Illustration by Mark Reusch

House speaker John B. Harwood doesn't take part in legislative votes having to do with Lincoln Greyhound Park. The powerful legislator removes himself from meetings and tallies on the subject and other gambling-related matters since his law partner, Daniel McKinnon, represents Lincoln Greyhound. Harwood is so intent on maintaining his distance that he won't even take questions from reporters, an assistant says, about the prospect of a Narragansett Indian casino in Rhode Island.

To critics, though, Harwood is at the center of a web of obstacles blocking the Narragansetts' long-sought casino, from strong legislative support for Lincoln Greyhound Park and Newport Grand Jai Alai, which possess a lucrative and growing monopoly on gambling in the state, to the way in which the tribe's proposals -- and the right of Rhode Islanders to vote on them -- were effectively deep-sixed in 2000 and again this year.

This time around, the House Finance Committee decided March 27 to create a seven-member subcommittee that will study the potential impact of a glittering Foxwoods-style casino in West Warwick. The 16-1 vote makes it unlikely that the Narragansetts will be able to get their casino proposal, which requires approval in a statewide referendum, on the ballot until at least November 2004.

Supporters of the move to create the study commission, including Representative Gordon Fox (D-Providence), chairman of the House Finance Committee, have disinterested company in arguing that the impact of a casino isn't something to be taken lightly. Part of the reason is that gaming revenue is the third largest pillar of the state budget, and much of this annual $253 million infusion comes from the nearly 2500 video lottery terminals (VLTs) at Lincoln Greyhound Park and Newport Grand Jai Alai. Indeed, officials at Lincoln and Newport cite the high percentage of VLT revenue returned to the state -- 51 and 57 percent, respectively -- in saying that they seek only a level playing field. There's also sharp disagreement about the extent to which the Narragansetts' envisioned casino would diminish business at Lincoln and Newport.

Fox cites the pursuit of an advantage in the debate by well-financed special interests in articulating the need to examine the issue and establish a regulatory plan before potentially clearing the way for a casino. "We need to arm the people of Rhode Island prior to opening that gate," he says. "The people will have the ultimate decision."

For the Narragansetts, though, who have stewed in frustration as fresh obstacles have steadily been put in their path, the vote to create the study commission smacks of another dose of paternalistic double standards. "None of this was ever studied," says Chief Sachem Matthew Thomas, referring to the presence of scratch tickets and expanding numbers of VLTs at Lincoln and Newport. "Now that the tribe's in [with a casino proposal], this has to be studied? We always knew it would be an uphill battle, unquestionably. We just feel strongly that we should have the opportunity to put this before the people. I don't know how to put it any other way. You can't tell an entity or an Indian tribe one thing and every time we get up to the plate, uh-huh, wait a minute. It's just amazing the crumbs they throw at us."

INDIAN GAMING has become huge business in the US, with some 325 casinos in more than 28 states generating $10 billion in annual revenue. Launching a casino has been relatively easy for most federally recognized tribes, and gaming has helped to reverse the legacy of poverty and social ills that came with the conquest of the American Indians and their confinement to reservations. Two such examples of this remarkable reversal of fortune can be found in nearby Connecticut, roughly 30 miles from Providence: Mohegan Sun and Foxwoods, which was founded in 1992 by the Mashantucket Pequots, the Narragansetts' historic rivals.

As previously reported in the Phoenix (see "Casino games," News, January 20, 2000), politicians in Rhode Island opposed the Narragansetts' efforts to establish a casino virtually from the start. After court fights and other forms of wrangling, the tribe was exempted from the Indian Gaming Regulatory Act when the late US Senator John Chafee inserted a controversial rider into a 1996 law, meaning that the Narragansetts' proposal must be approved in a statewide referendum.

Then, in 1998 -- one year before the tribe found a very willing host community in economically depressed West Warwick -- the General Assembly passed a law that gave itself the right to determine if a casino question should be placed on the ballot. Former House Majority Leader George Caruolo, who helped to push through the law, represented the Mashantucket Pequots, after ending his career as a legislator, according to a source who requested anonymity. Caruolo didn't return calls seeking comment.

