Something stinks in Pittsburgh and it's coming from a half built casino. It's also coming out of Harrisburg.Whatever your stance on gambling, it's approved, it's here and I don't see it going away. When this whole thing started, Pittsburgh had some big names with deep pockets bidding for the chance to bring the one armed bandits to town. The problem is two armed bandits from Governor Rendell to the Gaming Board members stuck their greedy little fingers in the deal.
Both losing bidders were better known and well-financed. Isle of Capri was going to build a $300 million dollar casino gambling facility in Pittsburgh and toss in a free arena for the Penguins. In a letter to the state Gaming Control Board, the Pittsburgh Gaming Task Force said the Isle of Capri proposal stood out among the three competing for the coveted casino license. No thanks said the state.
Harrah's also bid and was turned down. Only to later lend money to Don Barden. Apollo Strategic Value Fund LP, which has committed $150 million toward the slots parlor's financing, is part of Apollo Management, one of two private equity firms that acquired Harrah's for $17.1 billion. Harrah's owns a 50 percent stake in Harrah's Chester Casino & Racetrack, near Philadelphia.
So Barden won the prize. Just that fact is puzzling. Don Barden has borrowed money to the hilt. He just defaulted on a $200 million dollar loan. That's not good for your FICO score Don. Yet our government officials placed a big bet on him. Why? What's their payout? They gave him approval despite several concerning facts. Barden was part of a federal investigation in the mid-1990s. That's just the beginning.
In 2005, a federal appeals court ruled Barden's casino in Mississippi committed reverse discrimination by firing a white human resources director and replacing him with a less-experienced black employee.
In 1996, Detroit newspapers reported that a federal elections commission investigation determined that Barden co-signed an illegal loan for $50,000 to a Detroit congresswoman.
In Gary, IN city officials expressed anger when they learned that Barden negotiated a deal with the outgoing mayor to cut his casino's monthly payments to the city. Following those negotiations, former Gary Mayor Scott King went to work for Barden.
I could not help but wonder if Mr. Barden helped fund the gubernatorial campaign for a certain Philadelphia Mayor? From what I found, it doesn't appear that Barden has made any contributions to Pennsylvania politicians. However, he is friendly with Bill DeWeese who is the Democrat Majority Leader of the Pennsylvania House of Representatives. DeWeese reportedly was Barden's guest at the Super Bowl in Detroit.
Now after construction has stopped because of lack of payment, Don Barden has been forced to give 75% control of the half built casino. So who's rides in to scoop up control here? Chicago real estate billionaire investor Neil G. Bluhm.
Bluhm's group is scrambling to keep their own financial backers after failing to earn a license for a planned racetrack and casino in Lawrence County. Still, to rescue Barden, Bluhm and his partners plan to invest $120 million.
Why would a guy with his own financial issues dump $120 million into a volatile project already under scrutiny? Because the gaming board begged him to. Board members urged Bluhm to move quickly to get construction started again. "Come through for us," board member Kenneth McCabe told him.
Bluhm's group Centaur has a financial agreement with a consortium of banks. That agreement stipulates that the Lawrence County project get a $50 million license by July 15, 2008 or risk violating the terms of the loans. Centaur already holds a state harness-racing license for Valley View Downs racetrack and casino, which is planned about 55 miles northwest of Pittsburgh.
That's potentially one guy controlling 3 possible casinos in the area. But wait, there's more!
Bluhm is majority owner of Walton Street Capital who is listed as an investor in the proposed SugarHouse Casino on the Delaware River waterfront in Philadelphia. Construction on the project has been stalled by legal issues and neighborhood opposition since December 2006, when Bluhm and his team won one of two city licenses to build a stand-alone slots parlor in Philadelphia.
Now we are up to one guy having 4 casinos in Pennsylvainia and the main one just happens to be in Philadelphia. How nice for Gov. Rendell. Under Pennsylvania's gambling law, a majority owner of one casino site can have up to a 33.3 percent equity stake in another project. This is shady at best.
Dan Onorato & Luke Ravenstahl issues a statement on Majestic Star Casino:
“We are concerned about the recent issues regarding the casino, its ownership and finances. The residents of Pittsburgh and Allegheny County deserve to be informed about any changes in ownership or commitments made by the licensee. Therefore, we are requesting a presentation by the Gaming Control Board to explain the proposed changes and whether they will affect the casino’s construction timeline and opening date, as well as the funding of the new multi-purpose arena.”
There are a ton of questions and very few answers. Harrah's and Isle of Capri should be sent a note of apology and invited back to the table. Make this wide open for all to see. Forget these sleazy back door deals that leave you guessing as to who's getting paid.
The state has already placed a huge bet with our money and it's looks like they picked a 3 legged, blind horse to run their race. It's time for an investigation into all this.
There was concern about the tie between organized crime & gambling. That concern should include our elected officials in charge of this mess and the gaming board. We will be watching.
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