PORTLAND (AP) – A federal judge handling a libel suit against Shawn Scott has ordered the Bangor racino developer to put a stop to a newspaper advertisement targeted at a gaming company working to put a racino in Saco or Westbrook.

The ad, which ran last week in the Journal Tribune in Biddeford and the American Journal in Westbrook, claimed that Penn National Gaming owns a Mississippi casino that broke federal money laundering laws.

U.S. District Judge George Singal ordered Scott and Maine Opportunities, a Scott-financed committee that paid for the ad, to avoid the allegation in future ads.

The judge’s ruling Monday came in response to a motion that Penn National filed last week as part of its lawsuit claiming Maine Opportunities’ ad is libelous, defamatory and disruptive of the democratic process in Saco and Westbrook.

Penn National is working with Scarborough Downs to develop a racino in one of the two cities. Both will vote Dec. 30 whether to allow a racetrack with slot machines.

Although Singal stopped short of ordering a retraction of the ad, Penn National’s attorneys said the ruling proves that the allegations were false. The company plans to continue to seek a retraction and punitive and compensatory damages in excess of $75,000.

“Bottom line. They lied and they got caught,” said Eric Schippers, vice-president of public affairs for Penn National.

Stephen Langsdorf, an attorney representing Scott, did not admit the ad had mistakes, but agreed in court with Penn National’s request to stop its use. He said afterward that Maine Opportunities is looking into whether the ad is inaccurate, and if so, how it got into print.

“We obviously have to find out what happened here,” Langsdorf said.

Kathleen Newman, treasurer of Maine Opportunities and a defendant in the suit, said in an affidavit that the political action committee hired a private investigation firm to research Penn National. The firm provided information to a political consultant who in turn wrote the ad.

At issue is whether Penn National is connected to Casino Magic Biloxi in Biloxi, Miss. The ad claims Penn National owns the casino, which in 1999 reached a settlement with the U.S. Treasury Department over money laundering violations. Penn National said it does not own Casino Magic, but rather Penn National’s competitor, Pinnacle Entertainment, owns it.

Langsdorf argued in court that even if the ad is wrong, it is not libelous because Maine Opportunities easily could have made a mistake and did not act with malicious or reckless disregard for the truth.

AP-ES-12-23-03 0217EST