Judge quashes anti-racino ad PAC receives restraining order

PORTLAND – A federal judge Monday ordered a political action committee, formed to oppose two racino votes to be held in southern Maine, not to republish an ad that linked a Pennsylvania gaming firm to money laundering in Mississippi.

Penn National Gaming Inc. has a development deal with Scarborough Downs for a racino in either Westbrook or Saco. Voters in both communities will go to the polls Dec. 30.

The attorney for Maine Opportunities told U.S. District Judge George Singal that the PAC and its treasurer, Kathleen Newman, consented to the temporary restraining order during the hearing held at U.S. District Court in Portland.

Penn National filed a lawsuit Friday in federal court charging Shawn Scott, owner of Capital Seven LLC, the Las Vegas-based company developing a Bangor racino, Maine Opportunities and Newman with libel for funding a political advertisement that makes false accusations about Penn National. The full-page ads ran once on Dec. 17 in a Westbrook weekly and Biddeford daily paper.

The lawsuit sought preliminary and temporary injunctions and compensatory and punitive damages. Attorney John McCarthy of Bangor, who represented Penn National, also asked Singal to order the PAC to purchase ads for a retraction. The judge refused to issue such an order.

The ad reprinted a 1994 consent agreement between the U.S. Treasury Department and Casino Magic-Biloxi in which the casino admitted to money laundering. The ad stated that the casino was owned by Penn National. The company owns two casinos in Mississippi that it purchased from the firm that owned the Biloxi casino after the consent agreement was signed.

In an affidavit filed Monday, Newman stated that the information in the ad came from an investigative firm that gave it to a political consultant who wrote several ads, including the one that was published. Newman, a former member of the Maine Lottery Commission, suggested that the confusion arose because Penn National does own a Mississippi casino called Casino Magic in Bay St. Louis.

Newman, who is employed by Capital Seven, said in her affidavit that between the time the lawsuit was filed Friday and the hearing Monday afternoon, she had been unable to reach the investigator who researched and provided the information to determine whether or not it was accurate.

Scott’s attorney, Stephen Langsdorf, said Monday that neither his client nor Capital Seven held offices or other positions with Maine Opportunities.

The lawsuit was filed on the fourth day of licensing hearings before the Maine Harness Racing Commission at the Augusta Civic Center. The commission is scheduled to resume the hearing on Jan. 8 to determine whether Scott gets a license to operate the track at Bass Park and bring a $30 million racino with slot machines to Bangor.

Walter McKee, the Augusta attorney representing Newman and Maine Opportunities, said after the hearing that he would wait until after the election to decide whether to file a motion to dismiss the case. McKee said that it was doubtful that Penn National would be able to prove malice in order to win a libel case.

McCarthy said that Penn National most likely would not withdraw the lawsuit, but would seek punitive and compensatory damages as a result of the ads.