Commission Approves New Casino License for Lyon County Print
Commentary/Politics - Iowa Politics
Written by Lynn Campbell   
Friday, 14 May 2010 22:40

The Iowa Racing & Gaming Commission decided Thursday that the state is ready for one more casino -- not four -- and commissioners said they don't believe the issue will be addressed again for three to five years.

Lyon County will be the home of Iowa's 18th state-regulated casino, and the 20th overall when including the state's two Native American casinos. Licenses for casinos in Tama, Wapello, and Webster counties were turned down, with commissioners citing financing problems and the likelihood of pulling business from nearby casinos in voting against those licenses.

In approving the license for a Lyon County casino, commissioners said it would provide the biggest upside for the state with the least risk of cannibalization of other Iowa casinos' profits. The casino's proximity to Sioux Falls, South Dakota, and its distance from existing casinos were important considerations as well.

"Lyon County was projected to have over 80 percent of its revenue by out-of-state customers," said Commissioner Paul Hayes, an Urbandale Republican. "All other counties were projected to have less than 10 percent."

Lyon County was the heavy favorite throughout the year-long process to determine whether to award a new Iowa casino license for the first time since 2005. Two statewide studies on Iowa's gaming market released in May 2009 by GVA Marquette Advisors and The Innovation Group pointed to the potential of Lyon County in extreme northwest Iowa, which would tap the Sioux Falls market.

A major concern for legislators in denying an application for Webster County was the proposed casino's proximity to the Wild Rose Casino & Resorts in Emmetsburg and Prairie Meadows in Altoona.

Commissioner Kate Cutler, a Council Bluffs Democrat, said being in the middle of the state would mean pulling people from those and other casinos. "In the matter of a year or two it would most likely put Wild Rose out of business," she said.

Cutler said the major issues in Tama and Wapello counties were the sources of funding and the prospect of cannibalization. She said the funding source for the Wapello County casino changed last week, which was well past the January deadline the commission set for the Department of Criminal Investigation to perform background checks.

Ken Mimmack, president and CEO of Ingenus of Iowa and the developer of the Wapello County project, said he believes criteria such as cannibalization, firm financing-commitment letters, and consideration of what's happening to other casinos in the state made the bar to receive a license hard to clear.

In a prepared statement released after the decision, Governor Chet Culver said he and Lieutenant Governor Patty Judge "pledge to do everything we can to assist communities in Webster, Wapello, and Tama counties with their job-preservation and -creation efforts, now and in the future."

Executive Council Approves Special Prosecutor

With a voice vote, the Executive Council voted 3-0 late Monday afternoon to appoint attorney Lawrence Scalise as a special prosecutor to complete a criminal investigation of alleged improper campaign contributions from Fort Dodge gambling interests to Culver's re-election campaign.

Deputy Attorney General Julie Pottorff explained that the appearance of a conflict came when Donn Stanley took leave as a division head in the attorney general's office to manage Culver's re-election campaign. She said Scalise will charge the state $80 an hour for the investigation, which she described as "an incredible bargain for an attorney of his caliber." She said payments will be made from the state general fund.

Agriculture Secretary Bill Northey questioned whether there would be a limit to how much time and money will be spent on the investigation, or when it would be complete. Pottorff said there is no limit, and that's up to Scalise. But she said she'd update the Executive Council on costs as the investigation continues. "You'll see the bills as they come in," she said. "Those come in monthly."

Only Northey, a Republican, and Secretary of State Michael Mauro, a Democrat, attended the meeting; Culver participated by telephone. Culver did not weigh in on the issue, but also did not recuse himself from the vote. State Treasurer Michael Fitzgerald and State Auditor David Vaudt were absent.

Culver Chief of Staff Jim Larew maintained Monday that Culver's office is not at the center of the investigation, and that Culver acted properly when he advocated for the Iowa Racing & Gaming Commission to approve four new casino licenses, including the one in Fort Dodge.

"I think it's a big public policy issue that Iowa voters want to know about," Larew said of expanded gambling. "And the longstanding tradition has been, since Governor Branstad first promoted the opening of casinos, that persons either occupying the governor's chair or running for governor have offered opinions one way or another whether we should have more casinos, less casinos. That's an open public debate."

Larew said that because Culver was asked privately about his position on an expansion of gambling, "rather than have it be a private answer, he would offer it to the public as to what he thought the best policy was and they could take it one way or the other, agree or disagree."


Culver Addresses Controversies on Stateewide Television

Culver on Thursday was grilled by reporters about several controversies surrounding his office and campaign during a statewide television appearance just days before officially launching his bid for a second term as governor.

He maintained his innocence related to $25,000 in alleged improper contributions made to his campaign by Fort Dodge gambling interests, saying "we've done nothing wrong." And he downplayed the staff turnover in his campaign and office as "completely normal."

