9:06am

Wed June 26, 2013
Politics and Government

Ban on campaign contributions by gambling organizations was removed from legislation

When state lawmakers approved a bill to permit new gambling casinos in the final hours of the legislative session, they left something out: a provision to ban campaign contributions to legislators from gambling corporations.

When Gov. Andrew Cuomo announced his plan to create new gambling centers in New York, he said he also wanted to ban campaign contributions from gambling entities to state lawmakers.

Legislative leaders agreed. But when the final version of the bill arrived for legislators to vote on in a marathon end-of-session last Friday, the provision to ban the campaign contributions had disappeared.

Bill Mahoney, with the New York Public Interest Research Group (NYPIRG) says he was ready to write a memo on the move to curb campaign donations, during a session when other attempts at campaign finance reform failed, when he discovered that the clause had been taken out.

“This was quietly slipped away at the last minute,” Mahoney said. “Nobody noticed it until about two hours before the bills was going to be voted on.”

The law would create up to four gambling resorts upstate and expand slot-like machines on Long Island.  

None of the proposed reforms on curbing campaign donations were approved during the legislative session, so the current laws still stand. Corporations can give $5,000 to each political candidate, but Mahoney says those restrictions are misleading. There are numerous loopholes, including unlimited donations to so-called party housekeeping accounts, which are then funneled into campaigns. He says corporations can also disguise contributions by having their employees make the donations in a practice known as bundling, or set up companies known as LLCs as subsidiaries.

A report by the government reform group Common Cause finds that the gambling industry spent nearly $20 million dollars in the past two years on lobbying and campaign contributions to New York legislators.

Mahoney says when Cuomo first proposed the ban on casino donations; he was likely operating from the state’s past experience involving gambling, politics, and corruption.

“Historically, gambling money has been a big funder of the political parties in New York state, Mahoney said. “[New York City political organization] Tammany, for example, got a lot of their money from illegal gambling houses, who would pay bribes to Tammany Hall legislators.”

More recently, a 2010 state inspectors general’s report raised questions about former Senate leaders John Sampson and Malcolm Smith’s handling of the expansion of gambling at the Aqueduct Race track, including nearly $100,000 in campaign contributions by a bidder. Since then, Sampson and Smith have been indicted on bribery and embezzlement charges unrelated to the Aqueduct deal.

Cuomo says in the end he had to give up on the provision to ban the campaign contributions, because he couldn’t convince lawmakers to keep it in.

“We couldn’t work out everything,” Cuomo said. “Some things we couldn’t come to terms with.” But Cuomo says all contributions from the gambling companies to politicians will at least be made public.

“There will be full disclosure on everything,” Cuomo said.

Mahoney says legislators could reap the benefits from casinos long before any of the promised jobs or economic recovery occurs from the building of the gambling centers.

“The first sign of casino money in the state will certainly be in legislator’s campaign accounts,” he said.

Voters still have to approve a referendum to permit the new casinos, because they are currently illegal in New York if they are not on Indian lands. Their creation requires a change in the state’s constitution.  

But even if the plan fails at the ballot box in November, the law allows for the building of more slot machines operated through the state lottery division, which are legal in New York. So that means that either way, lawmakers are likely to soon receive more large campaign donations from the gambling industry.   

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