Monday, January 25, 2010

A Foxwoods Philadelphia Story

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This installment of The Tribes In The Media is a Philadelphia Inquirer article on the Mashantucket Pequot´s lobbying activities that resulted in a key extension to build a casino in Philadelphia, Pa.

How Foxwoods got a leg up
Time was not on the casino's side. Access to heavy hitters was.
By Jennifer Lin, Mario F. Cattabiani, and Amy Worden
Philadelphia Inquirer
January 24, 2010

Autumn was make-or-break time for the Foxwoods Casino in Philadelphia.

Opposition in neighborhoods and City Hall had stalled the project. Lenders had grown wary as casinos elsewhere struggled. State regulators set a final deadline: Foxwoods had to open by May 2011, or lose its license.

Foxwoods needed help in Harrisburg.

So its lawyer and lobbyist, Stephen A. Cozen, turned to an old friend whose campaigns he had generously supported: Gov. Rendell.

Then Cozen called on legislative leaders - Democrats Todd Eachus and Dwight Evans in the House, Republican Dominic Pileggi in the Senate. It was as if someone had drawn Cozen a map. Indeed, someone had.

"I advised him to talk to everyone in leadership, on both sides of the aisle," Rendell remembered.

By December, a 42-word sentence appeared on Page 55 of the 230-page bill to legalize poker and other table games at Pennsylvania casinos.

It said the state Gaming Control Board could extend a casino's license for "36 months . . . or December 31, 2012."

Those words spelled hope for Foxwoods' future.

Who put them in the bill?

The answer isn't simple or clear. It's behind the scenes, in the tortuous, often murky process of building a major piece of legislation - the "melting pot of ideas," as a Senate aide said.

But the idea of giving Foxwoods more time did not rise from the grass roots; it drifted down from the top. Casino foes learned of it too late to get it undone.

When General Assembly leaders met behind closed doors to work out a final version of the table-games bill, they kept the sentence in.

The story behind those words shows how, even in an era of greater government transparency and right-to-know laws, a well-connected private interest successfully pressed its cause in Harrisburg in ways invisible to the public.

Invisible, as well, to many of the public's representatives. Rep. Michael Vereb (R., Montgomery), who is on the House Gaming Oversight Committee, said Foxwoods lobbyists hadn't buttonholed rank-and-file legislators in Capitol hallways. They didn't have to.

"This," Vereb said, "was done in leaders' offices."

Critical meeting

By the time Cozen arrived at Rendell's satellite office in Philadelphia, on the 11th floor of the Bellevue in Center City, the governor was focusing on table games.

The budget impasse had ended after 101 days, but the final piece - the table-games bill, with its promise of hundreds of millions in state revenue - was not yet in place.

Cozen needed no introduction that day. He said he and Rendell went back 35 years - "when he was D.A., when he was mayor, and when he became the governor."

Since 2000, records show, Cozen has given $143,029 to Rendell's campaigns. The political action committee at the law firm Cozen founded, Cozen O'Connor, gave an additional $66,204. In September, Rendell's son, Jesse, 29, joined the 550-lawyer firm.

The governor bristled at the suggestion that he's too close to Cozen or other big donors. "If you are going to go with that conspiracy theory," Rendell said, "Cozen was a big contributor, so it didn't take Jesse to have 'suck' with me."

The main local partners in Foxwoods are charitable trusts for the families of New Jersey Nets part-owner Lewis Katz, developer Ron Rubin, and Comcast-Spectacor chairman Ed Snider. Rendell is friends with all three. In 1999, he called Katz his "single biggest" political fund-raiser.

Cozen said Katz, Rubin, and Snider would have no comment except through him.

At the Bellevue, Cozen made his pitch: Without an extension, Foxwoods would have to put up a temporary structure, spending as much as $40 million for the sole purpose of beating the gaming board's 2011 deadline.

That wouldn't be good for anyone, Cozen said, including any potential new investors. Rendell, in a separate interview, remembered Cozen's dropping a big Las Vegas name - Steve Wynn. Cozen said he didn't remember saying that name to Rendell.

