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Best of Howard Stutz

Gaming Guru

Howard Stutz
 

Gambling And Politics: Following The Money

14 March 2005

Eliminating soft money contributions from the political process played a major role in shrinking the amount Nevada's largest casino companies donated during the 2004 federal election cycle.

The industry's weight on Capitol Hill, however, hasn't diminished.

While four- and five-figure donations to re-election campaigns can lead to face time with the recipients, longtime relationships with members of Congress and the emerging influence of Nevada Democratic Sen. Harry Reid, now the Senate minority leader, gives the gaming industry increased access.

Meanwhile, with mounting monetary contributions, American Indian tribes have become a new competitor in the battle for political influence.

"Money clearly buys access, and with access comes influence," said Larry Noble, executive director of the Center for Responsive Politics a nonprofit, nonpartisan research organization tracking money in politics. "There's no doubt that gaming has bought access."

In 2004, the casino-gambling industry ranked No. 35 among the 80 industries charted within the miscellaneous business sector, accounting for $10.2 million in total contributions during the cycle, figures on the center's Web site, opensecrets.org, show.

However, $6.6 million of that total belonged to the Indian gaming subindustry.

Of the top 20 contributors to federal races within the casino-gambling industry, 13 were tribal governments that operate casinos.

"There are a different set of rules that apply to the tribes and some of the different prohibitions we face do not affect them," said Frank Fahrenkopf, president of the American Gaming Association, which serves as the casino industry's top lobbyist in Washington, D.C.

"Sometimes, I jokingly say that I have been neutered by Indian gaming issues," Fahrenkopf said. "The Nevada Resort Association was almost torn apart over Indian gaming. "The tribes have obviously been very strong in the political arena in Washington, D.C."

During the 2004 campaign, MGM Mirage was the largest contributor among casino companies, donating $485,485 to federal races.

The Morongo Band of Mission Indians, the Southern California tribe operating the Morongo Casino 20 minutes west of Palm Springs, was the second-largest federal-race contributor with $474,445.

The Mashantucket Pequot Tribe, operators of the large Foxwoods Resort in Mashantucket, Conn., was the industry's third-largest campaign contributor, donating $403,362.

Indian gaming leaders say their contributions are meant to benefit the interests of the entire tribal community, not just the casino.

Their interests include land claims, water use and environmental concerns. Gaming, they say, has given tribes the financial wherewithal to become a political force.

"Unlike MGM Mirage, which is concerned with just gaming matters, we have many other issues that affect our members," said Anthony Miranda, chairman of the California Nations Indian Gaming Association and a member of the Pechanga Band of Luise?o Indians near Temecula. "Gaming has given the tribes the economic resources to participate in the political process where our tribal governments can talk with government representatives on both the state and federal level," he said.

"Our concerns are being heard. It doesn't surprise me that the tribes are becoming larger contributors."

MGM Mirage spokesman Alan Feldman said he was a little perplexed by the amount of the tribes' contributions.

"We're in multiple jurisdictions and it's intriguing that a group with a single casino in one state contributed almost the same amount as us," Feldman said. "It makes you wonder what that's all about."

Anti-casino advocate Tom Grey, executive director of the National Coalition Against Legalized Gambling, said he wasn't surprised tribal casinos were donating more to campaigns.

With Indian gaming earning an estimated $18 billion in 2004, the tribes, he said, don't want any government interference.

"There is so much federal legislation being discussed that the tribes have become big players," Grey said. "It's almost become a battle of the titans."

Station Casinos spokeswoman Lesley Pittman said the gaming industry would be derelict if it didn't participate in politics.

Her company, which ranked fourth in 2004 on the federal level with $342,379 in contributions, gets involved because of its employee base, numbering close to 10,000 workers in Las Vegas.

"We have made substantial investments in our businesses, and the livelihood of our employees depends upon us keeping involved in the process," Pittman said. "It's our job to make sure our elected officials understand our industry."

Feldman expects MGM Mirage to fill a void that might be left when the company completes its purchase of Mandalay Resort Group, which had the seventh-highest total gaming industry contributions in 2004 with $297,555.

"I imagine our PAC (political action committee) money will grow," Feldman said. "(Mandalay Resort Group) didn't put as much emphasis on PAC money as we have."

MGM Mirage Chairman Terry Lanni, during the recent Nevada Gaming Commission hearings into the buyout of Mandalay, said that despite the company's size, he doesn't employ "clout" with a campaign contribution.

