Former Chicago Police Supt. Jody Weis joined the chorus of opposition to the state’s gambling expansion bill last week, warning that if it is implemented, “political corruption and crime syndicate infiltration will follow.”
Yet the concerns of Weis and other critics are largely addressed in the actual text of the legislation, a Chicago News Cooperative analysis of claims about the 400-page bill found.
Weis, who is now deputy director of the Chicago Crime Commission, called the bill “critically flawed due to lack of regulatory safeguards” and said it was “beyond my comprehension how the Illinois legislature passed this bill.” Chicago Crime Commission Executive Vice President Art Bilek said the bill is a “quagmire of gambling sinkholes and hidden reductions of regulatory control.” Members of the mob would be “standing in line” to apply for licenses, he warned.
Weis, Bilek and Illinois Gaming Board Chairman Aaron Jaffe, the state’s top gambling regulator, have all said the legislation — which clears the way for a Chicago casino and four others statewide and adds slot machines at racetracks — will allow political corruption and organized crime to infiltrate Illinois casinos.
“The Chicago Crime Commission does very good work, but in the gaming bill, they see things that aren’t there,” said state Rep. Lou Lang (D-Skokie), the bill’s House sponsor. “They see crime under every rock.”
The bill adheres to many of the existing procedures for awarding casino licenses, which the Illinois Gaming Board just completed for the newly opened Rivers Casino in Des Plaines. One substantial difference is that day-to-day operations of a Chicago casino would be handled by a separate staff, executive director and board appointed by Mayor Rahm Emanuel.
Jaffe has said the separate oversight creates a dangerous situation by dividing regulatory authority.
But the bill calls for the following checks and balances:
*The five Chicago Casino Development Board members who would oversee development of a casino would be subject to background checks and approval by the Illinois Gaming Board. They could be removed at any time by the mayor or the gaming board if they failed to execute their duties appropriately. Strict rules require them to report any communication between themselves and any entity that could be construed as a conflict of interest.
*An executive director overseeing the Chicago casino would undergo background checks and also must be approved by the Illinois Gaming Board.
*The Illinois Gaming Board must approve the temporary and permanent facility locations for a Chicago casino and any time extensions at the temporary site, if construction is delayed at the permanent spot.
*All potential licensees, shareholders, key players and investors of the new facilities would be subject to background checks the gaming board currently mandates.
*Contracts at the Chicago casino would be vetted and awarded in accordance with current gaming board rules.
*Whichever operator the Chicago Casino Development Board selects to run the Chicago casino must win final approval from the Illinois Gaming Board. Should concerns surface down the road, the gaming board can revoke the contract.
Contract Concerns
Jaffe, a former state lawmaker and retired Cook County judge, and Bilek, a retired law enforcement official, have raised concerns about contracts being awarded to corrupt entities. The construction and operation of casinos is a multimillion dollar business with a history of ties to organized crime. Jaffe said the bill doesn’t allow the gaming board to properly vet vendors at the Chicago casino.
But the bill requires any contracts less than $25,000 be let and bid competitively. Exceptions to competitive bidding must be approved by the Illinois Gaming Board. Contracts above $25,000 would automatically be awarded to the lowest bidder, according to the bill.
Casino contracts do not currently require board clearance. The board does require casino operators to have an approved system in place to make sure vendors undergo background checks.
Sponsors of the gaming bill have acknowledged the legislation is vague on contract oversight, but they are willing to strengthen the language in a follow-up bill to make certain vendors and contractors are vetted in accordance with gaming board rules. The intent of the bill, they said, was to keep current oversight on contracts, construction, materials and vendors in place.
“The gaming board has total oversight, period, no exception,” Lang said. “Everything is subject to gaming board rules and regulations.”
A spokesman for Senate President John Cullerton (D-Chicago) said the language could be tightened to reflect that.
“We still don’t have any specific problems identified from the governor’s office, but if it needs to be more specific, we would be happy to address that in follow-up legislation,” John Patterson said. “Everything is still under the gaming board’s control.”
Mob Influence
The gaming board’s Jaffe and other critics have warned that the board does not have enough staff to properly vet the thousands of new casino employees the bill will create openings for. Last month alone the board reviewed more than 600 applicants for positions at casinos and racetracks.
