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Spectacle Entertainment’s plans to open a casino in Vigo County could be in jeopardy after a Maryland political consultant pleaded guilty to illegally funneling thousands of dollars from an Indianapolis-based casino operator to an Indiana candidate running for the U.S. House of Representatives in 2015.
Neither the casino operator nor the candidate are named in the Virginia federal court case, which only refers to “Company A” and “Candidate 1.”
But a spokeswoman for the Indiana Gaming Commission said it understands Centaur Gaming is the casino company referenced in the court case. Centaur’s former CEO and general counsel now help operate Spectacle Entertainment.
Spectacle Gaming received legislative approval last year to close its two recently acquired Majestic Star riverboat casinos in Gary and instead open a land-based casino in the area. Spectacle is also the only company that applied to the Indiana Gaming Commission for a licence to open a casino in Vigo County.
The Indiana Gaming Commission said that a Feb. 7 meeting where the commission was expected to approve Spectacle’s application has been postponed, casting uncertainty on Spectacle Entertainment’s Vigo County plans. The commission is allowed to consider any factor under Indiana code when determining whether a casino applicant is “suitable” for the license.
Deputy Director Jennifer Reske said in a written statement Friday that the commission is reviewing the matter and finds the recent development “concerning.”
“We are working to ascertain the immediate impacts of this information upon the new casino construction project in Gary,” Reske said. “Majestic Star Casino will continue normal operations at this time.”
According to the federal court case, the vice president and general counsel of the Indiana casino company helped coordinate the transfer of the money.
John Keeler was the vice president and general counsel of Centaur and now serves in a similar role for Spectacle Entertainment, though his name was not cited in the court case. Keeler did not return phone calls Friday left by IndyStar.
Campaign contributions indicate that Candidate 1 in the federal court case is former state Sen. Brent Waltz of Greenwood. The dates and amounts of the contributions listed in the court case line up only with contributions to Waltz when he was running for Congress, according to Federal Elections Commission campaign finance records.
Waltz told IndyStar on Friday that he had hired Kelley Rogers, who would later be named as a co-conspirator in the federal court case, as a consultant for his campaign in 2015 but cut ties due to a lack of fundraising success. He said his campaign had reached out to people associated with Centaur as part of legal and widespread fundraising efforts, but they chose to contribute to his opponent instead.
Waltz said he was contacted by investigators about 18 months ago and has cooperated and answered their questions. He added that he hasn’t been contacted since.
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The campaign financing revelations came to light in a Jan. 23 plea agreement filed in the U.S. District Court for the Eastern District of Virginia. Charles O’Neil, the vice president of Maryland-based political consulting company Strategic Campaign Group Inc, admitted that he conspired with Rogers and Scott Mackenzie to transfer more than $10,000 from the Indiana casino company to the Indiana candidate from January 2015 until October 2015, according to the plea agreement.
O’Neil and his co-defendants transferred the money through checks issued in the names of at least eight individuals, including themselves, according to the court documents. Court records said the money appeared as contributions from the individuals, but it was actually from the casino company. The “conduits” were then reimbursed for their contributions, court records said.
The maneuver allowed the Indiana casino company to skirt federal election laws that prohibit corporate contributions and place limits on the amount of money an individual can contribute, according to court records. The action also allowed the casino company to “disguise the fact that Company A was the true source of the funds,” according to court records.
In his plea agreement, O’Neil acknowledged that the facts laid out by the U.S. attorneys were accurate.
MacKenzie and Rogers also pleaded guilty to charges in connection with the case, according to court documents.
O’Neil’s sentencing hearing is set for May 8.
The prosecutions of O’Neil and his co-defendants could mean that the casino operator, “Company A,” and its vice president and general counsel also will be charged federally, along with other employees who may have been involved, said Washington, D.C., attorney Brett Kappel, an expert in government affairs and public policy and a partner at the Akerman law firm.
In order for someone to be criminally prosecuted, Kappel said, the government has to show that the violation was knowing and willful.
“I wouldn’t be surprised if there’s already a sealed indictment of the company,” Kappel told IndyStar.
On the other hand, Kappel said, the candidate who received the funds likely would not be prosecuted unless he knew about the scheme.
“It is extremely rare for the candidate receiving the illegal funds to be prosecuted – I’ve never seen it happen unless they were actively involved in the scheme,” he said. “That usually only happens when the candidate owns the company making the illegal contributions.”
A representative of the U.S. attorney’s office in Alexandria, Virginia, declined to comment on the case Friday.
Last year, Spectacle Entertainment drew scrutiny when CEO Rod Ratcliff provided private flights for Gov. Eric Holcomb and his wife, Janet, at a time when Ratcliff was seeking changes to the state’s gaming laws that would benefit his company. Casinos are prohibited from donating to Indiana political campaigns.
The Indiana inspector general later said Holcomb violated no ethics rules by accepting the flights.
Call IndyStar reporter Kaitlin Lange at 317-432-9270. Follow her on Twitter: @kaitlin_lange.
Contact IndyStar reporter Crystal Hill at 317-444-6094 or cnhill@gannett.com. Follow her on Twitter: @crysnhill.
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