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Campaign For Slots In D.C. Crumbles

Court Upholds Rejection Of Petition Signatures

By Lori Montgomery
Washington Post Staff Writer
Wednesday, September 29, 2004; Page B01

A panel of the D.C. Court of Appeals yesterday upheld a decision by the city's election board to throw out thousands of petition signatures gathered to support a plan to legalize slot machines in the nation's capital, ending efforts by gambling supporters to put the issue on the Nov. 2 ballot.

In a 14-page opinion, three appellate judges ruled that the D.C. Board of Elections and Ethics had found compelling evidence that "a pervasive pattern of fraud, forgeries and other improprieties . . . permeated" a portion of a July petition drive aimed at gathering the signatures of 17,599 D.C. voters -- enough to put the slots initiative on the fall ballot.

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Given those findings, the court ruled, the board was justified when it invalidated in August signatures gathered by dozens of circulators, causing the gambling measure to fall short of its goal.

"The Board acted within its authority in concluding that a broad remedy of exclusion -- commensurate with the magnitude of wrongdoing it had found -- was necessary to preserve the integrity of the election process," the court wrote.

Proponents of the gambling measure said they would not appeal the ruling because it is too late to win an appeal and campaign for the initiative.

"It looks like, for this election, the court may have put a nail in this issue," said Pedro Alfonso, a businessman who chaired a political action committee supporting the gambling measure. But gambling "is only on the back burner," Alfonso said. "I believe it will be back on the table in 2006."

Gambling opponents celebrated the deathblow to the plan, developed by wealthy, offshore interests to persuade District voters to give them a 10-year monopoly on gambling.

"This is great," said Ron Drake, a lawyer who filed one of two challenges to the petition drive.

Drake said the ruling was "a strong opinion on behalf of the citizens of Washington, D.C., and I am proud to have fought the battle."

Dorothy Brizill, executive director of DCWatch, led a coalition of community activists who filed the other challenge. Yesterday's ruling marked the second time in two years that Brizill successfully challenged a petition drive organized by a well-funded adversary. In 2002, she prevented Mayor Anthony A. Williams from winning a spot on the Democratic primary ballot. The mayor was reelected with a write-in campaign.

Brizill planned yesterday to lunch at the Palm restaurant with her husband to celebrate the ruling. But she said she fears the slots initiative may be revived.

"They've got too much money invested to just give up now," Brizill said. "If you look at the experiences in other jurisdictions, when they fail the first time, they come back."

At issue was a proposal to install 3,500 slot machines on a 14-acre site in Northeast Washington at New York Avenue and Bladensburg Road. Backers promised to surround the casino with entertainment amenities including restaurants, movie theaters, a bowling alley and an area for children.

But slot machines were the heart of the project. According to backers, the machines would have generated an estimated $765 million a year in revenue, a quarter of which would have gone to city government.

The measure was promoted locally by Alfonso and former D.C. council member John Ray, but its real backers -- the sole source of funding for the campaign -- were financiers operating out of St. Croix in the U.S. Virgin Islands.

One of them, Shawn Scott, a gambling promoter who got his start near Las Vegas, has been denied or has failed to obtain gambling licenses in five states where regulators found instances of financial mismanagement, irregular accounting practices and hidden partnerships.

Another backer, Rob Newell, is an Idaho businessman with a long history of troubled business deals. A Spokane, Wash., investment firm of which he was an officer dissolved after state regulators accused it of swindling people.

Scott and Newell, who first approached Ray with the casino proposal in April, have spent more than $1.2 million on the D.C. slots campaign, according to campaign finance records. Yesterday, Steve Silver, a lawyer who manages Scott's and Newell's business affairs in the Virgin Islands, said he had not yet seen the court's opinion.

"I don't have any comment on it," he said.

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