Rahm Emails Show Casino Chief Sought Help After Family Contributed To Mayor
Emails obtained in BGA suit show gambling expansion talk between mayor's administration and Neil Bluhm. Family donated $770,000 to Pat Quinn, Bruce Rauner and Rahm Emanuel. Meanwhile, a consultant for Rivers Casino concluded gambling expansion would pose "existential threats" to its business.
In the months leading up to Mayor Rahm Emanuel’s 2015 re-election, members of the family that controls Illinois’ most successful casino gave $300,000 to his campaign. Just five days into Emanuel’s second term, Rivers Casino chairman Neil Bluhm called in a request.
Among emails obtained recently from Emanuel’s personal account by the Better Government Association is one sent to the mayor written by his deputy Steve Koch on May 23, 2015, relating a phone conversation with Bluhm.
“Spoke to Neil Bluhm,” Koch wrote. “he (sic) was calling to make sure we are as opposed to table games at racetracks as he is. I assured he (sic) we are adamantly opposed.”
The email, among hundreds released by the mayor’s office following an open records lawsuit settlement with the BGA, initially contained material that was redacted by the city. After the BGA challenged the decision to withhold portions of emailed conversations, the city has now disclosed additional material including a passage from the Koch email about Bluhm.
That communication took place one day after a report in The Daily Herald about a push in Springfield to expand casino style gambling to racetracks like Arlington Park. Such a move, had it succeeded, would have posed a competitive threat to nearby Rivers in Des Plaines.
The call and the cash illustrate the complicated intersection between campaign donations, partisan inclinations and business concerns in an Illinois political finance system supercharged by those with deep pockets.
The money to Emanuel capped a span of just six months in which Bluhm’s three adult children, themselves all holders of significant stakes in Rivers, along with their spouses made a total of $770,000 in donations to top Illinois politicians whose influence could affect the course of legal gambling in Illinois. That money greatly exceeded the size of campaign cash from other gambling related interests in Illinois.
Neil Bluhm, who is also an investment advisor to public pension funds, was prohibited under federal securities regulations from donating in the Chicago mayoral and Illinois governor’s races.
The Bluhms say the political giving had no connection to their casino interests.
The two primary recipients of their money—Emanuel and former Gov. Pat Quinn—held strikingly different positions on gambling expansion. The mayor has pushed for a Chicago casino that would almost surely siphon business from Rivers, while Quinn twice vetoed legislation that would have led to more competition in both the city and suburbs for the Bluhms’ casino.
Yet, as Neil Bluhm’s phone plea to Emanuel’s office underscores, the political fault lines when it comes to gambling matters can be shifting and situational.
Bluhm’s call to the deputy mayor prompted this email response from then chief City Hall lobbyist Michael Rendina: “We will need to call [state senate president John] Cullerton and ask that he keep them (table games at tracks) out of the bill.”
Emanuel spokesman Matt McGrath dismissed the importance of the Bluhm interaction, noting that city and Rivers had a common cause in opposing the threat of turning racetracks into casinos.
“We had the same position on table gaming because he was worried they would eat into the profits of his casino and we were worried they would eat into the profits of a possible Chicago casino,” said McGrath. “We didn’t need a reminder from Mr. Bluhm that this was something to be opposed.”
Spokesman Dennis Culloton said that Bluhm, a registered lobbyist for Rivers, alerted the city that the racetrack measure was afoot “to make sure the city reviewed the negative impact that table games at the tracks would have on gaming revenues to the city. As two major stakeholders in this potential legislation, this conversation was entirely appropriate and in the interest of the city.”
Nothing came of the attempts to add table games at the racetracks.
Before the Bluhm family donations to Emanuel, Bluhm’s children--Leslie, Meredith and Andrew--as well as one of their spouses gave $335,000 to the re-election committee of Democrat Quinn in the final weeks of his losing 2014 battle against Republican Bruce Rauner.
