Disputes Over Documents Threaten to Slow Casino Campaign Probe

Jul 17, 2017

Shawn Scott testifies during a hearing before the Maine Harness Racing Commission, Friday, Dec. 19, 2003, in Augusta.
Credit Joel Page / Associated Press/file

A slow response to subpoenas and disputes over documents could delay the investigation into the controversial campaign seeking to convince voters to support a casino in York County.

The Maine Ethics Commission took a series of votes Friday to modify its request for correspondence and bank records from several political committees funding the $4 million casino campaign.

The votes effectively push back deadlines for recently disclosed funders to respond to subpoenas issued by the commission in mid-June.

The subpoenas were sent to Cheryl Timberlake, the treasurer of the Horseracing Jobs Fairness ballot question committee, and Miami resident Lisa Scott, who until April appeared to be the only person funding the Horseracing Jobs Fairness campaign.

They were also sent to Bridge Capital LLC, an offshore investment firm in the Mariana Islands associated with Shawn Scott, Lisa Scott's brother, and Capital Seven LLC, another investment firm located in Las Vegas.

The commission is investigating whether Lisa Scott and the other organizations have fully disclosed their sources of funding for the Maine ballot campaign. The commission is also weighing whether the Horseracing Jobs Fairness campaign, which has operated for well over a year, should be hit with a hefty fine because it didn't disclose other funding sources until April.

A shadow has loomed over the casino campaign since it began late in 2015. The proposal that could appear before voters in November is written in such a way that only casino mogul Shawn Scott could obtain a license to operate it.

Scott first brought gambling to Bangor in 2003 after convincing voters to approve a facility in a referendum. A trail of litigation has followed Scott ever since. Last year groups associated with him were fined by Massachusetts regulators for hiding his involvement in a failed bid to convince voters in Massachusettes to build a gambling operation in Suffolk Downs.

Several of the groups associated with the Massachusetts referendum surfaced when the Horseracing Jobs Fairness campaign modified its finance reports in April amid scrutiny from state lawmakers and the Ethics Commission. The updated disclosure revealed for the first time that Lisa Scott is not the only one financing a campaign that has operated well outside the norms of traditional ballot initiatives.

The Ethics Commission launched an investigation into the campaign in mid-June, issuing subpoenas at the same time. Bruce Merrill, an attorney representing Lisa Scott, refused to accept the subpoenas after the commission's June meeting, saying he wasn't authorized to do so.

Since then the commission has struggled to get Lisa Scott to accept the subpoena for records. According to a memo by ethics staff, it sent the subpoena to the three addresses provided by Scott in the updated finance reports. None were accepted at the Las Vegas address she provided or the two Miami, Fla., addresses she disclosed in April.

Merrill, who attended the meeting, on Friday, agreed to accept the subpoena in exchange for a modified timeline to turn over the records or object to them. Scott now has until Aug. 4 to object to any of the records requested and until Sept. 1 to turn them over.

The five-member commission also appears ready to subpoena Lisa Scott to testify under oath. Several grilled Merrill about how to reach his client if they take that step.

The commission was reluctant to modify its request for records, but it's also trying to avoid a court dispute that could further delay its investigation.

"I think we have an obligation to try and get information before voters go into the polls in November," said Commissioner Richard Nass.

The complex web of campaign committees and corporations all have ties to Shawn Scott.

Jonathan Wayne, director of the Ethics Commission, said in April that new campaign filings "will likely be considered late."  Penalties for a determination of late filing could be steep. According to the law governing late filings for ballot question committee, the penalty for late reported activity over $50,000 can be 100 percent of whatever is reported late. The three ballot question committees that filed reports Wednesday reported activity of over $4 million.

The five-member ethics commission has discretion to raise or lower fines.

In March, lawmakers on the Veterans and Legal Affairs Committee took the unusual step of holding a public hearing to question the campaign. At the time, Dan Riley, an attorney hired shortly before the hearing, said he didn't know enough about the campaign to answer questions.

Nonetheless, Riley did reveal that he had been hired by Bridge Capital, located in the Mariana Islands. It was the first time the company had admitted it was backing the campaign.

The revelation prompted the Maine Ethics Commission to request a meeting with the campaign.

Bridge Capital is a high-risk investment firm based in Saipan of the Mariana Islands. Shawn Scott is a partner in the firm, which also bankrolled an unsuccessful campaign last year to build a slots parlor near Suffolk Downs in Massachusetts.

Shawn Scott first brought gambling to Maine after his campaign successfully convinced Bangor voters to approve slots at a race track there in 2003.

Scott later obtained a racino license, but not before the Maine Harness Racing Commission accused him and his business associates of operating a web of shell companies and “sloppy, if not irresponsible financial management.” The report also revealed Scott and his associates were involved in over two dozen lawsuits over an eight-year period.

The trail of litigation has followed Scott and his associates ever since he sold the Bangor facility to Penn National in 2004, netting $51 million. That includes the seizure by the government of Laos two years ago of a gambling facility run by Bridge Capital over corruption charges.

In a press statement released in April, Lisa Scott said the campaign did not intentionally mislead the Ethics Commission and did not understand Maine's disclosure requirements.

This story was originally published on July 14, 2017 at 2:18 p.m. ET.