Folding to the Casino Industry: How Soft Money Buys Congress
A new Public Citizen investigation reveals how the casino gambling industry used huge soft money campaign contributions to kill a popular bill that would have banned betting on college sports in Nevada – the only state where such wagers are legal. The Nevada casino industry exploited the soft money loophole in campaign finance law to gain influence with congressional leaders in both parties. The way these leaders then stymied the "Amateur Sports Integrity" bill (S. 2340) – despite its strong bipartisan support from sponsors like Sens. John McCain (R-Ariz.) and Joe Lieberman (D-Conn.) – makes this issue a textbook case for why Congress needs to adopt campaign finance reform.
Using extensive new interviews with members of Congress, their staffs, lobbyists and other knowledgeable insiders, as well as the latest figures on soft money contributions and the public record, Public Citizen’s study shows:
Republican and Democratic Party committees received $3.9 million in soft money from the Nevada casino industry for the 2000 election (Republican committees got $2.3 million, Democrats $1.6 million) – more than twice what they received in the 1996 cycle.
Nevada casino interests gave the Democratic Congressional Campaign Committee eight times the amount of soft money they did in 1996. The National Republican Congressional Committee collected almost four times more than in 1996. The parties’ Senate fundraising committees both saw threefold increases.
Congressional leaders, such as Senate Majority Leader Trent Lott (R-Miss.), Sen. Mitch McConnell (R-Ky.), House Speaker Dennis Hastert (R-Ill.), Rep. Tom Davis (R-Va.), House Minority Leader Dick Gephardt (D-Mo.) and Rep. Charles Rangel (D-N.Y.), worked to both raise casino soft money and kill the college gambling bill.
As this anti-gambling legislation became the casino industry’s top concern in Congress, industry leaders encouraged the congressional party leaders to compete for soft money by killing the bill. This competition reveals how corrupting the chase for soft money has become.
Rep. Davis, the chief House Republican fundraiser, said the bill wouldn’t pass because, "If we do it, we are going to expose our guys to a barrage of casino dollars...we’ve been told point blank that they are going to open the spigots [to the Democrats]."
Speaker Dennis Hastert got a House Judiciary Committee vote on the bill postponed because he didn’t want to be embarrassed by an anti-gambling vote on an upcoming fundraising trip to Las Vegas.
Chief Senate Republican fundraiser McConnell reportedly told senators the gambling lobby would allocate a $1 million-dollar "kitty" to congressional committees depending on what the parties did on the college gambling bill.
Majority Leader Lott did not make a serious effort to take up the bill after it passed – nearly unanimously – in the Senate Commerce Committee.
House Minority Leader Gephardt and Rep. Charles Rangel, the top Democrat on the House tax-writing committee, spent years cultivating the casino industry. Gephardt pronounced the college gambling bill dead at the same time as the House Republican leadership. Rangel is co-sponsoring legislation promoted by the casino industry that is designed to kill the college gambling bill. Gephardt also supports the pro-industry legislation.
Democrats on the House Judiciary Committee "went south" on the bill, as one lobbyist put it, at the last moment, largely to boost the re-election bid of a pro-casino Democratic congresswoman from Las Vegas, Rep. Shelley Berkley.
Senate Minority Leader Tom Daschle (D-S.D.) admitted the bill had "broad support" but did nothing to advance its consideration in the Senate. He expressed no public dissent when his deputy, Nevada Senator Harry Reid, consistently objected to bringing the bill up.
Talk about strange bedfellows – Barney Frank and the American Federation of Teachers, Jesse Helms and Christian family values groups all agree on one thing: Congress should close the loophole that exempts Nevada from a national betting ban on college sports.
But it hasn’t – and rarely has the sway of big contributors been more transparent on Capitol Hill.
For more than a year, Congress has refused to vote on the anti-gambling legislation1. Yet friends and foes of the bill both agree it would pass overwhelmingly if it could get to the floor2. Their apple-pie argument? Almost $1 billion a year is legally bet in Nevada on student-athletes and some of those wagers have played a part in point-shaving scandals that rocked college sports in the 1990s.
The Nevada casino industry stands alone against the ban. And the industry has been playing its trump card – the soft money loophole in federal campaign law. This loophole permits corporations, unions and wealthy individuals to make unlimited contributions to political parties that are used to help their candidates for Congress and the presidency.
This Public Citizen investigation reveals – through extensive interviews with members of Congress, congressional staff and lobbyists – how Republican and Democratic party leaders such as Senate Majority Leader Trent Lott (R-Miss.), Sen. Mitch McConnell (R-Ky.), House Speaker Dennis Hastert (R-Ill.), Rep. Tom Davis (R-Va.), Rep. Dick Gephardt (D-Mo.) and Rep. Charles Rangel (D-N.Y.) vigorously competed for casino industry soft money, while they worked to kill the gambling ban bill.
Desperate to win control of Congress in the ultra-close 2000 election, party leaders flew back and forth to Nevada to solicit soft money – and give their ear to casino executives. Yet they refused to meet with representatives from the National Collegiate Athletic Association (NCAA), a strong proponent of the bill, but one that doesn’t make political contributions.
They lined up to pay tribute to casino magnate Steve Wynn, although Wynn had publicly called members of Congress "idiots."
