John McCain: The Gambler - Part 1

Senator John McCain was on a roll. In a room reserved for high-stakes gamblers at the Foxwoods Resort Casino in Connecticut, he tossed $100 chips around a hot craps table. When the marathon session ended around 2:30 a.m., the Arizona senator and his entourage emerged with thousands of dollars in winnings.

A lifelong gambler, Mr. McCain takes risks, both on and off the craps table. He was throwing dice that night not long after his failed 2000 presidential bid, in which he was skewered by the Republican Party’s evangelical base, opponents of gambling. Mr. McCain was betting at a casino he oversaw as a member of the Senate Indian Affairs Committee, and he was doing so with the lobbyist who represents that casino, according to three associates of Mr. McCain.

The visit had been arranged by the lobbyist, Scott Reed, who works for the Mashantucket Pequot, a tribe that has contributed heavily to Mr. McCain’s campaigns and built Foxwoods into the world’s second-largest casino. Joining them was Rick Davis, Mr. McCain’s current campaign manager. Their night of good fortune epitomized not just Mr. McCain’s affection for gambling, but also the close relationship he has built with the gambling industry and its lobbyists during his 25-year career in Congress.

As a two-time chairman of the Indian Affairs Committee, Mr. McCain has done more than any other member of Congress to shape the laws governing America’s casinos, helping to transform the once-sleepy Indian gambling business into a $26-billion-a-year behemoth with 423 casinos across the country. He has won praise as a champion of economic development and self-governance on reservations.

“One of the founding fathers of Indian gaming” is what Steven Light, a University of North Dakota professor and a leading Indian gambling expert, called Mr. McCain.

As factions of the ferociously competitive gambling industry have vied for an edge, they have found it advantageous to cultivate a relationship with Mr. McCain or hire someone who has one, according to an examination based on more than 70 interviews and thousands of pages of documents.

Mr. McCain portrays himself as a Washington maverick unswayed by special interests, referring recently to lobbyists as “birds of prey.” Yet in his current campaign, more than 40 fund-raisers and top advisers have lobbied or worked for an array of gambling interests — including tribal and Las Vegas casinos, lottery companies and online poker purveyors.

When rules being considered by Congress threatened a California tribe’s planned casino in 2005, Mr. McCain helped spare the tribe. Its lobbyist, who had no prior experience in the gambling industry, had a nearly 20-year friendship with Mr. McCain.

In Connecticut that year, when a tribe was looking to open the state’s third casino, staff members on the Indian Affairs Committee provided guidance to lobbyists representing those fighting the casino, e-mail messages and interviews show. The proposed casino, which would have cut into the Pequots’ market share, was opposed by Mr. McCain’s colleagues in Connecticut.

Mr. McCain declined to be interviewed. In written answers to questions, his campaign staff said he was “justifiably proud” of his record on regulating Indian gambling. “Senator McCain has taken positions on policy issues because he believed they are in the public interest,” the campaign said.

Mr. McCain’s spokesman, Tucker Bounds, would not discuss the senator’s night of gambling at Foxwoods, saying: “Your paper has repeatedly attempted to insinuate impropriety on the part of Senator McCain where none exists — and it reveals that your publication is desperately willing to gamble away what little credibility it still has.”

Over his career, Mr. McCain has taken on special interests, like big tobacco, and angered the capital’s powerbrokers by promoting campaign finance reform and pushing to limit gifts that lobbyists can shower on lawmakers. On occasion, he has crossed the gambling industry on issues like regulating slot machines.

Perhaps no episode burnished Mr. McCain’s image as a reformer more than his stewardship three years ago of the Congressional investigation into Jack Abramoff, the disgraced Republican Indian gambling lobbyist who became a national symbol of the pay-to-play culture in Washington. The senator’s leadership during the scandal set the stage for the most sweeping overhaul of lobbying laws since Watergate.

“I’ve fought lobbyists who stole from Indian tribes,” the senator said in his speech accepting the Republican presidential nomination this month.

But interviews and records show that lobbyists and political operatives in Mr. McCain’s inner circle played a behind-the-scenes role in bringing Mr. Abramoff’s misdeeds to Mr. McCain’s attention — and then cashed in on the resulting investigation. The senator’s longtime chief political strategist, for example, was paid $100,000 over four months as a consultant to one tribe caught up in the inquiry, records show.

Mr. McCain’s campaign said the senator acted solely to protect American Indians, even though the inquiry posed “grave risk to his political interests.”

As public opposition to tribal casinos has grown in recent years, Mr. McCain has distanced himself from Indian gambling, Congressional and American Indian officials said.

