- The Washington Times - Thursday, July 1, 2004

The man who pitched the idea of bringing slot machines to the District led a similar effort in Maine that also involved well-connected political figures, out-of-state corporations and plenty of cash, according to public records and Maine officials.

The idea won approval, and pitchman Shawn A. Scott, 38, was permitted to put slots in a Bangor, Maine, racetrack. But the deal crumbled amid findings of irresponsible management, failure to cooperate with investigators and three dozen lawsuits against companies affiliated with Mr. Scott. He sold the track after state officials rejected his request for a harness racing license, required for having slots machines in a Maine racetrack.

“It’s a shell game with all of these corporations,” Bangor Mayor Daniel Tremble said yesterday. “There was clearly always some concern about who these business partners were.”

Supporters of the D.C. deal say Mr. Scott is no longer involved in bringing a $500 million gambling and entertainment complex to New York Avenue in Northeast. The D.C. Board of Elections and Ethics yesterday distributed the petitions that the investors need to get the initiative on the Nov. 2 ballot.

They must submit signatures from 17,599 persons, or 5 percent of registered D.C. voters, by 5 p.m. Tuesday to get the initiative on the ballot.

Pedro Alfonso, head of the D.C.-based Dynamic Concepts Inc. telecommunications firm, said Mr. Scott was involved only in “earlier discussions.”

“At this stage, there are two investors,” Mr. Alfonso said. “Myself and Robert Newell are the only investors. Just based on his previous activities, we thought that it might be more appropriate to keep the investment between Robert Newell and myself. In the very early stage, [Mr. Scott] exited, and it was mutual, and he is no longer involved in the process at all.”

Mr. Newell is an Idaho native living in St. Croix, Virgin Islands. He is financing the initiative through North Atlantic Investments LLC, which incorporated in Delaware on April 21, a day before the initiative was submitted to the D.C. board of elections.

North Atlantic Investments shares a St. Croix address with the Bridge Capital LLC venture-capital company.

A message left at Mr. Newell’s St. Croix office at Bridge Capital was not returned, but a woman who answered the phone confirmed that he is the company’s chief operating officer.

Mr. Scott owns or holds ownership in 111 companies with the same former Las Vegas address for Bridge Capital, according to the Maine Harness Racing Commission.

Mr. Scott is a partner with a man named John K. Baldwin in at least eight companies in Nevada, according to records from the Nevada Secretary of State. And Mr. Baldwin is Mr. Newell’s boss at Bridge Capital LLC.

A 32-page draft report prepared by the Maine Harness Racing Commission that supported withholding the license from Mr. Scott last year gives a detailed history of some of his past ventures.

Among the report’s findings:

• Mr. Scott’s companies have demonstrated “sloppy, if not irresponsible financial management and accounting practices.”

• Mr. Scott and his associated companies have demonstrated a “lack of cooperation” during investigations by the Maine Harness Racing Commission, the New York Racing and Wagering Board and the Louisiana State Police.

• Mr. Scott and his associated companies have been involved in 36 lawsuits from 1992 to 2000 in Louisiana, Nevada, New York and South Carolina.

The report also cites Mr. Scott’s ties to a business associate as a cause for concern because the associate “appears to exercise a degree of managerial and financial control over Mr. Scott’s companies and business dealings.”

The draft does not name the associate, but it states that concerns were raised about an associate during application processes in Louisiana and New York.

It also states that the New York Racing and Wagering Board would not give one of Mr. Scott’s tracks a license until Mr. Baldwin agreed to apply for a license because their finances were so intertwined.

The previous Las Vegas-based address for Mr. Baldwin’s Bridge Capital company is the same address listed for Capital One LLC, which bankrolled the Bangor slots initiative, according to records form the Maine Commission on Ethics and Election Practices.

Capital One and another Las Vegas firm at the same address contributed more than $600,000 in the month leading up to the slots referendum, according to Maine election records.

Mr. Tremble said yesterday that it was never clear who was involved in Mr. Scott’s bid to bring slot machines at the Bangor Raceway.

“I don’t know if these people ever operated a casino,” he said. “I think they go out and buy an operation, get the legislation in place and sell.”

Mr. Tremble said Mr. Scott and his associates engaged in similar strategies to win public support for slots as they are doing in the District.

He said the company hired a member of the state’s lottery commission, Kathleen Newman, and a Bangor council member, David Nealley, to work on the initiative for a company called Capital Seven.

“They hired a city councilor in Bangor, so they obviously are looking to have some influence in the process,” Mr. Tremble said.

In the District, the slots proponents hired former D.C. Council member John Ray and a public relations specialist who served as spokeswoman for Mayor Anthony A. Williams’s 2002 election campaign.

Mr. Alfonso said yesterday that Mr. Newell has a “stellar past” and is convinced that Mr. Newell is independent of Mr. Scott and Mr. Baldwin. He also said there was “absolutely no relationship from a financial standpoint,” regarding the D.C. deal.

“Mr. Newell is totally independent, and he can have whatever relationships he wants,” Mr. Alfonso said. “What he has outside of this, I can’t control.”

Mr. Alfonso could not say whether Bridge Capital would provide money for the project.

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