[Congressional Record Volume 141, Number 204 (Tuesday, December 19, 1995)]
[Senate]
[Pages S18929-S18931]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




               GAMING LOBBY GIVES LAVISHLY TO POLITICIANS

 Mr. SIMON. Mr. President, with monthly profits from single 
casinos running to millions of dollars, gambling promoters are using 
their new-found wealth to increase the spread of gambling. Grassroots 
community groups who raise concerns about new casinos are being 
outspent 50 to 1 in some areas.
  In Congress, high-priced lobbyists are attempting to stop a simple 
effort to gather information about the impact of the spread of 
gambling.
  A recent New York Times story, ``Gaming Lobby Gives Lavishly to 
Politicians,'' clearly describes issues that deserve our attention. I 
ask unanimous consent that it be printed in the Record.
  The article follows:

         [From the New York Times News Service, Dec. 18, 1995]

       Special Report: Gaming Lobby Gives Lavishly to Politicians

                            (By Kevin Sack)

       In only five years, the gambling industry has bought its 
     way into the ranks of the most formidable interest groups in 
     American politics, spending huge sums to gain the kind of 
     influence long wielded by big business, big labor and 
     organizations of doctors and lawyers.
       From the Empress riverboat casino in Joliet, Ill., to the 
     Mashantucket Pequot tribe in Ledyard, Conn., gambling 
     interests, which now run casinos in 24 states, have used vast 
     profits gleaned from their craps tables and slot machines to 
     fatten the campaign coffers of political candidates and wage 
     multimillion-dollar lobbying offensives.
       While state officials have been the primary beneficiaries 
     of the industry's largess, there has also been a surge in 
     contributions to federal and local officeholders.
       Gambling-financed political action committees gave three 
     times as much to congressional candidates and the national 
     parties in the 1993-94 election cycle as they gave in the 
     previous two years, according to Common Cause and the Center 
     for Responsive Politics, two Washington-based organizations 
     that monitor campaign financing.
       The $2 million total for the cycle put the industry in the 
     same league as long-established interest groups like the 
     United Automobile Workers, which gave $2.4 million, and the 
     National Rifle Association, which gave $2.2 million. 
     
[[Page S18930]]

