LEWISTON, Maine — Promoters of a statewide effort to bring a casino to downtown Lewiston in 2011 may avoid paying more than $35,000 in civil penalties for presenting false information under Maine’s campaign-finance reporting laws, based on new documents released Tuesday.
But the decision on what the political action committees set up by Stavros Mendros and Peter Robinson, both of Lewiston, will pay for intentionally misleading voters on the source of their funding will be made by the Maine Commission on Governmental Ethics and Election Practices.
The PACs, Green Jobs for ME and the People of Lewiston-Auburn, could have faced a total of more than $85,000 in penalties for misreporting where they got about $400,000 in campaign donations.
Reports submitted by the PACs show the bulk of their donations came from a Georgia-based slot machine maker, GT Source. But the commission’s investigation determined the company provided no money to the campaign.
Ethics commission staff Tuesday backed away from a specific penalty recommendation made in July, noting a trio of emails presented by Robinson in September that created a “they said, they said” scenario, making it difficult, without further investigation, to determine who knew what about where the campaign’s cash was coming from.
Robinson’s testimony is at odds with that of Scott Nash, a Maryland businessman who was also a partner of a Maine LLC, formed to operate the Lewiston casino if it were approved by voters, according to a new memo issued by ethics commission Executive Director Jonathan Wayne. Statewide voters rejected the casino proposal in November 2011.
In December 2011, Dennis Bailey, executive director of CasinosNo!, an anti-casino PAC, issued a complaint over the casino group’s PAC reports.
Robinson said he relied on information, including three emails from Nash that he presented to the ethics commission in September, that indicated the campaign funding was coming from Dwayne Graham, CEO of GT Source.
The commission’s investigation determined that the campaign was largely funded by Nash, Ryan Hill, also of Maryland, and Chase Burns of Oklahoma. All three have been involved in the gambling industry or are connected to companies that produce slot machines or slot machine software.
Ryan and Nash were involved in nonprofit programs that provided down-payment assistance to homeowners. The programs earned large fees and were the subject of negative stories in business and banking news from 2004 to 2008, according to the latest memo from Wayne of the ethics commission.
The third campaign investor, Burns, has been the subject of a criminal investigation in Florida since 2009 and was charged by prosecutors earlier this year with running 49 illegal gambling centers that he allegedly promoted as Internet cafes, Wayne wrote. The commission’s investigators determined Burns contributed $150,000 to the casino PACs.
“All three businessmen have backgrounds, which, if they were disclosed to the Maine public in 2011, could have raised public relations issues in the context of a statewide debate whether to approve a casino in Lewiston,” Wayne wrote.
He added that Nash and Ryan denied telling Mendros and Robinson the campaign was being bankrolled by GT Source. Nash also denied, via his attorney, sending emails to that effect, Wayne said.
Robinson and Mendros have said they believed all along that the campaign funding was coming from GT Source. The company’s CEO told the Sun Journal that he was, in fact, helping to finance the campaign.
“Their own report acknowledges that there is no possible way we could have known where this money came from, admits there is no difference between these companies that did give the money, so there was no reason for us to do it, and they even say they have no idea what our motive could be,” Mendros said. “But they still just decided we must be lying, based on a hunch, and they want to fine us.”
In the memo issued Tuesday, Wayne suggested the ethics commission hear again from Nash and Ryan before deciding whether it can accept Mendros and Robinson’s explanation that they didn’t know where the money was coming from.
Wayne wrote, “It is plausible that Mr. Robinson was on the outside of financial arrangements (possibly intentionally) and that his reporting was dependent on what he heard from others.”
The memo, however, cuts little slack for Mendros, noting the investigation asked for campaign bank records that showed where the money came from and Mendros would not provide those. It also noted that Nash and Ryan voluntarily submitted the bank records showing they were the primary campaign donors, not GT Source.
But Mendros’ attorney, in his response to the commission, said his client did cooperate and that Maine law didn’t require either Mendros or Robinson to ” … research and verify the funding was NOT from GT Source.”
Hill, Nash and Graham were also partners in a newly formed Maine-based limited liability corporation with which Mendros and other casino backers were negotiating prior to the November ballot initiative. A copy of a draft contract with the company, M5, signed by Mendros was provided to the ethics commission investigators.
The company would have become the owner of the Lewiston casino if it had been approved by voters. In return, the group was helping to fund the campaign or find funding for the campaign, Mendros said Tuesday.
He said Nash told him and Robinson the campaign funding was coming from Graham and GT Source. Nash and Hill cooperated with the investigation and provided bank records to show they were the ones paying Arlington, Va.-based Dome Messaging to cover campaign expenses for the casino, including radio and television airtime.
Mendros said Tuesday Dome Messaging had complete control of the campaign.
“I was out of the loop completely,” Mendros said. He said that if the commission believed he wanted to hide his funding sources for fear of the negative impact it would have on the campaign, then the commission shouldn’t count on those people to provide credible testimony.
“If they are that shady and they have all these problems, then why is ethics basing their entire case against us on their testimony?” Mendros asked.
Paul Lavin, assistant director for the commission, said Tuesday the commission would likely decide at its next meeting on Oct. 15 whether Mendros and Robinson will face penalties, and how much.