Gaming board sued over background checks

Marc Levy

Tuesday, Sept. 27, 2005 | 10:15 a.m.

HARRISBURG, Pa. -- The state troopers union filed suit Monday to stop gambling regulators from hiring private companies to investigate applicant backgrounds, saying it violates the state constitution and could leave Pennsylvania's nascent slot-machine industry vulnerable to organized crime.

The lawsuit, filed in state Supreme Court, comes at a time when the state Gaming Control Board is scrambling to issue licenses to gambling companies, which must contribute one-third of their slot-machine revenues to finance property-tax cuts for the state's 3 million homeowners.

"Outsourcing background checks will do nothing but weaken the oversight of an industry that has traditionally attracted organized crime and rampant corruption," said Sgt. Bruce Edwards, president of the Pennsylvania State Troopers Association.

Gaming Control Board spokesman Nick Hays said he was not aware of the suit being filed, and could not comment.

The background checks will screen both gambling companies and vendors that supply the slots parlors. The firms, their executives and their employees -- about 30,000 people in all -- will be investigated.

The union's 17-page lawsuit contends that the July 2004 law legalizing up to 61,000 slot machines at 14 venues gave state police the authority to conduct the background checks. The union also contends that the board, a legislative body, will be in violation of the constitutional separation of powers if it performs an executive function such as law enforcement.

For months, a disagreement has simmered between the board and the state police over who should perform the background checks. The seven-member gambling board last month authorized its staff to negotiate no-bid contracts with three private firms, while also seeking others through a competitive bidding process.

The state police commissioner, Col. Jeffrey B. Miller, wants his agency to manage the background checks and act as the repository of all intelligence gathered on gambling employees, executives and companies.

However, board members insist their agency's bureau of investigations and enforcement should manage the process, and split the checks between staff investigators, state police, and private firms. They say state troopers can handle the criminal records searches, but do not have the experience or manpower to conduct in-depth background checks and forensic accounting investigations.