"I explained the situation to him," Cozen said, "and he said he would think about it, and he understood."

Rendell said that he believed Katz, too, had spoken with him once about a Foxwoods extension, and that his response had been essentially the same as what he told Cozen.

The governor handed Cozen off to his point man in the table-games negotiations - his chief of staff, Steve Crawford.

The governor's aide and the Foxwoods lawyer "discussed what kind of extension would be acceptable," Cozen said. Crawford confirmed this, describing his role as "minimal."

Cozen said Crawford had asked him for wording: "What kind of language did I think would do the job? . . . I think I gave him a couple of sentences that could be added to any new gaming bill."

The lawyer told Crawford that his first choice was an automatic extension until Dec. 31, 2012, without requiring the gaming board's say-so. "It's easier to sell to investors," Cozen said.

He said Crawford, too, had advised him not to stop there but to talk it through with legislative leaders.

Cozen started making calls.

Professor Cozen

Cozen began lobbying for Foxwoods on Oct. 30, according to records he filed with the state. He said his role had been less a lobbyist and more an "educator."

"I was giving them the information and explaining to them why this makes sense for the state and the city."

He went to leaders of the Senate's GOP majority and its minority Democrats. In the city, where Foxwoods faced the stiffest opposition, Cozen called Evans, Appropriations chairman in the Democratic-ruled House.

Evans, in turn, sent him to Sens. Shirley Kitchen and Anthony Williams, both Philadelphia Democrats.

"I didn't get any promises," Cozen said, "but I did get, 'I understand,' 'It makes sense,' 'Let's see what we can do.' "

In the suburbs, Cozen called Rep. Michael Gerber (D., Montgomery), who runs the House Democrats' campaign fund. Cozen said this call was his idea. Rendell and Gerber, family friends for years, said it was Rendell's.

In any event, the call set the stage for Cozen to make another pitch.

As Gerber remembered it, Cozen said extra time would help Foxwoods recruit "an international gaming operation" - the better to build a bigger casino that would generate more jobs and tax revenue.

Cozen said Gerber had suggested he talk to the House majority leader, Eachus (D., Luzerne). Later, Gerber began checking in with negotiators about the Foxwoods extension - not to lobby, Gerber said, but just to get progress reports.

It wasn't his top priority, Gerber said, but "I believed the extension made sense, and tried to stay informed about it."

'A good idea'

By November, the pressure on the negotiators was intense. Rendell was holding hostage hundreds of millions in funding for state-supported universities until the table-games bill, with its promise of fresh revenue, was on his desk. Pennsylvania State, Lincoln, and Temple Universities and the University of Pittsburgh were pleading for their money.

In the midst of that public fray, the negotiators were hearing privately from Foxwoods people.

"The folks at Foxwoods contacted anybody they could think of who had a role in developing this legislation to push for whatever they could get," said Erik Arneson, spokesman for Pileggi (R., Delaware), the Senate majority leader.

Michael Schwoyer, a lawyer for the House Democrats and a specialist on gaming law, said Foxwoods had shopped several drafts to see what would fly with negotiators.

The answer was an extension to Dec. 31, 2012, he said. But negotiators took pains to leave it up to the gaming board. Foxwoods would get its extension only if the board found "good cause" to grant one.

"As long as the board had discretion, it wasn't something we particularly cared about one way or another," Arneson said.

Along the way, Rendell offered his views of the Foxwoods extension - gently, by his account: "When I was asked by legislators if it was a good idea, I said yes."

Schwoyer ran the wording past Evans' aides and Senate negotiators. No one objected.

"No one person carried the water on this," Arneson said. "The question was asked in negotiations, 'Does anyone have a problem with this?' And no one did."

Negotiators inserted the paragraph and moved on.

'Oh, my God'

Late on Friday, Nov. 13, Rep. Michael O'Brien, a Democrat whose district is near Foxwoods' South Philadelphia site, was back from two days of hearings on blight in Pittsburgh. He asked his chief aide, Mary Isaacson, to "stick your nose in the Capitol to see if anything's going down."

Isaacson checked an internal network that posts drafts of bills and amendments. "Oh, my God," she said.