In private, some party leaders admitted to their colleagues that campaign contributions led them to oppose the bill, yet they hid those motives from the public.
Meanwhile, industry representatives went so far as to reportedly offer up a $1 million soft money "kitty" that would be awarded if the sports gambling bill was killed.
Republican and Democratic party committees hit the jackpot. Companies and executives lobbying against the college gambling bill dumped $3.9 million of soft money into Republican ($2.3 million) and Democratic ($1.6 million) fundraising committees, according to the latest analysis of contributions for the 1999-2000 election cycle. (All references to soft money in this report concern only contributions from members of the American Gaming Association, a trade group created and dominated by Nevada casinos.)
Nevada casino interests gave the Democratic House fundraising committee eight times what they did in the 1995-1996 cycle. The Republican House Committee collected almost four times more than in 1996. The Senate committees both saw threefold increases. (see Table 1)
Table 1: Soft Money Contributions from American Gaming
Source: Public Disclosure Inc. (www.tray.com) data analyzed by Public Citizen.
The Problem: Corrupting College Sports
Congress formed the National Gambling Impact Study Commission in 1996 to investigate the problems created by the explosive growth of legal and illegal betting in America. In June 1999, the commission concluded its study and urged closing the loophole that allowed legal gambling on college and other amateur sports only in Nevada.
In a nutshell, the commission said wagering on college athletes "threatens the integrity of sports, it puts student athletes in a vulnerable position, [and] it can devastate individuals and careers3."
Sports betting scandals rocked eight universities in the 1990s, including Northwestern University, Arizona State University, Boston College and the University of Maryland. In fact, there were as many point-shaving scandals in the 1990s as in the previous five decades combined4.
The problem appeared pervasive. A 1999 University of Michigan study showed that one-in-20 college players either shaved points, wagered on their own games or leaked insider information about players to gamblers5.
Student athletes are clearly more susceptible to corruption than millionaire professional athletes. For instance, a Northwestern football player fumbled on the goal line in a 1994 game, rather than score, so he could collect a $400 bet he had made against his own team6.
And gambling could ruin their careers. Arizona State point guard Hedake Smith saw his promising future in the NBA dashed by his gambling conviction; Kevin Pendergast went from Notre Dame football hero to gambling ringleader and prison inmate7.
The NCAA seized the recommendation of the national gambling commission and pushed Congress to close the Nevada loophole.
The NCAA never pretended that one bit of legislation would eradicate all its problems8. No legislation could wipe out all the illegal gambling on college sports in the country. The illegal business, according to law enforcement experts, was perhaps 30 to 100 times bigger than the $700 million-to-$1 billion legally wagered on college sports each year in Nevada9.
But the NCAA wanted at least to put an end to legal gambling, which plays a part in point-shaving scandals and helps fuel illegal gambling10.
For example, Nevada casinos have provided a convenient outlet for those fixing games. Pendergast, who orchestrated the Northwestern University scandal, said he couldn’t have pulled off his scheme without the Las Vegas casinos. "My local bookie could not have covered a $20,000 bet on a game…and my conscience would not let me cheat someone I know," he explained11.
In addition, legal gambling in Nevada gives illegal bookies a way to spread their bets more evenly and reduce their potential losses. It works like this: if bookies have too much money riding on one side of a game, they can go to Nevada and place large bets to equalize the amount wagered on each side, thereby limiting their risk. Brian Sandoval, chairman of the Nevada Gaming Commission, acknowledged this connection when he proposed last year that Nevada limit wagers on college sports to $550. That way, Sandoval reasoned, illegal bookies wouldn’t be tempted to "lay off" their bets in Nevada. Sandoval later withdrew his proposal in response to pressure from the casino industry12.
More important, the NCAA wanted to send a strong message that it was wrong to bet on amateur athletes – and that message was hard to convey when federal law endorsed gambling on college students.
"You can’t wage an effective campaign against illegal sports betting, or even expect people to take this problem seriously, as long as the government continues to sanction legal sports betting," said Rep. Tim Roemer (D-Ind.), who sponsored the House bill to ban Nevada gambling on college sports13.
If the NCAA could get the legislative ball rolling it would be tough to stop. After all, 49 states already under the national sports gambling ban had nothing to lose by cracking down on Nevada. It was as if Congress had legalized the sale of cocaine in one state only, they could argue.
Casino Soft Money: "The Sweeping Ability to Speak to All Members"
Both political parties looked at the Nevada casino industry with a combination of trepidation and hope as the 1999-2000 election cycle approached. The battle for control of Congress would be the closest in 40 years and both parties knew they were in fierce competition for casino industry soft money.
House Republican leaders were worried that the social conservatives in their ranks, who were morally opposed to gambling and had led the push for the national gambling commission, would hurt their ability to raise funds from the casinos. House Democratic leaders, who had never received much soft money from Nevada casinos, were optimistic that years of cultivating the industry might finally start to pay dividends.
In the Senate, Republicans were quite confident. Senate Majority Leader Lott was probably the industry’s most important ally in Congress and in 1997-1998 the Lott-assisted GOP Senate fundraising committee raised more Nevada casino soft money than any congressional campaign committee14. Senate Democrats were less competitive, but still had some reason for hope: in the 1998 election they had received $518,000 in soft money from Nevada casinos and their executives. In addition, their chief fundraiser, Sen. Robert Torricelli was from New Jersey – the second biggest casino gambling state – and was a big supporter of the industry.
