In Massachusetts and Rhode Island, gambling was once the province of organized crime. It was run by bookies and guys named Bobo and Poochie who shattered knee-caps if you didn’t pay up. It was a sleazy, lucrative business that drew FBI agents and created widows.
That’s all changed of course. Beginning in the 1970s with lotteries, states across the nation got into the racket of separating people from their cash. It was seen as easy money that had the virtue of allowing the politicians to pay for government goodies without raising taxes.
Now this business is run by wealthy men in Brooks Brothers suits who employ thousands. They dress it up with restaurants and concerts, such as those endless Four Tops farewell tours. Casinos take bets with the swipe of a credit card. The industry is known by its Orwellian name, gaming.
In Rhode Island, gambling provides the third largest source of state money, after income and sales taxes. Now, how to divide some of these millions of dollars has split two companies who employ thousands of Rhode Islanders. They are technology provider IGT and casino operator Twin River. It’s hard to root for either company –they both seek crony capitalism no-bid deals from the state.
This isn’t a new issue. The no-bid deal for IGT harkens to 2003 when the company then known as GTECH was granted an exclusive 20-year contract by then-Republican Gov. Don Carcieri. At the time, the rationale was that the company was considering moving to Massachusetts and the deal was needed to keep them in Rhode Island.
Now, Democrat Raimondo has proposed a 20-year extension for IGT. This deal was negotiated in secret by her administration. Perhaps the worst element of this is that at the time her administration was in talks with IGT, the company donated $150,000 to the Democratic Governors Association, which Raimondo chairs. Not to be outdone, Twin River forked over $100,000 to the DGA.
In politics, appearances matter. Even in the grubby world of political fundraising, this one smells. Raimondo should have known better. At the very least, she could have waited until any deal was approved by the legislature before accepting such big money.
It resembled the way she harvested money during her reelection from executives of a Boston hospital behemoth that was seeking government approval for a merger with Rhode Island hospital chain Care New England.
Businessman and philanthropistAlan Hassenfeld stepped last week into this nasty joust between IGT and Twin River. According to the Providence Journal, Hassenfeld is offering to pay for an independent study so that state lawmakers can have the information they need to make a decision on the no-bid extension of IGT’s contract.
Hassenfeld has a point and he isn’t alone. Republican Rep. Brian Newberry of North Smithfield raised similar questions recently. And House Speaker Nick Mattiello, D-Cranston says he will “strongly consider” Hassenfeld’s opinion.
Hassenfeld and his toymaking family company, Hasbro, are known for their good works and philanthropy. But let’s run the reel back to the 1990s, when Hassenfeld’s self-interest trumped his zeal for government ethics.
In 1991, Hassenfeld was head of an advocacy organization known as Right Now, which fought for strong ethics laws on pols and open government. But in 1996, when rival Mattel threatened to takeover Hasbro, Hasbro executives ran to the Statehouse to protect their interests.
The Hasbro anti-takeover measure passed the Assembly in two days. There were no public hearings and no public discussion at all. None of the Hasbro executives even registered as lobbyists.
If Hassenfeld wants to do a public service, he ought to spend his time urging current Hasbro executives—who seek a new headquarters– to build it in Pawtucket, where it’s been for years.
Because of Raimondo’s secrecy, it is incumbent on the Assembly to vet the IGT deal. Anything less than a deep probe would be a disservice to Rhode Island taxpayers.
Scott MacKay’s commentary can be heard every Monday at 6:45 and 8:45 and at 5:44 in the afternoon.
