EASTON -- Despite a 15-month grand jury probe that failed to produce any criminal indictments, Maryland State Police will continue to investigate the lucrative legal slot machine activity on the Eastern Shore that last year yielded nearly $32 million in gross revenues.
Gov. William Donald Schaefer and Attorney General J. Joseph Curran Jr. said in a joint announcement yesterday that state police will use covert operations to determine if individuals or organizations are stealing proceeds from slot machines.
When findings of the probe were released late last month, Mr. Curran said the Anne Arundel County grand jury looking into slot machine operations was unable to find evidence of significant criminal wrongdoing. However, shoddy bookkeeping and confusion about the state's gambling laws made the slot machine operations vulnerable to criminal abuse, he said.
Mr. Curran endorsed the grand jury recommendation for strengthening laws governing slot machines and the creation of an oversight commission. But Governor Schaefer said the probe did not go far enough and criticized the attorney general's office, which had called the grand jury, for what he said was a failure to look into all possible instances of criminal activity.
Yesterday's announcement brought the two elected officials together on the slot issue. "It's a reconciliation of our differences," Mr. Curran said. Under a 1987 state law, 52 fraternal clubs and veterans organizations in eight of the Eastern Shore's nine counties are allowed to raise funds through slot machine gambling if they give at least 50 percent of the proceeds to charity. Worcester County officials had their clubs exempted from the law, partly because of Ocean City's fear that gambling would ruin the resort's image as a family retreat.
State officials said that gamblers dropped nearly $32 million into the slot machines last year.
Mr. Curran said the grand jury probe of slot machine operations was limited to uncovering evidence of tax law violations while state police sought to determine whether any individual or groups were stealing slot machine proceeds.
If state police are successful in presenting evidence of criminal wrongdoing, Mr. Curran said, his office will prosecute the cases in court. By doing so, the attorney general's office would be bypassing county prosecutors, who normally would handle local criminal matters.
Some Eastern Shore prosecutors feel uncomfortable about going after fraternal organizations because the groups contribute slot machine proceeds to community charities and, in many instances, the members are friends of the state's attorneys, said Page Boinest, the governor's press secretary.
That's not so in Wicomico County, said State's Attorney Davis Ruark.
"If cases are brought to this office, they shall be fully evaluated and fully prosecuted," Mr. Ruark declared. "I don't feel uncomfortable prosecuting anybody for any violation of the law."
But Kent County State's Attorney Susanne Hayman said she welcomes the attorney general's interference. "I agree with it," she said. "The county election is less than a year away and in a community this small with as many fraternal organizations as we have, everything is taken very personally."
Mr. Curran said the grand jury learned that many clubs were giving donations to groups and individuals that do not qualify as charities, including several instances when students received money to help pay college expenses. He described those occasions as "innocent things," resulting from a club's misunderstanding of the law.
In other cases where organizations made questionable use of slot money, Mr. Curran said, the alleged violations would have been misdemeanors, and all had exceeded the statute of limitations.
Mr. Curran said the continuing state police probe of slots could help protect clubs from crooked gamblers or "slot busters," who know how to make slot machines pay out more than they are supposed to.