In Louisiana, casinos are prohibited from making campaign contributions to politicians or state campaigns. But casinos can donate money to federal groups such as the Democratic and Republican Governors Associations. And these outside groups can spend freely on state races.
That money can be difficult to trace because governors’ associations don’t disclose their donors until months after an election.
Take the example of the Democratic Governors Association which spent over $8 million help re-elect Democratic incumbent Governor John Bel Edwards in Louisiana last fall.
An analysis by New Orleans Public Radio on recently disclosed 2019 tax records for the DGA show that Nevada-based casino companies donated nearly $400,000 to the Governors’ Association in the days and weeks leading up to Louisiana’s 2019 primary and runoff.
During this same period, the DGA injected millions of dollars into racing in Louisiana through a pro-Edwards group called Gumbo Pac, who plastered the waves with ads disparaging GOP opponent Eddie Rispone.
the Tax files 2019 for the Republican Governors Association also show more than $200,000 in donations from Nevada casino companies at Louisiana election time. And like its Democratic counterpart, the RGA also spent millions on the race, which became the most expensive gubernatorial contest in Louisiana history.
Critics say these casino donations to high-spending outside groups in Louisiana appear to circumvent a state law aimed at keeping gambling money out of politics.
“When casinos donate money to one of these groups just before an election in which the casino has a vested interest – like the governor’s race – and then the DGA or RGA spends the money in that race” says Paul Seamus Ryan, an executive at the Common Cause campaign fundraising watchdog. “It’s a pretty clear connection.”
The DGA and one of the casino companies we contacted disagree and say they are taking additional steps to ensure casino campaign contributions are not spent in states where they would be. prohibited.
For the DGA, that means isolating casino donations to “non-political uses,” according to a source at the DGA who was not authorized to speak publicly about compliance issues. The source also claims the timing of the casino donations was coincidental due to a planned fundraiser in Las Vegas.
The RGA did not return an email seeking comment.
We also reached out to Caesar’s Entertainment, which donated $100,000 to the DGA around election time in Louisiana â and overall donated hundreds of thousands of dollars to both charities in 2019.
Caesar’s owns Harrah’s Casino in downtown New Orleans, which in June received a 30-year extension of Edwards and the state legislature to exclusively operate Louisiana’s only land-based casino. A spokesperson for Governor Edwards declined to comment on the story.
Regarding campaign donations, a spokesperson for Caesar’s said the company does not contribute to political races in Louisiana and shared a letter he sends to governors associations urging them to restrict casino donations in states like Louisiana.
But for watchdogs like Ryan at Common Cause, that casino money â despite these precautions â still ends up helping the DGA’s political efforts in Louisiana.
“At the end of the day, it’s the casino’s money that goes to the DGA,” Ryan says. âIt arguably frees up DGA dollars to spend in Louisiana â money that would be illegal if the actual dollars came from the casinos themselves.â
Louisiana’s ban on casino campaign contributions stems – in part – from the state’s history of corruption involving gambling and politicians. Back in 2000 Edwin Edwards, a former governor, was sentenced to extort applicants for lucrative river casino licenses. There have been other scandals, too much.
Casinos are also big business in Louisiana, and elected officials have a lot to say about the industry, like the lucrative deal for Harrah’s in New Orleans.
The law prohibiting contributions to casinos was designed to prevent the appearance of corruption or undue influence, explains Austin Graham, lawyer at the Campaign Legal Center.
“The motivation behind any ‘pay-to-play’ restriction is that certain groups and entities – because they stand to benefit from very particular government action – may be regulated when they try to spend money or donate money to influence an election,” Graham said.
Many other states have similar âpay-to-playâ laws that prohibit specific special interests from making campaign contributions. In Indiana, it’s the lotto companies. In New Jersey, it’s government contractors, and in Louisiana, it’s casino companies.
But with outside groups like the Governors Associations free to collect and spend unlimited money without the same restrictions, watchdog groups fear these state-level âpay-to-playâ laws will lose their effect. efficiency.
For Ryan with Common Cause, the Louisiana example finally highlights the consequences of the Supreme Court’s decision United Citizens decision, which removed the limits on external expenditure.
“The courts are adopting this myth that this outside group money can’t corrupt because it’s independent and the money will be fully disclosed – neither of those things is true in many cases,” Ryan says. “And you are looking at such an example here.”