Lost in the media frenzy surrounding the breaking news of the Mark Foley scandal was the story that internet gambling prohibition, a piece of the so-called "
American Values Agenda" that Dennis Hastert and the House Republicans have been promoting this election season, had been
signed into law that same day. Along with the bills included in their"
suburban agenda" (you remember, that's the one where they stressed their commitment to protecting kids from internet predators) the measures incorporated into the American Values Agenda were designed to rally the Republican base by billboarding the party's allegiance to conservative values. Regarding the internet gambling legislation in particular,
Hastert said, "It seeks to protect our children from gambling sites at home, keep our hard-earned money in the bank, and put the criminals that seek to take advantage of our family earnings in jail." But if, by chance, any of that rhetoric gave you the impression that Dennis Hastert was seriously concerned about such things, or that he was in any fundamental way an opponent of the gaming industry, I've got a tip for you. Don't bet on it.
RESERVATIONS
Not far beyond the leading edge of suburban development west of Chicago, at Shabbona, Illinois, the
Prairie Band of Potawatomi Indians has begun buying back land that was once a
Potawatomi reservation, given by treaty in 1829 to the medicine man from whom the town later took it's name. The return of the Potawatomis, however, and the possibility that a casino might be coming with them, has provoked a great deal of controversy locally. Some members of the community are ardently opposed to the idea of a casino and its related development changing the quiet, small town way of life they currently enjoy in Shabbona. Others think that the jobs and development a casino would bring could be a good thing.
Shabbona is in Dennis Hastert's congressional district, and Hastert himself grew up not far from there, near Oswego. In fact, Hastert grew up right next to
two other Potawatomi reservations. The same Treaty of Prairie du Chien that gave Shabbona his reservation also gave two Potawatomi women,
Waish-Kee-Shaw and Mo-Ah-Way, more than
a thousand acres outside of what, a few years later, would become the village of Oswego. The local park district still maintains a 22 acre remnant of these reservations today as Waa Kee Sha Park, located, appropriately enough, on Reservation Road just south of town, and there is an effort being made right now to preserve the last 100 acres of nearby
Reservation Woods before development takes it's toll. Actually, Hastert grew up with
traces of the Potawatomi Indians all around him. Waubonsie Creek, which winds through Oswego, was named after the war chief of the Potawatomis. Na-Au-Say Township, where Waa Kee Sha Park is located, took its name from the Potawatomi village that had been there long before the reservations were established. And, interestingly enough, the area
Hastert's own Luxemburger immigrant community made theirs in the 1850s, the "Big Woods" on the north side of neighboring Aurora, had been the site of Waubonsie's own village not long before Hastert's people arrived.
One would expect that Hastert, a
lifelong history buff supposedly, and a high school history teacher before he began his political career, would know a little something about the Potawatomis, and perhaps even feel some sympathy for them, but apparently he does not. He has
consistently opposed the establishment of a Potawatomi casino at Shabbona, going so far as to co-sponsor
a bill in 2001 that sought to extinguish Indian land claims in Illinois, and thereby extinguish as well any possibility that the Potawatomi tribe would be able to establish a casino on it's ancestral land.
According to Hastert,, what is going on at Shabbona is nothing more than "venue shopping by tribes, in areas that they weren't necessarily in before, to put casinos down. We have a problem in Illinois with Miami Indians, in central Illinois. We also have a problem in my own district with the Kansas Potawatomi's who want to do the same thing."
Hastert has also opposed the establishment of a casino by the
Ho-Chunk Nation along the Northwest Tollway in suburban Chicago. And when his letter to Interior Secretary Gale Norton--written in 2003 in opposition to the Jena Band of Choctaw Indians' desire to establish a new casino--was attacked as a quid pro quo for campaign contributions from Jack Abramoff and his clients, Michael Stokke,
Hastert's deputy chief of staff, claimed "We've always opposed these things [Indian casinos], in our backyard, in our state, someplace else."
The problem with that claim is that when Hastert intervened in opposition to the Jena Band's casino application, he was also, at the very same time, intervening in
support of the Coushatta Tribe of Louisiana, who already had a casino and wanted to eliminate the threat of competition from a new one. And, it is worth mentioning, the Coushatta Tribe had already contributed $10,000 to Hastert's Keep Our Majority PAC at the time the letter was written, while the Jena Band had contributed no money to Hastert at all.
