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2 firms hired to search for executives for state gaming board
Wednesday, December 15, 2004

HARRISBURG -- Trying to jump-start the process of bringing slot machines to Pennsylvania, the new Gaming Control Board hired two "head hunter" firms yesterday to round up candidates for its three top administrative and legal jobs.

The board waived the state's usual requirement for competitive bidding in the hiring of the executive search firms, saying the tight time frame it is under to implement the complex new gambling expansion law justified such an emergency waiver.

The board hired, at a fee still to be decided, Diversified Search Inc. of Philadelphia to search nationwide for candidates for agency executive director and director of investigations and enforcement.

Diversified Search's reputation is impeccable, said gaming board Chairman Thomas "Tad'' Decker, head of a major Philadelphia law firm, Cozen O'Connor.

The board also hired Coleman Legal Search LLC of Philadelphia to find a chief counsel, who will head the stable of attorneys at the new gaming agency.

Another board member, Joseph W. "Chip" Marshall of the Temple University Health System, said he knew of both firms by reputation, which he said is "very good."

Marshall said, "Time is certainly of the essence" in the effort to create a whole new state agency from scratch.

He and other board members stressed, however, that they have adopted no specific time line for issuing licenses for the state's 14 new casinos or for getting them up and running.

The best estimate that state officials can give so far is that the first six casinos, which can get conditional licenses from the gaming board, might be operating by mid-2006. Those gambling parlors would be at four existing racetracks, including The Meadows in Washington County, as well as at two new tracks licensed by the state but not yet built, in Erie and Chester.

The chief counsel for the gaming board will likely be a busy person because three lawsuits already have been filed against the state's gaming law, which was enacted in July.

Copies of one lawsuit, filed by Beaver County developer Charles J. Betters, were served on Decker yesterday morning during a break in the daylong hearing.

Betters has filed one lawsuit in federal court and one in state court against the new slots law, which he claims doesn't give him a fair chance to compete for a new racetrack/casino in Pittsburgh. A third lawsuit was filed by Pennsylvanians Against Gambling Expansion, a group of citizens and legislators who oppose slots gambling.

The Gaming Control Board's executive director will be the top administrator for the new agency and boss of the 150 to 200 employees expected to be hired.

Until it hires its own staff, the gaming board has borrowed staff from other state agencies, including the Department of Revenue and Gov. Ed Rendell's office.

Rendell is a supporter of slots in Pennsylvania, saying that when all 14 casinos are up and fully running, he hopes the state will net up to $1 billion a year in additional tax revenue, which will be used to lower school property taxes.

The director of investigations and enforcement will work with state police to check the backgrounds of firms and individuals who want to manufacture and supply the 61,000 slot machines for the 14 casinos. They'll also check on executives of the companies that supply linen, food, janitorial services, and all other service and equipment contracts.

The amounts the executive search firms will be paid wasn't set yesterday, but such a fee is typically a percentage of the salary of the person hired, Decker said.

The new law gives the gaming board an initial appropriation of $7.5 million, from which the seven board members will be paid. Decker receives $150,000 a year as chairman and the others receive $145,000 each.

The board also adopted the state ethics code as a minimum code of conduct. It says state officials cannot engage in "conduct constituting conflict of interest" and cannot "seek or accept improper influence" over matters under its control.

Decker said board members should have no private conversations with gambling lobbyists about any slots-related matters.

The gaming board, at its first meeting yesterday, heard from Revenue Department experts about plans to buy a central computer control system, one of the keys to the new gambling system. It will keep tabs electronically on all slot machines.

Curt Haines, deputy revenue secretary for information technology, said he's gotten inquiries from several dozen companies that could supply the central control computer.

"This is a fiercely competitive business," he said.

He added that he hopes to make a recommendation to Revenue Secretary Greg Fajt by late January on which vendor should supply the computer. It will be connected electronically to every slot machine in every casino around the state and will monitor how much money is bet, how much is paid out and how much the state and the casino operator should get.

Haines said that all computer vendors have gotten the same information about what the state needs and have been given an equal chance to win the contract.

The gaming board will hold another all-day meeting today, when it will hear from state police about how it will monitor operations at the casinos and investigate the backgrounds of people involved in casino operations.

First published on December 15, 2004 at 12:00 am
Harrisburg Bureau Chief Tom Barnes can be reached at tbarnes@post-gazette.com or 1-717-787-4254.