From The Atlanta Journal-Constitution, 6/5/05:
http://www.ajc.com/metro/content/metro/0605/05ralphreed.html
Gaming foes banked on Ralph Reed
By JIM GALLOWAY
Montgomery --
Year after year, John Giles stood before Alabama legislators and
repeated the same words, occasionally after being reminded of the
penalty for perjury.
No gambling money, either directly or indirectly, had ever flowed to
the Christian Coalition of Alabama in its six-year fight against the
twin sins of a state lottery and video poker, the coalition president
vowed each time.
"I'd have to resign tomorrow," Giles told one lawmaker in 2003.
"It's not illegal, but it's unethical."
Giles, perhaps the most influential religious conservative in Alabama,
is now in the awkward position of backing an internal investigation
into the truth of his own words.
Ralph Reed, a Republican candidate for lieutenant governor in Georgia,
recently acknowledged that an Indian tribe with a casino in
Mississippi was a source for $1.15 million that Reed helped send to
two anti-gambling campaigns in Alabama in 1999 and 2000.
Giles' Christian Coalition received $850,000 after Reed, a political
strategist, gave assurances that the money was not derived from
gambling.
Reed has also said through a spokeswoman that Jack Abramoff, a close
friend and Washington lobbyist for Indian tribes with casinos, and who
is now the subject of several federal investigations, acted as an
intermediary for much of the cash.
In Alabama, the information put flesh to rumors of a
gamblers-and-the-godly alliance that had wafted through the state
Capitol -- even before voters rejected a HOPE-style lottery in 1999
pushed by the newly elected governor, Don Siegelman.
"Somebody's lying. It's either John Giles or Ralph Reed or both. I
think these people are scoundrels," said Siegelman, a Democrat who
blames his failure to win re-election on the lottery defeat.
Siegelman plans another run for the office next year, if he's not
hampered by a federal grand jury looking at gifts he allegedly
received as governor, and he intends to champion another vote on a
statewide lottery.
His pitch:
By supporting the anti-lottery movement, casinos in Mississippi ripped
free college tuition out of the hands of Alabama's brightest students,
and Republicans helped.
Christians and casinos
Six years ago, the defeat of the lottery prompted national headlines
about an underdog coalition of ministers who defeated the governor of
Alabama as well as the state's wealthy business interests.
Reed was at the center of the activity.
He arranged for important donations to the anti-lottery campaign and
an anti-video-poker effort the next year.
His Duluth public affairs firm used much of the money to conduct the
campaigns.
News that Mississippi gaming interests might have contributed to the
victories has revived Alabama Democrats and cast a shadow over one of
the nation's most powerful Christian Coalition chapters.
Giles, 50, had been riding a string of victories.
After assisting in the defeat of the lottery referendum, the intense
Methodist-turned-Catholic successfully opposed Republican Gov. Bob
Riley's tax reform referendum in 2003.
Giles' Christian Coalition chapter was at the center of the the fight
over the display of the Ten Commandments in the Alabama Supreme Court
building.
State Sen. Hank Erwin is a Christian broadcaster and close ally of
Giles.
"He still has clout in Montgomery. Of course, this episode has set him
back a little," the Republican lawmaker said.
Democratic lawmakers are drafting a letter to the state's Republican
attorney general, asking him to determine whether the coalition
violated any state laws regulating lobbying.
Giles has said his past statements regarding the uncontaminated nature
of Christian Coalition finances were based solely on guarantees by
Reed, who rose to prominence as leader of the national Christian
Coalition.
Otherwise, Giles has said little in public, except to announce that a
lawyer would look into "the origin of certain contributions to our
organization, and the motives behind those contributions."
Christian Coalition chapter bylaws forbid acceptance of gambling
money, as did the anti-lottery organization, now defunct.
The coalition's internal investigation is to be finished in a week or
so.
