The head of the public relations firm representing the initiative to bring slot machine gambling to the District said yesterday that the company has withdrawn from the effort because it became uneasy about the project's financial backers.
The move by the Walker Marchant Group came Tuesday night. A ruling that day by a D.C. Superior Court judge cleared the way for proponents of the gambling plan to begin collecting signatures to put the issue before District voters in November.
"On Tuesday night, we officially resigned the account. We were no longer comfortable going forward with the current outside investors," the firm's chief executive, Ann Walker Marchant, said in an interview yesterday.
She added, "I do hope the initiative is successful in attracting a strong slate of local investors, as initially promised."
The initiative -- proposed by D.C. businessman Pedro Alfonso and funded by Rob Newell, a financier from the U.S. Virgin Islands -- would ask voters to approve a plan to install as many as 3,500 video lottery terminals in an entertainment complex to be built on a 14-acre site at New York Avenue and Bladensburg Road NE.
In interviews, Newell has declined to answer questions about the source of the funding for the gambling initiative or to provide a copy of his resume.
The initiative's general counsel, former D.C. Council member John Ray, has said that the money for the campaign originates with Bridge Capital LLC. The St. Croix business provides high-cost loans for risky investments, according to its Web site.
Newell is chief operating officer of that company. Its chief financial officer is Shawn A. Scott, 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.
Ray has said that although it was Scott's idea to bring slots to the nation's capital, he barred Scott from the campaign after determining that he "would not be a good partner." But Ray has acknowledged that he is not sure whether Scott has a financial interest in the gambling project.
Ray said yesterday that the departure of the Walker Marchant Group from the slots campaign was a "mutual decision" that resulted from a failure to negotiate a new contract for the firm.
"She was simply asking for too much," Ray said of Marchant, who was a spokeswoman for the 2002 reelection bid of Mayor Anthony A. Williams (D). He said that her company's contract, which went into effect May 21, expired June 21 and that talks about a new agreement had been going on since.
Marchant, however, said, "The final decision to resign the account was not based on negotiations about our fees."
Neither Ray nor Marchant would discuss the financial details of the negotiations or disclose the dollar value of the first contract. Ray said that the initiative's backers had wanted the Walker Marchant Group's new contract to extend to the end of the campaign but that the firm preferred a contract that went only through July.
Meanwhile, Williams said at his weekly news conference that he opposed the slots bid and will vote against it if the measure is on the November ballot. But Williams added that he would sign a petition to put the measure before voters because he believes slots are an issue that should be decided by popular opinion.
"There are times when my personal views may differ from that of the voters," he said. "When I'm asked my opinion, I'm going to give it. And I don't think gambling should be in the District. . . . But I don't support keeping any person or idea off the ballot."
The next six days will be crucial for the initiative. To get the proposal on the Nov. 2 ballot, organizers must collect signatures from at least 17,500 registered D.C. voters by the close of business Tuesday.
This afternoon, the D.C. Board of Elections and Ethics has scheduled a special meeting to hand out the petition form, giving the initiative's supporters less than 123 hours to gather the necessary signatures.
Ray said organizers would need to pay petition circulators $5 to $6.50 per signature to collect enough names by the deadline.
But yesterday morning, five men who emerged from a downtown Washington hotel after signing up to work as petition handlers said they had been offered only $1 per signature. They said they were told that the figure could go up to $1.25 if 65 percent or more of the signatures they collected were validated by the elections board. Witnesses who accompanied petition circulators would earn 50 cents per signature, the men said they were told.
"I would be shocked if it is a dollar," Ray said when told of the men's comments. "I don't believe they can get there paying that."
He referred calls to Progressive Campaigns Inc., the Santa Monica, Calif., company hired to run the petition drive. "It is up to them to negotiate their deal or arrangement with those collecting signatures," Ray said.
A woman answering the phones at Progressive Campaigns said the company's president, Angelo Paparella, was unavailable for comment.
Staff writers Lori Montgomery and David Nakamura and researcher Bobbye Pratt contributed to this report.