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Feds investigating land deal involving Pa. senator, casino
Tuesday, March 22, 2005

HARRISBURG -- Federal prosecutors have asked the state to turn over records on the purchase of state land by a company partly owned by a state lawmaker. The company stands to make millions if a casino operator can win a license to operate on the site.

Gov. Ed Rendell confirmed today that a subpoena had been served on the agency that buys and sells property for the state. He said the state is cooperating, and that he believes the administration's role in the sale was above board.

In January 2004, the state sold 22 acres of marshland along the Delaware River in Philadelphia for $100,000 to two companies, one partly owned by Sen. Michael Stack, D-Philadelphia, and members of his family.

In August, a month after the Legislature legalized slot machines, Las Vegas-based Ameristar Casinos Inc. took out an option to purchase the property, plus 24 acres adjacent to it, for $37 million. It is hoping to secure a license to operate a slot-machine parlor on the site.

Stack has said he does not intend to profit from gambling, but also said he has no immediate plans to divest his share in the land.

"The more light that shines on this issue, the more it's clear that my behavior in this situation is perfectly appropriate," Stack said Tuesday.

The issuance of the subpoena was first reported Tuesday by The Philadelphia Inquirer.

A spokesman for the U.S. attorney in Harrisburg declined comment.

The state originally held the rights to the land as a waterway, which is no longer navigable because it has filled with sediment and debris.

In August 2003, the state Department of General Services appraised the marsh at $1.5 million. Three months later, the Legislature voted to approve the sale to Dyott Corp. and Beach Street Corp. to open the door to development. The department later reduced the price to $100,000, citing "significant environmental contamination" from a defunct shipyard.

Stack owns a 4 percent share of Beach Street, an interest he said was given to him by his father in 1995.

When the Senate voted on the sale, Stack abstained. But he did not divulge his interest in the land to the chamber or ask permission from the Senate president to abstain, saying that the Senate Democrats' counsel did not advise him to do so.

The state constitution requires that lawmakers disclose a conflict of interest to the chamber, and Senate rules require that members get permission to abstain from voting.

The Legislature has authorized up to 61,000 slot machines at 14 slot parlors to be built across the state. The state gambling board hopes to issue the first license by the end of this year, meaning that the first slots parlor would be up and running in 2006.

First published on March 22, 2005 at 12:00 am
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