One thing seemed a sure bet: Nevada casinos would increase their soft money contributions to these four congressional committees beyond the $981,000 they provided them in 1996 and the $1.6 million in 1998. After all, soft money contributions to the congressional committees – which are controlled by party leaders – had become the industry’s preferred vehicle for political influence. "Our efforts have been more focused on leadership than individual members," acknowledged Alan Feldman, a spokesman for MGM Mirage Resorts, which is by far the top Nevada industry contributor (see Table 2). Contributing soft money to congressional committees, he told Public Citizen, gave the industry the "sweeping ability to speak to all members at once15."
Table 2: Soft Money Contributions from American
Source: Public Disclosure Inc. (www.tray.com) data analyzed by Public Citizen.
The Republicans: "We Need the Money"
Party leaders understood this in spades. The House Republican sales pitch began in earnest on August 25, 1999, when House Speaker Dennis Hastert (R-Ill.) met with gambling executives at a luncheon for the National Republican Congressional Committee (NRCC), the fundraising arm of House GOP candidates. Hastert – the Republican with the most to lose in a close election because he would no longer be Speaker – called gambling a "great industry" in an effort to "woo back" casino executives and "soothe their fears that House Republicans are anti-gambling." Hastert also met privately with Steve Wynn, CEO of Mirage Resorts16.
The meetings proved fruitful. The NRCC garnered $330,000 in Nevada-dominated soft money that week and another $100,000 by early October.
In January 2000, Rep. Tom Davis (R-Va.), head of the NRCC and the chief fundraiser for GOP House candidates, trekked to Las Vegas in search of more gambling industry contributions17. Shortly afterwards, the college gambling ban bill was introduced in the House and industry leaders denounced it18. Davis and other GOP leaders were quick to follow suit.
In early February, Jon Porter, a Nevada Republican competing in one of the closest House races in the country, came to Washington D.C. and urged Davis personally and Hastert’s staff, as well as the staff of Majority Leader Dick Armey (R-Tex.), to oppose the NCAA bill19. On February 9, an anonymous GOP leader (later identified as Davis20) told a Las Vegas reporter, "there’s no intent to get this bill to the floor; there’s no stomach for it on the part of Republican leadership21." His view was soon sustained by what Rep. Jim Gibbons (R-Nev.) characterized as Hastert’s "quiet consent" in a private meeting with Nevada gambling executives22. In May, Gibbons went so far as to say he had a guarantee from Speaker Hastert that the bill "won’t see the light of day."
A prominent political figure with strong Republican connections told Public Citizen that Davis was candid with him about the major role of campaign contributions in a conversation last summer. Davis emphasized that he was concerned about a possible casino-fed onslaught by Democrats.
"This bill is just not going to pass," Davis told the source, who requested anonymity because of his ongoing work with GOP leaders. "If we do it we are going to expose our guys to a barrage of casino dollars. We have five-to-ten really vulnerable seats and we’ve been told point blank that they are going to open the spigots [to the Democrats if the bill goes to the floor]24."
The source gave a similar account to a Capitol Hill lobbyist last summer, indicating that Davis was also "expecting a big contribution" from casino interests toward the end of the congressional session tied to the bill25.
Throughout the year, Davis continued to assure candidate Porter and industry leaders that the bill was dead26. Meanwhile, the Republican leadership increased the odds against the NCAA bill.
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 bill27. In fact, Hastert got his wish – the committee vote was postponed.
On August 8, Hastert traveled to Nevada for three fundraising events28. Two weeks later the NRCC collected $180,000 in soft money from the casino industry, and another $40,000 came in to the NRCC by the end of September.
On September 13, the House Judiciary Committee finally held a vote on the anti-gambling bill and every Republican on the committee voted for it. Yet party leaders rejected Graham’s subsequent pleas to bring the bill to the full House for a vote. Graham charged that leaders in both parties had agreed "with a wink and a nod" to bury the bill29.
Over in the Senate, the bill was running into very similar obstacles erected by Sen. Mitch McConnell (R-Ky.) — who headed the National Republican Senatorial Committee, the fundraising arm for GOP Senate candidates – and Majority Leader Lott, who controlled the Senate agenda.
Public Citizen interviews with two well-placed Republican staff sources revealed the following: in late 1999 and early 2000, McConnell urged a number of GOP senators not to support the bill. His argument to Sen. Sam Brownback (R-Kan.), the bill’s chief GOP sponsor, as well as to then Sen. John Ashcroft (R-Mo.) and two other "vulnerable" Republicans up for re-election was that "this is a big year for Senate races" and "we need the money [from the casino industry]30." (Another Public Citizen source who is an NCAA official heard about McConnell’s approach directly from a Republican senator.)
McConnell also reportedly told senators, according to one of the Republican staff sources, that Frank Fahrenkopf, head of the American Gaming Association, the casino industry’s Washington lobby, had indicated "there was a million dollars in a kitty" which would be distributed to congressional fundraising committees when "he could see what happened with the bill31." This was remarkably similar to the approach the industry reportedly made to Rep. Davis, the chief House Republican fundraiser.
