HARRISBURG -- A Western Pennsylvania contractor convicted of tax evasion applied to the state Gaming Control Board about a year ago, asking for a vendor's license so his company could work on casino projects.
He since has been working on The Meadows Racetrack & Casino in Washington County, although the board says it hasn't finished investigating him.
William G. Tomko Jr., the Finleyville owner of W.G. Tomko Inc., was sentenced to house arrest for one year and fined $250,000 by a federal judge Sept. 30, 2005, after pleading guilty to persuading subcontractors and suppliers to bill his business for work done on his home. He avoided paying $228,000 in taxes by writing off the work as business expenses, prosecutors said. The U.S. Justice Department is appealing the sentence, contending it was too lenient.
"Construction at The Meadows requires several companies and hundreds of local workers," said Meadows spokesman David La Torre. "All are working toward the spring 2009 opening of our permanent casino. Like all other companies involved in the construction process, W.G. Tomko ... is allowed by the state to work at The Meadows until such time as we are notified otherwise."
Tomko and company officials did not respond to repeated attempts to reach them.
"The (2004 slots) law does not specifically address felony convictions for vendors," said Cyrus Pitre, chief enforcement counsel for the gambling board. "Upon conclusion of the Bureau of Investigations and Enforcement investigation and presentation, the board will have the opportunity to consider the matter based upon the full evidentiary record."
The board's approval of vendors is a substantial public policy issue, said Christopher Craig, a Senate Democratic lawyer who wrote much of the gambling law.
"The whole intention of focusing on vendors is to make sure they don't (illicitly) get into the financial stream of the industry," Craig said.
Other contractors have started working on casinos without board certification, said board spokesman Doug Harbach. A board spokesman could not say whether other contractors have criminal histories.
"People apply, and they've begun to do work. They're permitted to do work," Harbach said.
Whether a felony conviction bars someone from winning board approval to be a vendor is debatable.
Stephen MacNett, general counsel for Senate Republicans, said it appears the state gambling law disqualifies a vendor convicted of a felony within the past 15 years.
But Rep. Douglas Reichley, R-Allentown, an attorney, said he believes felony convictions of vendors are not covered under the law.
"There are obvious areas that have come to light that we believe need to be remedied. We believe there's a need for a comprehensive fix," Reichley said.
Senate Majority Whip Jane Orie, R-McCandless, said a felony conviction should be a "red flag" that prompts the board to suspend that company's work until it's thoroughly investigated. "It's just common sense. It's ridiculous," she said.
Reichley said he and House GOP colleagues next week will write to the board and ask that it disclose "any other vendors or employees who have felony convictions."
The general standard for any type of license or permit approval by the board is that an applicant establish "by clear and convincing evidence his or her good character, honesty and integrity," Craig said.
It's unknown what's included in Tomko's application because Pitre said it contains "confidential information" and isn't a public record. He declined to release it.
Asked why it has taken a year to decide whether to approve Tomko as a vendor, Harbach said: "It's not just 'case closed; you've been convicted.' It has to be investigated." He identified Tomko as principal owner of W.G. Tomko Inc.
In other states it would be highly unusual to allow a contractor to work while an application is under consideration, said Joe Kelly, a gambling expert licensed to practice law in Nevada, Illinois and Wisconsin.
"I don't think this would fly in Nevada or New Jersey," said Kelly, a professor of business administration at Buffalo State College, which is part of the State University of New York system.
New Jersey doesn't specifically bar felons from being licensed, but its gambling act lists crimes for which a person could be denied a license, said New Jersey Casino Control Commission spokesman Daniel Heneghan. Those crimes include "forgery and fraudulent practices (of the) second, third or fourth degree," as well as "all crimes of the first degree." Tax evasion could fall under one of those.
"If you have been convicted of one of those crimes, you may be automatically disqualified," Heneghan said. "That applies for a minimum of 10 years." After that, "the commission has discretion to grant licenses in spite of a person's felony conviction," Heneghan said.
Failure to properly vet contractors helped the mob infiltrate Atlantic City's fledgling casino industry in the 1970s and '80s, Kelly said. Two mob-affiliated subcontractors, for example, made nearly $840,000 during the casino-building boom from 1979 to 1986, according to a 1987 report by the New Jersey Commission of Investigation.
Since then, gambling regulators elsewhere have taken a strict view of licensing casino owners and contractors, Kelly said.
In Michigan, it's simpler.
"A supplier can't have a felony" conviction, said Eric Bush, spokesman for the Michigan Gaming Control Board.
Pennsylvania's felon prohibition lasts 15 years from the day the sentence ends. In 2006, gambling regulators awarded a casino license to Louis DeNaples, 67, of Dunmore, owner of the Mt. Airy Casino, who was convicted of felony fraud charges in 1978. He received a three-year suspended sentence.
DeNaples is awaiting a preliminary hearing on charges he lied about his alleged ties to organized crime in order to get his casino license. He denies wrongdoing.
Tax evasion generally is considered a "crime of moral turpitude. This is viewed as especially serious," Kelly said.
