Maine Casino Campaign Slapped With Record Ethics Fine

Nov 3, 2017

The Maine Ethics Commission took a series of votes Friday to fine campaign committees controlled by the sister of casino developer Shawn Scott a total of $500,000 for obscuring the source of millions of dollars pumped into the York County casino campaign.

The total fine is against four campaign committees controlled by Lisa Scott and another co-operated by Augusta lobbyist Cheryl Timberlake.

The commission held Scott and Timberlake jointly liable for the $130,000 penalty against the Horseracing Jobs Fairness Committee.

The total fines against Scott are the largest in the history of the commission.

The decision followed lengthy deliberation and procedural moves designed to guard against an expected appeal by a casino campaign that has dumped nearly $10 million into the ballot question that will appear as Question 1 on Tuesday.

Attorneys argued that the commission misinterpreted the maximum penalties under the law.

Scott faced a maximum penalty of $4.6 million. But the commission significantly reduced the fines in part because the donations were eventually disclosed and because several commissioners believed the public could infer that Scott was working on behalf of her brother.

Shawn Scott would have exclusive rights to the gambling license if Question 1 is approved by voters on Tuesday.

Documents gathered through subpoena show Shawn Scott calling the shots in Maine while often 11 times zones away at his Saipan residence in the Commonwealth of the Mariana Islands.

Shawn Scott’s funding and steering of the campaign was not disclosed until April.

The investigative documents indicate that Scott and his associates approved and facilitated wire transfers from various offshore and domestic firms and actively avoided questions from the press about the controversial gambling developer’s active role in the campaign.

Meanwhile, Shawn Scott and his associates  pumped more than $4 million into a signature gathering campaign that was resurrected last year by an investor with business holdings in Cambodia and Tokyo. The investor’s funding of the campaign remained secret until April.

The April disclosures were forced by an unusual public hearing held by the Legislature’s  Veterans and Legal Affairs Committee Committee. During that hearing Dan Riley, a lobbyist hired just hours before appearing before the committee, said he represented Shawn Scott’s Bridge Capital. 

Riley later said he was mistaken that Bridge Capital hired him — and he didn’t know who was behind the firm that did. But his comments prompted an inquiry from Jonathan Wayne, director of the Ethics Commission. During a subsequent meeting with Timberlake, the treasurer of the only campaign committee known to be running the casino effort, was advised by the commission to file new reports to update its funding sources.

The five-member commission took nearly 10 hours of testimony and cross-examination from Lisa Scott and Timberlake earlier on Tuesday. During that hearing Scott and Timberlake attempted to blame each other for not reporting donations from offshore and domestic firms, all of which are either linked to Shawn Scott or are investors in the project.

Timberlake was the treasurer for the ballot committee that spent over $4 million between late 2015 and last year to qualify for the ballot. Lisa Scott led the committee.

Until April, Scott appeared as the sole donor to the campaign. The new reports revealed a complicated funding network that prompted commissioners to question whether the campaign intentionally hid the donations.

A similar network was fined by Massachusetts regulators last year for hiding its involvement in a gambling campaign in Revere, Massachusetts.

Scott testified that Timberlake knew all along that Shawn Scott and his associates were bankrolling the initiative. Lisa Scott also said she relied on Timberlake to guide the campaign, including campaign finance law requirements.

Timberlake denied it, saying she was shut out of the financial transactions and was repeatedly told not to respond to press inquiries about the campaign’s funding, which she described as the “corporate veil.”

The five-member Commission prodded both witnesses, who testified under oath but offered sharply divergent accounts of what happened.

Attorneys for Scott and other investors in the campaign are expected to challenge the decision. Several of them argued earlier this week that the hearing and decision should have been delayed until after the election. They also suggested that the commission could be viewed as a co-conspirators in a government-led effort to defeat Question 1.

“Unfortunately, today’s rulings were the product of an administrative agency that was operating under a fundamental misunderstanding as to the scope and limits of its statutory authority and their obligations to the public under those laws,” Lisa Scott’s attorney Bruce Merrill said in a statement.  “The procedural process employed today by the Commission was so flawed that it compels a finding that it was arbitrary and capricious and violated Due Process.  This decision will be appealed it in the Courts. 

The penalty by the commission is by far the highest it’s ever assessed.

In 2014, the commission fined the National Organization for Marriage $50,250 for failing to reveal who financed a 2009 initiative that temporarily repealed Maine’s marriage equality law.

The NOM fine was a record penalty at the time.