Teaming with West Warwick and Boyd Gaming Corporation of Las Vegas, the Narragansetts got stymied in the House Finance Committee on a 10-7 vote in 2000 when they sought to place their proposal on the ballot. And it hardly bolstered the tribe's confidence this time around when people with ties to Harwood, including Joseph DeLorenzo -- who was employed at the time as a deputy secretary of state -- unsuccessfully tried to interest the tribe in partnering with Harrah's Entertainment. Boyd and the Narragansetts reunited as partners in February after having previously severed their ties.

Randy Noka, the first councilman of the Narragansetts says he was emerging from an economic development summit at the State House in February when DeLorenzo approached him. "He initially asked me, `Why'd you go with Boyd's? Why didn't you go with Harrah's?' " says Noka. "I said, `Boyd gave a better deal.' Noka says DeLorenzo told him the tribe should have went with Harrah's, and that the casino wasn't going to make progress this year, although there was no guarantee of a better outcome with Harrah's. DeLorenzo, who has offered a different version of events, didn't return a call seeking comment.

Backers of the tribe are also troubled by the way that two of the members of the casino study commission, Representative Paul V. Sherlock (D-Warwick), who will chair the group with Fox, and Representative Paul W. Crowley (D-Newport), are friends, respectively, with former legislators Edward Dodd, an adviser to the management of Lincoln Greyhound Park, and Chris Boyle, a lobbyist for Newport Grand Jai Alai.

It's these kind of things that lead Thomas and the tribe's supporters to believe that legislative support for Lincoln and Newport has played a big part in slowing down the Narragansetts' casino proposals. Boosters like Mike Levesque, a former West Warwick mayor who co-founded the group West Warwick 2000 to advocate for the casino two years ago, can barely contain their outrage. "They're still in the Lincoln and Newport protection plan and they're not letting anything interfere in their relationships with the casinos in Rhode Island," Levesque asserts, referring to the General Assembly. "The 800-pound gorilla is Lincoln. I still get a big kick from people referring to it as a dog track." Making note of Lincoln Greyhound's UK-based owner, Wembley PLC and jobs offered to the friends and relatives of legislators, he adds, "It's a cathouse owned by a British madam who doles out favors to the boys on Smith Street."

Lincoln Greyhound, which returns about $105 million in VLT revenue to the state, compared with $33 million from Newport Grand Jai Alai in fiscal 2002, certainly is the more lucrative of the two. The introduction of VLTs revived the fading dogtrack, which was floating near bankruptcy in the early '90s. But Dan Bucci, the CEO of Lincoln Greyhound, and Diane S. Hurley, the general manager of Newport Grand Jai Alai, cite the same argument of equity and fairness in rejecting suggestions of favoritism from the General Assembly.

"We have to compete in the marketplace," Hurley says. "What we would ask is that there be a level playing field regarding taxation," meaning that the state's percentage of net revenue from a casino should approximate the 51-to-57 percent of the VLT take at Newport and Lincoln.

Under the Narragansetts' proposal, Bucci and Hurley say, the state would receive 20-something percent of the net revenue. And Bucci says the Narragansett casino would produce a roughly equivalent amount of state revenue as Lincoln while dwarfing it in stature, geographical reach, and operating hours. "You don't have to be a nuclear scientist to understand the inequities of the proposal," he says.

Levesque, however, likens comparing the tribe's private casino plan with Lincoln and Newport, which receive a degree of public subsidy, as apples and oranges. Thomas disputes the 20-something percentage cited by Bucci and Hurley, although he acknowledged, in a worst-case estimate, that the state's share of revenue from the casino would be roughly equal to the $105 million produced by Lincoln's VLTs. Regardless, boosters contend that the casino would produce a net gain for the state of $100 million in additional revenue.