McConnell’s success appeared to be indicated by the fact that no GOP members of the Senate Judiciary Committee (including Ashcroft) would sponsor a bill that was popular with conservative grassroots activists.
When Sen. Orrin Hatch (R-Utah), chairman of the Senate Judiciary Committee, failed to advance the anti-gambling bill, Brownback began to discuss moving the bill to the Commerce Committee chaired by Sen. John McCain (R-Ariz.).
In March 2000, McCain was campaigning in the South Carolina presidential primary on his "Straight Talk Express" bus, when he got a call from Wynn, the casino magnate. Wynn, a contributor to McCain’s presidential campaign, screamed at the senator, demanding to know why he had become a co-sponsor of the college gambling ban bill. "McCain had to hold the phone away from his ear because Wynn was cussing so much," said one aide. McCain took offense at Wynn’s suggestion he could be bought and decided to push hard for the college gambling bill32.
The bill sailed through his Commerce Committee on a voice vote on April 13, 2000. Committee members voting "yea" included Senate Majority Leader Lott. However, Lott never used his considerable power to get the bill before the full Senate. Lott "didn’t make a serious effort to bring the bill to the floor," said one key Republican staff member – a view that was supported by another GOP Senate source33.
Instead, Lott indicated as early as April that there wasn’t enough time to get the college gambling bill on the Senate’s calendar last year. ("We’re pretty well booked," he said34.) Later Lott maintained he would lose hours of fleeting legislative time in opposing an anticipated filibuster against the bill35.
Brownback, in particular, was disappointed and felt misled. He publicly stated in September that Lott had promised to file for cloture on the bill (which meant attempting to cut off filibusters by Nevada’s senators and at least beginning to vote on it36). But Lott never followed through. "The way to move this bill was to file cloture," said one Republican source. "But Lott never did37."
Lott even refused repeated requests to meet with NCAA representatives38. Yet, shortly after the Commerce Committee vote on the bill, Lott was seen by one Republican aide meeting in his office with Frank Fahrenkopf, the chief lobbyist for the American Gaming Association39.
By the end of the 1999-2000 election cycle, the Republican Senate fundraising committee had collected more than $1 million from the Nevada casino industry, with $300,000 coming in late August and September, when it was clear the gambling bill was dead in the Senate.
The Democrats: Going Out of Their Way "to Learn More About Gaming"
Democrats also went into the 1999-2000 election season knowing that soft money from the casino industry could help them win control of Congress. Their prospects seemed strongest in the House because industry executives such as Wynn had expressed frustration with conservative House Republicans.
No one stood to gain more from a Democratic House victory than Minority Leader Gephardt, who would become Speaker. Another leading beneficiary would be Rep. Charles Rangel who would become chairman of the powerful Ways and Means Committee. Both positions would be critical to the industry if Democrats took over. Gephardt would control the legislative agenda in the House and Rangel would oversee tax laws, which had been the leading industry concern in recent years40.
Neither had a problem with the gambling industry. Since 1990, Gephardt himself was the sixth leading House recipient of gambling industry contributions, at $155,68941. He also had designated a pro-gambling representative to the National Gambling Impact Study Commission (John Wilhelm, a union official who represented Nevada casino workers). Rangel was eager to be educated on the subject – particularly during fundraising trips. As Wynn put it in February 2000, "Charlie Rangel’s gone out of his way to learn more about gaming42."
Rangel and Gephardt’s chief fundraiser, David Jones, first visited with Wynn at his golf course mansion in 1995. With Wynn’s support, Rangel became the Democratic Party "point-man" for raising money in Las Vegas43. He visited Las Vegas in February 199944. Then he and Gephardt went again in May 199945. And again in July 199946. The trips paid off. Wynn alone contributed $250,000 to the Democratic Congressional Campaign Committee (DCCC) in May 1999. That June, the Nevada casino industry chipped in with another $125,000 to the House Democratic fundraising committee; and the next month the industry wrote checks for another $140,000. Those three hauls alone amounted to 12 times what the DCCC collected from American Gaming Association members in all of 1997 and 1998.
There was more good news. Wynn, a registered Republican, pledged in July 1999 to raise at least $1 million for Democrats. (Rangel, it should be noted, had the "impression" the industry would still "support both sides47.")
In February 2000, the casino industry was honored at a United Way luncheon in Washington D.C. Although Wynn had called sponsors of the anti-gambling bill "idiots" several weeks before his luncheon speech48, Gephardt used the opportunity to publicly declare, "I am not for the [sports gambling] bill49."
A source close to Gephardt explained the Minority Leader’s opposition to the NCAA bill: He said Gephardt didn’t oppose the bill because of the casino industry contributions; rather he adopted his stance to help Rep. Shelley Berkley (D-Nev.) who was locked in a close contest with Republican Jon Porter – who was claiming he got GOP leaders to bury the anti-gambling bill. Still, the source acknowledged that Gephardt’s stance was helpful to "raising money." Once Gephardt had taken a pro-industry stand, the high-ranking source said, "you could go out and do a fundraiser." He admitted that Gephardt’s Nevada fundraising and pro-casino position created a "chicken-and-egg" problem – in other words, it was hard for outsiders to determine which came first50.
