Working for the house

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The state of Maine has been around since 1820, and in all these years, the system of governance outlined in our Constitution has been good enough for every corporation doing business in Maine.

Our state is governed, in part, by a citizen Legislature elected every two years. The Legislature interprets the “will of the people,” and condenses this will into written, legal form: a statute. All citizens and businesses have the right to approach the Legislature and argue the merits of proposed statutes, or statutory changes, but once a decision is made, they must conform to the new, or modified, law.

Penn National Gaming, a company that has raked in millions in gambling profits, 95 percent drained from people living within a 50-mile radius of Bangor, has other ideas about the Maine Constitution.

When members of the Legislature’s Appropriations Committee earlier this year suggested changing the 2004 statute governing gambling revenues, Penn National erupted in indignation, shut down its $131 million Bangor construction project, and caused a State House stir that ground the entire legislative process to a halt. Quickly, all proposals in the Appropriations Committee concerning Penn were pulled, and closed-door meetings were held by legislative leaders, the governor’s office, Penn National, and others.

The apparent result?

Penn National agreed to restart construction, but with the guarantee that their revenues, and the money received by the other statutory beneficiaries, could never be touched. Gov. John Baldacci, and the leadership of the House and Senate, apparently acquiesced to this cockeyed demand.

Some of their astute advisors, however, knew supplying Penn with this guarantee required a strategy to circumvent statutory limitations and challenges. Otherwise, citizens, like myself, could continue to confront this giveaway of Maine tax dollars, and this total lack of legislative accountability.

Thus, the governor issued an executive order on June 1, creating a “special committee.”

Rigging the law

Is the fix in?

The purpose of this committee, I believe, is to protect the money Penn National and all the other statutory beneficiaries collect into the future. It also precludes changes to the list of beneficiaries.

The following is the stated purpose, and objective, of this committee taken directly from the governor’s order:

“The committee is created to explore ways to enhance stability for this citizen-approved facility through simplification of the tax and revenue sharing structure in a revenue neutral manner that will yield to the state and the existing statutory beneficiaries the same revenue as would be collected under current law, but enhance the effectiveness and stability of the tax and revenue sharing requirements of current law. It is anticipated the Committee will examine, among other things, the current tax structure for the slot machine operator and potential adjustments to the methods by which it is taxed.”

This order emits a peculiar odor. It’s carefully crafted wording, I believe, leads to one inevitable conclusion: Current gambling interests must be protected into the future at all costs, by designing rules and regulations – outside the legislative process – to protect their revenues, and payouts, from future government interference. Any other action by this committee would run contrary to its stated purpose.

Why is it up to the Legislature and Gov. Baldacci to guarantee Penn National’s profit? Penn National has a monopoly granted under statutory law by the state of Maine, but not a monopoly granted in perpetuity. Penn National should not be given an exemption from normal statutory review and change, nor should statutory law be rigged by an appointed committee to accomplish the same end. What a deal: a monopoly with guaranteed profits, protected from tampering by the people.

Penn could probably use this special protection as leverage to sell itself to a private equity firm for billions, right?

Oh, wait. On June 19, Fortress Investment Group LLC, a private equity and hedge fund group, agreed to pay $6.1 billion for Penn National.

A return on Penn National investments should not concern our government. The well-being of Maine’s people should be its only concern. As the Wall Street Journal pointed out June 15, gambling has failed miserably as a tool for economic expansion and job creation. Gambling as economic development will also fail in Maine.

I believe, in the long-term, casino gambling will drain the financial lifeblood from our people, causing bankruptcies, family collapse, and distress in our quality of life. Again, the Maine Constitution obligates the Legislature to review statutes to the benefit of Mainers. I know our Legislature has the intelligence to do this job. They don’t need the governor to establish special committees to tell them what to think, or how to vote.

There are enough highly paid gambling lobbyists in Augusta already.

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A review is needed

I agree the 2004 gambling law cries out for a thorough review – but a legislative review. The Legislature has a committee to advise it on gambling matters – Maine’s Gambling Control Board – which after three years of hard work and fact gathering, if now authorized, can do this job. If Gov. Baldacci didn’t appoint a special committee to revise the original law, why would he find the need to appoint one now?

Many mistakes are evident in the original law. Mainers voted to allow the two existing commercial harness racing tracks, as of November 2003, to operate up to 1,500 slot machines each, provided the revenue supported harness racing, prescription drugs for the elderly, and educational scholarships for Maine kids. We voted on nothing else.

Under the law, however, the gambling control board was not authorized to track tax money once given to statutory beneficiaries, leaving the board unable to demand accountability for the distributions. A current recipient, for example, can take tax money and, theoretically, buy a vacation home. This might be what racetracks, off-track betting parlors, and lobbyists had in mind, but I know this was not the intent of Maine voters.

No more, no less

Again, Gov. Baldacci has appointed a gambling board with a three-year history of research and work.

He should utilize it.

The right of Maine people to review law, or advocate for change, should not be threatened by government actions. This potential exists with the issuance of the executive order creating this special directed purpose gambling committee.

This committee, and the government action that created it, could establish a very dangerous precedent. The power to create and modify statutory law is solely a legislative function. In 2004, as a private citizen, I fought to eliminate the off-track betting money from the original bill. I moved on after that effort failed, and proposed no further action in that regard until this new Legislature was seated. This was my right and my obligation.

Penn National enjoys the same rights and obligations. No more and no less.

And no exceptions

If Penn National doesn’t like our democratic process, then there are others, like a coalition of Maine’s Indian tribes perhaps, who may be ready to assume Penn National’s statutory position.

It is also time for Gov. Baldacci to get creative. Instead of appointing slick, rubber-stamping committees for gaming interests, he should call folks into his office and ask for intelligent alternatives. He should ask for solutions that are consistent with the way Maine has done business since 1820; solutions that benefit all Maine people.

No other business is exempted from change in Maine statute, and Penn National should be no exception.

Michael Peters is a former member of Maine’s Gambling Control Board and current member of the Maine Liquor & Lottery Commission. He lives in Dixfield.

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