The signature-gathering effort began around Election Day in 2015.

The petition asked whether Maine voters should support another casino, to be built in southern Maine. The wording of the initiative, which few signers likely looked at closely, was unusual. It said if the referendum passed, the Maine Gambling Control Board could accept applications for a casino license, but qualifying applications could only come “from an entity that owned in 2003 at least 51 percent of an entity licensed to operate a commercial track in Penobscot County.”

The sole person who fit that definition was Shawn Scott, a former Las Vegas businessman who now calls the Northern Mariana Islands home.

Scott is the enigmatic figure behind Maine’s first successful gambling initiative, Hollywood Slots in Bangor. Despite numerous investments across the country, mostly in casinos, that have left a trail of lawsuits and allegations of deceptive practices, Scott has emerged from each mostly unscathed.

After 14 years away from Maine, the state that helped him turn a massive profit, Scott has returned to see if he can do it again. This time, his sister, Lisa Scott of Miami, has been the public face while he has stayed in the background.

The effort got off to a rocky start. Their first petition effort failed: More than half the signatures gathered were invalid, and there were complaints of aggressive tactics. But they tried again late last year, using the casino referendum to promise jobs and much needed state revenue for items such as education.

The petition is now headed for the November ballot.

But although the tactic worked in 2003, this time around lawmakers from both parties have grown concerned about Scott’s latest casino initiative and are considering unprecedented, legally tricky action to avoid a referendum.

“Given what we know so far, it certainly seems as though they are trying to take advantage of Mainers,” said Sen. Garrett Mason, R-Lisbon Falls, co-chairman of the Veterans and Legal Affairs Committee. “We’re going to look at all of our options to prevent that from happening and protect Maine people.”

STAYING OUT OF THE SPOTLIGHT

Scott has been denied casino licenses several times before, but that hasn’t deterred him. In each case, he sold the facility and moved on.

That’s what happened in Bangor. Scott never stuck around to see Hollywood Slots built. He sold the racetrack and the rights to a casino to Penn National Gaming for $51 million amid an investigation by state regulators that uncovered a string of lawsuits, questionable financial practices and allegations of fraud. His share of the deal was about $30 million, a good return on his initial $2.5 million investment.

Scott has used that playbook for much of his career: Buy a struggling facility, push to add gambling through the citizen initiative process and then leave town after regulators start digging into his past.

While his practices are well-documented, he has operated mostly out of the public spotlight. Most lawmakers and others who have been involved in casino discussions, both now and 14 years ago, say they have never met him and know him only by reputation. Those who have worked for him – either directly or with a layer or two of lawyers and lobbyists in between – avoid saying anything about him.

“One of the difficulties is these people involved have hundreds of shell corporations. It’s hard to tell who is really behind it and I think that veil of secrecy exists to protect themselves,” said Rep. Louis Luchini, D-Ellsworth, the other co-chair of the Veterans and Legal Services Committee.

One thing is clear: Scott is a savvy and successful developer who makes money even amid scandal.

“He’s a very mysterious guy but what he’s trying to do now, it’s not like we haven’t seen it before,” said Dennis Bailey, a longtime political operative in Maine who for many years led an anti-gambling group called CasinosNo! “This is his thing. He comes in with a scorched earth campaign to get a casino question on the ballot and then flips it once it passes.”

Neither Shawn nor Lisa Scott responded to multiple phone messages and emails for this story.

Cheryl Timberlake, treasurer for the referendum’s ballot question committee, Horseracing Jobs Fairness, and Dan Riley, a lobbyist recently hired by the committee, also did not return calls or emails.

The phone number listed on the committee’s registration form to the Maine Ethics Commission is invalid. It belongs to a woman named Gladys, who said she had no idea who Shawn or Lisa Scott were.

Much of what is known publicly about Shawn Scott comes from investigative reports and lawsuits – and there have been plenty of both.

A report by investigators in Louisiana, where he invested in the late 1990s, indicated he attended high school in Riverside, California. He has a bachelor’s degree in psychobiology from the University of California at Riverside and a master’s in biology from California State University-San Bernardino. After college, he joined his family’s real estate company.

His first venture into gambling came in 1994 in Henderson, Nevada, a Las Vegas suburb, where he received a restricted license to operate a struggling casino, but withdrew an application for a full license after the Nevada Gaming Control Board questioned his accounting practices. He later sold the facility.