Protecting existing casinos in his district from competition was the stated reason for his opposition to the Ho-Chunk casino as well.
Officials in U.S. House Speaker Dennis Hastert's office Monday said the Yorkville Republican has major concerns about how the proposed Ho-Chunk Casino could harm riverboat operations and cash-strapped governments along the Fox River. ...
The potential loss of local revenue worries Hastert, spokesman Brad Hahn said. "He is keeping his eye on how this turns out," Hahn said. "Obviously, he has big concerns about how this would affect riverboats in Aurora and Elgin, both in his district."
Again, it is worth mentioning that the existing casinos in his district were campaign contributors. Hastert has received at least $97,500 from the Mandalay Resort Group/MGM Mirage [
1,
2,
3] and the Pritzker family (Hyatt Corp.) [
4,
5,
6,
7,
8], co-owners of the Grand Victoria Casino riverboat in Elgin, and at least $75,000 from the operators of the Hollywood Casino riverboat in Aurora [
9,
10,
11]. And the Prairie Band of Potawatamis in Shabbona? The Ho-Chunk Nation? No, they hadn't contributed any money to Hastert.
Being opposed to Indian gaming
per se had nothing to do with Hastert's opposition to these particular casinos. And it would seem that everybody involved in the Indian casino end of the gaming industry understands this, because a long list of them have been perfectly happy to give him money. The campaign committees and PACs Hastert controls have received at least $416,500 in campaign contributions from Indian gaming interests alone during the last ten years.
$70,000 from the Gila River Indian Community [12, 13, 14, 15, 16, 17, 18, 19, 20, 21]
$43,000 from the Morongo Band of Mission Indians [22, 23, 24, 25, 26]
$41,500 from the Mashantucket Pequot Tribal Nation [
27, 28, 29, 30, 31, 32, 33]
$30,000 from the Salt River Pima-Maricopa Indian Community [
34, 35, 36, 37]
$27,000 from the Mississippi Band of Choctaw Indians (Abramoff client) [38, 39, 40, 41, 42, 43]
$26,000 from the Agua Caliente Band of Cahuilla Indians (Abramoff client) [44, 45, 46, 47, 48, 49]
$26,000 from the Oneida Indian Nation [50, 51]
$25,000 from the Saginaw Chippewa Indian Tribe (Abramoff client) [52, 53, 54, 55]
$17,500 from the National Indian Gaming Association and it's American Indian Sovereignty Self-Determination and Economic PAC [56, 57]
$16,000 from the San Manuel Band of Mission Indians [58, 59, 60, 61]
$15,000 from the Eastern Band of Cherokee Indians [62, 63, 64]
$10,000 from the Barona Indian Tribe [65, 66]
$10,000 from the Coushatta Tribe of Louisiana (Abramoff client) [67, 68]
$10,000 from the Osage Tribal Council [69, 70]
$10,000 from the Seneca Nation Indians [71, 72]
$7,000 from the Viejas Tribal Government [73, 74]
$5,000 from the Ak-Chin Indian Community [75]
$5,000 from the Chitimacha Tribe of Louisiana [76]
$5,000 from the Grand Traverse Band of Ottawa and Chippewa Indians [77]
$5,000 from the Mohegan Tribe [78]
$5,000 from the Seminole Tribe of Florida [79]
$4,000 from the Forest County Potawatomi Community [80]
$1,000 from the Sac & Fox Tribe of the Mississippi in Iowa [81]
and $1,000 from Schaghticoke Tribal Nation Chief Richard Velky Sr., who hoped to be able to get a casino for his tribe, too. [82]
Also, $1,000 from Paragon Gaming (manages various Indian casinos) [83]
and $500 from Station Casinos (manages the Match-E-Be-Nash-She-Wish Band of Potawatomi Indians in Michigan, among others) [84]
And if you want to consider contributions from lobbyists registered to represent Indian tribes in the casino business, add at least another $228,000 to the total.