When it came to giving immediate assistance to the Nevada casino industry, House Democratic leaders couldn’t top their GOP counterparts, who controlled the House and its legislative agenda – and had pronounced the bill dead in February 2000. However, the Democratic leadership’s action lent support to the industry by providing some assurance that they would not pressure Republicans to advance the bill, which had 40 Democratic sponsors.
Rep. Roemer, the chief Democratic sponsor of the college sports bill in the House, told Public Citizen, "The Republican leadership has stonewalled the issue and refused to allow us to bring this to the floor. And the Democratic leadership has opposed the bill…Both sides share some brunt of the blame for the fate of the bill…"
When the House Judiciary Committee finally met in September to consider the legislation, the situation was anti-climactic. "Everyone knew the bill was not going to the floor," said one key Democratic staff member51.
Still, the bill’s sponsors were confident it would be approved by the committee with strong bipartisan support. The day before the hearing, Rep. Graham predicted that liberals, including ranking Democrat John Conyers of Michigan, and conservatives such as committee Chairman Henry Hyde (R-Ill.) would vote for the bill52. During the June hearings on the bill, Conyers had been very critical of the casino industry’s arguments against the bill. "We were befuddled by his position," admitted MGM Mirage spokesman Alan Feldman53. But Conyers and other Democrats surprised observers and "went south on the bill," as one professional sports lobbyist put it. Judiciary Democrats voted 11-2 to kill the bill and substitute one offered by Conyers that called for a study and federal task force on illegal gambling instead. Conyers’ substitute was nearly identical to a bill sponsored by Rep. Berkley, a former casino executive55. Republicans defeated Conyers’ amendment and the Nevada betting ban passed by a 19-9 vote.
Berkley aggressively lobbied Democrats on the committee and Democratic members and staff privately explain that Berkley’s appeals for help in her election appeared to be the major factor in the Democratic vote. One congressman who spoke on the condition of anonymity recalled, "Shelley Berkley was making a whole big deal. She was in a very tough race… This would loom larger in Democratic decisions [than usual] because all we have been doing in the last two years has been trying to win the House56." Rep. Barney Frank (D-Mass.), the number two Democrat on the committee, flatly told Public Citizen, "It was Shelley Berkley’s strong lobbying that determined the Democratic vote57."
Indeed, Berkley later publicly boasted to casino executives that she had turned the Judiciary Democrats against the NCAA bill58.
Two weeks after the Judiciary Committee vote (and six weeks before the November election), Gephardt and Rangel went to Las Vegas, where they collected casino industry checks for $265,000. (Another $53,000 came to the DCCC by early October). While the Judiciary vote appeared to be driven by election politics, the result only reinforced Gephardt’s and Rangel’s fundraising message of support for the industry. "Any vote coming out of committee is important…it was worth showing some questions were raised, that it wasn’t a slam dunk," remarked MGM Mirage’s Feldman59.
In the Senate, throughout the year, Democratic leaders also did nothing to aid supporters of the bill. Senate Minority Leader Tom Daschle (D-S.D.) admitted on the floor of the Senate that the NCAA bill had "broad support60." But he expressed no public dissent when his deputy, Sen. Harry Reid (D-Nev.), consistently objected to bringing the bill up in the Senate. "Daschle said nothing, didn’t try to help," according to one Republican source61. A source close to Daschle described his position as retaliation for Republican leaders’ unwillingness to allow votes on Democratic legislation62.
The Democratic Senatorial Campaign Committee received $100,000 from Nevada casino interests in March 2000 and another $100,000 in September, on their way to a total of $468,635 from Nevada casinos in the 1999-2000 election cycle.
Finally, according to the NCAA’s chief lobbyist, House Democratic leader Gephardt declined – like his Republican counterparts – to meet with NCAA representatives to discuss the bill. Senate Minority Leader Daschle did arrange for a staffer to meet with NCAA officials.
Conclusion: "In 2002, both parties will need all the money they can get"
All signs point to a continuing congressional battle over a betting ban in 2001. McCain has vowed to take another shot at passing the NCAA bill this year, right after the campaign finance reform debate scheduled for late March. The Nevada casino industry has already launched a pre-emptive strike – this time, with the overt support of House Democratic leaders.
On February 14, Nevada Reps. Gibbons and Berkley introduced H.R. 641, which would do nothing to curb Nevada gambling on college sports. Instead their bill calls for another federal study of illegal gambling and a $28 million Justice Department task force to crack down on those who break existing gambling laws. In addition, the bill would double the maximum prison term to 10 years for rigging any sports competition.
The bill is widely seen as an obvious stab at thwarting McCain and the NCAA. "It’s a way to kill the bill," acknowledged Barney Frank. "Berkley’s bill just gives people an excuse [to oppose McCain’s bill]63."
Despite Berkley’s heavy-handedness, Rep. David Bonior (D-Mich.), the second-highest ranking Democrat in the House, and Reps. Rangel and Conyers were quick to sign-on as co-sponsors of the bill. Gephardt has also endorsed the bill, as has the new chief fundraiser for House Democrats, Rep. Nita Lowey (D-N.Y.).
In January, Davis – the chief House GOP fundraiser – kicked off the new election cycle by visiting Las Vegas to chat with gambling executives and thank contributors.
"The House and Senate are locked in virtual ties," concluded one Republican source. "In 2002, both parties will need all the money they can get64."