More facts may surface this summer when the U.S. Senate Indian Affairs
Committee in Washington resumes hearings on Abramoff's doings
Coalition takes money
Reed recently acknowledged that some money he sent to Alabama
originated with an Indian tribe that says it draws 85 percent to 90
percent of its business income from gambling and related activities.
Reed and the Mississippi Band of Choctaw say the cash was drawn from a
fund fed by the tribe's nongambling enterprises.
The same account is the source of millions of dollars the Choctaw have
spent on lobbying and political contributions, according to the tribe.
Many leaders of the Alabama anti-gambling campaigns have rejected the
distinction.
"We don't operate in shades of gray. This is black and white," said
Gary Palmer, president of the conservative Alabama Policy Institute,
who was active in the anti-lottery campaign.
Eric Johnston, a Birmingham lawyer, was treasurer for the anti-lottery
campaign.
"I would have been against accepting any of the money if we'd known it
came from Indians, period," he said.
Battle of 1999
In the spring of 1999, both Reed and Alabama became part of an
Abramoff-inspired operation largely aimed at gambling in the
Southeast.
On one side were Abramoff's Indian clients with Class III licenses
allowing them to operate highly profitable casino gambling.
On the other side were tribes limited to Class II gaming -- which
includes bingo -- who had ambitions of moving up.
Upgrades in gambling status required agreements between tribes and
individual state governments, as mandated by the 1988 federal statute
legalizing Indian gaming.
Fortunes were at stake in the fights over new competition.
The National Indian Gaming Association estimated that tribes generated
gross revenues of $18.5 billion in 2004.
Investigations by two Senate committees and the U.S. Justice
Department have focused on $82 million that Abramoff and his partner,
public affairs specialist Michael Scanlon, received from their tribal
clients -- and how the money was spread through Washington and beyond.
Reed has acknowledged receiving $4.2 million through Scanlon to use
his evangelical contacts and organize grass-roots anti-gambling
campaigns in Louisiana and Texas.
The money came from casino-rich Indian tribes, but Reed said he had
"no direct knowledge" of the source of the payments until news
accounts surfaced last summer.
The bottom line, Reed says, is that his efforts were aimed at putting
a halt to the spread of gambling.
"The salient point for me is that I was engaged in work that I deeply
believed in," Reed said recently.
In Alabama, a small but ambitious proponent of gambling has been the
Poarch Band of Creek Indians, a 2,300-member tribe centered in the
southern part of the state.
The Creeks have authorization to offer bingo games.
But at the tribe's new facility, the Riverside Entertainment Center in
Wetumpka, a dozen miles north of Montgomery, the 538 machines that
light up the 16,000-square-foot warehouse look and behave much like
Las Vegas slot machines.
And the cash payout can be just as hefty.
The software that operates the Wetumpka machines is bingo-based, which
makes them legal in Alabama.
Alabama also has four dog tracks, whose owners have adopted the same
machines.
And they also have spent large sums on lobbying.
Help from Harrah's
But it is the Creeks who have made the most public push for Class III
gambling status, and their sovereign standing gives them a legal
advantage.
The Poarch Band has contracted with the Las Vegas conglomerate
Harrah's Entertainment to expand the tribe's Riverside operation,
which opened in March, by nearly tenfold.
All that the tribe needs to add roulette, high-stakes poker and
blackjack is an agreement with Alabama.
The lottery vote was considered crucial to paving the way.
"No state that had adopted a lottery had rejected Indian gambling,"
said Eddie Tullis, chairman of the Poarch Band.
So the owners of casinos in next-door Mississippi -- including the
Choctaw -- had reason to work to defeat the measure, said Tullis.
The video poker legislation was similarly viewed as a wedge the Creeks
would have been able to use.
"They were concerned that we were on the verge of an agreement with
the state to pay the state a good percentage of our casino profits,"
Tullis said.
Among Abramoff's Indian clients, only the Choctaw would have been
concerned with the activities of the Poarch Band, the tribal chairman
said.
A spokeswoman for the Choctaw declined to comment.
