Friday, July 15, 2005

Coverage about gambling crime from another state

The first blog posting was on June 19. And update in the comments was posted on July 15, 2005.

Peoria and Pittsburgh are similar in a number of ways. I lived in Peoria and coached a number of kids from Pekin. Here is a nice article to consider as gambling knocks on the doorway of Pittsburgh's future.

STLtoday - News - Illinois State News: "Gambling-related crimes no longer shock Pekin, Ill.
By Kevin McDermott, Post-Dispatch Springfield Bureau

PEKIN, Ill. - The mayor is facing criminal charges of betting city funds at the local riverboat casino, but that's not necessarily the most startling thing about Pekin's latest gambling scandal.

Full story with click to that site (no registration required). Or, see it in the comments of this blog.

I don't like gambling's arrival to Pittsburgh. We need to monitor and have strong watchguards on that entire endeavor.

Furthermore, when the gambling incomes are diverted to pay off debt such as desired with the SEA (Stadium and Exibition Authority) and the Convention Center overhead, we are sure to be a loose twice.

The upside with the gambling incomes needs to be robust, helpful, meaningful and boost the overall community. If the upside is going to lead into nothingness, then it would be much more prudent to do without.

The proposed gambling incomes are over hyped. The promises are sure to be broken. The total amounts are fabrications. The "upside" isn't that high at all.


Anonymous said...

Gambling-related crimes no longer shock Pekin, Ill.
By Kevin McDermott
Post-Dispatch Springfield Bureau

PEKIN, Ill. - The mayor is facing criminal charges of betting city funds at the local riverboat casino, but that's not necessarily the most startling thing about Pekin's latest gambling scandal.

In the few years since legalized gambling floated into the region, residents of this community have gotten used to seeing public figures - politicians, lawyers, even police officers - nailed for playing the tables with other people's money.

What's notable this time is that the mayor, Lyndell Howard, admits gambling with the city credit card, stressing that he repaid the money. He hasn't issued anything that sounds like an apology - and has vowed to run for re-election. A lot of people here think he could win.

It's amazing what plays in, and around, Peoria these days.

"I think there is a certain tolerance when you hear about these types of cases repeatedly," said Tazewell County State's Attorney Stewart Umholtz. He is prosecuting Howard on charges of official misconduct for gambling with a city credit card at the Par-A-Dice Riverboat Casino, just up the road in East Peoria. "Many members of the public come to not be surprised when something like this happens."

Umholtz noted that Pekin had seen a deputy police chief removed on similar charges. He said he expects to file charges soon against an officer of a civic organization who allegedly blew thousands of charitable dollars on the boat.

Then there was the conviction of the former sheriff of neighboring Woodford County for gambling-related embezzlement, not to mention a series of Peoria attorneys who have been caught betting their clients' money. One on trial now is accused of losing a quarter-million dollars from a woman's estate.

"These crimes were the result of individuals trying to support addiction to gambling," Umholtz said. He believes legalized gambling has increased his criminal docket in less obvious ways as well, to the point that he has lobbied for legislation that would force the casino to pay legal expenses for the county. "Of course, the more acceptable you make gambling, the more likely that a person's addiction is going to need feeding."

Bizarre phenomenon

The Peoria region, long considered the nation's barometer for middle-America values, has a gambling problem, legal officials here believe. In the years since casino gambling was approved in Illinois, they say there is anecdotal evidence, if not hard data, to suggest that gambling addiction is causing crimes such as fraud, theft and embezzlement.

"Typically, you see crimes involving theft of property ... to gain funds (to gamble), and the second thing is writing bad checks," said Mark Wertz, a Tazewell County assistant public defender. He says he has increasingly argued during his clients' sentencing hearings that gambling addiction was a factor in the crimes.

But most disturbing, officials say, are the crimes being committed by otherwise law-abiding, even prominent citizens - and the apparent acceptance of such crimes by the public.

"The opportunity has turned some honest people into criminals. These are lawyers, investors, bankers ... (stealing) tens and hundreds of thousands of dollars," says Peoria County State's Attorney Kevin Lyons. He is currently prosecuting what he termed his "third or fourth" local attorney - a close friend - accused of the gambling-related embezzlement of about $250,000 from a client.

"These are formally educated, bright, articulate people of the world, yet they will look right at you and say, 'I was going to pay it back ...'" Lyons said. "It's a very bizarre phenomenon in society."

Critics allege that legalized gambling increases crime, although it's a difficult allegation to prove statistically. When prosecutors convict someone of simple theft, writing bad checks or other monetary crimes, it's not always known - or relevant - whether the money was spent on groceries or blackjack.

Both sides of the debate can cite different studies to make their point. Anti-gambling activists point to some data that show increases in some crime rates in casino communities. Pro-gambling interests have other studies indicating that those rates are due to the presence of more tourists in those areas.

One of the most prominent studies, a report compiled in 1999 for a congressional inquiry, doesn't settle the issue. It found anecdotal evidence to "suggest that a relationship may exist between gambling activity and the commission of crime" - including a survey in which 47 percent of Gamblers Anonymous members "admitted stealing to finance their gambling." But the report concluded that "insufficient data exists" to prove that has a significant impact on local crime rates.

"Some of the anti-gaming folks claim crime is running rampant (around) the casinos, but they don't have any sources" to back that up, said Tom Swoik, executive director of the Illinois Casino Gaming Association, which estimates that just 1 percent of the adult population suffers from gambling compulsions.

The gaming industry notes that, unlike the crime-data debate, its tax payments to Illinois are undisputed. The boats directly paid more than $800 million to Illinois and local host communities in taxes last year.

