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Ex-gaming official fights rules he helped
write
By Douglas Holt As part of that rejections, the board accused top casino officials of bringing in two shareholders with ties to organized crime and using a mob-linked contractor at the casino construction site. The board found that those associations violated rules that bar casino operators from associating with "persons of unsavory reputation." But in his affidavit McQuaid said the rules he helped create to bar activities discrediting the casino industry are "extraordinarily subjective." Consequently, a board prohibition against doing anything that would bring discredit to the casino industry "is incapable of being defined with clear meaning," McQuaid argued. Emerald lawyer Michael Ficaro said he saw nothing inconsistent in McQuaid trying to poke holes in rules he helped devise and once enforced. "The point is you must put standards in rules if you charge somebody with violating those standards," Ficaro said. "You can't just charge people with things that are not in the rules." Meanwhile, Emerald Casino is seeking to short-circuit legal maneuvering by selling its contested license to Las Vegas casino giant MGM-Mirage Inc. for $615 million. On Tuesday, Emerald officials are expected to outline their latest settlement offer, which would earmark $300 million of the proceeds for the state. In a recent interview with the Tribune, Emerald Chief Executive Officer Kevin Flynn said he and relatives will keep the license tied up in court unless they get a "fair return" on roughly $40 million they sank into the casino effort. The latest proposal would leave the Flynns with a profit of roughly $50 million after taxes and expenses, said a source familiar with the negotiations. But Atty. Gen. Jim Ryan, who is the Republican candidate for governor, said he would fight to block any deal that would make a profit for Emerald investors while circumventing the appeals process. "I don't know how much clearer I can make it," Ryan said Monday. "We shouldn't lower our standards, frankly, just to make a buck." Other documents submitted by Emerald lawyers in connection with their appeal reflect a flurry of Emerald stock purchases and sales made by Flynn's father, Donald, a former Waste Management executive who is Emerald's main financial backer. The transactions raised the ire of the board, which said they were made without its approval. During a September 2000 meeting, former board member Mac Ryder said, "It seems the Emerald owners have been buying and selling shares like they were sweet corn in season, without board approval." At the time no details on the transactions were released. Emerald officials have said in court documents that they are not required to tell state investigators how or why people obtained shares. On Sept. 1, 1999, less than three months after Gov. George Ryan signed a gambling law allowing the casino to go to Rosemont, Donald Flynn sold casino shares to 11 individuals for a total of $5.9 million. The buyers included John Sisto, nephew of state Rep. Ralph Capparelli (D-Chicago), a key casino backer; Susan Leonis, a friend of Rosemont Mayor Donald Stephens and a lobbyist for Rosemont; and Joseph Salamone, whose brother has organized-crime ties, according to the Gaming Board. Sisto and Salamone spent $375,000 for a stake of one-quarter of 1 percent in the casino venture; Leonis put up $750,000 for one-half of 1 percent, the records show. Two months later Donald Flynn sold shares to Emerald insiders for far less. Flynn sold McQuaid just over one-quarter of 1 percent for $53,477, a 90 percent discount from what outsiders paid. Flynn also bought out some original shareholders in a company that originally operated a now-defunct casino near Galena, Ill. On Sept. 21, 1999, Flynn bought shares from six longtime shareholders for $11.7 million, records show. Copyright © 2002, Chicago Tribune |
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