$151,000 from Akin Gump [85, 86, 87, 88, 89, 90, 91, 92, 93, 94, 95, 96, 97, 98, 99]
$75,000 from Greenberg Traurig [100, 101, 102, 103, 104]
$2,000 from Preston Gates Ellis [105, 106]
Nothing could be farther from the truth than the notion that Dennis Hastert is opposed to Indian casinos here, there and everywhere. Indeed, Hastert is on such good terms with the Gila River Indian Community--thanks to their shared concern with diabetes most certainly, but perhaps also because Gila River is by far the most generous of Hastert's Indian gaming campaign contributors--that their annual
Speaker's Cup golf tournament is named in honor of him. And when Hastert made charitable contributions earlier this year to atone for at least some of the Abramoff-tainted contributions he had taken, instead of giving the money back to the tribes from whom he had received it, the lion's share of those donations went to
Gila River.
But Indian gaming, or should I say Indian gaming
money, isn't the half of it.
BETTING ON THE COME
Tough talk by the current crop of Republicans about the evils of gambling didn't begin in response to the emergence of Indian casinos, or even with the arrival of internet gambling. The more principled of the conservatives in the party had been profoundly opposed to gambling all along. When Pat
Buchanan won the Republican primary in Louisiana in 1996, he did so while running on an anti-gambling platform. Later that year, a leading congressional opponent of gambling, Rep. Frank Wolf (R-VA), saw his National Gambling Impact Study Commission Act signed into law. Indeed, it was the release of that commission's report in June 1999 that proved to be the tipping point in the relations between the Republican Party and the gaming industry. Interestingly enough, however, the anti-gambling legislation that was proposed in the wake of that report didn't make things worse between the two of them; it ended up bringing them closer together.
That same month
top Nevada casino executives met with leaders of the House of Representatives to discuss their concerns about legislation that could harm Nevada casinos. ... House Speaker Dennis Hastert met with Mirage Resorts Chairman Steve Wynn; Boyd Gaming Corp. Chairman Bill Boyd and President Don Snyder; Park Place Mid-South Region President Tom Brosig; and Isle of Capri Casinos President John Gallaway. The group told Hastert that some in the gaming industry believe that there is a lack of communication between casino executives and the leadership of the Republican-controlled House, and they outlined their opposition to the college betting ban. Hastert listened but didn't make any comments. But other Republican leaders who attended the session with Hastert made implied or direct commitments. Republicans have told casino executives that the bill to ban college sports betting is dead this Congressional session.
Hastert didn't stay quiet for long, however. Within a couple of months he was in Las Vegas himself, betting
on the come.
On Wednesday, a top Republican Congressional leader visited Las Vegas to raise money for the Republican Party and to try and assure Las Vegas casino executives that the Republican Party is not against gaming. The Speaker of the House of Representatives, Dennis Hastert, spoke publicly at a luncheon on Wednesday in Las Vegas about his party's pro-gaming stance and said that his party will not try and ban gaming or place any restrictions on it.
The biggest problem for the gaming industry is House Republican conservatives who have been critical of gambling, notably Representative Frank Wolf of Virginia. Two years ago Wolf was instrumental in getting Congress to set up a national commission to study the negative effects of U.S. gambling.
Wolf has called gaming industry people "roaches'' and has talked about imposing a 1 percent tax on gambling revenue and eliminating the income tax deduction for gambling losses.
At the fund-raiser Hastert made it clear that Wolf didn't speak for the leadership, dismissing Wolf's stance by saying, "He's got freedom of speech,'' according to [Frank] Fahrenkopf [President and CEO of the American Gaming Association, and former chairman of the Republican National Committee].
The trip proved to be a lucrative one. Hastert raised at least $475,000 that afternoon. Viva Las Vegas!
1999 Las Vegas fundraiser
$250,000 from Circus Circus Enterprises
$50,000 from MGM Grand
$50,000 from Park Place Entertainment
$25,000 from Boyd Gaming Corp.
$25,000 from Hollywood Casino, owners of the riverboat in Aurora
$25,000 from International Game Technology
$25,000 from Station Casinos
$5,000 from Harrah's
In 2000, as August rolled around and the time neared for another fundraising trip, Hastert was concerned that an upcoming vote on a college betting ban in the House Judiciary Committee might complicate things with his new friends in Vegas, since they had been assured the year before that the bill was dead.