"I don't like the word clout," Lanni told commissioners. "I look at a contribution, quite frankly, as if we have an issue and we want to talk them, that gives you some access. I think that's true at the city, county, state and federal levels."

In the past 16 years MGM Mirage has been Reid's top campaign contributor. The senator raised more than $158,500 from the company's political action committee and employees.

Fahrenkopf has watched campaign cycles ebb and flow for several decades. He served a stint as chairman of the Republican Party in the 1980s under President Reagan.

Eliminating soft money changed campaign dynamics considerably, he said.

Through McCain-Feingold, the bipartisan campaign finance reform act signed into law in 2002, soft money -- large sums donated to national political parties by corporations, labor unions and wealthy individuals -- was banned. The companies had to form political action committees to donate to various parties.

In 2002, casino gambling interests contributed nearly $15 million to federal races, including almost $8.6 million in soft money.

"(McCain-Feingold) changed things considerably. It's a lot different because it's all hard money now," Fahrenkopf said.

Gaming executives' political attitudes might inspire their companies' donation habits, Fahrenkopf said. The association tries to encourage casino companies to give widely to different preselected pro-gaming politicians in Congress.

However, casino companies that operate in multiple markets may choose to concentrate their donations locally to candidates of their own choosing.

The association tries to influence politicians both with money and experience. The group will invite politicians to meet workers and executives to see casinos in action.

"We try to get members of both parties out to Las Vegas to take them around and show them how our system of regulation works.

"Yes, they may have a fund-raiser during that trip but we also give them an education. For example, we'll put them in a room with a bunch of employees and they can get to understand their interests and concerns."

Democratic candidates received $5.8 million from casino companies while Republicans collected $4.4 million in 2004. Tribes gave 66 percent of their money to Democrats.

Gaming as a whole, both tribal and nontribal interests, gave the bulk of its money, 65 percent, or $6.6 million, through PACs.

The top five recipients were four of the five-member Nevada congressional delegation that campaigned in 2004, and Rep. Frank LoBiondo, R-N.J., who represents Atlantic City.

Nevada candidates receiving gaming money were Reid and congressional incumbents Jim Gibbons, Shelley Berkley and Jon Porter.

President Bush's re-election campaign was the lead recipient of total gaming money: $340,363, closely followed by Reid, who collected $310,213 in his landslide re-election effort.

The top tribal gaming recipients weren't as successful.

Indian casinos provided $146,900, the most for any candidate, to former South Dakota Democratic Sen. Tom Daschle's total gaming war chest of $183,900. Daschle lost a close election to Republican John Thune.

The tribe's second largest beneficiary was Oklahoma congressional candidate Kalyn Cherie Free, an American Indian, who received $130,350 from gaming, of which $127,600 came from tribal enterprises.

Free lost decisively in a Democratic primary to Rep. Dan Boren.

Top Gaming Industry Contributors to Federal Candidates and Parties

Company

Amount

Democrats

Republicans

MGM Mirage

$485,485

51 percent

49 percent

Morongo Band of Mission Indians

$474,445

62 percent

38 percent

Mashantucket Pequot Tribe

$403,362

57 percent

43 percent

Station Casinos

$342,379

21 percent

79 percent

National Thoroughbred Racing Assoc.

$303,950

25 percent

75 percent

Saginaw Chippewa Indian Tribe

$303,230

35 percent

65 percent

Mandalay Resort Group

$297,555

33 percent

67 percent

Caesars Entertainment

$268,415

65 percent

35 percent

Wynn Resorts Ltd.

$266,391

6 percent

94 percent

Harrah's Entertainment

$261,830

62 percent

38 percent

Top Recipients of Contributions from Gaming

Candidate

Amount

1. President George W. Bush

$340,360

2. Sen. Harry Reid, D-Nev.

$310,213

3. Rep. Jon Porter, R-Nev.

$239,968

4. Rep. Shelley Berkley, D-Nev.

$194,941

5. Sen. Tom Daschle, D-S.D.

$183,900

6. Rep. Jim Gibbons, R-Nev.

$147,094

7. Kalyn Cherie Free, D-Okla.

$130,350*

8. Rep. Richard Gephardt, D-Mo.

$126,250**

9. Rep. Patrick Kennedy, D-R.I.

$119,370

10. Sen. Ben Nighthorse Campbell, R-Colo.

$118,650

15. Sen. John Kerry, D-Mass.

$96,050**

*Lost Democratic primary for Oklahoma's 2nd Congressional District

**Unsuccessfully ran to be president of United States

Source: Opensecrets.org