Rendell's group role questioned He met with gambling firms as finance head of a governors' organization.

Posted: May 25, 2005

HARRISBURG — As governor, Ed Rendell cannot accept political contributions from gambling executives under the state's new slot machine law.

But as finance chairman of the Democratic Governors' Association, Rendell met last month with gambling company officials while on a fund-raising trip to Las Vegas. Gambling companies have been generous supporters of the Democratic group, contributing more than $1.1 million in the last two years, records show.

Penny Lee, a former spokeswoman for the governor who recently took over as the DGA's executive director, described the trip as educational.

"The governors have been traveling across the country to garner support for the association and this is just one stop among many," Lee said.

A campaign-finance watchdog called it troubling.

"Rendell does not appear to be violating the law, but he's certainly violating the spirit of it . . . which is for decision-makers to be free of any influence from gambling institutions," said Robert M. Stern, president of the Center for Governmental Studies, a Los Angeles-based nonpartisan research organization that studies state and local campaign finance.

Stern said the Pennsylvania law should be amended to prohibit public officials from raising money from gambling companies and executives for any organization.

"That's a big loophole," he said.

The DGA is a powerhouse among 527s - a term used to describe nonprofit political organizations that are organized under that section of the IRS tax code. The group has spent more than $44 million since the 2000 election cycle, according to the Center for Public Integrity, a nonpartisan group that tracks campaign spending.

Some of that money went to Rendell, who received $482,000 from the Democratic group in 2002 and 2003, according to Pennsylvania campaign-finance records.

In all, casino companies gave $1,180,750 to the DGA in 2003 and 2004, according to IRS records compiled by Dwight L. Morris & Associates, a nonpartisan campaign-finance analysis firm in Bristow, Va. The DGA has not been required to file a disclosure report since the end of 2004.

Kate Philips, the governor's spokeswoman, said Rendell cannot benefit from any of the money raised by the Democratic Governors' Association because Pennsylvania law prohibits candidates from accepting corporate donations, even if indirectly from another group.

But as finance chairman, Rendell is judged by how much money he raises for his organization, and some of the big contributors to the Democratic Governors' Association are also expected to be big players in Pennsylvania's new slots games.

"To the interests who give, they don't care where the money goes, they care about who's raising it and making sure they curry favor with that person," said Larry Noble, former general counsel of the Federal Election Commission and executive director of the Center for Responsive Politics, a nonpartisan research group that tracks money in politics.

Rendell campaigned on a promise that he would bring gambling to Pennsylvania. He made gambling legal last July 5 by signing into law a bill legalizing as many as 61,000 slot machines at 14 locations across the state.

Harrah's Entertainment Inc. is a partner in Chester Downs & Marina, a harness racetrack under construction in Chester that under the law would receive a slots license. Harrah's also has said it is looking into other possible deals in the state.

Harrah's donated $50,000 to the DGA in two months in 2003 shortly after Rendell became finance chair. The governor became the group's finance chairman in the spring of 2003, Lee said.

For at least part of his trip to Las Vegas, Rendell was accompanied by Melissa Heller, a Philadelphia-based lobbyist for International Game Technology (IGT). Heller, who is a fund-raiser for Rendell, is also seeking to win a lucrative slots distributorship from IGT.

Heller referred all questions to a spokesman for IGT, which donated $170,000 to the Democratic group in 2003 and 2004.

"While in town on his trip, two people from IGT had lunch with him," said Ed Rogich, vice president of marketing for IGT. "There was a discussion of our long-term support of DGA, but it was not him coming to solicit us."

Rogich said IGT has supported both the Republican and Democratic Governors' Associations and had made its yearly contribution to the Democrats prior to Rendell's visit.

Rendell also met with executives of Boyd Gaming Corp., and MGM Entertainment.

"The only thing I know is that they were raising money for the Democratic Governors' Association," said Michael Stratton, a paid consultant to the DGA who arranges transportation for New Mexico Gov. Bill Richardson, the DGA chairman.

Another company that has donated to the Democratic group and has an interest in Pennsylvania is GTECH Corp., which won a contract from the state's revenue department to supply the state's central control monitoring system. GTECH donated $150,750 to the Democratic group in 2003 and 2004.

Rendell isn't the only state Democrat involved in raising money for a national committee. State Rep. Mike Veon (D., Beaver) is treasurer of the Democratic Leadership Campaign Committee.

Centaur Inc., an Indiana-based company that has applied to operate a harness track and slots venue in Veon's district, has given $40,000 to the DLCC since the state adopted the gambling law.

In 2003 and 2004, records show, IGT gave $225,000, and Harrah's Entertainment Inc. gave $100,000.

Veon did not return a call seeking comment. He has said in the past that he actively solicits contributions from gambling companies, but that he does not accept the money for his own campaign.

Contact staff writer John Sullivan at 717-787-5934 or johnsullivan@phillynews.com.

Inquirer staff writer Dylan Purcell contributed to this article.

Gambling Contributions

Companies that donated to the Democratic Governors' Association in 2003 and 2004, for a total of $1,180,750:

Ameristar Casinos Inc. . . . $15,000

Boyd Gaming Corp. . . . 5,000

Fitzgeralds Casino & Hotel . . . 15,000

Gold Strike Casino Resort . . . 10,000

GTECH Corp. . . . 150,750

Gulfside Casino Partnership/Copa Casino . . . 40,000

Harrah's Entertainment Inc. . . . 50,000

International Game Technology . . . 170,000

Mississippi Band of Choctaw Indians . . . 150,000

Morongo Band of Mission Indians . . . 500,000

Oneida Tribe of Indians of Wisconsin . . . 10,000

Park Place Entertainment Corp. . . . 20,000

Scientific Games Corp. . . . 45,000

SOURCE: Dwight L. Morris & Associates

Contribution Ban

Here is an excerpt from the bill signed into law by Gov. Rendell on July 5, 2004, legalizing gambling in Pennsylvania:

"An applicant for a slot machine license, manufacturer license or supplier license, licensed racing entity, licensed manufacturer, licensed supplier or licensed gaming entity, or a person who holds a similar gaming license or permit or a controlling interest in a gaming license or permit in another jurisdiction, or any holding, affiliate, intermediary or subsidiary company thereof, or any officer, director, or key employee of such applicant, licensed manufacturer or licensed supplier, licensed racing entity or licensed gaming entity or any holding, affiliate, intermediary or subsidiary company thereof, shall be prohibited from contributing any money or in-kind contribution to a candidate for nomination or election to any public office in this commonwealth, or to any political committee or state party in this commonwealth, or to any group, committee or association organized in support of any such candidate, political committee or state party."

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