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'Giveaway' of slots licenses criticized


If Gov. Robert L. Ehrlich Jr. is stymied in his bid to put slot machines at Maryland's horse racing tracks, it will be the result in no small part of the number crunching of a little-known investment banker from Chevy Chase.

Jeffrey C. Hooke, a conservative anti-tax activist, has issued a string of studies over the past year that question what he regards as a potential "giveaway" of slots licenses worth tens of millions of dollars to a small group of politically connected racetrack owners.

His efforts have played a key role in shifting the debate from whether to have slots at tracks to the value of the licenses, getting the best deal for taxpayers and whether such licenses should be opened to competitive bidding.

"His research has had a significant impact on the discussion," said W. Minor Carter, a lobbyist for a coalition of anti-slots groups. "He's done a real public service."

It's not the first time Hooke, 48, has challenged the state's power elite from his sparsely furnished, one-room office in an 18-story office tower in Tysons Corner, Va.

Three years ago, Hooke and two associates staged a campaign against paying Baltimore Orioles owner and powerful lawyer Peter G. Angelos $1.1 billion in legal fees from the $4.4 billion the state was to receive as part of a national legal settlement with tobacco companies. Angelos eventually agreed to accept $150 million over five years.

The slots debate has again put Hooke in the public spotlight.

"The state is creating the business in the first place, so why shouldn't it get as much as it can?" he says.

Hook was a one-time candidate for state comptroller - he stepped aside after 10 days to give Michael Steele, now lieutenant governor, a better shot at the Republican nomination - and grew up in the Northwood neighborhood of Baltimore, near Morgan State University. He earned a master's degree in business administration from the Wharton School of the University of Pennsylvania.

He and his wife, Patty, a former aide to former Rep. Constance A. Morella, a Republican from Montgomery County, have two school-age children.

Hooke said he decided to tackle the slots battle for the same reasons that he and his tax policy group took on the Angelos legal fee issue: It offends him when government confers riches on politically connected insiders.

Hooke said he saw that kind of crony capitalism while traveling to Third World countries as an investment officer for the World Bank.

He said friends of those in power were often awarded at a fraction of their value exclusive, lucrative franchises to supply utilities or other services.

"I've seen a lot of poverty in my travels, and at the same time you've got these small, elite cliques that are largely maintained by government-controlled monopolies and oligarchies," Hooke said. "That's always offended me."

He said he saw disturbing parallels as the debate about slots began to take shape in Maryland.

"I was always aware that a gambling monopoly in this state would be extremely lucrative," Hooke said. "Allowing tracks to keep from 39 percent to 46 percent of the revenue, that's a giveaway."

To supporters, Hooke is an advocate of good government who is seeking to protect the interests of Maryland's taxpayers.

Tom Firey of the Maryland Public Policy Institute, who has co-written some of Hooke's slots studies, said Hooke has "contributed to the public discourse" by focusing on the tax side of the slots issue.

"I think a lot of people listen to Jeff, even if some people get mad and their blood pressure goes up," Firey said. "A lot of people want things to go the right way and realize he has something important to say."

Hooke's detractors dismiss his studies as inaccurate. They note that he has no background in horse racing or the economics of gambling.

"He strikes me as almost like a gadfly," said Paul Schurick, the governor's communications director and point man on the slots issue.

"Just when the debate is making sense, some study he does comes flying in out of left field. Some of it is just goofy," Schurick said. "It has not been helpful,"

Hooke, the author of three books on corporate finance, said he is confident that his studies accurately portray the issues surrounding slots.

Hooke's reports are issued through the Maryland Tax Education Foundation, a nonprofit, conservative tax policy group that he chairs.

The group has an annual budget of $10,000 to $20,000, raised through contributions from conservatives who fight to curtail government spending and keep taxes low, he said.

In his reports, Hooke has argued that exclusive, regional slots licenses in Maryland could be worth $1.5 billion if auctioned to the highest bidder. And he has challenged the conventional wisdom that allowing slots at sites other than racetracks would damage Maryland's ailing horse racing industry.

"I think his slots information generally is viewed by the people who know something about slots as pulling numbers out of the air," said Richard Hug, who is active in Republican politics and was Ehrlich's campaign finance chairman.

Hug said he has known Hooke for several years and that he doesn't doubt his sincerity but finds his studies to be questionable.

Hooke has supported Republican candidates and gave $1,000 to Ehrlich's campaign during the gubernatorial race in 2002.

"I think he believes in good government," Hug said. "I just question the credibility of his studies, that's all."

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