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Slots Barred From Ballot

D.C. Calls Flaws 'Monumental'; Appeal Is Planned

By Lori Montgomery and Serge F. Kovaleski
Washington Post Staff Writers
Friday, August 6, 2004; Page A01

The D.C. elections board ruled yesterday that a petition drive to legalize slot machines failed to collect enough valid signatures to qualify for the Nov. 2 ballot, ending for now a rushed and ambitious campaign by offshore investors to open a gambling hall in the nation's capital.

Though the drive produced more than 56,000 signatures -- three times the number needed -- the board determined that only 21,664 came from registered D.C. voters. From that pool, 6,977 were discarded after the board found evidence of fraud, forgery and other "systematic" violations of local election laws.

Slots promoters John Ray, left, and Pedro Alfonso talk about the election board's decision to keep their initiative off the November ballot. They said they will appeal the case in court. (Marvin Joseph -- The Washington Post)

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D.C. Slots Initiative Is Dealt A Blow (The Washington Post, Aug 4, 2004)
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Financing Behind D.C. Slots Murky (The Washington Post, Aug 1, 2004)
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That left slots proponents with 14,687 valid signatures, well short of the 17,599 required -- the equivalent of 5 percent of the number of registered voters in the District.

"The flaws were significant when considered individually, and they were monumental when considered collectively," said elections board Chairman Wilma A. Lewis. "They turned the laws of the District of Columbia on their head."

Proponents of the initiative said they would keep pushing their plan to bring 3,500 slot machines and more than 1,500 jobs to a run-down stretch of New York Avenue NE. They said they would file a notice of appeal today, arguing that the elections board had wrongly invalidated signatures gathered by paid petition circulators who emphasized the benefits of gambling, including a fresh flow of revenue for government services.

"The game is still in play. The next step is the . . . Court of Appeals," said John Ray, a former D.C. Council member and attorney for the slots initiative. "The voters who put their signatures on those petitions, they did it in good faith, and they have a right to have their voice heard."

Religious and community activists who have been fighting for two months to block the initiative broke into applause after the ruling. They vowed to fight any effort to revive the gambling plan, arguing that it would bring crime and addiction to their neighborhoods, rather than jobs.

"Look, this is sweet. We can't allow folks to come in from out of town and break our laws," said Regina James, a Ward 5 advisory neighborhood commissioner who lives near the site proposed for the slots complex. "Gambling would be an unfair temptation for the economically disadvantaged because they would be chasing a false dream."

The board's ruling, delivered during a 5 p.m. hearing at One Judiciary Square, marked its first major action since Lewis took command in May. A former U.S. attorney, Lewis was plodding and deliberate throughout a nine-day public inquiry into the July petition drive. But she was firm as she delivered her verdict.

The discarded signatures included hundreds submitted by D.C. residents who falsely claimed on petition affidavits to have gathered signatures that were actually collected by professional election workers flown in from California, Michigan and other states.

While the use of out-of-town "assistants" is permissible, the board ruled that they may not direct the signature-gathering process. Many nonresidents broke the law, Lewis said, because they "actively performed the circulatory responsibilities" reserved for city residents.

By far the most invalidated signatures were collected under the direction of a single subcontractor, Florida-based Stars & Stripes USA Inc. The board concluded that Stars & Stripes USA trained people to illegally misrepresent the initiative as being "about schools and health care," rather than about gambling.

Lewis said that the Stars & Stripes operation was "fatally flawed" and that the "irregularities and improprieties of Stars & Stripes compelled the rejection of those signatures."

The board has yet to assess fines or other sanctions in connection with the five-day petition drive. Businessman Pedro Alfonso, who chairs a political action committee formed to push the initiative, said he hopes the board does not subject the committee to substantial sanctions because "we were not aware of [the wrongdoing], did not participate in it and did not condone it."

The battle over slots now moves to the D.C. Court of Appeals, where Alfonso said he would seek an expedited review in hopes of putting slots on the ballot this year. Even if they prevail, however, slots supporters face major political hurdles.

Key members of the U.S. House have said Congress is unlikely to approve a gambling hall less than three miles from the U.S. Capitol. Mayor Anthony A. Williams (D) opposes gambling, and a majority of the D.C. Council has signed a resolution stating that "the District of Columbia would be worse off with thousands of video lottery terminals than it is without them."

Still, "I regret that they weren't able to get on the ballot," Williams said. "I'd like to have the citizens deal with it and dispatch it one way or the other."

Since they filed the initiative April 22, Ray and Alfonso have been engaged in a headlong rush for the ballot. Initiatives normally have six months to gather signatures, but they chose to compress their petition drive to make the deadline for the November election.

The campaign has been funded by a group of St. Croix entrepreneurs, who are proposing to build a $510 million entertainment complex that would generate an estimated $765 million a year in slots revenue. A quarter of that cash would be given to the D.C. government.

The St. Croix investors include Rob Newell, an Idaho man with a history of failed business ventures, and Shawn Scott, a Las Vegas entrepreneur who has been denied or failed to obtain gambling licenses in five states where regulators found evidence of financial mismanagement, irregular accounting practices and hidden partnerships.

Newell, Scott and their associates have spent nearly $700,000 on the slots drive, paying legal fees to Ray and consulting fees to Alfonso and hiring a California company, Progressive Campaigns Inc., to run the petition drive. PCI President Angelo Paparella did not return four calls yesterday to his cell phone or office, where a woman who answered the phone referred calls to Ray.

Carl Towe, the owner of Stars & Stripes USA, challenged the board's characterization of his company's work.

"There may be a couple bad apples in the barrel, but they threw out the whole barrel," Towe said, adding that the "bad work" was confined to one of four drive managers.

Towe called the board's ruling "an injustice to the people of Washington, D.C."

But Angelo Ferrell, a supermarket security guard who was paid $155 for falsely signing petition affidavits, called the ruling "a good thing."

"I think they [slots proponents] were dishonest in some ways," Ferrell said. "They misled people into thinking that it was going to benefit the city and the children and the elderly."

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