Doubts may overshadow racino hearing

AUGUSTA – With a backdrop of unresolved “ifs” and a disputed “when,” Maine’s Harness Racing Commission this week takes up the case of Las Vegas businessman Shawn Scott, who wants to operate slot machines in Bangor.

The hearing, which was scheduled to run Monday through Wednesday at the Augusta Civic Center, comes amid uncertainties and disputes over key issues and new doubts over whether Scott is fit to operate a racino at Bangor Historic Raceway.

“We’re really looking forward to the hearings,” said Christen Graham, spokeswoman for Scott. “They’ll give us an opportunity to clear up a lot of questions that are on the table.”

The five-member commission is considering Scott’s application for a license to run harness races at the Bangor track, where his Capital Seven LLC has major interest. The application is for 2003 and 2004 licenses, state officials say.

Under a referendum proposal approved by Maine voters Nov. 4, a commercial harness racing operator licensed as of 2003 can operate slots at the track, provided voters in the local municipality allow it.

Bangor voters have approved Scott’s plan, and he has even broken ground for a new facility at the track. Votes are pending in two southern Maine communities, Saco and Westbrook, on a racino proposal by the Scarborough Downs track.

It’s not known whether the commission will act at all on Scott’s application.

Gov. John Baldacci says the commission should hold its horses in rendering a decision, said spokesman Lee Umphrey. Baldacci says the commissioners should keep in mind that he is submitting legislation to overhaul Maine’s laws regulating slots, which the governor claims are now the nation’s weakest.

By Baldacci’s timing, the citizen-approved slot machine law will not become operative until 45 days after the Legislature convenes Jan. 7, which gives lawmakers time to deliberate and pass a new law.

But Graham contends the initiated law takes effect Jan. 3, or 30 days after the governor proclaimed the referendum results.

The timing dispute is complicated by the fluid nature of the package Baldacci has been developing. While Baldacci has released a draft of the measure, no one knows what the final product will look like.

Baldacci legal counsel Kurt Adams said the governor’s bill will not have an impact on the Harness Racing Commission’s decision because it does not address harness racing. Adams also said the commission is now authorized only to consider harness racing issues.

However, Adams added, Baldacci’s bill could affect a provision in the initiated law to automatically grant slot-machine licenses to licensed harness-race tracks.

Even the weather was adding uncertainty to the mix, as forecasters posted winter storm warnings Sunday and predicted up to a foot of snow in the capital area and heavier accumulations farther north.

The Harness Racing Commission, whose members are appointed by the governor, spent more than $450,000 investigating Scott and his business activities and associates to see if the 37-year-old Hawaii resident is suitable to run a slot-machine enterprise in Maine.

Investigators traveled to Louisiana and New York and contacted officials in Nevada, New Mexico and South Carolina for a report which was released publicly after requests by Maine media under the state’s Freedom of Access Law.

In addition, witnesses are being subpoenaed to appear at the hearing.

“It’ll be an interesting show,” predicted Dennis Bailey, spokesman for Casinos No!, which opposes having slot machines in Maine and led the campaign to defeat a Maine Indian tribes’ proposal for a $650 million gambling casino in November.

Observations about Scott’s business dealings that are part of a 61/2-inch thick stack of documents collected by investigators have drawn widespread interest as the racino saga has unfolded in Maine.

Bangor Historic Track Inc. says that on Dec. 31, 2002, Capital Seven LLC purchased 17,900 shares of previously unissued common stock, giving Capital Seven 49.86 percent portion of issued and outstanding shares of the track.

But documents cite evidence showing that “former stockholders have been paid more than 96 percent of the total consideration for their stock,” making Scott essentially the owner.

The documents say an application Scott filed in New York inaccurately states he never had a license suspended or revoked, and that he failed to cooperate with investigations while applying for gaming licenses in New York and Louisiana.

Other documents filed with the commission by independent consultants question the backgrounds of his business associates and address Scott’s financial responsibility.

“His own testimony indicates that he is unaware, unfamiliar or cannot remember specific information regarding the companies he owns,” says one of the documents.

It adds that Scott is unsure who prepares his personal tax return, does not know whether he receives a paycheck, and does not know who his business partners are within his various business entities.