He then went to Louisiana, where he purchased Delta Downs, a struggling racetrack, for $10 million, and successfully pushed to add slot machines – a tactic he would later use in Maine.

After local voters approved the slot machine referendum, though, the state’s racing commission started to question his finances. They didn’t get many answers and what they did get raised more questions, including several tax liens and lawsuits alleging nonpayment for services.

But Scott never stuck around to answer those questions. He sold the track in 2001 for $130 million to Boyd Gaming, which invested heavily in approving the facility, including adding a hotel.

Although the track was damaged by Hurricane Katrina in 2005, it has been a success and the slot machines have provided much needed revenue.

Despite the scrutiny, Scott’s sale of Delta Downs made him a name in the gaming industry. In 2002, he used some of the proceeds to buy a majority stake in another failing racetrack, Vernon Downs in upstate New York, where a new law had recently been approved to allow slot machines.

Scott couldn’t get a license to operate, though. A background check by the New York State Racing and Wagering Board raised concerns about the origin of his money and who his financial partners were. He also lied on the application about whether he had been denied licenses elsewhere. They echoed previous concerns in Nevada, where an investigator referred to Scott’s accounting practices as “smoke and mirrors” because he couldn’t account for where the money was coming from or where it was going.

Scott appealed the board’s decision but ended up selling his interest in Vernon Downs in 2004.

The other shareholders sued Scott, alleging mismanagement. The case was eventually dismissed.

At the same time he was trying to bring slot machines to New York, Scott, through his company Capital Seven, purchased a controlling stake in the Bangor Historic Raceway at Bass Park, another facility that had seen better days.

He spent $1 million to acquire a majority stake and then spent $1.5 million on a statewide referendum campaign, pitching the initiative as a way to bring badly needed jobs and tax revenue to a struggling area. He said it could save the state’s storied horse racing industry.

Maine had rejected previous gambling initiatives at the polls before, but Scott’s timing proved fortuitous.

A HARD LOOK AT SCOTT’S PAST

On the November 2003 ballot in Maine, there were two gambling-related citizen initiatives, one to allow the Passamaquoddy and Penobscot Indian tribes to jointly operate a casino in Sanford, the other to allow slot machines at horse racing tracks. In Maine, that meant Bangor and Scarborough Downs.

Voters overwhelmingly rejected the tribal initiative, with 67 percent opposed, but the other question passed with 52 percent support.

Bailey, who was involved in the opposition through his group CasinosNo!, said the referendum led by Scott flew under the radar.

“We had spent a lot of resources trying to defeat Sanford, which we viewed as the bigger threat,” he said. “In hindsight, we should have paid more attention to (Scott).”

The way that question was written required both statewide and local approval for slot machines. Bangor gave it. Scarborough did not. Scott, ironically, helped fund the campaign to defeat the local initiative there.

Penn National, the company that ended up purchasing the Bangor track from Scott, sued him for defamation, alleging that an ad in a weekly paper, paid for by Scott’s political action committee, claimed Penn National had been charged with violating federal laws for money-laundering. The case actually involved another gaming company.

The treasurer for Scott’s campaign at the time was Kathleen Newman, now Gov. Paul LePage’s deputy chief of staff. Newman did not respond to requests for comment.

Scarborough Downs later filed a lawsuit against Scott, claiming he undermined the track’s efforts to get slot machines so he could have a monopoly in Bangor. The suit also accused Scott of creating a sham political action committee and reneging on an agreement about how much time the town would have to set up its own local vote.

After the vote, Scott applied for the slots license in Bangor. That’s when regulators began to look closer at his past, culminating in a 36-page report by former Maine Harness Racing Commission executive director Henry Jackson. It’s one of the most comprehensive looks at Scott’s dealings going back to the 1990s. Scott fought against its release and for good reason: It does not paint him in a favorable light.

Shawn Scott, center, confers with attorneys at a hearing of the Maine Harness Racing Commission at the Augusta Civic Center in December 2003. While his practices are publicly well-documented, Scott has operated mostly out of the spotlight. “One of the difficulties,” says Rep. Louis Luchini, D-Ellsworth, “is … it’s hard to tell who is really behind (the casino effort) and I think that veil of secrecy exists to protect themselves.” Staff photo by Gordon Chibroski

Jackson’s investigation, aided by two assistant attorney generals and an accountant, was exhaustive. It included scrutiny of 40,000 pages of documents from four states. It was also incomplete.