       At the state level, meanwhile, the rising tide of gambling 
     money has in many places become a flood. In Florida last 
     year, pro-gambling forces spent $16.5 million in an 
     unsuccessful effort to win approval of casinos in a 
     referendum. That sum was almost as much as the state's two 
     gubernatorial candidates spent combined.
       In other states, the industry's wealth has allowed it to 
     outspend its opponents by as much as 50 to 1. In the process, 
     that wealth has contributed to major corruption scandals in 
     Louisiana, Missouri, Arizona, Kentucky, South Carolina and 
     West Virginia, all since 1989, when legalized gambling began 
     its cross-country expansion.
       Perhaps most significant, the torrent of dollars has 
     rapidly eroded a longstanding stigma against the 
     intermingling of gambling and politics.
       ``Twenty years ago, if you got support from gambling 
     interests it would have been the kiss of death,'' said Rep. 
     Frank R. Wolf, R-Va., who opposes the continued expansion of 
     gambling. ``If you were running for office in Illinois or 
     Iowa an got money from gambling interests, you wouldn't want 
     to tell your brother or mother.''
       Noting that today's casinos are run by Indian tribes and 
     Fortune 500 companies, not mobsters, gambling industry 
     officials assert that it is only natural for a heavily 
     regulated, high-growth business to play an active role in 
     politics, just as public utilities and tobacco companies do.
       ``The only industry that is more regulated is the nuclear 
     power industry,'' said Mark B. Edwards Jr., a gambling 
     analyst for the State Capital Resource Center, a private 
     group that monitors political developments for casino 
     companies. ``Therefore, it's more important for the gaming 
     industry to flex some political muscle.''
       The gaming industry has focused its lobbying campaigns on 
     state capitals, where governors, lawmakers and regulators 
     hold the authority to determine whether to expand gambling, 
     which companies will get gambling licenses and vending 
     contracts, and how extensively gambling will be taxed and 
     controlled.
       Gambling opponents say the abundance of lobbying money, and 
     the promise of bountiful tax revenue, has helped the industry 
     move its operations into impoversished communities, with 
     little attention paid to social consequences like the effect 
     on compulsive gamblers or on small businesses there.
       A backlash has begun to emerge in which grass-roots anti-
     gambling drives in some states have managed to neutralize the 
     influence of big money. But that is no easy task.
       In the last two years, campaigns to establish or expand 
     legalized gambling in Florida, Missouri, Virginia and 
     Connecticut have spent more money than was ever before spent 
     in those states on any lobbying effort.
       During Virginia's legislative session this year, gambling 
     interests hired 48 lobbyists. In Texas, they hired 74, more 
     than two for every state senator and one for every two 
     members of the Texas House.
       The lobbyists are often enlisted from the ranks of former 
     public officials. The lobbying payroll in Illinois has 
     included a former governor, a former state attorney general, 
     a former state police director, two former U.S. attorneys, a 
     former mayor of Chicago and dozens of former state 
     legislators, including a Senate president and a House 
     majority leader.
       Two years ago a Nevada casino company, Primadonna Resorts, 
     offered two Illinois lobbyists a compensation package of $20 
     million over 20 years if they could reel in a riverboat 
     license.
       For an April 1994 referendum on allowing slot machines in 
     Missouri, committees financed by out-or-state casino 
     companies paid out $4.2 million, outspending the proposal's 
     opponents by 50 to 1, according to a study by Alfred Kahn, a 
     retired professor of planning at Southern Illinois University 
     at Edwardsville.
       The measure failed by one-tenth of a percentage point. 
     Seven months later, the gambling companies were back, this 
     time spending $11.5 million. The proposal passed with 54 
     percent of the vote.
       The gambling opponents, Kahn said, ``were just overwhelmed 
     by wall-to-wall television commercials.''
       Like lobbying expenditures, campaign contributions have 
     been flowing as freely as complimentary cocktails on a casino 
     floor. Only one state, New Jersey, prohibits political 
     contributions from gambling interests.
       In Louisiana, in the heart of the nation's oil patch, 
     gambling interests in 1993 and 1994 gave state legislators 
     more than twice as much as did the petrochemical industry, 
     according to a study by The Times-Picayune of New Orleans.
       ``I've been told by legislator after legislator that the 
     gambling industry has become the single largest political 
     influence in their states,'' said Robert Goodman, a professor 
     at Hampshire College in Amherst, Mass., who is the author of 
     ``The Luck Business'' (Free Press, 1995), a book critical of 
     legalized gambling's spread. ``It's a sea change in the 
     political landscape in the states where the gambling industry 
     is operating.''
       As in many other states that now have casinos, the spending 
     in Illinois has been spurred by competition among gambling 
     concerns whose interests conflict.
       Wealthy businessmen who want to obtain casino licenses from 
     the state, which now allows casino gambling only on 
     riverboats, are spending hundreds of thousands of dollars a 
     year in campaign contributions to help persuade legislators 
     to expand gambling to Chicago and any number of suburbs.
       Fearful of new competition, the owners of the state's 10 
     existing casino licenses are contributing hundreds of 
     thousands more to protect their monopolies. In doing so, they 
     have placed themselves in an unusual alliance with those who 
     oppose gambling on moral or social grounds.
       In Washington, the rise of the gambling industry has 
     created influential power brokers. In a single afternoon last 
     June, Steve Wynn, chairman of Mirage Resorts, one of the 
     country's largest Casino companies, raised nearly $500,000 
     for the presidential campaign of Bob Dole, the Senate 
     majority leader.
       The fund-raising luncheon, at a posh Las Vegas country 
     club, came one day after Dole had traveled to Los Angeles to 
     level a withering attack on what he described as the 
     mercenary values of the entertainment industry.
       Dole opposes new taxes on the gambling industry, said his 
     spokesman, Clarkson Hine, but supports creation of a federal 
     commission to study gambling's effects. The industry opposes 
     such a commission, believing that it could lead to heightened 
     regulation. But Hine said Dole ``feels strongly'' that 
     regulation should be left to the states.
       In any event, Mirage Resorts is hardly the only gambling-
     industry player in the capital. The 370-member Mashantucket 
     Pequot tribe, virtually unknown until it opened the Foxwoods 
     Resort Casino in Ledyard, Conn., in 1992, is one of many 
     others, having given $465,000 to the Democratic National 
     Committee and $100,000 to the Republican National Committee 
     from 1991 to 1994.
       Gambling money is so abundant that on occasion it reaches 
     out even to the most vocal of gambling opponents, like Gov. 
     Kirk Fordice of Mississippi, where casino operations have 
     been growing for five years.
       In 1993, Fordice accepted $73,500 in contributions from 
     casino interests, almost a third of all the money he raised 
     that year. Then, beginning last Jan. 1, he swore off 
     accepting any more gambling money, although he declined to 
     return the earlier bounty.
       The purpose of the new policy, said Andy Taggart, his 
     campaign manager, was to take an issue away from his opponent 
     in the gubernatorial race this year. Fordice won.
       It was political money, along with the promise of new tax 
     revenue for recession-racked states, that provided the 
     kindling for the wildfire spread of legalized gambling in the 
     1990s.
       In 1988, only Nevada and New Jersey had casinos. Now, 24 
     states have casinos on land, water or Indian reservations, 
     and 48 states have legalized gambling of some kind.
       In the last four years, annual legal-gambling revenue has 
     grown by 50 percent, to $39.9 billion. That is nearly a 
     quadrupling since 1982, according to an annual survey by 
     Christiansen/Cummings Associates, a consulting firm that 
     specializes in the gaming industry. On average, profit 
     margins are high, ranging from 15 to 20 percent, said Will E. 
     Cummings, managing director of the firm.
       ``Without the outside influence coming in'' to lobby in 
     this state or that, ``there would be no spread of gaming,'' 
     said William N. Thompson, a professor at the University of 
     Nevada at Las Vegas who is co-author of ``The Last Resort: 
     Success and Failure in Campaigns for Casinos'' (University of 
     Nevada Press, 1990). ``The opponents don't get to make their 
     case.''
       In the last year, though, the industry has suffered several 
     financial and political failure, suggesting that the market 
     for betting may finally be saturated. A casino in New Orleans 
     and riverboats in Louisiana and Mississippi have failed, and 
     voters and lawmakers have rejected the expansion of gambling 
     in a number of states.
       Industry analysts say some of the backlash can be 
     attributed to growing revulsion with the amount of gambling 
     money in politics, and to concern about corruption among 
     holders of public office.
       In the most recent scandal, the FBI said in August that it 
     was investigating whether video poker operators in Louisiana 
     had bribed lawmakers into killing anti-gambling legislation 
     earlier this year. That inquiry is continuing, but many of 
     the legislators who are targets of it either have chosen to 
     retire or failed to win re-election this fall.
       In Pennsylvania, state Attorney General Ernie Preate, Jr. 
     pleaded guilty in June to hiding campaign contributions from 
     operators of illegal video poker games. And from 1989 to 
     1992, lawmakers in Arizona, Kentucky, South Carolina and West 
     Virginia were convicted of accepting bribes from gambling 
     interests.
       Frank J. Fahrenkopf Jr., president of the American Gaming 
     Association, the industry's trade group, told a congressional 
     committee last month that singling out legalized betting as a 
     corrupting influence was unfair.
       ``The problem,'' said Fahrenkopf, a former Republican 
     national chairman, ``is that where there is money, there is 
     the potential for corruption, and that is by no means 
     confined to gaming interests.'' After listing political 
     scandals from Teapot Dome to Abscam, he added, ``To suggest 
     that it is unique to our industry is manipulative, cynical 
     and, frankly, dishonest.''
       Even when operating within the law, though, gambling 
     supporters have sometimes lacked subtlety.
       In 1994, the president of the Louisiana Senate, Sammy 
     Nunez, handed out envelopes to colleagues on the Senate 
     floor, each containing a $2,500 campaign check from a casino 
     owner. Nunez lost in a bid for re-election in November.
     