Rep. Lindsey Graham of South Carolina was the chief Republican sponsor of the bill and a member of the House Judiciary Committee, which had jurisdiction over the legislation. According to two sources who were present at a Sept. 26, 2000 meeting with editors of The Washington Times, Graham said that the GOP "leadership" had spoken to him about postponing a Committee vote on the bill that had been scheduled for July. Graham was told that Hastert had another Las Vegas fundraiser scheduled for August, during the campaign homestretch, and didn't want to be embarrassed by a favorable Republican vote on the bill. In fact, Hastert got his wish -- the committee vote was postponed.
With that potentially embarrassing scheduling matter taken care of, off Hastert went to Las Vegas again. When he returned to Capitol Hill immediately thereafter it was with at least $230,000 in campaign contributions in his pockets. Metaphorically speaking, of course.
2000 Las Vegas fundraiser
$100,000 from Mirage Resorts
$35,000 from Park Place Entertainment
$25,000 from Harrah's
$25,000 from Mandalay Resort Group, co-owners of the other riverboat in Elgin
$25,000 from Station Casinos
$15,000 from Boyd Gaming Corporation
$5,000 from Harvey's Casino Resorts
In January 2001, Hastert placed casino industry-friendly chairmen in charge of three committees that were responsible for dealing with gaming legislation.
New chairmen of three key House committees are considered friendly to the casino industry and should make it more difficult for Congress to pass legislation adverse to gaming interests, lawmakers and analysts said Friday. ...
All three of the new chairmen voted last July for a bill to ban Internet gambling. The gaming industry supported the ban, which failed to reach final passage. ...
While the new chairmen will want to put their individual stamps on the committees, they also "traditionally are very beholden to the leadership," gaming analyst Mark Edwards said.
Later that year a reported
half million was raised at a DC fundraiser for casino executives, and soon after Hastert's next Las Vegas fundraiser brought in at least $255,000.
2001 Las Vegas fundraiser
$75,000 from International Game Technology
$50,000 from Mandalay Resort Group
$50,000 from MGM Mirage
$25,000 from Park Place Entertainment
$20,000 from Station Casinos
$20,000 from Boyd Gaming Corporation
$10,000 from Harrah's
$5,000 from Tropicana Resort and Casino
There appears to have been at least one more Vegas fundraising junket in 2002, but it's hard to tell for sure exactly when it happened and exactly which contributions were the result of it, so I'll simply lump the rest of Hastert's take from gaming interests together here. (The following totals do not include any of the amounts listed above for the 1999-2001 Vegas fundraising trips.)
$247,000 from Harrah's [107, 108, 109, 110, 111, 112, 113, 114, 115, 116, 117, 118, 119, 120, 121, 122]
$245,000 from MGM Mirage [123, 124, 125, 126]
$77,400 from the American Gaming Association [127, 128, 129, 130, 131, 132, 133]
$50,000 from Hollywood Casino Corporation [134, 135]
$43,000 from Station Casinos [136, 137, 138, 139, 140, 141, 142, 143, 144]
$28,000 from Mandalay Resort Group [145, 146]
$20,000 from Boyd Gaming Corporation [147, 148]
$15,000 from Caesars Entertainment [149]
$14,500 from Starwood Hotels & Resorts (Alladin Casino) [150, 151]
$6,000 from International Game Technology [152, 153]
$6,000 from the Isle of Capri Casinos, which operates the riverboats just outside of Hastert's district in Davenport and Bettendorf, IA [154, 155, 156, 157]
$5,000 from the Argosy Gambling Company, which operates the riverboat in Alton, IL [158]
$2,000 from Tropicana Resort and Casino [159]
Oh, and Denny has done well at the track, too. He has received $131,000 from the National Thoroughbred Racing Association [
160,
161,
162,
163,
164,
165,
166,
167], and $75,100 from Duchossois Industries and the Duchossois family [
168,
169,
170,
171,
172,
173,
174,
175,
176,
177,
178,
179,
180,
181,
182,
183,
184,
185,
186,
187,
188,
189,
190,
191,
192,
193,
194,
195]. In the later case, it's only fair to note Duchossois Industries is a rather diversified operation, with many interests in addition to the gaming industry, and the Duchossois family have been such loyal supporters of the Republican Party that Hastert's stand on gaming may well be but one of many issues of interest to them. Perhaps not even the most important one. That said,
Arlington Park Racetrack in suburban Chicago has for some time been a Duchossois-run operation. Duchossois money is gaming money, too. And anti-gaming legislation never makes it through the House without an exemption being written in for horse racing.
