Creating slots distributorships is unnecessary, opportunity for graft
Pennsylvanians decided that they didn't approve of the self-serving pay raise legislators awarded themselves with a 2 a.m. vote last July 7. And now, regardless of what one thinks about the pros and cons of legalizing slot machines, voters should let their legislators know that it is time to drop the requirement that all slot machine sales must go through a Pennsylvania company.
Two lawmakers from Western Pennsylvania are proposing that the requirement to create — and then force all slot machine sales through — state-based distribution companies be dropped from the 2004 slot machine gambling law.
Sen. Jane Orie, R-McCandless, and Rep. Mike Turzai, R-Bradford Woods, are right — the mandate should be dropped.
In early March, a similar change was considered in the House, but when it looked like it might pass, a powerful lobbyist and former state lawmaker appeared in Harrisburg to help defeat the proposal.
That alone should be enough to get voters' attention.
Proponents of the slots-distribution scheme argue that it will help create jobs in Pennsylvania by forcing 14 proposed casinos to buy their slot machines through a middleman, rather than directly from the manufacturers, which is the way it is handled by every other state with slot machines.
But these government-created businesses would add little more than bureaucracy and higher costs. True, a few office and warehouse jobs would be created, but the big money would go to the new businesses' owners — who would, most likely, be already well-off people who are politically well-connected to the power brokers in Harrisburg.
The owners or investors in the 24 applicants for the slots distributorships include Mark Singel, a former lieutenant governor; Mitchell Rubin, chairman of the Pennsylvania Turnpike Commission; Neely Frye, a lobbyist for a multinational pharmaceutical company and a former aide to Pennsylvania House Speaker John Perzel; Jim Roddey, former Allegheny County chief executive (who, to his credit, has promised to donate 40 percent of his profits to community organizations); and Sala Udin, former Pittsburgh City Council member.
Another prospective slots distributor is connected to Stephen Wojdak, the same powerful Harrisburg lobbyist who personally stepped in to thwart the earlier attempt to drop the mandated distributorship provision of the slots law. Although Wojdak has a financial interest in one of the supplier applicants, his name does not appear and his ownership interest is held in the name of his children, identified only as "minor child 1" and "minor child 2."
Average Pennsylvanians would be better served by the legislature trying to create jobs that actually are needed in the state and serve a legitimate economic purpose. The make-work jobs associated with the proposed slot machine distributorships would be of limited benefit, with the real money going to the well-connected owners of those companies. And there can be little doubt that money and favors from those owners of distributorships would somehow find their way back to Harrisburg's most powerful lawmakers, their friends and families.
Once again, voters have seen the state legislature acting in ways that make little economic sense, but appear to be self-serving or potentially self-serving.
Voter anger and sustained public pressure convinced state lawmakers to repeal last summer's pay raise. Similar pressure should build support for the proposal by Orie and Turzai to drop the provision forcing the creation of Pennsylvania-based slots distributorships.
If Pennsylvania is going to proceed with the installation of up to 61,000 slot machines, the process should be as simple and straightforward as possible. The creation of state-based distributorships, which will only add costs and inefficiencies to the process of installing slot machines, should send up more than a few red flags to voters who are learning to look more closely at how Harrisburg does business.
The slot machine supplier mandate serves no legitimate economic purpose — and is not found in any other state. Does that mean Pennsylvania lawmakers are smarter than their counterparts in other states, or just more brazen and creative when it comes to finding ways to help their friends, family, political supporters — and themselves?
