A shadowy casino campaign designed to benefit a controversial gambling developer has filed a series of reports showing that the initiative, aimed at building a casino in southern Maine, has been almost exclusively financed by offshore investment companies and a Las Vegas firm.
The new disclosure raises questions about whether the campaign will face penalties for obscuring its financial backers for over a year.
One company, Capital Seven LLC, is run by Shawn Scott, the man who brought gambling to Bangor in 2003. The referendum is written in such a way that only Scott can build the casino. But until the new filings with the Maine Ethics Commission were released late Wednesday, neither Scott nor Capital Seven has appeared on any of the campaign finance reports.
The original ballot question committee, Horseracing Jobs Fairness, had previously only shown donations from Scott's sister, Lisa Scott, from Miami.
The previous reports showed Lisa Scott giving more than $4 million to a campaign that has operated for more than a year.
The new filings include three new ballot question committees, all of which have received loans from Capital Seven of more than $3 million. Others funders include Regent Able Associate Co, domiciled in Japan. Bridge Capital, a firm located in the Mariana Islands and to which Shawn Scott is a partner, does not appear on the filings. However, an attorney representing the firm has already confirmed that Bridge Capital is backing the campaign. Additionally, corporation filings in Las Vegas show that John Baldwin is listed as a manager for Capital Seven. Baldwin is also the CEO for Bridge Capital.
The complex web of campaign committees and corporations all have ties to Shawn Scott. The same web companies of attempted to pass gambling facility in Massachusetts last year. The campaign ran afoul of regulators there for hiding Bridge Capital's involvement in the campaign. ,
Jonathan Wayne, director of the Ethics Commission, said in an email Thursday that the commission will determine later what action it should take, but that 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.
Bridge Capital was fined by Massachusetts regulators $125,000 for originally hiding the firm's involvement. It was later revealed that the firm gave $1.4 million to the campaign.
Rep. Louis Luchini, D-Ellsworth, co-chairman of the Veterans and Legal Affairs Committee, said the concealing of funding in Maine is disturbing.
"This same group did the same thing in Massachusetts. Once it was revealed they were hiding the true source of their money they got hit with a $125,000 fine," he said. "Here were doing with over $4 million, so I hope they get hit really hard in the state of Maine."
He added, "In my view, the voters who signed the petitions were essentially being lied to because they didn't know who is truly behind this initiative."
VLA co-chairman Garrett Mason said the ballot campaign "stinks" and is "corrupt."
"We knew something was wrong with them. The committee knew that in its questioning ... and I think the organizers are starting to figure out that we're on to them," Mason said.
Luchini and Mason both said they are open to holding another hearing to question the campaign. The VLA committee is still in possession of the referendum bill that is supposed to go to voters. The panel has limited options to deal with the proposal and cannot kill or amend it.
The Maine casino effort has thus far operated well outside of the realm of traditional campaigns. It was denied access to the ballot last year after the Secretary of State rejected its petition effort, citing widespread irregularities. It has since qualified for the ballot, but lawmakers have scrutinized the proposal because of Scott's involvement.
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 of a gambling facility run by Bridge Capital by the government of Laos two years ago over corruption charges.
The way the ballot initiative is written, Scott would be the only person who could build the casino.
In a press statement released Friday, Lisa Scott said the campaign did not intentionally mislead the ethics commission and did not understand Maine's disclosure requirements.