For casino supporters, time is of the essence. They point to the way in which the Wampanoag tribe of Martha's Vineyard hopes to build a casino in southeastern Massachusetts. Lawmakers in Massachusetts are reportedly eyeing casino revenue as a way to fill a multibillion-dollar budget gap.

Fox, however, cites the preoccupation of legislators with Rhode Island's $70 million budget shortfall and the lack of help that a casino could offer in the current or next fiscal year as part of the rationale for the study commission, which is scheduled to report its findings by April 2003. The lawmaker, who says he originated the idea for the study commission, describes it as consistent with the best interests of the state. With Boyd and Harrah's pelting each other with unflattering charges and counter-charges, a thorough and open process represents a sound approach for vetting the Narragansetts' casino proposal and dispelling the related suspicion and speculation, he says. "I'm a big believer in the therapeutic process of sunshine," Fox says.

The House Finance Committee chairman, who supported the placement of the tribe's question on the ballot in 2000, says Harwood was "totally not involved" in the matter. And Fox remains untroubled by the social connections between some members of the study commission and representatives of Lincoln and Newport, attributing it to the state's small size. "This is Rhode Island," he says. "We all know everyone. Everyone knows one another. I believe they [Sherlock and Crowley] take their roles very seriously."

In separate interviews, Sherlock and Crowley dismissed suggestions of a possible conflict and said their opposition to placing the Narragansett casino proposal on the ballot in 2000 and 2002 was based on a desire for more information about the impact or a belief that the earlier plan didn't represent a good deal for the state. "I don't even know what Ed Dodd does," says Sherlock. "I think he may work at Lincoln. So does the governor's brother. What that has to do with my decision-making is about zero or minus."

Crowley says his responsibility as a legislator includes probing the casino issue, and echoing Bucci and Hurley, he cited the Narragansetts' casino proposals as unattractive deals for the state. "One of my concerns is that the average voter is never going to ask all these questions," Crowley says. "They're just going to be sold a shiny new car."

The concept of studying the effect of casino isn't without support outside of the General Assembly. "I think it is a complex issue to go forward with a casino, just given the possible consequences on the state budget and the various social consequences of gambling," says Darrell West, a professor of political science at Brown University. "Right now, the state budget is dependent on the lottery -- it's one of the biggest items in the budget. We don't really have strong evidence of how a casino would affect lottery revenue. I think it's prudent to do a study to try to sort out those issues."

The editorial page of the Providence Journal, which is hardly enamored with Speaker Harwood, also expressed wariness last month about the prospect of a casino gaining unstoppable momentum. Referring to the DeLorenzo controversy, which involved other individuals with ties to Harwood or Cranston politics, the paper editorialized, "All of this goes to show that citizens should remain deeply skeptical of any further expansion of gambling in Rhode Island. One can imagine how the casino industry might use its enormous power and wealth in the cozy Ocean State."

AT ITS MOST basic, the debate over a establishing a casino in West Warwick represents a conflict between the desire of the Narragansett Indians to raise their fortunes and the advisability of significantly expanding gambling in the state. But when it comes to the bombast and intrigue that marks this issue -- and the tens of millions of dollars that are at stake -- nothing is ever quite so simple.

Still, for all the fair criticism that can be made of gambling, it's clear that Lincoln Greyhound Park, Newport Grand Jai Alai, and those that benefit from their business are among the main beneficiaries of preserving the status quo.

Although Harwood has taken pains to remove himself from gambling-related votes and meetings, reformers focus on the fact that the speaker's law partner, Daniel McKinnon, has long been the counsel for Lincoln Greyhound. Interest in the topic hasn't been dampened by the news, as the Journal reported in January, that a federal grand jury was probing allegations made last year against Wembley USA by two former company executives. Among the claims in a wrongful-termination lawsuit is an allegation that a scheme had been hatched to pay millions of dollars to an unspecified Rhode Island lawyer.

