Oversight board's chief antes up for city slots

The chairman of the state oversight board on Pittsburgh's finances wants a stake in a city slots hall if the Legislature approves gambling. William Lieberman says he's looking to invest in one of several groups that would pursue a state license.

"What I'm trying to do is be an investor, at whatever level that is, in a gaming operation," Lieberman said Thursday. "I may not be successful."

Lieberman, a politically connected Republican who contributes to both Republicans and Democrats, says he has teamed up with Charles Zappala, a staunch Democrat, to find a group looking for partners. Zappala, an investor who lives in Mt. Lebanon, is the brother of state Chief Justice Emeritus Stephen A. Zappala and uncle of Allegheny County District Attorney Stephen A. Zappala Jr.

Lieberman, an insurance broker who lives in Squirrel Hill, said he still is "talking to different people" about his interest.

Lieberman acknowledged he has connections in Harrisburg that might be viewed as an asset by a group seeking a gambling license. He said his interest in gambling does not conflict with his voluntary role as chairman of the state-appointed board.

"It's hard to see it being a conflict if I'm involved as a very, very minor partner in a venture," Lieberman said. "It's not a conflict but a plus. Don't we want new investment in the city• I don't think it's a conflict if I'm part of a group bringing new investment to the city of Pittsburgh."

Ethics experts tend to agree that Lieberman does not face a conflict, but it could turn into an issue if he becomes a major investor in a slots parlor and the oversight board sees gambling revenue as part of the solution to Pittsburgh's financial problems.

"By virtue of the fact he was appointed to the oversight board is evidence enough that he's influential," said Joseph Sabino Mistick, a Duquesne University law professor. "I think he would have a hard decision to make if he became an investor and was faced with a recommendation related to legal gambling."

Public officials are prohibited from using their offices to gain direct financial benefits, said John Contino, executive director of the state Ethics Commission.

As long as Lieberman remains a minor investor in a gambling partnership and the oversight board does not discuss gambling as a solution to the city's money woes, Lieberman does not have a problem, said Barry Kauffman, executive director of Pennsylvania Common Cause, a good government lobbying group.

"If somebody else brings that to the table and that becomes a key element, he might recuse himself or resign," Kauffman said. "At this stage of the game, it doesn't sound like a conflict."

Appearance of impropriety

Jerry Shuster, a political communications professor at the University of Pittsburgh and Robert Morris University, isn't convinced. Lieberman's desire to invest in gambling creates the appearance of a conflict that could undermine the oversight board's work, Shuster said.

"People could begin to challenge the credibility of the decision-making -- that it's not in the best interest of the city, but the best interest of someone trying to enhance their own position financially or otherwise," Shuster said.

The General Assembly created the oversight board in February to look at Pittsburgh's finances, make recommendations and ensure the city sticks to an approved five-year budget plan. The board issued a preliminary report April 12 and plans to release more findings next week.

Lieberman was appointed to the board by House Speaker John Perzel, R-Philadelphia. Lieberman contributed $10,000 to Perzel's "victory" fund in March, according to a campaign database maintained by state Rep. Greg Vitali, D-Delaware. The Pennsylvania Department of State does not permit the public to search campaign contributions by donor's name.

Perzel spokeswoman Beth Williams said Lieberman "is a staunch professional. The speaker believes if a questionable situation would arise, Mr. Lieberman would know if and when to recuse himself. The speaker doesn't believe it is a conflict."

Lieberman said his desire to invest in gambling dates back two years.

He and Charles Zappala, who could not be reached for comment, began talks last year about partnering with developer C.J. Betters, who wants to build a thoroughbred track and slots hall in the city's Hays section. Those talks broke off in the fall.

"Everybody has different purposes (in a partnership), and obviously (Lieberman) was politically astute to some degree," Betters said.

Lieberman was among a group of about 15 people who met in April with state House Minority Leader Bill DeWeese, D-Greene County, for an update on the stalled slots legislation. Zappala did not attend that meeting at the Duquesne Club, Downtown.

Betting on the future

State lawmakers are expected to vote on the legislation this year, perhaps before the end of this month. Gov. Ed Rendell has promoted slots at eight horse tracks and four stand-alone parlors as a way to provide property tax rebates. Plans call for one of the parlors to be in Pittsburgh.

Licenses for slots halls would be awarded by a state gambling commission. They could cost up to $75 million each.

Gambling revenue might eventually be used to help rescue financially ailing Pittsburgh, but Lieberman said the oversight board will not address that possibility in any of its recommendations. Nor will he try to steer it in that direction.

"I don't think being on the board gives me any more influence," Lieberman said. "I've probably made more enemies than acquired friends. I don't think my being on the oversight board changes it one way or another."

Other board members said they have talked about gambling long enough to decide only that they will not count on revenue from it.

"We never thought of that as a solution," Vice Chairman John Murray said. "Even if it happens and the city receives some revenue from it, nobody believes it will solve the problem."

Lieberman's political connections are tied to his work as a campaign contributor and money-raiser. He has contributed thousands to candidates in the state in recent years.

He has contributed more than $15,000 this year, including the $10,000 to Perzel. Lieberman gave $18,000 in 2003 and $13,000 in 2002. He has given to both Republicans and Democrats.

Zappala has made four contributions this year totaling $18,500, including $10,000 in March to state Sen. Vincent Fumo, the Philadelphia Democrat who chairs the Appropriations Committee. Zappala contributed more than $16,000 last year and $34,000 in 2002.

If state lawmakers approve gambling legislation and Lieberman invests in a group seeking a slots hall license, he said he will ask lawmakers to seek an opinion from the state Ethics Commission. If the commission rules he has a conflict, Lieberman said he will consider resigning from the oversight board.

"I will not be in a position where people think I'm doing the wrong thing," he said. "If the state Ethics Commission tells me I'm conflicted, then I'll make a decision. I don't see any issue, but I'm prepared to deal with it if it's a conflict. I will not let it be a conflict."