THE WRONG TEAM
Hastert, it would seem, had hit the jackpot by making friendly with the gaming industry. But when a Center for Responsive Politics study revealed in 2003 that the casinos were still giving more money to the Democrats than they were to the Republicans, Denny wasn't happy. "'The speaker is
dismayed and disappointed that the gaming industry continues to place their bets on the wrong team,' said Pete Jeffries, Hastert's communications director."
Or consider the following, which dates back to 1999, when Hastert was still new to the games Speakers play nowadays, and no doubt still testing the limits of the clout that had been dropped into his lap.
Wynn has held several fundraisers for House Democratic Leader Richard Gephardt of Missouri, who hopes to wrest control of the speaker's chair from Hastert in 2000, and has donated $250,000 to the Democratic Congressional Campaign Committee. But Hastert suggested that Wynn, Lanni and their respective companies would be better off keeping the Republicans in power.
How different is that from Tom DeLay's "suggestions" to the trade associations and lobbying firms of K Street that they had better start hiring Republicans, and redistributing their campaign contributions to the Republican side of the aisle as well, if they expected the Republicans in power to give them a hearing? A little different, perhaps, but not much.
Hastert, after all, had a job to do. As Speaker, he says in his autobiography
my job is to run the House and make sure we hold the House. So I have two functions. One is governmental, the other political. The governmental function is to run the House, move the legislation through, make sure the chairmen and the committees are all operating smoothly. ... The other function is political. I have to recruit the best possible candidates for Congress and make sure they have the financial and other resources they need to run or, if they're already in Congress, to make sure they have enough to stave off potential challengers. That's the part of my job that keeps me on the road so much. (Denny Hastert, Speaker: Lessons from Forty Years in Coaching and Politics, Washington, DC: Regnery Publishing, 2004, pp. 181-82)
On the road raising money. Back inside the Beltway raising money. At gala dinners, at receptions, at luncheons raising money. Sometimes the money comes in by the bucketful, like those trips to Vegas. Sometimes it's more like that one afternoon at Jack's place, arriving in nice, neat bundles.
On June 3, 2003 a fundraiser is held at Abramoff's restaurant, Signatures, for Hastert's Keep Our Majority PAC.
Seven days later, Hastert wrote Norton urging her to reject the Jena tribe of Choctaw Indians' request for a new casino. Hastert's three top House deputies also signed the letter.
Approving the Jena application or others like it would "run counter to congressional intent," Hastert's June 10, 2003, letter warned Norton.
It was exactly what Abramoff's tribal clients wanted. The tribes, including the Louisiana Coushattas and Mississippi Choctaw, were trying to block the Jena's gambling hall for fear it would undercut business at their own casinos.
And six days after that, on June 16th, at least $26,250 in campaign contributions from Abramoff, his associates, and his clients are received by Hastert's PAC.
$2,500, Jack Abramoff, Washington DC, Greenberg Traurig
$1,000, Shawn M. Vasell, Arlington, VA, Greenberg Traurig
$1,000, Neil Volz, Washington, DC, Greenberg Traurig
$500, Todd A. Boulanger, Washington, DC, Greenber Traurig
$500, Duane R. Gibson, Washington, DC, Greenberg Traurig
$500, Kevin A. Ring, Washington, DC, Greenberg Traurig
$250, Padgett R. Wilson, Alexandria, VA, Greenberg, Traurig
$5,000, Mashanbucket Pequot Tribal Nation, Mashanbucket, CT
$5,000, Saginaw Chippewa Indian Tribe, Mt. Pleasant, MI
$5,000, Grand Traverse Band of Ottawa and Chippewa Indians, Peshawbestown, MI
$5,000, Chitimacha Tribe of Louisiana, Charenton, LA
Quid pro quo? Not according to Hastert. When this interesting series of events finally saw the light of day, he would claim that it was nothing more than a "
coincidence."