[[Page S18931]]

       In Illinois in 1993, Al Ronan, a legislator turned casino 
     lobbyist, pulled lawmakers off the floor and handed them 
     white envelopes containing campaign checks of $50 to $300.
       ``The gambling companies have been like a bull in a china 
     shop,'' said William R. Eadington, director of the Institute 
     for the Study of Gambling and Commercial Gaming, at the 
     University of Nevada at Reno. ``These were companies that did 
     not have the sophistication to understand the nuances of 
     political activity.''
       Some exports, noting the intense issue that gambling money 
     has become in some states and localities, believe that the 
     industry has turned into its own worst enemy.
       Despite devoting $16.5 million to the referendum on casino 
     legalization in Florida last year, pro-gambling forces were 
     crushed at the polls, 62 percent to 38 percent, at least 
     partly because of voter discomfort with that level of 
     spending.
       And given the corruption investigation in Louisiana, 
     candidates for governor there spent much of the race this 
     year trying to trump each other's anti-gambling stands.
       Further, after St. Louis County Executive George Westfall 
     accepted more than $150,000 in contributions from companies 
     competing for a riverboat casino license, the County Council 
     this year approved a ban on the industry's political 
     donations.
       In recent months, some casino companies have decided to put 
     a stop to their own multimillion-dollar political wagers.
       One such company is Mirage Resorts, which spent more than 
     $10 million in a four-year failed campaign to place a casino 
     in Bridgeport, Conn.
       ``Our company policy right now is that we are not going to 
     go or in any jurisdiction and actively lobby to change any 
     law, to actively try to convince people,'' said Richard D. 
     Bronson, a member of Mirage's board and president of the 
     company's development arm. ``Look what happened in 
     Connecticut.''
       Added Alan M. Feldman, Mirage's vice president for public 
     affairs: ``It has told us that this isn't our bag. We're just 
     not political animals.''

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