October 23, 2017
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Attorneys for Maine casino referendum backers refuse to accept ethics panel’s subpoenas

By Michael Shepherd, BDN Staff
Updated:
BDN File | BDN
BDN File | BDN
A Bangor man signs a petition outside the garage at Pickering Square in Bangor, Jan. 13, 2016.

AUGUSTA, Maine — Attorneys for the backers of a York County casino referendum walked out of a hearing Friday without accepting subpoenas for financial records after the state’s ethics watchdog voted to investigate them.

The probe will focus on $4.3 million in campaign funds as of March’s end given to Lisa Scott, a Miami woman listed as the campaign leader, by a company linked to her brother, U.S. Virgin Islands developer Shawn Scott, and a foreign company. That funding stream was disclosed in April in possible violation of Maine law.

It may shed more light on the complicated international financial dealings of Shawn Scott, who along with his fellow investors in the Nevada company Capital Seven, LLC, would be the only entity that could win the casino if Mainers vote “yes” on the November ballot.

However, the walk-out by attorneys representing the backers sheds doubt whether the campaign will comply. Two Maine legislators who requested the investigation said Friday that the move may lend momentum to their novel plan to pass the bill in the Legislature, then immediately move to repeal it, which could keep it off the ballot.

After a Friday morning hearing in which Bruce Merrill, a Portland-based lawyer for Lisa Scott, and Alexis Fallon, a lawyer for Capital Seven and the Regent Able Associate Co., a Japanese consulting company, gave presentations to the Maine Ethics Commission, the commission’s chairwoman, Margaret Matheson, signed subpoenas intended for Merrill seeking financial records and communications between the entities behind the effort.

However, Merrill protested that move and walked out of the commission’s office with Fallon on Augusta’s Memorial Circle without accepting the subpoenas from Jonathan Wayne, the commission’s executive director.

Merrill told reporters as he walked out that he’s “not authorized” to accept a subpoena, saying he hasn’t read it and taking it would make him “derelict in my responsibility.”

It was unclear after the hearing if Wayne’s action constituted service of the subpoenas under Maine law. Wayne said after the hearing that he was assessing that and will be requesting documents, but that he won’t publicly discuss next steps.

During the hearing, Merrill told commissioners the money previously documented as loans provided to Lisa Scott and two of her companies by Capital Seven and Regent Able would not have to be repaid if the bid fails.

If it succeeds, there may be “some benefit” to Lisa Scott, Merrill told commissioners. That prompted commissioners to question whether they were loans before unanimously authorizing the investigation requested by their staff last week.

The main focus of the probe will be whether the loans to Scott made public in April violate a section of Maine law that makes campaigns that receive at least $5,000 on elections disclose the contribution within a week. Wayne has recommended they be viewed as late while Merrill has argued the campaign is in compliance and an investigation is unnecessary.

This is Shawn Scott’s second foray into Maine, where he persuaded voters in 2003 to allow slot machines at a Bangor facility that became Hollywood Casino after he sold the rights for $51 million, without getting a license, a process complicated by a damning report from harness racing regulators.

Lisa Scott’s current trouble with the ethics commission was prompted by a request for investigation from Senate Majority Leader Garrett Mason, R-Lisbon Falls, and Rep. Louis Luchini, D-Ellsworth, the chairmen of the Legislature’s gambling oversight committee who oppose the new casino.

It closely resembles a 2016 casino campaign linked to the Scotts in Massachusetts that drew $125,000 in ethics penalties for concealing contributions that came after a settlement, but Fallon told the commission Friday that “we’re not here to disguise” contributions.

In the Legislature, Mason and Luchini have floated a plan to pass and repeal the casino question before lawmakers adjourn later this month.

It has never been tried and would rely on a loophole in the Maine Constitution, which allows the Legislature to keep citizen-initiated laws off the ballot only by passing them outright, but says nothing about what happens if they’re immediately repealed. The move risks a legal challenge.

Mason and Luchini said they were waiting for Friday’s hearing to decide how to move forward, but that the walk-out only helped the cases they’re going to make to legislators in both parties.

“It just adds more fuel to the fire,” Mason said.


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