Gaming Board head introduced Casino Queen partners

Monday, May 12, 1997 | 11:59 a.m.

Michael Gaughan, a veteran Las Vegas casino operator, said Friedman introduced him to the group that would apply to open the Casino Queen in East St. Louis, including Charles Bidwill III, vice president of Chicago's Sportsman's Park.

Bidwill eventually became chairman of the riverboat's board of directors. Gaughan became one of partners.

The gambling boat has turned into the third-most profitable in the state. Gross revenues run about $10 million a month.

"I would say the person most instrumental in getting the casino partnership going in East St. Louis was Friedman," Gaughan told the Belleville News-Democrat for a story published today. He said his relationship with one of the other Casino Queen partners has now soured.

Also in 1991, Friedman was recommending the board reject two other applications for casinos in the Metro East - one in East St. Louis and another just south in Sauget, the News-Democrat reported.

J. Thomas Johnson, current chairman of the Gaming Board, said linking potential casino partners would be a breach of ethics.

"We direct our staff to tell (casino applicants) what the process is. We should have no interest or responsibility in putting that application together. That would be a conflict," he said.

However, Johnson added that Friedman is "a man of the highest integrity."

Friedman acknowledged he brought the Casino Queen partners together.

"I made each other aware of each others' interests," said Friedman, who now works for Illinois Attorney General Jim Ryan.

Friedman said his sole motive was to bring a casino to East St. Louis, the only city in Illinois at the time guaranteed a casino license under the state's Distressed Cities Act.

State Sen. Denny Jacobs said Friedman "was doing all of the selecting of, not only the (casino) locations, but the partnerships, too."

Jacobs, D-East Moline, sponsored the state's law legalizing riverboat casinos in 1990, and Friedman's decisions hit close to home. Jacobs' son, Mike, was a minor partner with less than a 1 percent interest in the group that wanted a casino in Sauget.

Michael Belletire, administrator of the Gaming Board, said he does not have a problem with Friedman's role in steering the Casino Queen partnership.

"The presumption was that the law said a license had to be in East St. Louis," said Belletire, who was Gov. Jim Edgar's top adviser on casino issues in the state before his Gaming Board appointment.

On Nov. 27, 1990, the board followed Friedman's recommendation to reject an application for an East St. Louis casino from Joe Terrell, a Baton Rouge, La., developer. Friedman accused Terrell of shady dealings in Louisiana, where Terrell had been charged but acquitted in a bribery case. Friedman also questioned Terrell's dealings in an East St. Louis land purchase.

In October 1991, the Gaming Board followed Friedman's lead to delay action on the Sauget application. The board later delayed the application a second time and finally killed it.