Reeds' anti-gambling work in Alabama began in 1999, on behalf of both
Abramoff, for whom he was a subcontractor, and for the Committee
Against Gambling Expansion, an alliance of local religious and
family-oriented organizations.
How much money was raised for CAGE and the sources of the funds is
unknown.
Alabama state law doesn't require disclosure of the information.
On Friday, Lisa Baron, a spokeswoman for Reed, indicated that
Abramoff's law firm arranged for some of the funds.
"We were given assurances that the contributions did not derive from
gambling activity," she said.
The anti-gambling group operated out of the offices of the Christian
Coalition of Alabama.
CAGE opposed two related bills under consideration by the state
Legislature in Montgomery:
Siegelman's lottery proposal, and a bill to permit video poker at
Alabama's four struggling dog racing tracks.
Reed and his firm, Century Strategies, went to work activating
evangelicals, primarily against the video poker bill.
Reed placed notices in church bulletins.
He mailed thousands of pastors a letter, signed by evangelist Pat
Robertson and Eagle Forum President Phyllis Schlafly.
Firm used $1.1 million
The bill setting up an Oct. 12, 1999, vote on a statewide lottery won
approval.
The video poker measure failed.
Proponents of the lottery raised $5 million.
Opponents didn't establish Citizens Against Legalized Lottery until
six weeks before the vote, but quickly raised $1.6 million -- much of
it from local churches.
Reed's firm was the primary consultant for CALL.
Ultimately, $1.1 million would move through Century Strategies, to pay
for TV air time and radio commercials, direct mail pieces, and what a
Reed campaign spokeswoman said was a standard commission.
That same September, 200 miles from Montgomery, the Choctaw decided to
build a second casino in Philadelphia, Miss.
The Choctaw won't say whether the events are related, but on Oct. 6,
1999, Citizens Against Legalized Lottery received a $300,000 check
from Washington-based Americans for Tax Reform.
The anti-tax organization's president is Grover Norquist, a close
friend of both Reed and Abramoff.
Norquist recently said the money came from an Indian tribe in
Mississippi interested in protecting its gaming interests.
The Choctaw are the only gaming tribe in Mississippi.
Reed worked directly with Norquist for the money, and gave assurances
to CALL that it came from non-gaming sources.
Only later, a spokeswoman for Reed said, did he learn it came from the
Choctaw.
Observed Erwin, the Alabama senator:
"There was so much trust and faith in Ralph Reed because of his
association with the national Coalition."
Following the defeat of the lottery by voters, attention returned to
the state Capitol in Montgomery.
The Christian Coalition of Alabama coordinated opposition to a revived
measure to permit video poker machines at dog tracks.
The bill was defeated.
The coalition's entire effort was funded with three checks written by
Americans for Tax Reform, totaling $850,000.
Norquist said the cash had the same origins as the previous donation,
and Reed said he understood it came from "tribal sources."
It is this money that Reed says was arranged by Abramoff, the
Washington lobbyist.
Giles said the entire amount was signed over to Century Strategies.
Asked how the money was spent, Baron, the Reed spokeswoman, said the
campaign was "heavily weighted toward paid media, direct mail, and
telemarketing."
In hindsight, religious conservative leaders say the final recipients
of the money should have asked tougher questions about its origins.
Dan Ireland, the chaplain of the Alabama Legislature and one of the
organizers of the anti-lottery campaign, said:
"If they offered me $850,000, before I'd accept one penny, there'd be
an investigation."
Wounds from Alabama's gambling wars are not healed.
This year, the Legislature was paralyzed for weeks while Senate
Republicans filibustered a Democratic attempt to break the influence
of the Christian Coalition by forcing it to disclose whose money is
behind its campaigns.
Democrats say they're certain to try again.
The revelations of the last few weeks will make it hard for GOP
lawmakers to resist closing the loophole.
Siegelman, the former governor, called the disclosure measure a
necessary step to a second lottery vote.
"This time we'll be keeping our eyes on the Indian casinos and the
Christian Coalition," he said.
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Harry
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