What is perhaps most disturbing about this story is the notion that any group with $4 million can torpedo a good idea. "Public Citizen has performed a remarkable service by digging into the interaction between political money and gambling on college sports," said Bill Bradley, a former college basketball star, U.S. senator and presidential candidate, who received an advance copy of this report. "This report is a good reason for those who care about college sports to support campaign finance reform65."
Gary Bauer, the chairman of the Campaign for Working Families, president of American Values and a former presidential candidate, also praised Public Citizen’s investigation. "This report is a must-read for every person who has wondered where the gambling industry money is going and what happens to public policy when it gets there," said Bauer, who also received an advance copy. "It was a riveting and profoundly sad report because it shows that our political system has been infected by an industry that leaves broken lives in its wake66."
Statements of Bill Bradley and Gary Bauer endorsing Public Citizen’s March 15 report, "Folding to the Casino Industry," are below. Both issued statements on March 12 after receiving advance copies of the report. Bradley, a former college basketball star, U.S. Senator and presidential candidate, called a report "a good reason to support campaign finance reform." Bauer, chairman of the Campaign for Working Families, president of American Values and a former presidential candidate, said the report was a "must-read."
WASHINGTON, D.C. - "The leadership in our nation's capitol must act to cut the cancer of gambling dollars out of American politics if we are to avoid further destruction of our citizens' respect for government," Gary Bauer said Thursday. The chairman of the Campaign for Working Families, president of American Values and a former presidential candidate addressed the issue of gambling dollars in politics as Public Citizen released an extensive report on the role gambling dollars played in recent political events.
Bauer continued: "This report is a must-read for every person who has wondered where the gambling industry money is going and what happens to public policy when it gets there. It was a riveting and profoundly sad report because it shows that our political system has been infected by an industry that leaves broken lives in its wake."
"I commend Public Citizen for exposing the incredible financial powerhouse of the gambling industry, which can bring millions of lobbying dollars into politics through a business that makes money by destroying lives. It should offend every pro-family American that casinos take scarce dollars out of a family's budget by ensnaring people in an addictive trap…. And then uses those same dollars to expand the business. I hope that a consensus can be reached on Capital Hill to pass fair campaign finance reform legislation that preserves free speech while stopping the corrupting influence of unlimited soft money."
FOR MORE INFORMATION OR INTERVIEWS, CONTACT KRISTI HAMRICK AT 703-508-3717.
"Public Citizen has performed a remarkable service by digging into the interaction between political money and gambling on college sports. I don't think college athletics should be the equivalent of roulette chips. Most Americans agree. This report is a good reason for those who care about college sports to support campaign finance reform."
1. S. 2021, "The High School and College Sports Gambling Prohibition Act," sponsored by Sen. Sam Brownback (R-Kan.) was introduced Feb. 1, 2000. A similar bill, S. 2340, "The Amateur Sports Integrity Act," was introduced by Sen. John McCain (R-Ariz.) on April 13, 2000. A House companion bill, H.R. 3575, "Student Athlete Protection Act," was introduced Feb. 3, 2000 by its sponsor Rep. Lindsey Graham (R-S.C.) H.R. 3575 had 81 co-sponsors: 40 Democrats, 40 Republicans and one Independent. S.2021 had 21 co-sponsors: 14 Republicans, including Sen. Richard Lugar (R-Ind.), Phil Gramm (R-Texas) and John McCain, and seven Democrats, including Sen. Patrick Leahy (D-Vt.) and John Edwards (D-N.C.) as well as Joe Lieberman.
2. Associated Press, "Committee to consider legislation," Sept. 12, 2000. Sen. Richard Bryan (D-Nev.), a leading opponent of the college gambling bill, said the bill would pass by a "veto-proof majority" if it got to the Senate floor. Sen. John McCain also predicted that the bill would pass the Senate 97-3 in a Sept. 12, 2000 Washington D.C. press conference. At the same press conference, Rep. Graham said the bill – which was approved 19-9 in the House Judiciary Committee – would get close to 300 votes in the full House.
3. National Gambling Impact Study Commission Report, June 18, 1999, pps. 3-18 (recommendation), 2-14.
4. Ismail Turay Jr., "Battle Looms In Congress Over College Sports Betting," Cox News Service, Jan. 24, 2000.
5. U.S. Senate, "Report of the Committee on Commerce, Science, and Transportation on S.2340," May 3, 2000.
6. Patrick Hruby, "Will a proposed federal ban on college sports gambling be enough to stymie scandal?" The Washington Times, Oct. 8, 2000.
7. Stevin (Hedake) Smith as told to Don Yaeger, "Confessions of a Point Shaver," Sports Illustrated, Nov. 9, 1998.
8. Written testimony of Dr. Charles Wethington, Jr., president of the University of Kentucky and chairman of the NCAA Executive Committee. "While we recognize that a ban on collegiate sports gambling will not eliminate all gambling on college sports, it is a significant start. If we miss this legislative opportunity, the job of fighting illegal sports wagering elsewhere will be infinitely more difficult."
9. According to National Gambling Impact Study Commission, the amount of money bet illegally on sports ranges from $80 billion to $380 billion a year. Also see Michael Gannon, "Taking a Gamble," FoxSportsBiz.Com, Sept. 15, 2000. "The Nevada State Gaming Board said only $2.6 billion, about a third of which comes from bets on college games, was legally wagered on sports in the state’s casinos last year."
