MEDILL NEWS SERVICE
Frank Fahrenkopf: High-Powered Advocate for Casinos
By MICHAEL B. FARRELL
MEDILL NEWS SERVICE

WASHINGTON - The money to finance then-First Lady Hillary Rodham Clinton's health care reform plan had to come from somewhere. The Clinton administration thought it had the solution: a 4 per cent tax on gambling revenues.

The casino industry, profoundly shaken, decided it needed a politically connected Washington lobbyist and, in 1994, turned to Frank J. Fahrenkopf Jr., high-powered Washington lawyer and former Republican Party national chairman.

Gambling interests managed to beat back the proposal without Fahrenkopf's help, but the thought of adding a federal tax on top of state and local taxes on casinos so unsettled the industry that it decided a lobbying organization was the answer to any future threats.

"That's when they decided we better quit screwing around here and form a trade organization," said Fahrenkopf, who has served as president of the American Gaming Association, the lobby arm of the casino industry, since forming it in 1995.

Today, the AGA has an annual budget of $4.9 million.

Fahrenkopf, 64, is a savvy political insider who grew up around gambling in Reno, Nev., and represented casinos as a lawyer. He counts among his many friends ex-presidents, Las Vegas entertainer Wayne Newton and gambler William J. Bennett, the "Book of Virtues" author recently exposed for his loss of millions playing slot machines.

He has hobnobbed with presidents and GOP bigwigs as chairman of the Republican National Committee. With those kinds of credentials, he wasn't going to come cheap.

After refusing the industry's initial offers, he was finally hired for a reported $1 million a year-a figure he smilingly says he'll neither confirm nor deny.

"He was the best hired gun that money could buy," said the Rev. Tom Grey, founder and executive director of the National Coalition Against Legalized Gambling "There is no doubt that he plays a very skilled Washington game."

Grey, 63, often finds himself paired against the polished, well-dressed Fahrenkopf, whose shirts are adorned with presidential cuff links, which he received from Ronald Reagan. Grey, in interview with Medill News Service, described Fahrenkopf as a "thuggish" bully in an expensive suit who Grey claims-contrary to all available evidence--is loosing the debate against further expansion of the casino industry.

Grey, a pastor on special assignment from the Methodist Church, acknowledges he's "unglamorous" compared with Fahrenkopf. The pastor's also vastly outgunned financially. He makes $3,000 a month and has an annual budget of $340,000. He doesn't have a cell phone. His headquarters are in Hanover, Ill.

"The opposition against Frank are the common people and Frank is not a common person," Grey said.

Although Fahrenkopf insists he respects Grey, the pastor says casino interests have been attacking him as a "phony" who spreads misinformation about gambling and have been ridiculing him as only "fit to be the Iraqi information minister."

"I must have gotten under his thin, but expensive, skin," he said.

Fahrenkopf makes no apologies for being dogged when it comes to serving the interests of the casinos. And some of those tactics are evident in how casinos came out in the 1999 National Gambling Impact Study Commission Report.

"They came up with a balanced report for the casino industry-because we spent a lot of time," he said. " Everywhere that commission was, I was. And we made sure that anyone who testified, we said, ëLook, make decisions on the facts.' And we presented the facts. We felt pretty good with the way the commercial casino industry came out."

Casino insiders have said Fahrenkopf is too beholden to particular big-money casinos, which caused a rift between the AGA and Mandalay Resort Group.

In March 2002, Mandalay Resort Group pulled out of the AGA over differences with the industry's lobbying arm. In an article about the split, the Las Vegas Review-Journal quoted sources saying the Mandaly quit because Fahrenkopf was "sucking up" to MGM Mirage Chairman Terry Lanni.

Internal bickering aside, Fahrenkopf's has become the public face of casino gambling in America.

And when the news broke that exposed conservative commentator and former drug czar Bennett as a habitual gambler who has lost $340,000 at Caesars Atlantic City and millions more in Las Vegas, Bennett consulted Fahrehkopf.

"I viewed this less as a legal problem than a public relations problem," Fahrenkopf said. Bennett lost face in public, Fahrenkopf said, because he " put himself out there as a pillar of virtue."

Fahrenkopf acknowledged that Bennett may have lost millions of dollars over years of playing slots, but disputed news accounts of his losses in Atlantic City. "Bill Bennett was there about 24 hours playing slots machines," he said. "He won money, but he didn't lose a nickel. He's a net winner in Atlantic City."

Part of the AGA's role is to "create a better understanding about the gaming entertainment industry." And that means dispelling notions that casinos are still run by mafia bosses and remain breeding grounds for organized crime.

Shaking that image entirely has been a tough job despite the fact 11 states have legal casinos, others are considering legalizing them and some of the casino managers are graduates of Ivy League schools.

In fact, despite the millions the AGA spends to polish the image of legal gambling, Fahrenkopf doubted that the perception would be dispelled in his lifetime.

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