Bilek, of the Crime Commission, said he was “suspicious and concerned” lawmakers purposely designed an expansion bill so enormous, the gaming board couldn’t possibly keep up.
Though the bill’s supporters dispute that claim, they do agree the board will need to hire more staff, and the legislature — according to Lang and Cullerton — is not opposed to helping facilitate that.
However, the gaming board’s staffing levels would be addressed in its appropriations bill, not in the gambling expansion bill, which requires a separate act of the legislature. Lang said he would “be happy to” introduce a bill supplementing the board’s budget if asked. Typically, state agency directors testify before House and Senate appropriations committees to request more money during the spring session. The gaming board did not testify in Springfield then because the gaming bill had not yet passed and the agency does not take positions on pending legislation, Illinois Gaming Board spokesman Gene O’Shea said in May.
Jaffe did not make his concerns about the bill known, and neither did the Chicago Crime Commission, until it passed both chambers on May 31.
When lawmakers legalized video poker two years ago they gave the gaming board more money to allow it to hire dozens of new employees. But that hiring push was put on hold when an Illinois Appellate Court in January struck down the video poker law. The board wanted to wait for a final court decision. That came last month from the Illinois Supreme Court, which reinstated the video gaming law. Gaming board member Eugene Winkler said the agency will now focus on expanding its staff.
The gaming board last year was encouraged to take its hiring practices slowly, given the state’s budget woes and a push from Gov. Pat Quinn’s office to keep employee headcount down, according to a source familiar with the board’s operations. And it takes time to hire, train and do background checks for investigative positions, the source said.
Bilek also criticized provisions in the bill that force the gaming board to choose whether to approve casino licenses within one year, racetrack licenses within 120 days, and video poker licenses within 60 days.
But the expedited time frames were necessary, lawmakers and bill supporters have said, because of the gaming board’s delay in approving new licenses. The gaming board took two years to get the Des Plaines casino up and running. Legalized video poker, which the legislature approved in 2009, is not yet operational.
Chicago Casino License
The crime commission’s Bilek has questioned why the bill makes the gaming license for Chicago more difficult to revoke than those for other sites. Pulling Chicago’s license would require an act of the General Assembly; current law gives that authority to the gaming board.
“One of the quiet features of the bill is a perpetual license for a casino in Chicago,” Bilek said. “It’s an unknown. There are none in Las Vegas, none at the 10 existing casinos and yet Chicago is given a license that can only be taken away by the General Assembly.”
That’s by design, according to Lang, because the license is owned by taxpayers — the only such taxpayer-owned facility in the country. Hundreds of millions of taxpayers’ dollars are likely to be spent investing in and building the casino, and the bill is written to protect taxpayers from being “out” on their investment, Lang said.
Up to Quinn
The bill remains in the state Senate where Cullerton placed a “hold” on it moments after its passage. He has been negotiating with Quinn’s office to develop a follow-up bill that addresses Quinn’s and others’ concerns in an attempt to avoid a total veto.
Cullerton initially said he would hold the bill until the fall veto session, which starts in October. But Lang and others want him to release it sooner so they can develop a game plan. If Quinn alters the bill or vetoes it outright, they’ll have to try to pass it again.
“It’s been my desire to make sure the bill got to the governor’s office so that there would be action on it before or during veto session,” Lang said.
Quinn has not said what he’ll do with the bill when it arrives on his desk. He called it “excessive” the morning after the legislature adjourned from its spring session. Quinn has been meeting with supporters and opponents — including on Friday with former Gov. Jim Edgar, a proponent — as he makes up his mind.
“I don’t think he’s there yet,” Quinn spokeswoman Brooke Anderson said. “I would say that he has a number of concerns about the bill in general. He is thoroughly reviewing it, page by page, and meeting with all sides. He believes any expansion needs proper and strong oversight, so there are a number of factors the governor is considering.”
Critics, especially Bilek, hope the governor will at least veto one section of the bill involving the position of gaming board administrator. The bill calls for the administrator to become a gubernatorial appointee confirmed by the Senate. The gaming board currently chooses the administrator.
The prospect of making the gaming board administrator a gubernatorial appointee raises alarm bells among regulators who remember former Gov. Rod Blagojevich’s attempts to influence a proposed casino in Rosemont. Visit chicagonewscoop.org for more on the story Wednesday.
Kristen McQueary covers state government as part of a partnership between CNC and WBEZ