|
The Washington Post Ehrlich Ally
Hitting Up Racing Industry By Craig Whitlock
and Lori Montgomery Maryland Gov. Robert L. Ehrlich Jr.'s chief fundraiser is asking the horse racing industry to pay for a six-figure advertising campaign in support of the governor's plan to legalize slot machine gambling at racetracks, according to legislative and racing sources. Richard E. Hug, the finance chairman for Ehrlich's election committee, has been seeking donations from racing interests in recent days, urging them to write checks to a newly established group called Citizens for Maryland's Future, sources said. The nonprofit organization, which is not required to identify its contributors, would then underwrite a broadcast ad campaign to pressure lawmakers to approve Ehrlich's slot machine bill. In a telephone interview yesterday, Hug acknowledged that he was involved with the fundraising and confirmed the existence of the nonprofit group but declined to say how much money he had collected or give other details. He said he was not acting on Ehrlich's orders, but would not answer questions about whether he was working in concert with members of the Republican governor's administration. "I'm not doing this on behalf of the governor. I haven't talked to the governor about it," said Hug, who is also Ehrlich's appointee to the University System of Maryland Board of Regents. "You or I or anybody else as a private citizen can be involved with this kind of thing. I don't see anything ethically wrong with it." Maryland law prohibits the governor and legislators from raising campaign money during the annual 90-day General Assembly session, which began Jan. 14. Any donations to the pro-gambling group would not be counted as campaign contributions, Hug said, but rather as "independent expenditures" designed to sway public opinion in favor of slot machines. Maryland's horse racing industry stands to make hundreds of millions of dollars a year under Ehrlich's slots proposal. According to the governor's latest bill, introduced last week, four racetracks in the state would receive gambling licenses and the right to 11,500 slots combined. Ehrlich's staff has estimated that racetracks would collect $600 million annually in gross revenue once the gambling parlors are fully operational. Paul E. Schurick, the governor's communications adviser and an architect of his slots bill, said that Hug informed him of the lobbying campaign about two weeks ago but that the Ehrlich administration was not involved. "He's told us about it, but this is not anything we've discussed in detail," he said. Schurick said the administration liked the idea, however, noting that anti-gambling forces held a rally Wednesday and have formed their own nonprofit organization, called StopSlotsMaryland. That group reported raising and spending about $25,000 last year to oppose Ehrlich's slots plan, but has not collected any new contributions since then, said W. Minor Carter, the group's lobbyist. In comparison, racetracks reported spending more than $2.5 million last year to lobby in favor of slots. "I don't know the genesis of it, but we're delighted that a pro-slots coalition has come together to meet the anti-slots coalition," Schurick said. "What a great country. That's what makes Annapolis such a great spot, that these kinds of coalitions break out all the time." According to two racing industry sources who spoke on condition of anonymity, Hug told two potential donors to the pro-gambling cause to call Schurick if they had any questions about the governor's proposed slots legislation. Hug declined to comment when asked about the conversations. Schurick said he has "not one time, never" spoken to anyone in the racing industry about Hug's fundraising or about the media campaign. William Rickman Jr., the owner of Ocean Downs Racetrack on the Eastern Shore and a proposed racetrack in Western Maryland, said he was solicited for money but would not say who approached him. He said he declined to make a donation. "Let's put it this way: Have I heard about it? My comment is: Yes," Rickman said. "Have I participated? No, I have not." Joe Thompson, owner of Winbak Farms in Cecil County, one of the largest standardbred horse-breeding operations in the country, said he was contacted this week by a fundraiser for the governor, but he declined to say whether it was Hug or provide details. "I don't want to talk about that," he said. The state's largest racetracks said they had not been approached by Hug for donations and were unaware of the campaign. "I have not heard a single word about anything like that," said Timothy Capps, executive vice president of the Maryland Jockey Club, which owns Pimlico Racecourse and Laurel Park. "If it's happening, it's nothing I've heard anything about." Mark Ricigliano, a veterinarian who has a contract to purchase Rosecroft Raceway in Oxon Hill, also said he had not been asked for money. Public advocacy campaigns are a staple of state and federal politics. Last year, Cloverleaf Enterprises Inc., the owner of Rosecroft Raceway in Oxon Hill, spent about $150,000 on radio advertisements and other expenses to urge the public to support slot machines at racetracks. But elected officials usually take care to distance themselves from such lobbying campaigns. "Pressure from Dick Hug on Ehrlich allies could be seen as a shakedown, that they have to pony up if they want the bill passed," said James Browning, executive director of Common Cause Maryland. The pro-slots group is known as a 501(c) (4), a reference to the section of the U.S. Tax Code that allows for a "civic league or social welfare organization" whose funds are used "exclusively to promote social welfare," according to Internal Revenue Service guidelines. In the political world, such nonprofit groups are valued as the only type of tax-exempt organization allowed to raise unlimited sums from anonymous donors to fund media and lobbying campaigns. "The advantage . . . is it doesn't have to disclose its contributors. That, and there are no limits on what it can accept," said Larry Noble, executive director of the Center for Responsive Politics, a nonpartisan research group that tracks money in politics. In 2000, President-elect Bush formed such an organization, the Bush/Cheney Presidential Transition Foundation Inc., to help cover expenses as he prepared to take office. In 2002, Ehrlich formed a similar group to pay for his inaugural festivities. © 2004 The Washington Post Company |