She called O'Brien to say a new draft of an "omnibus amendment" included wording for Foxwoods.

There had been talk of a Foxwoods extension, but this was the first time legislators outside the bubble of negotiations were seeing it in print.

O'Brien opposed Foxwoods' latest site, just 400 feet from some of his constituents' homes. He said Foxwoods investors should face the music and lose their license if they couldn't open on time.

Casino foes learned of the Foxwoods wording from a newspaper article. Mary O. Reinhart, a retired park ranger who lives across from the site, e-mailed her legislators to say she was "appalled." She said in an interview, "We're pawns."

At Casino-Free Philadelphia's urging, 137 people e-mailed legislators to ask who inserted the wording. "Those questions were ignored," said Paul Boni, the group's lawyer.

The omnibus amendment replaced 186 amendments that rank-and-file House members with concerns ranging from fire-hall raffles to property-tax relief had batted around in weeks of floor debate.

O'Brien felt betrayed. The debate had been "an open and transparent process," he said. "Then late on a Friday night, it's bam!"

Standing in the rain

On Dec. 2, four legislators, including O'Brien and Sen. Larry Farnese, a South Philadelphia Democrat, stood in the rain at the casino site to protest its new lease on life. "The time is right for the gaming board to get us out of business with Foxwoods," Farnese declared.

An anxious Cozen phoned the House majority leader.

Eachus said Cozen had voiced concern about rising resistance from local lawmakers. (In a recent interview, Eachus defended the bill, saying casinos unbuilt meant state revenue uncollected. "It's a balance-sheet issue.")

He assured Cozen the Foxwoods language would stay.

A few days later, Farnese got a chance to question Foxwoods' people - albeit behind closed doors. Kitchen, who heads the city's Senate delegation, set up a meeting in the Capitol to air questions from legislators in districts most affected by the project.

"The state is losing revenue on a yearly basis from your not being in a position to build. And you want an extension?" Farnese said he had told F. Warren Jacoby, a Foxwoods lawyer and Cozen partner. "This sounds like a bad deal all the way around."

But by then, the deal was as good as done.

On Dec. 14, a last-minute bid by several Philadelphia legislators to pry open the omnibus amendment and vote on scrapping the Foxwoods wording fell short.

Cozen was still anxious. "I bit my nails up until the end," he said.

On Jan. 6, the bill got its final vote, passing the House, 103-89. The next day, Rendell signed it without a ceremony, noting "misgivings" about some parts of the bill.

Indeed, the "melting pot of ideas," as Arneson had described it, had come to look more like the marketplace in Casablanca. Investor groups had wrestled over access to casino licenses. Someone added words exempting Foxwoods and the SugarHouse Casino, being built on the Northern Liberties-Fishtown border, from Philadelphia's indoor-smoking ban. Legislators earmarked slices of gaming revenue for pet projects.

As the governor put it, the bill was laden with pork when it reached his desk. "That's not a good way to run a railroad," Rendell said.

He did not mention the Foxwoods extension language.

Cozen said the final wording was "nothing like" what he had first suggested to Rendell's aide, Crawford.

Nonetheless, Cozen said, "I was very pleased with it."

'A fair hearing'

Time and again, Republicans and anti-casino forces have wagged a finger at what Rep. Curt Schroder (R., Chester), top Republican on the House Gaming Oversight Committee, calls "a cozy relationship between the governor and the web of gaming interests."

Rendell rejected such suggestions, saying even his biggest donors get no governmental favors from him. "Having 'suck' with me doesn't mean I will do stuff for you," he said.

"It means that I go to bar mitzvahs and to weddings and I stop by tables and say hello. I am the best at it. . . . That's what I do for contributors. I make them feel like a big deal. And I also give them a fair hearing."

Rendell said he favored giving Foxwoods time because casino revenue helps the state balance its books and offer property-tax relief. He said that was why "I want Foxwoods up and running as fast as possible."

"I don't do things for contributors," Rendell repeated. "I do them because they are the right things to do."

Who was most responsible for the Foxwoods language in the bill? "Cozen," the governor replied. "He did a great job. He is a great lawyer."