- The Washington Times - Monday, July 12, 2004

Two companies from the U.S. Virgin Islands together have spent more than $617,000 since May to put a gambling hall on New York Avenue NE, including fees to a local investor, a former D.C. Council member and the son of a current council member representing the ward where the casino would be located.

One of those companies — Bridge Capital LLC — is owned by John K. Baldwin, a St. Croix businessman whose financial ties with a casino financier prompted investigations by gaming regulators in Maine and New York last year.

In addition, Bridge Capital’s chief operating officer, Robert L. Newell, owns North Atlantic Investments LLC — the other Virgin Islands-based company that has bankrolled the District’s gambling initiative. The firm incorporated in Delaware on April 21, the day before the District’s gambling initiative was introduced.

Together, the two offshore firms — sharing the same address in St. Croix — have spent $617,613 and have accrued $153,454 in debt since May in their efforts to bring slot machine-like gambling to the District, according to contribution and expenditure reports filed yesterday with the D.C. Office of Campaign Finance.

Their expenditures include:

• $187,243.50 to Manatt Phelps and Phillips, the law firm that employs former D.C. Council member John Ray, who has been the chief lobbyist for the initiative.

• $18,000 in consulting fees to Pedro Alfonso, the head of the D.C.-based telecommunications firm Dynamic Concepts Inc., who has been identified as the only local investor in the gambling project.

• $390 to Vincent Orange Jr., a “petition circulator” and the son of council member Vincent B. Orange Sr., Ward 5 Democrat.

The contribution and expenditure reports were filed by the Citizens Committee for the D.C. Video Lottery Terminal Initiative, the group lobbying for the casino. The reports show that North Atlantic Investments and Bridge Capital have provided all the funding for the gambling initiative.

Mr. Alfonso has said Mr. Newell is the key investor in the project, but Mr. Newell has said he is the “coordinator” of a group of investors, whom he declined to identify, The Washington Times reported last week.

The reports filed yesterday with the Office of Campaign Finance, the investigative arm of the D.C. Board of Elections and Ethics, show that at least one other venture-capital firm is involved with the initiative.

Currently, the Board of Elections is verifying the authenticity of more than 50,000 signatures on petitions to put a referendum for the New York Avenue casino on the Nov. 2 ballot.

Of the $153,000 that North Atlantic and Bridge Capital have accrued in debt, they owe $107,000 to Mr. Ray, their chief lobbyist.

According to Mr. Ray’s lobbying report, his work included meeting in person or by telephone with nine D.C. Council members or their staff, a deputy mayor and the city’s chief financial officer.

Mr. Ray and associate Tina Ang met or spoke on the telephone with the elder Mr. Orange eight times to discuss the slots proposal between May 21 and June 22. Mr. Ray did not participate in more than three meetings or conversations with any other council member or council member’s staff over the same period.

Mr. Orange, who represents the neighborhood where the planned casino would be located, has not taken a position on the video-lottery terminal initiative.

However on June 10, Mr. Orange urged the Office of the Secretary of the District of Columbia to print a supplemental edition of the D.C. Register that expedited the process of collecting signatures needed to put the measure on the November ballot.

According to the lobbying report, one of Mr. Ray’s telephone discussions with Mr. Orange was on June 10.

A spokeswoman for Mr. Orange yesterday said the council member was likely unaware that his son was a petition circulator for the gambling proposal.

Mr. Ray did not return a phone call for comment yesterday.

Other initiative expenditures include a June 10 payment of $200 to Perry Queen, a Northeast resident and campaign manager for former D.C. Council member Harry Thomas Sr.

Mr. Queen was one of about a half-dozen persons who submitted written testimony to the elections board on June 2 in favor of the initiative.

Since May, Mr. Newell has provided $592,700 for the initiative via nine installments, including payments of $11,700, $91,00 and $190,000 that were made on July 2.

The only payment not made by North Atlantic Investments was a $70,759 installment provided by Bridge Capital on May 30.

Bridge Capital’s president, Mr. Baldwin, was asked by the New York State Racing and Wagering Board last year to submit an application for a license to run the Vernon Downs racetrack in Vernon, N.Y., because it was difficult to distinguish his finances from those of his business associate Shawn A. Scott, the main applicant for the license.

Mr. Scott, a Las Vegas gambling financier, originally pitched the idea of bringing video-lottery terminals to the District. Mr. Alfonso and Mr. Ray say he since has dropped out of the process.

Mr. Newell’s name surfaced during licensing background checks of Mr. Scott, according to a spokeswoman for the New York wagering board, though there was no evidence that Mr. Newell was directly involved in the Vernon Downs racetrack.

Mr. Scott was denied a license to run Vernon Downs amid concerns about his character and ties to Hoolea Paoa, a Hawaiian business associate with a criminal history. Mr. Scott also has been turned down for a casino license in Las Vegas.

Henry Jackson, executive director for the Maine Harness Racing Commission, said investigators couldn’t distinguish Mr. Scott’s finances from those of Mr. Baldwin.

Mr. Jackson said questions about Mr. Baldwin’s influence through Bridge Capital and other firms surfaced repeatedly during a licensing investigation of Mr. Scott.

The Maine investigation found that Mr. Scott owns or holds ownership in 111 companies, all of which gave a former Las Vegas address for Bridge Capital. The investigation report says those companies have demonstrated “sloppy, if not irresponsible financial management and accounting practices.”

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