners with alleged organized crime 
     figures and clearly did not qualify under the suitability 
     requirements of Louisiana law.
       I was shocked and dismayed to find the attorneys for Bally 
     introducing into the record of our proceedings a letter 
     signed by three Assistant United States attorneys expressing 
     concern regarding the President's findings and support for 
     Bally Gaming, Inc. A copy of that letter is attached for your 
     ready reference. In my 20 years as a federal judge I have 
     never seen the Department of Justice interject itself in such 
     a flagrant fashion into the proceedings of a state board. You 
     will note that
      the letter contains conclusory and unsupportable statements. 
     For example, the letter states the corporation did not do 
     anything wrong, rather it was its president, as though a 
     corporation could act other than through its officers.
       At a public meeting attended by Bally's attorneys I 
     expressed my opinion about the questionable conduct of the 
     United States Attorney's office in writing such a letter. At 
     very least we had the obligation to hear sworn testimony in 
     support of the conclusions if the government's attorneys 
     wanted to give their views. They declined an invitation to 
     testify, and when we issued subpoenas to them they 
     predictably invoked executive privilege and refused to 
     testify. Bally's attorneys then decided to ``withdraw'' the 
     letter from the three assistant United States attorneys as 
     though they somehow expected 
     [[Page E781]]  that the Board members were supposed to ignore 
     what had already been presented.
       It was on January 26, 1995 that the United States 
     Attorney's office wrote to us telling us that they would not 
     agree to testify before the Board. On January 27, 1995 one of 
     the same assistant United States attorneys who wrote the 
     letter issued a subpoena for all of the Board members to 
     appear before the United States Grand Jury on January 31, 
     1995. The Board is scheduled to vote on the Bally appeal the 
     next day, February 1, 1995. A copy of the subpoena is 
     attached.
       As I am sure you are aware a federal grand jury subpoena 
     can be disconcerting under the best of circumstances. 
     However, just before issuing the subpoena to the Board 
     members the United States Attorney's Office had already 
     gotten the President of LEDGC, Mr. Whitmore, before the 
     Federal Grand Jury and grilled him in a most antagonistic 
     manner. They made it very plain to him that they disagreed 
     with his assessment of Bally's activities. it was clearly not 
     a session designed to secure information, but rather to 
     challenge Mr. Whitmore's conclusions.
       Through my attorney, Julian Murray, I expressed to Mr. 
     Letten how ill timed and intimidating were such subpoenas. I 
     inquired as to whether the grand jury appearances could be 
     postponed for a reasonable amount of time so that the Board 
     members did not have to vote on such an important matter 
     knowing that they would incur the ire of the federal 
     prosecutors before whom they would have to appear the next 
     day. Mr. Letten responded to my attorney that a continuance 
     was not possible. Rather, he, Mr. Irwin and Mr. Perricone 
     (the same three Assistant United States Attorneys that sent 
     the letter) felt that it was imperative that the grand jury 
     hearing go forward. When a meeting was requested with United 
     States Attorney Eddie Jordan so that that decision could be 
     reviewed, Mr. Letten responded that the United States 
     Attorney had recused himself in the matter and that he, 
     Letten, was the United States Attorney as far as this 
     particular matter was concerned.
       I am therefore required to write to you for review of this 
     decision. I request that there be a postponement of my 
     appearance before the federal grand jury and that when I do 
     appear that the proceedings be handled by a special assistant 
     United States attorney appointed by you.
       In closing I emphasize that I write this letter as an 
     individual Board member and do not purport to speak for the 
     Board as a whole or any of the other members. However, I can 
     state to you without equivocation that the interference by 
     the United States Attorney in the Board's proceedings has had 
     a chilling effect on its deliberation. I suggest that if you 
     will take the time which I am requesting to check into this 
     matter you will find that there is not in fact any urgency 
     that would dictate against my request for a reasonable 
     postponement of the grand jury appearance. If there is ever 
     any information which I am able to provide to the United 
     State's government I am perfectly willing to do so. I simply 
     request that the inquiry be conducted in an appropriate 
     manner by prosecutors who do not have what is, at very least, 
     the appearance of ulterior motives.
       Thanking you for your prompt attention to this matter and 
     awaiting your reply, I remain,
           Very truly yours,

                                             Fred J. Cassibry,

                                       U.S. District Judge, (Ret.)
     Board Member, LEDGC.
                                                                    ____

