Gallagher tries to draw distinction in race

Kirsten Searer

Monday, March 29, 2004 | 11:35 a.m.

Tom Gallagher doesn't place bets in casinos, so it's ironic -- and telling -- that he rose to the top of a casino company.

"I'm way too competitive to gamble," Gallagher said. "If chance is involved as opposed to effort and skill, I'm not a big fan."

Gallagher, the oldest of eight in a middle-class Detroit family, put himself through Harvard Law School with plans to become a politician. But fate led him to a prominent law firm and, eventually, to the towers of Caesars Palace as the chief executive of Park Place Entertainment, now known as Caesars Entertainment.

Now, at 59, Gallagher wants to make good on the dreams he held as a youth. This November, the Democrat hopes to beat Rep. Jon Porter, R-Nev., a freshman congressman, in a seat that was created two years ago.

But Gallagher will face a challenge in Porter, whose affable personality appeals even to his political adversaries.

"Jon's an incredibly nice man and a good man," said Democratic political consultant Billy Vassiliadis. "That's going to be tough to beat. Tom's going to have to give some compelling reasons why he should be elected."

So far, Gallagher has portrayed himself as a someone who won't always toe the party line.

In his campaign announcement speech, Gallagher criticized Porter for his lack of independence by voting with the Republican Party leadership on most issues.

"I think Jon Porter's a nice man and I think he's well intentioned but I think there's a dramatic difference between what I will be able to do and what he has been able to do so far," Gallagher said when he first floated the idea of running.

Gallagher hasn't completely outlined the specifics of his platform, but he has said he will focus on fully funding education, especially mandates such as the ones created in the No Child Left Behind Act.

He also has talked about rewarding employers so they have incentives to provide health insurance. He criticizes the Bush Medicare reform package, saying it won't do enough to lower prescription drug bills for seniors. He's also critical of the deficit.

And he said he will fight any notion that the war on terrorism is fought by one party over another.

"Somehow we must rise above the 60-second TV spot and engage in the most important debate of our century -- how to protect our freedom at home and throughout the world," he said in his announcement speech.

Gallagher said he wants to reach out to working men and women, something that might seem like a stretch for the often serious, bespectacled millionaire. But watchers say they expect Gallagher to attack the race with the same ferocity that he has every other project in his life.

"In a sense, he's always been very independent in his own life," said Gallagher's youngest son, Ryan. "He's kind of always had his own path."

Gallagher isn't the typical top attorney or chief executive, Ryan Gallagher said. He remembers that, as a child, he would beg his father to turn up the heat -- Gallagher kept the thermostat down to cut costs.

"He said, 'You know what you do, you go outside and stand out there for 10 minutes and when you come back inside it will feel warm again,' " Ryan Gallagher said. "He's definitely not a flashy character."

Instead of buying big homes, Gallagher and his wife of 37 years, Mary, raised their four children in fixer-uppers. One home the family bought in the Los Angeles area started out at 1,300 square feet and ended up at 4,500 square feet, Gallagher said. He did most of the carpentry, plumbing, wiring and heating himself, he said.

"The thing I've always enjoyed about doing things with your hands is the sense of accomplishment you get," he said. "Either it's right or, if it's not, you fix it."

Ryan Gallagher said his father's work schedule was simple: In the office by 6 a.m., home by 9 p.m. and into the garage to work for a few hours before bed.

Early in his career as an attorney, Gallagher joined the Capital Hill staff of California Sen. John Tunney, a charismatic young Democrat whose good looks and exuberance reminded many of a Kennedy.

When Tunney lost his re-election bid, Gallagher landed at a prominent East Coast law firm, where he set up offices in London and Saudi Arabia and was known as the "fireman in the firm."

"Big law firms get asked to do a lot of difficult things in odd places," said Gallagher, who became a successful mergers-and-acquisition attorney. "I got the reputation of being someone who could jump in and take over a problem in almost any area of the world."

Gallagher caught the eye of entertainment mogul Merv Griffin, who was looking for help in completing a multimillion-dollar deal with Donald Trump. Eventually, Griffin lured Gallagher in to be the chief executive of Griffin Group Inc., where he spent five years.

After a three-year stint with Hilton Hotels as chief administrative officer and legal counsel, Gallagher moved to Las Vegas in 2000 to be the chief executive of Park Place Entertainment.

