Supporters of a proposal to set up a gambling complex on New York Avenue NE have identified Idaho financier Robert L. Newell as the key financial backer of the $550 million project.
But Mr. Newell says he is the “coordinator” of a group of investors, whom he declined to identify.
Mr. Newell, 43, has a history of troubled business dealings, including bankruptcies, a government censure and ties to a gambling financier who has been denied a license to run a Las Vegas casino.
Pedro Alfonso, head of the District-based telecommunications firm Dynamic Concepts Inc., and his attorney, former D.C. Council member John Ray, have said little about Mr. Newell’s role in their efforts to bring to the District video lottery terminals, which are similar to slot machines. Mr. Alfonso and Mr. Ray have said that Mr. Newell and Mr. Alfonso are the only investors in the project.
Mr. Alfonso and Mr. Ray could not be reached for comment yesterday.
Tuesday, Mr. Alfonso delivered to the D.C. Board of Elections and Ethics petitions bearing more than 50,000 signatures to put the initiative on the November ballot. The board has 30 days to verify that the signatures are those of registered D.C. voters.
Mr. Newell’s name does not appear on any documents regarding the gambling initiative because, under D.C. law, such a proposal must be put forward by a city resident, said Bill O’Field, spokesman for the board.
The names on the documents are those of Mr. Alfonso and Vicky Wilcher, treasurer of the group supporting the proposal, according to the D.C. Office of Campaign Finance, the investigative arm of the ethics board.
According to official records from Spokane, Wash., Mr. Newell was accused of persuading unsophisticated investors to put their life savings into questionable deals that failed.
In 1997, an elderly Spokane couple filed a lawsuit against several people and companies — including Mr. Newell, a company he managed and another company for which he was a corporate officer.
The couple said the companies, each with their own sets of investors, ran a Ponzi-like scheme using money from new investors to pay off earlier investors.
They said Mr. Newell, through a company he ran called Claremont Management Inc. and RTC #3 Investment Group LLC, persuaded them to invest $580,000. The couple recouped about 50 percent of their investment in an out-of-court settlement with the defendants.
Based on that complaint and others, the Securities Division of the Washington state Department of Financial Institutions investigated a network of companies, including RTC #3, for which Mr. Newell served as a corporate officer, according to Nevada incorporation records.
The investigation revealed several violations of state securities laws, and RTC #3 was placed in receivership.
Claremont Management declared bankruptcy in 2000. Its sole asset, a hotel called the Claremont Inn in Claremont, Calif., also went bankrupt, leaving behind $424,000 in debts. Mr. Newell is identified as the inn’s manager in bankruptcy documents.
Scott Miller, head of economic development for the city of Claremont, said he remembered Mr. Newell and that city officials had offered to help Claremont Management through its financial difficulties, but that there were serious questions about who controlled the company’s finances.
The city filed a lawsuit in 1999 to determine who held third and fourth mortgages on the inn, but dropped the suit when the Claremont Inn declared bankruptcy, he said.
“There were a lot of shadowy characters along with this,” Mr. Miller said.
Asked about his involvement with RTC #3 and Claremont Management, Mr. Newell declined to provide details.
“I do a lot of business on an annual basis. Our group [Bridge Capital LLC] currently does a billion dollars in business annually. Some things just don’t go the way you plan. You can’t always hit a home run,” Mr. Newell said.
Mr. Newell is the chief operating officer for Bridge Capital, which shares a St. Croix, U.S. Virgin Islands, address with North Atlantic Investments LLC, the company funding the D.C. slots initiative. Mr. Newell is the owner of North Atlantic Investments.
Bridge Capital’s president, John K. 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. He has since dropped out of the process.
Mr. Newell’s name surfaced during licensing background checks of Mr. Scott, according to Stacy Clifford, spokeswoman for the New York wagering board.
Miss Clifford said there was no evidence that Mr. Newell was directly involved in the Vernon Downs racetrack, but that his name came up during checks of other businesses linked to Mr. Scott and Mr. Baldwin.
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.
“There was some concern about the amount of managerial oversight exerted by Mr. Baldwin,” Mr. Jackson said.
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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