          [From the Advocate, Baton Rouge, LA., Jan 31, 1995]

                Feds Should Explain Prosecutors' Actions

       Appearances can sometimes be deceiving, but it certainly 
     appears as if federal prosecutors are attempting to influence 
     a decision by the state casino board.
       We question whether interference in the affairs of the 
     casino board is the proper role for the federal prosecutors 
     and think a public explanation is in order.
       At issue is a casino board decision on the issue of whether 
     Bally Gaming Inc. should be issued a license to supply to the 
     New Orleans casino $6.2 million in slot machines and the 
     computer software to control the machines.
       Wilmore Whitmore, chief executive officer of the casino 
     regulatory agency, earlier this month had banned Bally from 
     doing business with Harrah's Jazz Co. Whitmore cited Bally's 
     involvement in the Louisiana video poker industry with two 
     companies named by federal prosecutors as organized crime 
     fronts.
       Federal prosecutors have said Bally was the victim of the 
     alleged scheme by organized crime to make inroads into 
     Louisiana's video poker gambling industry.
       Whitmore contended, however, that Bally was negligent in 
     its rush to capitalize on the lucrative video gambling 
     industry in Louisiana and failed to exercise sound business 
     practices.
       In the early stages, Bally Gaming advanced thousands of 
     dollars to the two Louisiana companies without meaningful 
     oversight, Whitmore said. This business association 
     ``afforded organized crime the opportunity to infiltrate the 
     Louisiana video poker industry.''
       Whitmore also said Bally directors knew or should have 
     known about a year before federal indictments were returned 
     against 17 individuals that the two companies in which some 
     of the indicted men were involved were linked to criminal 
     elements.
       The former president of Bally Gaming, Alan Maiss of Reno, 
     Nev., pleaded guilty earlier this month to two counts of 
     misprision of a felony--having knowledge of crimes being 
     committed but failing to report them to proper authorities--
     in connection with the case.
       Bally appealed Whitmore's denial of a license, and the 
     casino board conducted a hearing last week on that appeal.
       During the hearing, new casino board member Fred Cassibry 
     of New Orleans, a former U.S. District Judge, was critical of 
     federal prosecutors for writing letters to the casino board 
     in response to a Bally request. The letters portrayed Bally 
     as a victim in the scheme which led to the indictment of 17 
     people last May.
       ``I consider this a serious breach of ethics and law.'' 
     Cassibry said of the letters. ``It is a disgusting and 
     disgraceful attempt to influence this board.''
       The board instructed Whitmore to invite Assistant U.S. 
     Attorneys Jim Letten, Steven Irwin and Salvador Perricone, 
     along with a state police representative, to testify at the 
     hearings.
       After the federal prosecutors offered to speak only with 
     ``one or two of the commissioners,'' the board issued a 
     subpoena for them to testify, Cassibry said Monday. The 
     subpoena was ignored, he said.
       Now, the U.S. attorney's office has issued subpoenas to all 
     nine members of the casino board to appear today before a 
     federal grand jury.
       The casino board is scheduled to meet Wednesday to consider 
     whether to uphold Whitmore's denial of the license.
       Cassibry said the U.S. attorney's office is trying to 
     intimidate the casino board into issuing the license to 
     Bally.
       It certainly looks as if Cassibry is correct.
       If that is the case, it is a highly inappropriate role for 
     federal prosecutors to take.
       Based on the information presented during the three-day 
     hearing last week we believe Whitmore was justified in his 
     denial of a license for Bally's to do business with the New 
     Orleans casino. Bally's failure to exercise due diligence in 
     regards to its associations certainly seems to be sufficient 
     cause to believe that Louisiana is better off without further 
     association with the firm.
       Louisiana has enough mud on its face already for its inept 
     regulation of gambling without adding more by waffling on a 
     license for a firm which allowed the tentacles of organized 
     crime to reach into video poker gambling in the state.
       Cassibry said the federal prosecutors became involved 
     because they want Bally to be clean so they can portray the 
     firm as the victim.
       ``If Bally is the victim, they can stick it to all of those 
     people they are trying to convict . . . That's the only 
     reason I can think of for this outlandish behavior,'' he 
     said.
       We appreciate the federal prosecutors for their role in 
     bringing to light the efforts by organized crime families in 
     New Orleans, New York and New Jersey to become involved in 
     Louisiana's gambling business.
       But we don't believe the involvement of the prosecutors in 
     attempting to take up for Bally now is appropriate.
       The actions of the federal prosecutors are sufficiently 
     serious that they deserve the attention of--and an 
     explanation by--Attorney General Janet Reno.
                                  ____