10. Jeff Simpson, "State Officials Propose Cap on College Bets," Law Vegas Review-Journal, Oct. 12, 2000. Also see National Gambling Impact Study Commission, Background Briefing Paper on Sports Wagering submitted by John Shosky, Ph.D,. Nov. 10, 1998; James Suroweicki, "The Financial Page: The Brilliance of Bookies," The New Yorker Jan. 29, 2001.
11. U.S. Senate, "Report of the Committee on Commerce, Science, and Transportation on S.2340," May 3, 2000.
12. Jeff Simpson, "Betting Ban: Regulators Dump Cap," Law Vegas Review-Journal, Nov. 21, 2000.
13. Rep. Tim Roemer, "Statement Before The Senate Committee on Commerce, Science and Transportation," March 29, 2000.
14. Stephen Weissman and Jamie Willmuth, "Betting on Trent Lott: The Casino Gambling Industry’s Campaign Contributions Pay Off in Congress," Public Citizen’s Congress Watch, June 1999. http://www.citizen.org/congress/reform/betting.htm#*1
Also see Jeff Simpson, "Senator: Bush threat to casinos," Las Vegas Review-Journal, August 5, 2000, reporting "[Sen.] Bryan also credited Sen. Trent Lott, R-Miss., the Senate majority leader, with helping to kill a provision that would have prevented gamblers from using gaming losses to offset gaming winnings on their tax returns."
15. Interview with MGM Mirage spokesman Alan Feldman, Jan. 19, 2001. Also see Jonathan Salant, "Nevada becomes major stop on fund-raising circuit," Associated Press, Oct. 20, 2000: "‘From a business point of view, you look for the opportunity to be able to meet them and explain your point of view,’ said Mike Sloan, senior vice president for the Mandalay Resort Group. ‘Every business wants someone to understand them when they’re legislating against them.’"
16. Dave Boyer, "Hastert Uses Trip To Raise Funds, Woo Gambling Interests," The Washington Times, August 29, 1999.
17. Mark Preston and Jim VandeHei, "Gaming Battle Tips Off," Roll Call Jan. 31, 2000, reports that Davis flew to Las Vegas to request money from Wynn "earlier this month" and, ‘"The fight for casino money is intense,’ said a senior GOP source."
18. Preston and VandeHei, "Gaming Battle Tips Off," Roll Call, Jan. 31, 2000.
19. Jane Ann Morrison, "GOP Leaders Say College Betting Ban Dead," Las Vegas Review-Journal, Feb. 10, 2000.
20. Mark Preston, "NCAA Tries ‘Hail Mary’ on Betting Bill: GOP Leaders Block Legislation But College Coaches Not Ready to Give Up Yet," Roll Call, Feb. 21, 2000, includes statement that "several GOP sources said National Republican Congressional Committee Chairman Tom Davis is the GOP leader who assured Porter the bill was dead."
21. Jane Ann Morrison, "GOP Leaders Say College Betting Ban is Dead," Las Vegas Review-Journal, Feb. 10, 2000.
22. Dave Berns, "Casino Executives Use Lunch to Lobby Against Gaming Bills," Las Vegas Review-Journal, Feb. 17, 2000.
23. Cy Ryan, "Betting Ban in Trouble," Las Vegas Sun, May 1, 2000.
24. Public Citizen interview with Republican political figure (name withheld), Dec. 28, 2000.
25. Public Citizen interview with lobbyist (name withheld), Dec. 5, 2000.
26. Dave Berns, "Casino Executives Use Luncheon to Lobby Against Gaming Bills," Las Vegas Review-Journal, Feb. 17, 2000; Mark Preston, "NCAA Tries ‘Hail Mary’ on Betting Bill," Roll Call, Feb. 21, 2000; Fredrika Schouten, "Bill that would outlaw college sports wagering not good bet," Gannett News Service, Sept. 18, 2000.
27. Public Citizen interviews with Republican staff source (name withheld), Jan. 17, 2001 and another Capitol Hill source (name withheld), Jan. 12, 2001.
28. Jan Moller, "Porter defends GOP visits used to generate money," Las Vegas Review- Journal, Aug. 10, 2000.
29. National Journal News Service, "When Money Talks," National Journal, Oct. 14, 2000.
30. Public Citizen interviews with two GOP staff sources (names withheld), Dec. 6, 2000 and Dec. 28, 2000.
31. Public Citizen interview with GOP Senate staff source (name withheld), Jan. 26, 2001.
32. Public Citizen interview with GOP Senate staff source (name withheld), Dec. 6, 2000.
33. Public Citizen interview with two GOP Senate staff sources (names withheld), Dec. 6, 2000 and Dec. 28, 2000.
34. Mark Asher, "Bill Would Limit Wagering," The Washington Post, April 14, 2000.
35. Public Citizen interview with GOP Senate staff source (name withheld), Dec. 6, 2000.
36. Scott Sonner, "Senator criticizes Dean Smith on gambling bill," Associated Press, Sept. 14, 2000: "Sen. Sam Brownback said this week that Majority Leader Trent Lott of Mississippi assured the bill’s supporters they will get a chance this year to muster 60 votes to break a filibuster by Nevada’s senators.