The economy already was starting to falter, but Gallagher laid out plans to build a new tower and the Colosseum at Caesars Palace.

As the head of Park Place, and as the chairman of the Nevada Resort Association, Gallagher earned some fans for making tough decisions.

In 2002, Gallagher was one of a few resort executives who first opened up contract negotiations to help resolve complaints about health insurance and the workload of housekeepers, said D. Taylor, secretary-treasurer of the Culinary Workers Union, Local 226.

And Gallagher was openly critical of allowing unregulated Internet gambling, saying it could hurt addicts or children.

"We've got to be careful about giving the impression that we're trying to put a vacuum cleaner in their pockets," he said in October 2001, at a session of the Global Gaming Expo that focuses on Internet gambling.

Gallagher argued that the public's view of casinos would decline even more if casinos weren't careful with Internet gaming.

"As a corporate leader, he worried about things like corporate culture and advancement," said Vassiliadis, whose R&R Partners handled advertising for Caesars Palace. "He is broad thinking in that regard."

Attorney Kim Sinatra followed Gallagher from the law firm Gibson, Dunn & Crutcher to the Griffin Group Inc. and finally to Park Place Entertainment. He was her mentor, she said, someone who taught her "how important it is to always be straight with people."

He came in on Saturdays and Sundays to work with the rest of his management when they were putting together a new strategic plan, she said.

"He's an incredible hard worker, too," Sinatra said. "A diligent, straight-forward, good-guy kind of thing."

Gallagher said he expected to work at Park Place for longer than the two years he was there. Still, while he was gearing up his plans for the company, the Sept. 11, 2001, terrorist attacks hit, and the gaming industry reeled.

His management team was in Lake Tahoe on the day of the attacks. No one was able to fly out of Lake Tahoe, so Gallagher "commandeered" a shuttle bus and drove about 15 of his staff members home to Las Vegas.

A sad day was punctuated with a funny moment as Gallagher pulled up to the valet lane at Caesars Palace driving the shuttle. Valet parkers were more than surprised, he said, to see their chief executive hauling a bus-load of people.

In October 2002, Las Vegas Life named its top 25 most powerful people in the state, and while Gallagher didn't make the list, he was named in the "On the Bubble" list that lumped him in good company with people such as Sen. John Ensign, R-Nev., and Senate Minority Leader Dina Titus, D-Las Vegas.

Yet in November 2002, Gallagher announced his resignation. Reportedly, he was under pressure from Park Place's board after stocks continued to slump under his watch. He said his resignation was a mutual decision by him and the board.

"He was CEO of a company at one of the more challenging times that the industry in Las Vegas faced," said Marc Falcone, a gaming analyst for Deutsche Bank. "Those challenges created obstacles in trying to improve the position of Park Place Entertainment."

According to reports at the time, Gallagher received a total $7.9 million for his salary, bonuses, options and a compensation package he received when he resigned.

"I always felt it would be a long process to finish turning the ship, but it was clearly going to take a lot of time," he said. "It was a good time for a transition and it was time to do something else."

As soon as he arrived in Nevada, Gallagher started cutting checks to politicians, mostly Democrats. He has given a total of $33,000 to federal politicians since 2000, including $2,000 he spent to attend a Bush-Cheney luncheon last fall along with a few friends.

"I knew that at some point in my career somebody would try to use it against me," Gallagher said of attending the Republican function.

"But it's worth doing because I wanted to see this up close," he said. "I had watched from a distance and I was really curious about this juggernaut of fund-raising that the Bush folks had put together."

While Gallagher said he won't buy this election, some predict he might have to pony up hundreds of thousands of dollars to be competitive with Porter.

Ironically, his criticism of Porter -- that he votes along with the party power structure -- could hurt Gallagher when he tries to raise money along the Strip, his old stamping grounds.

Some gamers privately say that Porter has been so amiable to their industry that casino executives aren't likely to open up their wallets for their former colleague. Gallagher said he understands that some in the industry didn't expect a competitive race, and they already made commitments to Porter.

"I understand that it's not their problem that I entered the race somewhat late in the game," Gallagher said. "I do believe that as the race goes forward, that people will be helping my campaign as well."

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