And yet,
Many lobbyists seek Hastert's signature on letters seeking to change the policies of regulatory agencies. But a GOP lobbyist said [Hastert's Chief Counsel, Ted] Van Der Meid has a firm policy of not intervening on these matters, saying, "Ted won't let the Speaker do that."
Similarly, when the fact was uncovered that Hastert's PAC hadn't ever actually gotten around to
paying for the fundraiser, meaning that it had effectively been
comped by Abramoff, Hastert's people would claim that their failure to pay for the in-kind expenses incurred had been a mere "
oversight."
And here I had been thinking all this time that Hastert didn't know what oversight meant.
AMERICAN VALUES
When Republicans first began pushing internet gambling prohibition about ten years ago, it was a fairly straightforward proposition. As the titles of the legislation would indicate--Computer Gambling Prevention Act of 1996, Internet Gambling Prohibition Act of 1997--these were anti-gambling measures, no doubt about it. And the National Gambling Impact Study Commission report recommendations regarding internet gambling, released in June 1999, called for prohibition "Without allowing new exemptions or the expansion of existing federal exemptions to other jurisdictions."
But there was a problem with this approach. The bills never made it to the floor for a vote. Too manny Members had gaming interests in their districts that would be harmed by the legislation. So, in order to sweeten the deal, loopholes began to show up in these bills. So many loopholes, in fact, that House Resources Committee Chairman Don
Young wrote to Hastert to complain.
I note that H.R. 3125 has been reported out of Subcommittee containing an exemption from its proposed Internet gambling prohibition for the following forms of gambling:
--intrastate lotteries,
--horse tracks,
--jai alai,
--multi-state lotteries,
--dog tracks,
--fantasy sports,
--and all other intrastate pari-mutual wagering authorized by any State.
It appears that just about the only Internet gambling prohibited by H.R. 3125 is tribal gaming.
Still, the loopholes had the desired effect. Internet gambling prohibition legislation finally egan to make its way toward a floor vote in 2000. And while so much had been compromised away in order to win support for the bill that there wasn't much gambling prohibition left in the measure, what little was left was threatening to some. Like the company eLottery, who hired Jack Abramoff in May, 2000 to work against the bill.
The strategy? Persuade supporters of internet gambling prohibition that Goodlatte's bill would actually
expand opportunities for legalized gambling. And with the help of friends and associates like DeLay staffer Tony Rudy, Grover Norquist, Ralph Reed, and Rev. Louis P. Sheldon of the Traditional Values Coalition, Abramoff was able to do just that, and outmaneuver the majority in Congress who supported the bill.
In early June 2000, DeLay had not yet taken a position on the Internet gambling ban. But his aide, Rudy, was already providing advice to Abramoff about how to kill it. ...
He followed up with a suggestion that Abramoff's team get a conservative House caucus to seek a meeting with the chamber's top leaders, Speaker J. Dennis Hastert (R-Ill.) and Majority Leader Richard K. Armey (R-Tex.) -- a key supporter of the bill. ...
Sheldon was also hard at work, holding news conferences and button holing House conservatives to argue against the bill. On July 10, he called Abramoff's group saying he had run into resistance from the staff of an influential member who still favored the bill. ...
Abramoff got another strategy e-mail the next morning from Rudy. Rudy was on DeLay's staff but wrote "we" as though he belonged to Abramoff's team. "I think we should get weyrich to get like 10 groups to sign a letter to denny and armey on gaming bill," Rudy wrote ...
Slowly the tide began to turn. DeLay came on board, as did Rules Committee Chairman David Dreier, and it was decided the usual rules would be suspended when the bill came to the floor for a vote. The upside of this strategy was that they would be able to avoid amendments and extended debate that could easily upset the balance of the carefully negotiated exemptions Goodlatte had woven into the bill to win support. The downside was that the bill would now have to receive a two-thirds majority to pass. When it came to a vote the final tally was 245 in favor, 159 opposed. In spite of the fact a strong majority supported the bill, it didn't pass. Abramoff had persuaded just enough of the right people to oppose it, enabling him to win round one.
