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Knowing the Rules of the Political Contribution Prohibition Game is Key in an Election Year

1 March 2000

This year's election season is beginning to heat up. Last week Michigan held the Republican primary and every newspaper, radio station, TV broadcast and Internet news site contained the latest and greatest information on what each candidate was saying and promising. These same reports included updates on the amount of money each candidate had collected in order to keep his political drive alive. As a result, I am sure I am not the only person receiving letters, note cards and filers requesting my support (a/k/a money) for candidate X or committee Y. However, for those involved in Michigan's private casino industry this should be a red flag reminder that all of the Detroit casino operators and suppliers, as well as certain employees of these companies, are strictly prohibited from making state or local political contributions. A violation of this prohibition is grounds for the Michigan Gaming Control Board to revoke a casino operators license or the privilege of a casino supplier (gaming and non-gaming) to provide goods or services to a casino. Worse yet is that violation of this prohibition is a felony, punishable by imprisonment for 10 years and/or a fine of up to $100,000.

To protect your job, business contract or consulting agreement with one of the Detroit casinos, you must always follow the letter of the law. As it relates to the political contributions restriction, that means saying no to long time friends and supporters of your interests. To learn all of the Rules of the Political Contribution Game, consult the Michigan Gaming Control and Revenue Act and the Michigan Gaming Control Board Administrative Rules. These documents are available at www.state.mi.us/mgcb/.

The following answers to frequently asked questions are designed to protect you from violating the political contribution restrictions for the Detroit casino operators, suppliers and their employees.

Question 1: Who is prohibited from making a contribution?

Answer 1: The Michigan Gaming Control and Revenue Act, as amended, prohibits the following persons from making contributions to a state or local elective office holder, candidate, candidate committee, political party committee, independent committee (as defined by the Michigan Campaign Finance Act), or committee organized by a state legislative caucus: 1) a person who holds a Casino License issued by the Michigan Gaming Control Board ; 2) a person who holds a supplier license issued by the Michigan Gaming Control Board; 3) a person who holds one percent interest in either a supplier or operators license; 4) a person who holds a one percent interest in the buildings, facilities or rooms connected to a casino, or a one percent interest in any other facility in the city that is under the control of a casino licensee or affiliated company ("casino enterprise"); 5) an officer or managerial employee of a licensee or casino enterprise; 6) an officer of any entity that holds a one percent interest in a licensee or casino enterprise; or 7) an independent committee of a licensee or casino enterprise. A person subject to this prohibition is also prohibited from making contributions through a legal entity established, directed or controlled by that person.

Question 2: For how long does the contribution prohibition continue?

Answer 2: Casino Licensees - Political contributions may not be made for a date one year prior to applying to the Michigan Gaming Control Board for a Casino License, and continuing until three years after the license expires. The prohibited period includes all time in between these dates, including the period when the Board is still considering a license application.

Supplier Licensees - Political contributions may not be made from the date an application is submitted to the Michigan Gaming Control Board for a Supplier License, and continuing until three years after the license expires.

Question 3: What is the punishment for violating the political contribution prohibition?

Answer 3: A person who makes a prohibited contribution is guilty of a felony, punishable by imprisonment for 10 years and/or fine of not more than $100,000.

Question 4: Where can a political committee or candidate gain a list entities prohibited from making a political contribution?

Answer 4: Casino Licensees - The Casino Interest Registration Act requires that a person holding a casino interest must file a registration form with the Department of State within five days after obtaining a casino interest. Twice a year, the Department of State must publish a list of the names of persons who hold casino interests. This list must be given wide public dissemination.

Suppliers Licensees - The Department of State is not required to publish a comprehensive list of suppliers prohibited from giving political contributions. However, for licensing reasons the Michigan Gaming Control Board publishes a list of all companies registered as vendors or suppliers to the Detroit casinos. Note, however, that the Board's list does not constitute a comprehensive list of companies and persons prohibited from giving political contributions.

Question 5: Who is prohibited from accepting a political contribution from a casino licensee or supplier licensee?

Answer 5: The Michigan Campaign Finance Act, as amended, prohibits a committee from knowingly maintaining receipt of a contribution that is prohibited under the Michigan Gaming Control and Revenue Act, as amended. A committee knowingly maintains the receipt of a contribution only if it fails to return the contribution within 30 business days after receiving notice from the Department of State that the committee has received a prohibited contribution.

Question 6: To whom can a Detroit Casino Licensee and Supplier Licensee legally give a political contribution?

Answer 6: A Casino Licensee and Supplier Licensee can contribute to a federal committee or federal candidate, as well as a State of Michigan Ballot Committee. However, it is important to check with any federal candidate or federal committee to verify that absolutely zero percent of your contribution will be used or donated to a State of Michigan candidate or committee (other than a State of Michigan Ballot Committee) prohibited from receiving your contribution.

Question 7: Can a Casino Licensee or Supplier Licensee volunteer his/her time working for a candidate or committee that the Michigan Gaming Control and Revenue Act prohibits giving a political contribution?

Answer 7: The Michigan Gaming Control and Revenue Act does not prohibit a Casino Licensee or Supplier Licensee from volunteering time to work on any committee for any local, state or federal office.

Michigan's political contribution prohibition was designed by the Michigan Legislature to protect the integrity of Michigan

David Waddell
David Waddell is an attorney for Regulatory Management Counselors, P.C. (RMC), which assists businesses in navigating the legislative, regulatory and licensing systems governing Michigan’s commercial and tribal casino industries. He is the co-author of The State of Michigan Gaming Law Legal Resource Book and one of the founders of The Michigan Gaming Newsletter.

David Waddell Websites:

www.michigangaming.com
David Waddell
David Waddell is an attorney for Regulatory Management Counselors, P.C. (RMC), which assists businesses in navigating the legislative, regulatory and licensing systems governing Michigan’s commercial and tribal casino industries. He is the co-author of The State of Michigan Gaming Law Legal Resource Book and one of the founders of The Michigan Gaming Newsletter.

David Waddell Websites:

www.michigangaming.com