Bucci, who has denied any improprieties in connection with the lawsuit, says the Narragansetts' envisioned $500 million casino "would devastate our operation. "I don't think that any prudent observer of the gaming scene would expect a track with VLTs to be viable with a full-blown Indian casino only about 30 miles away."

But state Senator Stephen D. Alves (D-West Warwick), who recently introduced a bill seeking to have the Narragansetts' casino proposal included on the November ballot, contends there's enough business to go around. A study, commissioned by the tribe and completed by Christiansen Capital Advisers LLC, described a potential $1 billion gambling market in Rhode Island. Under different scenarios described in the study, the current take from VLTs in Newport and Lincoln would drop with the introduction of a casino, increase by $5 million with the addition of coin-fed slot machines, and climb to $300 million with the coin-fed slots and additional VLTs.

At any rate, casino critics are doubtful of the tribe's numbers. Alves is confident that his bill, which has 24 cosponsors and is tentatively scheduled for a hearing Tuesday, May 7, will pass the Senate Finance Committee. Even if the measure passes the Senate, though, the House will likely be another story.

Casino proponents hope the Alves' Senate bill will put pressure on the House, and they plan to make the long-besieged right of Rhode Islanders to vote on gaming initiatives an issue in selected fall races. While casino supporters claim that the public is on their side, it remains to be seen if the issue will resonate will voters.

As far as Harwood goes, McKinnon, who didn't return a call seeking comment, cited, in a 1999 interview with the Journal, the presence of a metaphorical "Chinese wall" around Harwood's desk at their Pawtucket law practice that separates the speaker from matters related to Lincoln Greyhound.

Not everyone is convinced, however, that Harwood is so disinterested. H. Philip West Jr., executive director of Common Cause of Rhode Island, says there's no question that McKinnon "in the long run, will benefit from anything that preserves Lincoln Greyhound's exclusive franchise in the northern part of the state. My guess is that his legal fees are not directly related to the gambling take, and I don't want to be so naïve to suggest that, but what I am suggesting is that his link to the speaker may be a factor in his getting the job in the first place."

West doesn't discount the importance of examining the impact of a casino. But he also cites a prediction made by a knowledgeable State House insider after the House Finance Committee voted in favor of the study commission. "It invites a bidding war between Boyd and Harrah's for the next two years in terms of campaign contributions to the leadership and other `bennies,' " West says. "Both sides now are eager to ingratiate themselves with the House leadership that will make the final decision whether or not to allow the West Warwick casino to go forward. They will control the commission that will write the recommendations. They will make sure that whatever the commission recommends is fully in line with they want to happen. That's the way it works."

Members of the study commission, however, cite the need for more information. "I just believe deeply that it's a very complicated issue of which neither the legislature nor the general public is fully informed," says Sherlock. "I believe it is our responsibility, even though it may be late in coming, to become fully informed prior to a public vote."

Although the House Finance Committee has twice stopped attempts by the Narragansetts to place the casino question on the state ballot, the legislator-dominated state Lottery Commission has typically embraced proposals to expand gambling in Rhode Island. In April 1999, for example, the commission, six of whose nine positions are filled by legislators (with three appointments from Harwood, and three from the Senate majority leader), narrowly voted to raise by almost 50 percent the number of video lottery terminals at Lincoln Greyhound Park and Newport Jai Alai.

This concentration of legislative power -- with Rhode Island being the only state that allows legislators to serve as voting members of a lottery commission -- is part of what inspired reformers to seek the placement of a question on the November ballot that could more evenly distribute legislative and executive power in the state (see "Unbridled power," September, 28 2001). On April 10, however, the bill was effectively killed when the House, on a 49-38 vote, referred it back to the Judiciary Committee.

There's a sharp difference, of course, between ballot questions that could establish a casino or introduce a different form of separation of powers in Rhode Island. There's also a contrasting motive in why a majority of legislators would oppose these efforts. But for critics, the two matters both highlight the General Assembly's adamant unwillingness to act against its own interests.

Ian Donnis can be reached at idonnis[a]phx.com.

Issue Date: May 3 - 9, 2002