The bill's supporters, however, refused to give up and vowed to bring it back somehow for another vote before the end of the session. So Abramoff went back to work.
Abramoff's strategy was to dispatch Sheldon to pressure about 10 social conservatives in their home districts, accusing them of being soft on gambling for supporting Goodlatte's bill. Abramoff's group hoped those members would stir fears among House leaders that another vote on the gambling bill could threaten those members and thus the GOP's thin 13-seat majority. ...
Sheldon's campaign in conservative districts had the desired chilling effect on GOP leaders. That became clear on Oct. 24, when House Republicans met to discuss their year-end strategy ... DeLay, Safavian wrote in an e-mail, "spoke up and noted that the bill could cost as many as four House seats. At that point, there was silence. Not even Rep. Dick Armey (R-Texas) -- our previous opponent -- said a word." ...
Abramoff had won another round. He had succeeded in convincing the Republican leadership not only that the bill simply wasn't much of an anti-gambling bill in it's compromised form, but, more importantly, that there would also be a political price to be paid if it passed. So, it didn't. It never ever got to the House floor for a second look. And the interests Abramoff represented, segments of the gaming industry Goodlatte's legislation really could have put out of business, dodged another bullet.
It should be mentioned that while Abramoff was taking the lead, he wasn't the only lobbyist on the case. While he and
his Preston Gates team were working against this legislation on behalf of eLottery, former Abramoff associate David Safavian and his team at Janus-Merritt Strategies (the firm Safavian founded with Norquist in 1997 after leaving Preston Gates) was working the same beat on behalf of the
Interactive Gaming Council, the
Interactive Services Association,
CDM Fantasy Sports, and the
Inland Entertainment Company. Indeed, as supporters of the internet gambling ban tried in vain to get the bill attached to some other legislative package during the lame duck session of Congress held after the election that fall,
Safavian was reporting to his clients that "our entire team has been essentially camped out on Capitol Hill and at the White House for the past two weeks, urging the negotiators to reject any Internet gambling rider that might come up."
Podesta.com (soon to evolve into PodestaMattoon, when
Daniel J. Mattoon, Hastert's close friend and longtime political associate, signed on as the senior Republican principal at the firm in the middle of all of this legislative wrangling) was also representing the Interactive Gaming Council. And during this period, while these lobbyists were working against this legislation, Hastert received $21,000 [
196,
197,
198] in campaign contributions from them.
Safavian appears to have played an even more interesting role in derailing internet gambling legislation when it was reintroduced in 2001. Once again, Goodlatte was attempting to guide his carefully crafted bill through Congress.
In the end, however, Goodlatte's compromises were stripped out of the bill when the committee approved an amendment from Rep. Chris Cannon, R-Utah, that made the legislation more of an outright ban on all forms of Internet gambling. Cannon's amendment removed exemptions for casinos and state lotteries, for example.
Ostensibly, Cannon's amendment toughened the bill by removing exemptions for horse and dog betting. But in reality it was a torpedo: many House members represented areas with extensive horse-betting, including Speaker of the House Dennis Hastert (R-IL). If the bill reached the floor, it would probably die.
And it wasn't just the gambling interests back home that would have mattered to Hastert. At least a few of the
Las Vegas casino operators, such as the MGM Mirage, Park Place Entertainment, and Station Casinos--the very people Hastert had been raising enormous sums from at his Vegas fundraisers every year, the very people he had told he had no interest in regulating their industry--were counting on one of those exemptions to allow them to set up their own Internet gambling websites.
So, when Cannon's amendment closed up the loopholes, making the bill a truly
anti-gambling bill once again, it lost the support it needed to pass. Abramoff and everybody else who was working on behalf of the internet gambling interests won another round.
What did Safavian have to do with all of this? Well, Safavian had left Janus-Merritt in 2001 to become Cannon's Chief of Staff.
While working for Cannon, David served as the congressman's political advisor and oversaw the legislative activities of the office. His role, he says, involved managing the minutiae of the legislative process ...
