Financing Behind D.C. Slots Murky

Gambling experts said the initiative would give the District the most lenient rules in the nation.

In states that have legalized gambling, "anyone that's a beneficial owner would have to undergo a background check," said Sebastian Sinclair, a gambling consultant at Christiansen Capital Advisors. "It's consumer protection. To make sure there is no organized crime influence . . . to let customers know the games are fair and they're not going to get cheated."

William A. Bible, former chairman of the Nevada Gaming Control Board, chuckled when told of the rules proposed in the D.C. initiative. He called them an open invitation to "Mafia Bank Inc."

Whether D.C. residents will get a chance to vote on the initiative depends on a decision by the D.C. elections board. Through eight days of public hearings, the board has heard allegations that the petition drive in support of the slots initiative was marred by widespread violations of local election laws. Some D.C. residents said their signatures were forged on petitions circulated by someone else. The board must decide whether enough signatures are legitimate to earn the initiative a spot on the ballot.

Through hours of testimony, Newell sat alone in the hearing room, sometimes jotting notes. When asked about the initiative's prospects, he said he was optimistic.

Newell repeatedly has refused to discuss his relationship with Scott and Baldwin, and North Atlantic's relationship with Bridge Capital, a private lending firm Baldwin founded in Nevada in 1995. The company moved last year to Frederiksted, where it has qualified for an economic development program that gives the firm and its owners a 90 percent exemption from federal income taxes for 15 years.

In its application for the program, Bridge described itself as an investment and consulting firm "with a focus on clients engaged in casino/gaming acquisitions and operations." Silver would not say whether Bridge intends to invest in the D.C. gambling operation. Scott and Baldwin did not respond to messages left at 17 Strand.

Newell also has rebuffed requests for personal information. In June, he told a reporter that he had "a broad background in lending, hotel operations and projects like this around the country." Asked more recently to list some of those projects, Newell said, "I'm not going to comment."

Information gleaned from a number of sources, including public documents, corporate records and interviews with people who have done business with Newell, paints a portrait of a small-town boy from Northern Idaho who has long chased great wealth without obvious success.

Some of the few facts Newell has publicly disclosed about his life could not be verified. For example, Newell claimed through a spokeswoman to have served as "director of the Spokane Economic Development Council." But no one at the Spokane Area Economic Development Council, the Spokane Neighborhood Economic Development Alliance or the Spokane Regional Chamber of Commerce knew who he was.

"We did all the checking we could. Nobody's heard of this guy," chamber spokesman Jeff Selle said.

Newell also claimed through a spokeswoman to have "owned 100 percent of the Chaparral Hotel and Casino on the Las Vegas strip." And Newell told Ray that he "operated casino activities in Las Vegas at one point," Ray said.

But Nevada gaming officials have never heard of Newell. Public records indicate that he briefly owned the Chaparral in 1996, when it was known as the Lone Star. But the financially troubled hotel has never held a gambling license, said Keith Copher, chief of enforcement for the Nevada Gaming Control Board, who said the hotel was torn down several years ago.

Ray has defended Newell. In June, Ray said he had "done due diligence on Rob" and concluded that Newell "has invested and operated in a lot of arenas with major companies that clearly demonstrate he's a very good businessman."