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October 24, 2014

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POLITICS:

Months of emails between Harry Reid, Dean Heller reveal how poker efforts deteriorated

WASHINGTON — The online poker bill-making process has never been pretty. But a collection of emails released by Senate Majority Leader Harry Reid’s chief of staff Friday reveals an especially brambled picture of what has kept legislation crucial for Nevada’s biggest industry on ice for so long.

The story framed by the emails is one of missed opportunities and broken promises. At its heart, it’s also a story of a tenuous partnership between the Senate’s top dog and its freshest pup, Reid and Republican Sen. Dean Heller.

The pair also are at each other’s throats over a Nevada election that could determine who controls the Senate next year.

Reid’s adversaries contend the account Reid's staff has put forward is at best incomplete and designed to be politically misleading.

The emails were released Friday when Reid’s chief of staff, David Krone, summoned Las Vegas media to his office in the Capitol to, as he put it, show them what is really going on with the long-stalled legislation that would both legalize online poker and halt a proliferation of other kinds of Internet gambling being considered by other states.

Krone's decision to share the emails comes during an increasingly bitter finger-pointing feud in which Reid has accused Heller of failing to deliver Republican votes he had promised and Heller has accused Reid of contorting facts and irresponsibly politicizing an issue of vital importance to Nevada.

“I am not going to let Dean Heller go out there and call Harry Reid a liar,” said Krone, who has never spoken about poker publicly. “I want to tell my side of the story.”

To make his case, Krone shared a raft of emails detailing exchanges between him and Mac Abrams, Heller’s former chief of staff, who has been running Heller’s Senate campaign since May 1. The emails were sent between May and September.

The correspondence details the arc of Heller’s involvement in the process — starting from when Abrams first privately asked Krone if he should start pressuring Republican Senate leaders for support of a bill to legalize online poker playing for money, and ending in an exchange of letters that have been publicly displayed in newspapers. It’s a role Heller took on at the urging of the gaming industry, which saw him as the most likely asset in corralling enough uneasy Republicans to support the measure.

“They don’t know how to remain calm,” Krone wrote of the gaming lobbyists to Abrams, jokingly, on May 9th, the day their online poker alliance on Senate strategy appears to have been born.

Heller’s chance to play an integral role in the winning over enough Republican votes was sparked when Krone confided in Abrams that a deal he had struck with Republican Sen. Jon Kyl of Arizona was going south because Kyl wasn’t holding up his end of the bargain.

Kyl had been an opponent of online gambling, but apparently had been won over by the argument that a recent Department of Justice opinion that the Wire Act prohibited only online sports betting would open the floodgates to individual states entering the online gambling market.

According to Krone, Kyl and an adviser, Marty Gold, had agreed to forward draft legislation to Senate Minority Leader Mitch McConnell and broker a meeting between the two Senate leaders.

“Marty hasn’t delivered and Kyl hasn’t spoken to McConnell,” Krone wrote to Abrams.

It took Heller’s top aide but a moment to volunteer.

“Do you want Dean to make a call to McConnell?” Abrams wrote to Krone.

They would continue to ping each other back and forth throughout that day on details, with Abrams at one point adding: “The last thing I want to do is to screw this up.”

“Since Kyl doesn’t seem to be asking McConnell, then Dean is the best person,” Krone would write to Abrams.

So began the correspondence in which Heller and Reid’s top aides traded thoughts on process — discussing various bills that could be used as a vehicle for the legislation — as well as politics.

Reid’s request to Heller to come up with approximately 10 to 20 Republican votes is recorded in the exchange shared by Krone. Heller’s response is not.

The fate of a poker bill is heavily dependent on getting cooperation from Republicans, as Reid’s best estimate has been that 45 Senate Democrats will vote for the bill. Winning over 15 Republicans, however, is often dependent on winning the endorsement of GOP leaders.

“The focus is on leadership,” said Jan Jones, a lobbyist for Caesars Entertainment. “A bill of this consequence is never going to happen, standalone or otherwise, without leadership’s support.”

But the emails show Krone and Abrams both depicting Republican leadership — namely, Kyl and McConnell — as being neither supportive nor focused.

“My fears were confirmed,” Abrams wrote to Krone on May 15. “This is a McConnell staff issue.”

“Fahrenkopf blew up yesterday to me about how Kyl has handled this,” Krone wrote the same day, referencing the director of the American Gaming Association, Frank Fahrenkopf. “He said he could not believe Kyl never went to McConnell.”

“McConnell’s staff is pissed that Kyl and Reid’s staffs did not include them in writing the bills,” Abrams wrote to Krone.

Krone described the exchanges as a stepwise building of trust that carried them to a do-or-die point in August, when Reid’s office polled the gaming industry stakeholders about whether or not they were willing to push ahead on a standalone poker bill in September.

“Heller said, I cannot tell you I have the votes today, however I feel confident that if the bill were brought to the floor, the votes would be there,” Krone said Friday.

That vote never happened. And Heller maintains he never made Reid that promise.

