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Could indictment sink gambling plan?
Lawmakers question governor's ability to carry off proposal
By John Patterson | Daily Herald Staff
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Published: 12/15/2007 11:56 PM

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SPRINGFIELD -- With Gov. Rod Blagojevich's gambling point man now accused of placing millions of dollars in illegal bets and breaking the law to cover it up, state lawmakers face the question of whether they're willing to entrust Blagojevich with a massive gambling expansion plan.

"Given how close Mr. Kelly is to the governor as an adviser … it certainly gives you pause," said state Rep. Paul Froehlich, a Schaumburg Democrat, expressing a sentiment shared by many suburban lawmakers.

In recent months, gambling has emerged as the lynchpin for bringing resolution to several lingering issues. Lawmakers hope new and bigger casinos would generate billions in tax dollars that could be used to fund road, bridge and school projects -- the type of construction spending not seen in nearly a decade. Currently, that spending deal is needed to round up downstate and outlying suburban support for bailing out Chicagoland's bus and train agencies teetering on the verge of financial "doomsday."

But last week, federal authorities indicted Christopher Kelly on charges stemming from alleged illegal gambling and subsequent tax evasion. Kelly's attorney says his client does not owe any taxes and that the charges have nothing to do with his state work.

Kelly, 49, of Burr Ridge, is a close friend of the governor's. Blagojevich turned to him early in his administration for help with gambling negotiations, in part because, as the governor once put it, Kelly knew about gambling.

Federal prosecutors alleged Kelly "placed millions of dollars of wagers with" an illegal Illinois bookmaking operation between 2000 and 2006. All told, U.S. Attorney Patrick Fitzgerald claimed Kelly underreported $1 million in personal income and $300,000 in income to businesses he controlled.

"It's troubling that the governor would pick someone who was heavily involved in apparently not only legal gambling but illegal gambling to be his point person for casino oversight. I think it calls into question what kind of vetting process he has," said David Morrison, associate director of the Illinois Campaign for Political Reform.

For many involved -- most notably Blagojevich -- the indictments couldn't have come at a worse time. Unable this year to win lawmakers' support for several high-profile, high-stakes programs, Blagojevich was attempting to help broker the gambling deal in an effort to avoid the transit "doomsday" and at the same time win approval of a construction spending plan that had eluded him throughout his first term.

Unions, local officials and a number of lawmakers have increasingly expressed an interest in gambling expansion out of growing desperation for state-backed construction spending, which Illinois hasn't had since 1999. The unions want the jobs, local officials want the improvements and both have been leaning on lawmakers to do something.

The Illinois House planned to convene Monday to consider a gambling plan, but on Friday, House Speaker Michael Madigan, a Chicago Democrat, canceled citing the recent indictments and the need for lawmakers and the governor to endorse more stringent ethical reforms in gambling oversight. Blagojevich is considering ordering lawmakers back to the Capitol regardless.

One version of the gambling plan essentially strips Blagojevich of his current power to pick Illinois Gaming Board members and adds a number of provisions greatly expanding the financial and political autonomy of state gambling regulators.

"I'm for giving this governor the least power of any governor that's been there," said state Rep. Patricia Reid Lindner, an Aurora Republican.

Other suburban lawmakers, however, defended the governor, saying Kelly hasn't been involved in gambling talks for years, the indictments focus on alleged incidents in his private life and the simple truth is Madigan doesn't have the votes to pass his plans and the Kelly scandal is providing cover.

"In recent discussions, there's been no Chris Kelly sighting," said state Sen. Terry Link, a Waukegan Democrat. "I don't think it should have any bearing on what we're dong today."

The Blagojevich administration did not respond to requests for comment regarding this story. In statements sent last week to reporters in the wake of the indictments, the governor offered his personal support for Kelly, calling him a friend and saying it's "important to let the legal process play out and not rush to judgment."

Meanwhile, gambling critics note Kelly's indictment highlights problems with legalized gambling and urged others to think about whether this is the best way for the state to make money.

"So far all we've heard is the easy money and how good it is for the state and how it's necessary, it's the only way to solve the problem," said state Rep. Jack Franks, a Woodstock Democrat. "People talked about the social costs and the other problems that are associated with gambling, but they've been drowned out by the beat of 'We need this money.'

"I think the result of this indictment is it's going to slow down the process considerably."

What they're saying

The Daily Herald contacted lawmakers and legislative leaders to ask them if the indictment of Gov. Rod Blagojevich's gambling adviser would affect gambling expansion plans. Here's a sampling of what they had to say:

"It doesn't have any effect on me because I'm voting 'no.' We have so much gambling in Illinois now. We're No. 3 now and going to No. 2, and the only state ahead of us is the one that legalizes prostitution too. I don't like the way we're headed."

-- State Rep. Bob Biggins, an Elmhurst Republican

"I think it will put a cloud over things because people are going to have to be sober in their discussions when they think about the ramifications for the state."

-- State Rep. Jack Franks, a Woodstock Democrat

"No, as I understand it, the indictment was on personal dealings."

-- Cindy Davidsmeyer, spokeswoman for Senate President Emil Jones Jr., a Chicago Democrat

"Does it make an unenthusiastic group more unenthusiastic? If that's possible I guess the answer is yes."

-- Steve Brown, spokesman for House Speaker Michael Madigan, a Chicago Democrat

"It's not like the trust level is really strong. We keep wondering how much worse, worse is."

-- State Rep. Paul Froehlich, a Schaumburg Democrat

"I have never been a proponent that we should fund education through gambling, but the other alternative is to raise taxes and I don't think my constituents support that."

-- State Rep. Patricia Reid Linder, a Sugar Grove Republican

"It's going to bring a higher level of scrutiny to the whole process of gambling as it exists here in Illinois. It's clear it's a serious concern and now we see evidence again of how it can go awry."

-- State Rep. Mike Fortner, a West Chicago Republican

"I'm disgusted with it. I'm really disgusted that people choose people like that to be part of our … system."

-- State Rep. Jim Meyer, a Naperville Republican