Florida sheriffs had pleaded for years with the Legislature to close the loophole that fueled the fastest expansion of illegal gambling in decades — so-called “Internet cafes.”
Legislators squabbled. Bills languished or failed. But the delay paid off — for lawmakers and the industry.
Threatened with being shut down, the owners and operators flooded lawmakers with campaign cash and hired a stable of lobbyists with money that police now say was illegally obtained. Among the biggest contributors was Allied Veterans, the purported charity organization that authorities said this week secretly operated electronic slot machines at Internet cafes at 49 gaming centers across Florida.
Allied and related companies donated $2 million to the lawmakers’ campaigns and committees over at least three years, police say.
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An analysis by the Herald/Times found that Allied, however, was not alone in writing large checks to political candidates. Another chain of gambling centers, run by Arcola Systems of Florida, layered at least $864,000 in checks on legislators in the last two years. Arcola is not named in the state and federal investigation of Allied.
With federal and state investigators now preparing indictments on racketeering and corruption charges, the same politicians who have quietly accepted industry checks are prepared to pass a bill to ban Internet cafes.
The House Gaming Committee will take up a bill to ban the gaming centers on Friday; a similar bill will be taken up in the Senate on Monday. Legislative leaders said they hope to get a bill on the governor’s desk by the end of the month.
‘closed our eyes’
“We are finally seeing what an epidemic this is that as elected officials we’ve closed our eyes to,” said Rep. Carlos Trujillo, R-Miami, sponsor of the House bill. “Seeing the amount of money these institutions made and stole from some of the most vulnerable in our state is really sad.”
Lobbyists working for Allied Veterans say they were misled, and have resigned. And the politicians are suggesting they may even return the campaign contributions.
Allied Veterans, which as a charity organization was not allowed to make campaign contributions, often channeled checks through the owners of its affiliated gaming centers and the head of the company that provided the slot machine software, Chase Burns, the Herald/Times found. Burns, owner of International Internet Technologies, used five different companies to shower legislators with $283,000 in the last two years alone.
He gave $75,000 to the Florida Democratic Party, $52,000 to the Republican Party of Florida, $40,000 to the political committee run by Sen. Jack Latvala, R-St. Petersburg, and $25,000 to the political committee controlled by Sen. Joe Negron, R-Palm City. Burns also made multiple contributions to individual lawmakers and often skirted the $500 cap by sending checks from various companies he controls.
The Associated Press reported that key players behind Allied pumped more than $1 million into the campaign accounts of politicians. Among them: Sen. Miguel Diaz de la Portilla, R-Miami. He has been pushing a bill to regulate the Internet cafes instead of banning them.
“There’s no way for any of us to know what’s going on behind closed doors or with these individuals,” Diaz de la Portilla told the AP.
In contrast to Allied’s contribution strategy, Arcola Systems and its affiliates used a political committee controlled by their lobbyist David Ramba, as well as a series of other political committees run by Ramba to steer money to legislators. Among the top recipients, according to the Herald/Times analysis: $50,000 to the House Majority, led by House Speaker Will Weatherford, R-Wesley Chapel; $30,000 to the Senate Majority, led by Senate President Don Gaetz, R-Niceville; $25,000 to Latvala; $25,000 to the political committee controlled by Rep. Richard Corcoran, R-Trinity; $20,000 to the Republican Party of Florida; $12,500 to the Florida Democratic Party; and $116,000 to the Citizens for Housing and Urban Growth, another political committee controlled by Ramba.
In the wake of the federal and state investigation, lawmakers are trying to take a very public distance from the money. On Wednesday, Gaetz sent out a statement saying he wants a “top to bottom review of my own campaign contributions as well as funds raised by the Republican Senate Majority for the Republican Party of Florida during the 2012 cycle for which I had leadership responsibility.”
He noted that he “declined to meet with Allied Veterans and refused campaign contributions from the organization” and that he has “a practice of not accepting contributions to my own campaigns from gaming entities, and I did not knowingly accept campaign contributions from any Internet cafes for my own campaign or on behalf of the Republican Senate Majority.”
Negron said that he is also reviewing his campaign donations.
Even lobbyists are peeling away. Nine registered to work on behalf of Allied and Burns’ Oklahoma company withdrew from representing them in Tallahassee. Sarah Bascom, a spokeswoman for the lobbyists, said Allied and Burns “had misrepresented themselves to us.”
Almost as fast as the political fallout, however, is the speed with which legislators are lining up to clarify the law that allows Internet cafes to operate under a loophole in the state’s sweepstakes law.
The House has called a meeting of the Select Committee on Gaming for Friday to take up Trujillo’s bill. It will not only ban the illegal slot machine games operated at Internet cafes, but it will also ban their pornographic games and ban the maquinitas operating in South Florida.
“It’s absolutely justified,’’ Trujillo said. “Currently under Florida law these gaming establishments are illegal. They are operating under a gray area. They’re completely unregulated. Nobody even checks if their odds are valid. They do not pay taxes. They contribute absolutely nothing to our cities, our counties or our state.”
Mary Ellen Klas can be reached at meklas@ MiamiHerald.com and on Twitter @MaryEllenKlas