The Illinois Gaming Board has labeled each of Bluhm children “key” persons at Rivers because of their sizable ownership stakes in a casino with $400 million in annual gross revenues, by far the most lucrative of the state’s 10 casinos.
Ironies abound in those donations to Quinn. Among reasons he gave for vetoing the two gambling expansion bills was that both failed to include bans on political donations from casino owners. What’s more, the Bluhm money far exceeded general limits on political donations signed into law by Quinn, but was nonetheless allowed under an exception triggered when the wealthy Rauner began pouring millions of dollars of his own money into his campaign.
Around half of the Bluhm money to Quinn was donated through a limited partnership owned by Andrew Bluhm. His company’s title did not bear the Bluhm name, so any connection to the casino was not readily apparent.
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After Quinn lost to Rauner, the Bluhm family turned around and financially backed the Republican with $85,000 in donations to his inaugural/transition committee. Rauner, as both a candidate and governor, has expressed personal unease about gambling while saying he would still be open to expansion if local communities wanted it.
The Bluhm family designated Leslie Bluhm to respond to questions from the Better Government Association on behalf of them all. In a telephone interview, she said the contributions were not engineered by her father, or related to the casino business.
“No one tells me who to support,” she said.
Leslie Bluhm is a co-founder of the non-profit Chicago Cares, which matches up volunteers with other non-profits. She said that she and other family members financially back candidates like Quinn who favor progressive and women’s causes, “…and not infrequently these contributions are against my business interests.”
However, such would not have been the case when giving to Quinn.
By any measure, Rivers is the most financially successful casino in Illinois, with revenues double that of the next most lucrative competitor, state records show.
That jackpot would clearly be imperiled if a casino opened in Chicago to the east of Rivers or if Arlington, to the west, received permission to add casino like gaming operations.
As lawmakers pushed gaming expansion bills a few years ago, a public affairs and lobbying firm hired by the Bluhm company worked to defeat them, according to a case study posted on the web site of the firm, Culloton Strategies. The Culloton firm, called the prospect of additional casinos, including one in nearby Chicago, “existential threats” to Rivers.
The firm, owned by Dennis Culloton - the Rivers spokesman - declared that one of Quinn’s gambling expansion vetoes came after an “intense” lobbying campaign “focused solely on the office of the governor.”
Last summer, Rivers filed a property tax appeal with the Cook County Assessor that took note of continuing efforts in Springfield to expand casino gambling into Chicago and elsewhere. “There is no doubt that the new (Chicago) casino would have a significant cannibalizing effect on the Petitioner’s gambling revenues,” the document from Rivers asserted.
For their part, the three politicians uniformly denied being influenced by donations.
Quinn’s gaming vetoes came in 2012 and 2013 on bills that would have authorized five new casinos in Illinois, including one in Chicago, as well as allow slot machines at racetracks such as Arlington. The 2015 proposal that stirred Bluhm to contact Emanuel’s office would have taken Arlington and other tracks even further down the road to becoming full blown casinos by authorizing them to offer table games like roulette or craps.
In his vetoes, Quinn said he was not opposed to gaming expansion in general, but found both bills “significantly flawed” because they lacked “strict ethical standards.”
In a message that accompanied the veto of the 2012 bill, Quinn stressed that “We must prevent campaign contributions by gaming operators from infecting our political process.” The following year, as he rejected the second gaming measure, Quinn declared such a donation ban “essential to keeping corruption out of the gaming industry.”
William Morgan, a spokesman for the former governor, said Quinn “followed his conscience” in rejecting the legislation. That said, Morgan saw no inconsistency between Quinn’s veto rationale and his later acceptance of gambling related donations.
“To apply a campaign contribution restriction which was never enacted to only one candidate in a statewide race would violate fundamental fairness and not establish a level playing field for the competing candidates,” the Quinn spokesman said.
Morgan said Quinn had personally known and worked with Leslie Bluhm, her sister Meredith Bluhm-Wolf and their mother on a variety of causes including pro-choice and volunteerism, and on several occasions helped the family promote Chicago Cares’ service project events.