One can therefore reasonably assume that Safavian would have been intimately involved in the crafting of Cannon's amendment and would have known exactly what it's effect would be, that it would be a "poison pill" that would doom the bill, exactly the thing his friend and mentor Jack Abramoff wanted to see happen.
Abramoff moved on from Preston Gates to Greenberg Traurig at the beginning of 2001, but he brought clients with him and added new ones. His new firm was registered to represent the
Interactive Gaming Council, the
E-Commerce Payment Coalition,
Playboy Enterprises,
Bowman International (an online sports betting service),
Starnet (developers of online gaming software), and the
National Association of State and Provincial Lotteries on internet gaming issues, and in 2002 they added
Sportingbet (a London-based online gambling company) to their roster. In addition,
Financial Times has just this month reported that they were also representing Gibraltar-based
PartyGaming, operators of the world's largest online poker site. Abramoff's junior associates worked the accounts, but one can safely assume Jack was never too far removed from the fray.
In 2003, at the beginning of the next Congress, Rep. Jim Leach (R-IA) started off a new round of this legislative dance by reintroducing the Unlawful Internet Gambling Funding Prohibition Act, which sought to prohibit anyone engaged in a gambling business from accepting credit cards, checks, electronic fund transfers, or the like in connection with illegal Internet gambling. As one would have expected by this point it included the usual exemptions for lotteries, and horse and dog racing, and, again, as expected, it was amended by Cannon in the House Judiciary Committee to strip the exemptions back out. Rep. Spencer Bachus (R-AL) then introduced a new version of the bill which put the exemptions back in, but eliminated any criminal or civil penalties. This allowed the bill to sidestep the Judiciary Committee, and, more to the point, to sidestep Cannon, with the intention of reintroducing the penalties once the bill had safely made it over to the Senate. But a number of Members were reportedly uncomfortable with the manner in which the bill was being "
fast-tracked" through the system, and, once again, in order to avoid amendments being offered on the House floor, the usual rules were suspended and a two-thirds vote was required for passage. The votes were not there, so a floor vote never took place.
Without exemptions built into the legislation, internet gambling prohibition could never attract enough support to have a chance of passing. With exemptions built in, crafty opponents such as Jack Abramoff were able by hook or by crook to defeat it by persuaded just enough Members that the measure would no longer have the effect of prohibiting gambling, but would instead expand it by protecting established gaming interests. In spite of all the moralistic rhetoric that would be thrown around the Republicans regarding the evils of gambling and the harm it brought to society, true internet gambling prohibition, without loopholes being built in for established gaming interests, had never and would never be seriously considered in Speaker Hastert's House of Representatives.
Greenberg Traurig would continue to represent all of their Internet gambling clients through 2004 (they still represent the Interactive Gaming Council today). The campaign contributions continued as well. Between 2001 and 2004, Abramoff, his associates at the firm, and the Greenberg Traurig PAC gave another $47,250 [
199,
200,
201,
202,
203,
204,
205,
206] to Hastert. (And they would give Denny another $33,500 [
207,
208,
209,
210] in 2005-06, after Abramoff was fired, as they continued to lobby against Internet gaming prohibition.)
As the story of the Abramoff scandal unfolded through the course of 2004 and 2005, Jack's old friends began seeking to distance themselves from him every which way they could. After Abramoff pled guilty to corruption charges on January 3, 2006, Hastert begrudgingly made
charitable donations that were supposedly equal (they weren't even close) to the amount of money he had received from Abramoff and his clients. House Republicans also looked for legislative remedies for what ailed them.
House members are rushing to co-sponsor a version of the Internet ban that failed after an Abramoff-led lobbying blitz in 2000. ... With a Justice Department influence-peddling investigation still under way, lawmakers want to "show some separation between them and him [Abramoff]," says Rep. Bob Goodlatte (R., Va.), a chief sponsor of the 2000 Internet-gambling ban. In a few weeks, Mr. Goodlatte has racked up more than 100 co-sponsors
New life was also breathed into Leach's bill, and on June 27, the Speaker announced that the House Republicans were making Internet gambling prohibition, in one form or another, a part of the American Values Agenda they would run on this year.
In the end, however, it was Senate Majority Leader Bill Frist, not Hastert, who made sure something passed before time ran out. Denny had other priorities.
"