Was Grange investor part of New York casino deal called corrupt and rigged?

The people opposed to a private casino in Wood Village came out swinging in their first campaign ad. They renamed the Grange casino complex the "Grunge" and branded Canadian backers Clairvest as foreigners.

Not only that, but the TV spot claims that casino backers would bring "a history of scandal and crime" to Oregon. As evidence, they point to a failed New York venture in 2010.

"Their New York casino deal was called rigged and corrupt," says the television announcer, while on screen the words "rigged" and "corrupt" appear with the masthead for the "New York Post" daily newspaper tabloid.

The campaign ad prompted one question for PolitiFact Oregon: What happened in New York?

We need to introduce the players for those not following the campaign. The Grange is a $300 million entertainment and casino complex to be built at the old greyhound racing track in Wood Village if state voters approve Measures 82 and 83. Running the opposition campaign is the It’s Still a Bad Idea Committee, funded largely with money from tribes that could lose a lot of money should a private casino compete with their tribal casinos.  

The owner and operator of The Grange would be PDX Entertainment Company, but the big money backers are Clairvest Groupand the Great Canadian Gaming Corporation. Both are based in Canada and operate multiple casinos.

Clairvest previously had served as the primary financial backer on a race track casino project in Queens, New York, as part of the Aqueduct Entertainment Group consortium. AEG was awarded the contract in 2010 despite having the lowest up-front money bid. The offer was rescinded under media scrutiny. The deal fell apart.  

Michael Goodwin, a political columnist for The New York Post, wrote about the unraveling in a March 10, 2010, column. It is from this column that the words "corrupt" and "rigged" were taken for the ad, and as we usually do, we hunted down the source. Here are the relevant parts:

"The lucrative contract for video slots at the raceway looked and smelled corrupt from the start, and yesterday’s strange developments do nothing to dispel the suspicions," Goodwin wrote. "In fact, the failure by the winning team to finish its application on time and the withdrawals of the Rev. Floyd Flake and rap star Jay-Z from the group adds to the suspicions the process was rigged."

The state inspector general’s office weighed in on the whole tangled, tarnished process with a hefty investigative report in October 2010. The report described the bidding process as chaotic, lacking clear rules. The report criticized lawmakers and state officials, especially Senate Democratic leader John Sampson, who shared competitive information with AEG and apparently pressured its lobbyists for campaign contributions, which it made. No criminal charges were filed.

Anna Richter Taylor, a spokeswoman for the casino project in Wood Village, said it’s not fair for opponents to taint the Oregon project "by linking it with headlines from a project that Clairvest,  one of our many investors, was involved in back east." She added, "The investigation revealed New York politicians trying to shake down participants in their legislative process. Thankfully Oregon is not New York."

But Cynara Lilly, a spokeswoman for casino opponents, said voters shouldn’t minimize the role of Clairvest now or in the past. "That they now have partners doesn't negate the importance of their record."

We have to agree with Lilly. Clairvest is a major player in the Wood Village casino, with co-CEO Jeff Parr now serving as a director of PDX Entertainment Company. While the words "corrupt" and "rigged" are the opinions of a columnist and not legal findings, the New York inspector general’s report made it clear that Clairvest-backed AEG engaged in dubious activities in an attempt to win the contract.

The columnist wrote that "the lucrative contract … looked and smelled corrupt" and  that there were "suspicions the process was rigged." Driving the problems were lawmakers -- but that doesn’t exonerate Clairvest, which financed AEG, from paying to play.

Does that mean Clairvest will bring problems to Oregon? We can’t make that link, and neither can casino opponents. But opponents can say with accuracy that "their New York casino deal was called rigged and corrupt." The only additional information we’d offer is the abhorrent behavior of the others involved.

We rule the statement Mostly True.

Featured Fact-check

Yes on 82 and 83 campaign

stated on September 20, 2012 in a campaign ad

Says Measures 82 and 83 authorize just one more casino.