                [From the Times-Picayune, Feb. 3, 1995]

                     Wrong Decision, Wrong Message

       By granting Bally Gaming Inc. a license to sell $6.2 
     million worth of slot machines and computer equipment to the 
     temporary casino, the state Casino Board this week reinforced 
     the notion that Louisiana's gambling regulators are more 
     concerned with protecting the powerful casino interests than 
     the integrity of the industry in our state.
       Bally Gaming made a terrible business decision when it 
     picked Worldwide Gaming as its exclusive Louisiana 
     distributor for Bally video poker machines three years ago. 
     As this newspaper reported in our December series, ``Stacking 
     the Deck: The Birth of Louisiana Gambling,'' in less than a 
     year, Worldwide had squandered $13 billion Bally had lent it 
     and was in bankruptcy.
       And that was the good news.
       A year later, 17 people associated with Worldwide were 
     indicted by the federal government on charges that they 
     operated Worldwide as a front company for organized crime. 
     All but Stephen Bolson, a co-founder of Worldwide, pleaded 
     innocent and await trial.
       Enter now the U.S. attorney's office in New Orleans, which 
     wrote a letter for Bally responding to the Casino Board's 
     concerns and claiming the company was an innocent victim in 
     the Worldwide affair.
       The office's view that Bally was an innocent victim in the 
     Worldwide scheme was already clear from court documents they 
     filed in the case. Writing a letter on behalf of Bally can 
     only create the impression that the federal government was 
     weighing in on Bally's side in a regulatory dispute where the 
     U.S. attorney has no role.
       Whether a company is completely innocent of criminal 
     wrongdoing in its business dealings is an entirely different 
     matter from whether a company is suitable to receive a 
     gambling license.
       [[Page E782]] In fact, there is much in the record of 
     Worldwide's bankruptcy and in court documents and depositions 
     taken in the case to raise serious questions about Bally's 
     suitability to do business in Louisiana's gambling industry.
       Here are a few of the details that raise legitimate 
     unanswered questions about Bally Gaming.
       Jerry Flynn, Bally Gaming sales manager in 1992, testified 
     in a court deposition that then-Bally president Alan Maiss 
     knew of Worldwide's ties to alleged mobsters but continued to 
     do business with the company. Maiss denies the allegation.
       In a plea agreement with the federal government, Mr. Maiss 
     earlier this month pleaded guilty to a felony count of 
     failing to report that one of Worldwide's founders, 
     Christopher Tanfield, did not have a Louisiana gambling 
     license.
       Mr. Tanfield, one of the people indicted in the Worldwide 
     case, testified last week in a deposition for the Casino 
     Board that his agreement to resign from Worldwide in 1992 
     after a newspaper article linked him to members of a New York 
     organized crime family was essentially an artifice--that he 
     continued to work 20-hour days as a ``consultant'' to 
     Worldwide, taking instructions from Bally officials.
       If that is true, it goes to the heart of Casino Board 
     President Wilmore Whitmore's ruling that Bally was unsuitable 
     for a license in part because Bally failed to aggressively 
     address concerns about mob ties in Worldwide's operations.
       There is a larger issue at stake here than whether Bally 
     Gaming does or does not have a license.
       Under the best of circumstances, a state should do 
     everything in its power to place a gambling license in the 
     hands of operators who are above reproach.
       A gambling license is a privilege, not a right. State 
     regulators need not prove that an applicant for a gambling 
     license is unsuitable; the applicant has to prove beyond a 
     reasonable doubt that it is suitable to hold a license.
       In deciding to overturn Mr. Whitmore's decision, the 
     gambling board in essence decided that the interests of a 
     casino equipment vendor outweighed the public's right to an 
     untainted gambling industry.
       There are many companies across the country that would leap 
     at the chance to supply the casino with equipment--companies 
     whose reputations, judgment and attention to detail are not 
     in question.
       By granting Bally a license, the Casino Board has announced 
     what kinds of past behavior it will overlook in its 
     applicants, what kinds of questions it will leave unanswered, 
     what kinds of issues it will overlook.
       The board has set the bar at an all-too-familiar low level, 
     and the citizens of the state are ill served by its action.
     

                          ____________________