One month before the 2014 general election, Meredith Bluhm-Wolf hosted a fundraiser for Quinn at her Gold Coast home which featured President Barack Obama as the star attraction. In all, the event raised $1.2 million for Quinn, including $50,000 from Leslie Bluhm, and a total of $110,000 from Bluhm-Wolf and her husband William Wolf.
Another $175,000 came from DSC Advisors, LP, an investment firm owned by Neil Bluhm’s son Andrew, a Rivers Casino shareholder as well as a manager of the family run casino chain that includes facilities in Illinois and other states.
In addition to the $335,000 in donations from Wolf and the Bluhm siblings, Quinn received $80,000 from the mother of the three Bluhm children, who is divorced from Neil Bluhm and not a shareholder in Rivers. Another $50,000 was given to Quinn by Neil Bluhm’s sister, who is a minor shareholder in Rivers.
The Obama-Bluhm fundraiser did not come close to helping Quinn erase a gaping fundraising disadvantage. Rauner raised $66 million in the 2014 race, including $27.6 million of his own money. Quinn’s total take was less than half that at $31 million.
“Quinn was up against someone with an unlimited checkbook,” said political scientist Kent Redfield, an expert in campaign finance at the Springfield campus of The University of Illinois. “He was looking for friends where he could find them. Principles are a lot easier in the abstract than in battle.”
Once Rauner won, he raised another $3 million for inaugural festivities and for a transition committee, voluntarily disclosing top donors including five members of the extended Bluhm family. The three Bluhm children each donated $17,000, as did Leslie Bluhm’s husband and an investment company owned by William Wolf, according to Culloton.
Unlike the rest of the Bluhm clan, Leslie Bluhm’s spouse, businessman David Helfand, sided with Rauner in the governor’s race, donating $50,000.
“I did not know nor care about Bruce Rauner’s position on the casino,” said Leslie Bluhm. She and her husband knew Rauner and his wife through business and charitable circles and said they donated to the transition to wish the newly elected governor well.
Of the Rauner-Quinn faceoff, she said “I frankly wish all elections had two basically decent candidates like this.”
A spokesman for the governor, Lance Trover, said, “Any donation, no matter the donor, has zero bearing on the governor’s decision-making.”
Leslie Bluhm also said her donations to Emanuel had nothing to do with the casino but were made in response to solicitations from businessman Michael Sacks, who is close to Emanuel and a “dear dear friend” of hers.
|Michael Sacks | Sun-Times file photo|
Donation caps were also lifted in Emanuel’s re-election battle after a few outsized contributions green-lighted the same sort of fundraising free-for all that characterized the earlier governor’s contest. That enabled the Bluhms to super-size their donations to the mayor.
Collectively, the three siblings and two of their spouses donated $300,000 to Emanuel between December 2014 and March 2015.
Pete Giangreco, a spokesman for Emanuel’s political committee, said that the mayor supports a Chicago casino and “there is no question the contributions have not influenced the opinion or action of this administration in any way.”
During the last five years, state records show that Rivers’ key owners have made far larger campaign donations than other Illinois casino operators.
State records show that one member of the wealthy Pritzker family, Jennifer Pritzker who owns a small fraction of the Grand Victoria Casino in Elgin, contributed $104,000 to Rauner’s 2014 race, and up to $25,000 to his inaugural committee. Pritzker had no comment.
Rauner also received up to $50,000 for his inaugural committee from Richard Duchossois, the chairman of Arlington and the scion of a family that is the largest shareholder in the company that owns the track. Meanwhile, Duchossois’ son, Craig, contributed $125,000 to Emanuel’s re-election.
Both Duchossois’ said their donations were not made to gain benefit for Arlington. Richard Duchossois said the donations had “nothing to do with gambling,” while his son noted that they “failed miserably” over the years in lobbying efforts to level the competitive playing field between racetracks and casinos.
“Racing in Illinois is dying,” said Craig Duchossois.