"Our conscience is clear," Culver said on Iowa Press regarding the investigation into his campaign contributions. "I have 7,500 contributors across this state and across the country that have willingly stepped up to support my candidacy. We expect that every one of those donors follows the rules. And if they don't, there will be consequences."

Culver said gambling interests have contributed to campaigns for a long time. He maintained that his office and campaign are not the center of the criminal investigation and said he has no control over what his 7,500 contributors do.

"It's their choice and it's their decision to make sure that they are in compliance with the rules and the laws," he said. "There are a lot of things that are completely out of my control. Obviously, we want this to come to a quick and speedy resolution, and we are going to be completely cooperative, as we have been, in terms of any questions that might arise. We've done nothing wrong."

Culver punted when asked about yet another controversy: an investigation by the Iowa Ethics & Campaign Disclosure Board into Culver's former chief of staff John Frew, his company Frew Nations Group, and its new contract to manage the downtown Cedar Rapids convention facility. Iowans for Tax Relief questioned Frew's role in implementing the I-JOBS bonding for infrastructure program, then managing a project that received $15 million from I-JOBS.

"I think any of those questions should be left to the former Republican speaker of the House and now mayor of Cedar Rapids, Mayor Corbett, and the nonpartisan city council in Cedar Rapids that hired Mr. Frew," Culver said. "Those were decisions made by the mayor and the city council."

Iowa Expected to Retain First-in-the-Nation Caucuses

Iowa is on track to retain its first-in-the-nation presidential caucuses, which would be held in early February 2012. That's under draft recommendations released this week by Republicans; like Democrats, they would exempt Iowa from the "window" that all other states must abide by.

"It's always a fight, and the fact that we have formal recognition of Iowa's status from these draft rules is a key milestone for Iowa," Republican Party of Iowa Chairman Matt Strawn said Thursday.

The Republican National Committee's Temporary Delegate Selection Committee this week issued its draft recommendations specifically exempting Iowa, New Hampshire, South Carolina, and Nevada from the rule that there be no primary, caucus, or convention prior to the first Tuesday in March.

Nineteen states would have to move their primaries or caucuses back to the first Tuesday in March or face sanctions by the Democratic and Republican national committees.

Republicans' draft recommendations must still be reviewed for three months before they come up for a vote by the full Republican National Committee during its summer meeting the first week of August in Kansas City. Any changes to the rules would need approval by two-thirds of the 168 members of the Republican National Committee.

The Democratic Change Commission's recommendations must go before the rules committee of the Democratic National Committee, which meets May 21-22. The full Democratic National Committee is expected to vote on the recommendations August 19-21 when it meets in St. Louis.

Auditor Vaudt Backs Branstad for Governor

State Auditor David Vaudt has endorsed former Governor Terry Branstad in the 2010 Republican primary for governor, and the two now plan to campaign together across the state.

"At this time with the fiscal crisis that Iowa is facing, this is the most important endorsement that any gubernatorial candidate could receive," Branstad said at a Statehouse news conference packed with television cameras, reporters, and Republican staffers. "It demonstrates how committed David Vaudt and I both are to restoring fiscal responsibility and getting Iowa's fiscal house in order again."

Branstad pointed to a projected $1-billion state-budget gap next fiscal year. He vowed that if re-elected governor, he'd replace yearly budgets with a biennial budget process, develop and implement a five-year financial plan for state government, and veto any budget that includes "notwithstanding" language to violate the state's 99-percent spending limitation, which he said Democrats have done 133 times during the Culver administration.

"I am committed to restoring honest budgeting and financial accountability in state government," Branstad said. "I will strictly adhere to our 99-percent spending limitation, just as we did between 1992 when it was enacted and 1999 when I left office."

Vaudt said he had never made an endorsement in a Republican primary. He cited Branstad's past accomplishments and proposals for the future as the reasons for his endorsement. "I believe it's very critical for the future of this state to have new leadership in Terrace Hill next year," Vaudt said. "We simply cannot afford four more years under the current administration."

Branstad acknowledged past criticism from former Republican State Auditor Dick Johnson that Branstad kept two sets of books, that the state's financial house was not in order, and that he had raised taxes repeatedly, but said those things were fixed.

"Dick Johnson made some valid criticisms back in the '80s when the Democrats controlled both houses of the legislature and as a result, we put together the Committee to Reform State Spending in '91 and we passed the spending reforms," Branstad said. "If you look at the record, there's some valid criticisms that were made back in the '80s, but those were corrected and we lived with it. What's sad is what's happened since I left office."

Culver's re-election campaign questioned Vaudt's endorsement, asking how someone who claims to be fiscally responsible could endorse the gubernatorial candidate who was criticized as keeping two sets of books.

"With all due respect, David Vaudt's endorsement does not compare to the triple-A bond rating earned by Governor Culver for his fiscal stewardship during these tough economic times," said Culver Campaign Manager Stanley.

This weekly summary comes from IowaPolitics.com, an online government and politics news service. Reporter Andrew Duffelmeyer and other correspondents contributed to this report.