But he has rarely wavered in his loyalty to Las Vegas, where he counts casino executives among his close friends and most prolific fund-raisers. “Beyond just his support for gaming, Nevada supports John McCain because he’s one of us, a Westerner at heart,” said Sig Rogich, a Nevada Republican kingmaker who raised nearly $2 million for Mr. McCain at an event at his home in June.

Only six members of Congress have received more money from the gambling industry than Mr. McCain, and five hail from the casino hubs of Nevada and New Jersey, according to data from the Center for Responsive Politics dating back to 1989. In the presidential race, Senator Barack Obama has also received money from the industry; Mr. McCain has raised almost twice as much.

In May 2007, as Mr. McCain’s presidential bid was floundering, he spent a weekend at the MGM Grand on the Las Vegas strip. A fund-raiser hosted by J. Terrence Lanni, the casino’s top executive and a longtime friend of the senator, raised $400,000 for his campaign. Afterward, Mr. McCain attended a boxing match and hit the craps tables.

For much of his adult life, Mr. McCain has gambled as often as once a month, friends and associates said, traveling to Las Vegas for weekend betting marathons. Former senior campaign officials said they worried about Mr. McCain’s patronage of casinos, given the power he wields over the industry. The officials, like others interviewed for this article, spoke on condition of anonymity.

“We were always concerned about appearances,” one former official said. “If you go around saying that appearances matter, then they matter.”

The former official said he would tell Mr. McCain: “Do we really have to go to a casino? I don’t think it’s a good idea. The base doesn’t like it. It doesn’t look good. And good things don’t happen in casinos at midnight.”

“You worry too much,” Mr. McCain would respond, the official said.

A Record of Support

In one of their last conversations, Representative Morris K. Udall, Arizona’s powerful Democrat, whose devotion to American Indian causes was legendary, implored his friend Mr. McCain to carry on his legacy.

“Don’t forget the Indians,” Mr. Udall, who died in 1998, told Mr. McCain in a directive that the senator has recounted to others.

More than a decade earlier, Mr. Udall had persuaded Mr. McCain to join the Senate Indian Affairs Committee. Mr. McCain, whose home state has the third-highest Indian population, eloquently decried the “grinding poverty” that gripped many reservations.

The two men helped write the Indian Gaming Regulatory Act of 1988 after the Supreme Court found that states had virtually no right to control wagering on reservations. The legislation provided a framework for the oversight and growth of Indian casinos: In 1988, Indian gambling represented less than 1 percent of the nation’s gambling revenues; today it captures more than one third.

On the Senate floor after the bill’s passage, Mr. McCain said he personally opposed Indian gambling, but when impoverished communities “are faced with only one option for economic development, and that is to set up gambling on their reservations, then I cannot disapprove.”

In 1994, Mr. McCain pushed an amendment that enabled dozens of additional tribes to win federal recognition and open casinos. And in 1998, Mr. McCain fought a Senate effort to rein in the boom.

He also voted twice in the last decade to give casinos tax breaks estimated to cost the government more than $326 million over a dozen years.

The first tax break benefited the industry in Las Vegas, one of a number of ways Mr. McCain has helped nontribal casinos. Mr. Lanni, the MGM Mirage chief executive, said that an unsuccessful bid by the senator to ban wagering on college sports in Nevada was the only time he could recall Mr. McCain opposing Las Vegas. “I can’t think of any other issue,” Mr. Lanni said.

The second tax break helped tribal casinos like Foxwoods and was pushed by Scott Reed, the Pequots’ lobbyist.

Mr. McCain had gotten to know Mr. Reed during Senator Bob Dole’s 1996 presidential campaign, which Mr. Reed managed. Four years later, when Mr. McCain ran for president, Mr. Reed recommended he hire his close friend and protégé, Rick Davis, to manage that campaign.

During his 2000 primary race against George W. Bush, Mr. McCain promoted his record of helping Indian Country, telling reporters on a campaign swing that he had provided critical support to “the Pequot, now the proud owners of the largest casino in the world.”

But Mr. McCain’s record on Indian gambling was fast becoming a difficult issue for him in the primary. Bush supporters like Gov. John Engler of Michigan lambasted Mr. McCain for his “close ties to Indian gambling.”

A decade after Mr. McCain co-authored the Indian gambling act, the political tides had turned. Tribal casinos, which were growing at a blazing pace, had become increasingly unpopular around the country for reasons as varied as morality and traffic.

Then came the biggest lobbying scandal to shake Washington.

Continued in Part 2