Instead, what transpired was an exchange of letters, previously leaked to the press, that gave way to finger pointing and name-calling, as Reid and Heller accused the other of sabotaging the poker bill for their own political ambition.

Reid wrote to Heller that he “cannot stand by while you abdicate your responsibility as a U.S. senator,” and jeered his not being able to come up with the votes he’d promised to bring to the table; Heller accused Reid of setting him up simply to harangue him in his race against Reid’s protege, Shelley Berkley.

Krone disputed the idea that he was playing politics Friday. “If I wanted to burn them, we would have burned them a long time ago,” he said.

In a phone call late Friday night, Abrams did not dispute the authenticity of the emails that were shown to Las Vegas reporters. But he did protest that they show just a sliver of the extent of their cooperation on online poker, most of which happened on the phone.

Months before the email chain and months before the Department of Justice’s opinion on the Wire Act, Abrams said he had approached Krone to offer his help.

“Until May, in every one of my meetings that I have had with David, I asked, ‘what do you want Mr. Heller to be doing,’” Abrams said. “He said, ‘Mac, we’ve got the Senate under control, you don’t have to worry about the Senate. What you need to do is work the House.’”

Heller’s staff maintains they never shook hands on any other deal with Reid, whether it was to bring along 15 votes, prioritize the Senate, or move legislation before the lame duck period.

For Abrams — and for the representatives of the Senate Republican leaders reached Friday night — there had long been signs as early as May that the partnership between Reid and Heller had been fraying. The tension began when Krone instructed Heller’s office to get the necessary Republican votes.

In the flurry of emails between Krone and Abrams, it is clear the two were planning to organize a summit of the principals on poker: Reid, Heller, McConnell and Kyl. That summit was to take place on May 23 at 2:30 p.m. But the meeting never happened.

As Krone tells it, Reid had approached McConnell on the Senate floor that morning for a pre-summit tete-a-tete.

“Sen. Reid came in my office...and said: ‘I’ve been here for a long time and I know when somebody wants to work out a deal and when they don’t want to work out a deal,’” Krone said, continuing to quote Reid: “‘And he gave me every reason why he didn’t want to do this.”

McConnell’s office vehemently disagrees with that assertion.

“Sen. McConnell was happy to have the meeting, but Sen. Reid canceled it,” said McConnell’s spokesman, Don Stewart, on Friday night.

So does Heller’s.

“Reid hadn’t talked to McConnell and none of the three most important players had been in the room with McConnell to discuss this,” Abrams said. “I think that was a real pivotal point. Reid cancelled the meeting.”

In a statement Friday night, Kyl also sharply disputed the email characterization by Krone and Abrams that he wasn’t living up to his promises.

“Sen. Heller and I have had dozens of conversations with our Republican colleagues in both the Senate and the House, as well as Sen. McConnell and members of House leadership, without whose support legislation would not be possible,” Kyl said in a statement Friday night.

The Republicans say Krone’s decision to release the emails is simply the latest in a series of decisions taken with the intent of using the poker bill to score political points.

“Unfortunately, Harry Reid and his mouthpiece, David Krone, have put their political goals ahead of serious efforts to secure passage of an online gaming proposal - all to undercut Dean Heller during an election year,” Kyl said in a statement Friday night. “It’s not too late to get this done in the lame duck, but Harry Reid will have to stop playing partisan politics lest he poison the well altogether.”

“Sen. Reid’s efforts to write this bill behind closed doors, with no input from the committees or his constituents, was not an approach (McConnell) could support,” Stewart said. “It is unfortunate that the Majority Leader’s office is intent instead on using this subject as an occasion for last minute, partisan gamesmanship in the dwindling days before an election.”

Krone, saying he was angry that such accusations were thrown at Reid, forcefully eschews any suggestion that his boss has any political interest at heart.

“Whether you believe this or not, I am going to say this: I believe that Harry Reid put this before getting Shelley Berkley elected,” Krone said. “I really, firmly, 100 percent believe that because he knew how important it is to the state."

He did add, however, that he thought Heller had backed himself into a corner this month, allowing his once central role in the poker process to become fully eroded.

“I think at this point he’s made himself irrelevant to the process,” Krone said, calling Heller's letter “third-rate amateur.”

“He had an unbelievable chance to stand on the floor, in the well, with Harry Reid, and say we got this done for Nevada together,” Krone said. “To be honest with you, I think that pretty much would have clinched the election for him.”

But Heller’s people maintain that if there’s anyone who is rising above politics, it’s Heller.

“They say the deadline has passed, but Dean Heller is still meeting with U.S. senators. ... Heller has not given up on this,” Abrams said, explaining that Heller had met with a handful of Senators this week.

But he too, could not refrain from his own politically-charged warning.

“Internet poker will never become legal if Dean Heller is not in the United States Senate,” Abrams said. “You need a Republican to convince other Republicans to get this done. You need a Republican to educate them. He is probably the most relevant person in this process.”

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