Backers of a plan to legalize slot machines in the nation's capital spent nearly $1.4 million on their failed campaign to win a spot on the Nov. 2 ballot and still owe nearly $600,000, much of it to attorneys who fought unsuccessfully to put the gambling initiative before District voters.
According to documents filed late Monday with the D.C. Office of Campaign Finance, the political action committee formed to promote the gambling measure has received $1.372 million in contributions since it was formed in April. All of the money came from a group of St. Croix financiers led by gambling promoter Shawn Scott, who has been denied or failed to obtain gambling licenses in five states.
The committee has spent almost all of the contributions, the report shows, paying out $1.37 million to lawyers, political consultants and residents who circulated petitions for the gambling measure during a frenetic five-day petition drive in July. As of Oct. 25, the committee had just $2,833.18 on hand.
The initiative would have authorized Scott and his associates to install 3,500 slot machines on a 14-acre site in Northeast Washington at New York Avenue and Bladensburg Road. The gambling emporium would have generated an estimated $765 million per year in revenue, according to promoters, a quarter of which would have been given to the city.
In July, backers collected 50,000 signatures in support of the measure -- more than three times the number needed to qualify for the ballot -- but the D.C. Board of Elections and Ethics ruled that many were fraudulently obtained. Last month, the D.C. Court of Appeals upheld the board's ruling, and gambling supporters declined to appeal.
Also in September, The Washington Post reported that the slots committee had spent more than $2 million to promote the measure after the Office of Campaign Finance provided the newspaper with an inaccurate copy of the committee's Sept. 10 report. At the time, the committee had actually spent $1.26 million.
The agency's spokesman, Mike Simpson, said the error was caused by "some kind of glitch" in software that allows political action committees to file reports electronically. The problem did not affect other reports, Simpson said, and it has since been corrected.
The latest filing by the slots committee shows that the flow of money from the U.S. Virgin Islands has dried up since the initiative failed to make the ballot. From Sept. 11 to Oct. 25, the committee received no wire transfers from Scott and his associates at Bridge Capital, a private-equity lending firm. The firm's only contribution during that period was $80,000 in legal fees paid to Dallas attorney Deborah Deitsch-Perez, who has represented Bridge Capital.
Meanwhile, the report shows that the committee owes $93,679 to the firm of George W. Jones Jr., who spearheaded the appeal; $68,200 to attorney Erik S. Jaffe, who assisted; and a whopping $386,723 to the firm of former D.C. council member John Ray, who has served as general counsel to the committee since its inception.
Ray and Jones did not respond to messages; Jaffe declined to comment.
Deitsch-Perez said those bills will be paid. "Some things may already be in process," she said. "It's really more an accounting thing."