37. Public Citizen interview with GOP Senate staff source (name withheld), Dec. 28, 2000.
38. A leading NCAA official (name withheld) told Public Citizen on Feb. 6, 2001 that Lott declined repeated requests to meet with NCAA President Cedric Dempsey.
39. Public Citizen interview with Republican staff source (name withheld), Dec. 6, 2000.
40. David Strow, "Most gaming execs favor Bush," Nov. 3, 2000, Las Vegas Sun, reports that Clinton administration unsuccessfully pushed in 1994 to impose a federal tax on gaming: "As a result of that shakedown, the industry became political, and the American Gaming Association was formed," said Bill Thompson, professor of public administration at University of Nevada-Las Vegas. Also see Weissman and Willmuth, "Betting on Trent Lott," Public Citizen, June 1999.
42. Tony Batt, "Wynn shows little charity toward foes of gambling," Las Vegas Review-Journal, Feb. 16, 2000. Wynn also said the ascension of Rangel to Ways and Means Committee chairman would be more important than getting a Nevada representative on the powerful tax-writing committee.
43. Susan Glasser, "Democrats’ Fast Track is ‘Soft Money,’" The Washington Post, Oct. 17, 1999. Page 1. Also see Ethan Wallison, "Democrats Score Big During Las Vegas Fundraiser," Roll Call, July 12, 1999, including a statement from NRCC spokeswoman Jill Schroeder that Democrats have aggressively courted the gambling industry and that Democrats have been "shopping around." Rangel; Jonathan Slant, "Nevada becomes major stop on fund-raising circuit," Associated Press, Oct. 20, 2000. ("At a big oval table inside the clubhouse of the Las Vegas Country Club last month, more than a dozen business leaders shared soft drinks and coffee with the Democrat in line to become chairman of the tax-writing Ways and Means committee if his party recaptures the House. Rep Charles Rangel, D-N.Y. left Las Vegas with $400,000 for the Democratic Congressional Campaign Committee."); and Jane Ann Morrison, "Political muscle may lose punch," Las Vegas Review-Journal, April 3, 2000, reporting Rangel’s plan to hold an April 9 fund-raiser for Rep. Shelley Berkley, D-Nev., at the MGM’s exclusive high-roller area, the Mansion.
44. Susan Glasser, "Democrats’ Fast Track is ‘Soft Money,’" The Washington Post, Oct. 17, 1999. Page 1.
45. Ethan Wallison, "Democrats Score Big During Las Vegas Fundraiser," Roll Call, July 12, 1999.
46. Wallison, "Democrats Score Big During Las Vegas Fundraiser," Roll Call, July 12, 1999.
47. Wallison, "Democrats Score Big During Las Vegas Fundraiser," Roll Call, July 12, 1999.
48. Mark Preston and Jim VandeHei, "Gaming Battle Tips Off," Roll Call Jan. 31, 2000.
49. Mark Preston, "NCAA Tries ‘Hail Mary’ on Betting Bill: GOP Leaders Block Legislation But College Coaches Not Ready to Give Up Yet," Roll Call, Feb. 21, 2000.
50. Public Citizen interview with high-ranking Democratic aide (name withheld), Feb. 21, 2001.
51. Public Citizen interview with Democratic staff source (name withheld), Jan. 17, 2001.
52. Federal Document Clearing House, "U.S. Senator Sam Brownback holds news conference with others regarding college sports gambling bill," (transcript of press conference) Sept. 12, 2000.
53. Public Citizen interview with Alan Feldman, Feb. 8, 2001.
54. Public Citizen interview with lobbyist (name withheld), Jan. 8, 2001.
55. Frederika Schouten, "Foes of college sports betting push for ban," Gannett News Service, Sept. 13, 2000; see also Tony Batt, "Hearing Set for Bet Ban Bill," Las Vegas Review-Journal, May 20, 2000.
56. Public Citizen interview with member of Congress (name withheld), Dec. 20, 2000.
57. Public Citizen interview with Rep. Barney Frank, Feb. 21, 2001.
58. "Betting ban bill passes panel," Las Vegas Review-Journal, Sept. 14, 2000, reports: "Berkley said afterward she lobbied committee members heavily and considered it an accomplishment that most Democrats voted against the anti-gaming bill. ‘I sat down with Conyers and spent a good deal of time explaining the issue from the Nevada perspective,’ she said." Article also says, "Opponents said while they lost in committee, the margin was hardly the slam dunk promised by Graham…Casino industry executives…said the committee vote was not a strong endorsement."
59. Public Citizen interview with Alan Feldman, Feb. 8, 2001.
60. Congressional Record, July 18, 2000, p. S7120.
61. Public Citizen interview with Republican staff source (name withheld), Dec. 28, 2000.
62. Public Citizen interview with Democratic staff source (name withheld), Feb. 23, 2001.
63. Public Citizen interview with Rep. Barney Frank, Feb. 21, 2001.
64. Public Citizen interview with Republican staff source (name withheld), Dec. 28, 2000.
65. Statement by Bill Bradley sent to Public Citizen (via email) March 12, 2001.
66. Statement by Gary Bauer sent to Public Citizen March 12, 2001