As for the anecdotes about embezzlement for gambling by prominent citizens, Swoik said: "You've got to put it in perspective. We had over 15 million admissions to the nine casinos (in Illinois) last year."

But people like the Rev. Tom Grey say it's common sense that those high-profile anecdotes are indicators of a wider problem. He believes that the money that communities lose to crime, criminal prosecution, bankruptcy and other ills more than offsets what the casinos pay in taxes.

"How many anecdotal cases of embezzlement, theft, robbery does one have to compile before someone says, 'It's gambling-related?'" said Grey, co-founder of the National Coalition Against Legalized Gambling.

"I keep a file of grandmothers (from around the country) who have stuck up banks to fund their gambling habits. If there can be a file like that, I have to say to you ... this is real."

Criminal courts in the Metro East area, like other riverboat areas, have seen numerous cases that, officials say, wouldn't have happened if not for the presence of the boats.

St. Clair County State's Attorney Robert Haida says such cases often involve professional people who steal from their businesses to fund gambling habits. "We've had individuals who you'd normally be very surprised to see as defendants, becoming defendants," he said.

Among the more visible recent cases in the Metro East area was the conviction in 2002 of a bank vice president in Waterloo who pleaded guilty of embezzling $241,000 from the bank and losing it at local riverboats.

At the banker's sentencing, the judge said that "whoever let loose this scourge of big-time gambling on our community ought to have his head examined."

That opinion by Chief Judge G. Patrick Murphy of the U.S. District Court, Southern District of Illinois, hasn't changed, he said last week.

"I've had people in my courtroom who have been sentenced for stealing really serious money and who blew it at the casino, people who had otherwise clean records, and who would not have been in court if not for the casino," Murphy said.

Outrage, support

Howard, 67, the first-term Pekin mayor, is accused of using an official city credit card to get cash from the onboard automatic-teller machines at the Par-A-Dice.

Indictments allege Howard used more than $1,400 in city funds during several trips to the boat last year, a modest sum by the standards of these kinds of cases. Umholtz, the state's attorney, maintains that the amount is irrelevant, given that city credit can legally be used only for official city purposes.

All sides agree that Howard, whose term expires in 2007, paid the money back.

Howard's attorneys argue that there's nothing in city ordinances specifying how city-issued credit cards are to be used. Umholtz says his case is based on the state constitution, which specifies in Article 8 that "public funds, property or credit shall be used only for public purposes."

"Our contention is that any mayor's use of a city credit card to get cash to gamble is not a 'public purpose,'" Umholtz said.

Howard has declined to comment, saying a judge has asked the parties not to discuss it. "No one is going to talk to you, including me," Howard said last week. His attorney couldn't be reached.

Earlier this year, Howard told the Pekin Daily Times that he had used a city credit card to gamble "at least once or twice" at the Par-A-Dice, but always paid it back.

"I don't see how that is illegal or questionable," Howard told the newspaper. "I did nothing to hide this ... It has been out in the world for all to see."

There is clearly some outrage in the community. ("The nerve!" scolded one typical letter to the editor in the Daily Times.) But there is also enough support for the mayor that he was able to hold a $50-a-plate steak dinner to raise funds for his legal expenses.

Even residents who are furious with Howard - and there was no shortage of them at Ernie's Family Restaurant in Pekin one afternoon last week - don't tend to blame the boat.

"I think it's a disgrace, he ought to be in jail. He stole funds, he gambled with citizens' money," said Pekin resident Terrie Lawrence, dining with a friend.

But asked whether the boat was the problem, she scoffed and shook her head. "It's like anything else: If you've got a gambling habit, it's pretty bad (to live near a casino). But you don't ban taverns because you've got a few alcoholics. I see nothing the matter with riverboat. It's entertainment, so, fine."

Par-A-Dice last week referred calls to its parent company, Boyd Gaming Corp. of Las Vegas. Rob Stillwell, Boyd's vice president for corporate communications, disputed the notion that legalized gambling spawns crime.

"There are certainly examples where increases in tourism" might increase some types of crime, just because of the increase in people, Stillwell said, but he added that that same tourism helps the communities in terms of spending and tax revenue.

Reporter Kevin McDermott
Phone: 217-782-4912

Jordan Potter said...

That Post-Dispatch story needs two important corrections.

First, although Mayor Lyn Howard hasn't issued a public apology, he did say last November, when we first learned about his gambling with city credit:

“If this is illegal and some infringement of the law, I didn’t know it. I did nothing to hide this. … Never in 65 years have I been accused of anything improper, illegal or unethical and I don’t intend to start now. If I made a mistake — I made a mistake. There was no intent of wrongdoing on my part. I don’t even get a piece of mail at city hall that isn’t open, so you know I couldn’t have tried to hide this. They knew what I was doing — it has been out in the world for all to see.”


“I’m embarrassed. I’m embarrassed for my family and for the city. I am sad about that, but I in no way think I did anything wrong.”

Second, Howard has not vowed to run for reelection. One of his attorneys, Gerald Hall, has said that he thinks the mayor will run again, but Howard himself has said he hasn't made any definite plans.

After yesterday's court hearing, six of Howard's nine counts of official misconduct were dismissed, and the case was set for trial on the three remaining counts this Halloween. The State's Attorney himself asked the judge to dismiss three of the counts, and another three were dismissed because the judge said the statute under which the mayor was charged did not have to do with anything the mayor did. The three remaining counts, however, the judge said were proper and were very strong. He said the state has sufficient evidence to show a probability that the mayor will be convicted, though that will be for a jury to decide.

So, in a few months it looks like Mayor Howard will be forced to resign.

Mark Rauterkus said...

Thanks so much for the update and clarifications.