State gaming regulators ordered their investigators to change a background report on Mount Airy Casino Resort owner Louis DeNaples -- and gave DeNaples early access to challenge its findings -- before awarding him a slots license, according to sources.
The Pennsylvania Gaming Control Board's Bureau of Investigations and Enforcement revised its report on DeNaples at least six times, sources said, after board Executive Director Ann Neeb and General Counsel Frank Donaghue reviewed each draft and objected to BIE's findings as inconclusive, unsubstantiated or hearsay.
The process used in Pennsylvania is alien to experienced gaming jurisdictions such as New Jersey and Nevada, where investigators conduct background checks of license applicants independently. There, only after gaming investigators complete their work, are background reports delivered to decision-makers. Also, in those states, decision-makers expect to hear all allegations -- proven or not -- about an applicant prior to voting.
Pennsylvania's decision-makers discounted assertions they believed to be unproven. ''We only wanted to know what could be proven,'' Tad Decker, the former board chairman, said in an interview.
Neeb and Donaghue ordered BIE to strip investigators' analysis of their findings from the report, sources said. That overruled Michael Schwoyer, thendeputy chief counsel for BIE, who argued that BIE's conclusions were vital and necessary for the board's consideration, sources said.
DeNaples' final background report included only brief references to what BIE had uncovered about DeNaples, including alleged ties to reputed mobster William D'Elia, questionable campaign contributions to Gov. Ed Rendell and others by some of DeNaples' businesses, and the purchase and resale of trucks damaged by Hurricane Katrina by a company DeNaples co-owns.
BIE forwarded some of what it found during its DeNaples investigation to federal and state agencies as ''criminal referrals.'' An agency makes such a referral when it suspects criminal wrongdoing but may not be in a position or be best able to pursue it.
At BIE's insistence, the investigators' raw findings were attached to the final DeNaples report as exhibits. The information in the exhibits went largely unexplained in the final report.
Some of the information -- it's unknown how much -- was aired during the board's review, which included two closed-door meetings with DeNaples and his lawyers.
In December 2006, the board voted unanimously to award DeNaples a slots license. In February 2007, the board suspended his license because in January a county prosecutor had charged him with perjury, accusing him of lying to the board about his ties to organized crime. Through a spokesman, DeNaples has said he has no such ties and is innocent.
Board spokesman Doug Harbach said Neeb and Donaghue's involvement in the crafting of DeNaples' background report was proper and routine.
''BIE's reports were not 'ordered' to be changed,'' Harbach said in an e-mailed response to questions. ''This allegation is completely misleading and a mischaracterization of the process.
''Reports of this magnitude will certainly undergo a number of revisions,'' Harbach said. ''The appropriate bureaus within the gaming control board, including BIE, made edits and revisions based upon their review as each continued work on the matter, and for no other reason.
''The Board Â
did not have a role in the preparation of any applicants' background report,'' Harbach said.
But two state legislators, told by The Morning Call of the changes sources said were made to the DeNaples report, questioned the integrity of the process.
''We have a [gaming] board that seemingly thwarted the action of its own agency,'' said Rep. Doug Reichley, R-Lehigh.
''The whole purpose of doing background investigations is to get the complete and unvarnished truth about all aspects of any applicant for a license,'' said Senate Majority Whip Jeff Piccolo, R-Dauphin. ''What the board did in this case was serve as an advocate for the licensee.''
Both lawmakers recently have called for changes in gaming law to make the process of awarding licenses more transparent, and to place the attorney general, not BIE, in charge of background investigations. Each voted against the law allowing slots in Pennsylvania.
DeNaples findings gutted before slots vote, sources say
Investigators ordered to remove analysis about casino owner's alleged ties to organized crime
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