Jackson said in 2004 that he had “a heck of a time” getting Scott to give up information.

What Maine investigators did find, though, was concerning.

“Mr. Scott and his associated companies have not provided many of the documents requested during the course of this investigation,” the report stated. “It is reported that he demonstrated a similar lack of cooperation during investigations conducted by the New York Racing and Wagering Board and the Louisiana State Police.”

Jackson concluded that many of Scott’s companies “have demonstrated sloppy, if not irresponsible, financial management and accounting practices over several years.”

Another major area of concern were Scott’s business associates, particularly Hoolae Paoa, who has a lengthy criminal history that included convictions for assault and felony theft. Paoa was the CEO of Scott’s firm Capital Seven and also served as vice president of Bangor Historic Track.

It was Paoa, not Scott, who spent more time in Bangor back in 2003 but Scott had a local ally he paid to help smooth things over – David Nealley, a Bangor city councilor.

Other councilors questioned Nealley about his connection to Scott at the time, and some even tried to petition to overturn the decision. It didn’t work. Nealley did not respond to requests for comment.

Maine regulators did not intend to issue him a license, so Scott looked for a buyer. He found Penn National Gaming, a gambling industry leader, and sold his stake.

Penn National was granted a license and developed Maine’s first casino, Hollywood Slots, which has turned into an unqualified success. Bangor leaders who loathed the idea of doing business with Scott warmed to Penn National.

Today, the casino offers 1,000 slot machines, dozens of table games and a hotel. The city of Bangor leveraged its share of casino proceeds to finance the construction of a new arena and conference center that sits directly across the street from the casino.

MORE LICENSING FIGHTS

Even though he made a profit from the Bangor sale, the licensing fight damaged him.

In 2004, Scott was involved with a citizen initiative to bring a slot machine parlor to Washington, D.C. Business partners distanced themselves from Scott’s involvement after officials there started to look into his past.

John Ray, a former member of the D.C. Council, told The Washington Post that after doing due diligence on Scott’s background, “We did not like what we saw on Shawn and thought he would not be a good partner.”

The effort failed after the city’s election board found forged signatures and other irregularities.

Also in 2004, Scott was involved with a citizen initiative to bring slots to Idaho. That failed for lack of signatures, but election clerks also found evidence of forged signatures.

As lawsuits started to pile up, Scott, through his company Bridge Capital, shifted his focus to overseas developments.

According to its website, the company has clients in the Philippines, Cambodia, Thailand and Laos and specializes in high-risk investments.

A casino owned by Scott and associates in Laos was seized by the government in 2015 after allegations of corruption. It has since been sold.

Even as he looked for investment opportunities overseas, Scott was still active in the U.S., particularly in casinos and racetracks.

In November, the Boston Globe reported that Scott was one of the investors in a $3.2 million campaign to open a slots parlor near Suffolk Downs racetrack in Massachusetts.

Documents filed with the state revised an earlier filing to show that Scott has been a major funder of the campaign since its earliest days, a fact contradicted by promoters’ claims.

The main developer, Eugene McCain, denied that Scott was involved in the effort, even though Scott and Paoa had done business with him before, and had helped him scout properties.

McCain also hired Nealley as a casino advocate. Nealley appeared in two debates, speaking mostly about his experiences in Bangor, where Hollywood Slots has been an economic driver.

Massachusetts last year fined the group pushing for the slots parlor $125,000 for violating campaign disclosure laws – similar allegations to the ones facing the committee here in Maine.

Luchini said lawsuits and fines and ethical questions appear to be part of the cost of doing business for Scott and his associates.

A DRASTIC OPTION

While his connection to the Massachusetts casino effort is unclear, Scott also returned to Maine in late 2015.

Signature gatherers fanned out on Election Day 2015 and in the following weeks to gather signatures. Many were accused of using misleading tactics.

In February 2016, more than 91,000 signatures were turned in to the Secretary of State’s office – far more than the roughly 61,000 needed. Less than half were valid. Secretary of State Matthew Dunlap called them a “mess.”

The wording of the referendum also raised eyebrows because it clearly benefitted only Scott.

Undeterred, Scott continued to push for signatures. Early this year, supporters turned in enough valid signatures to get a question on the ballot, even as the committee behind the effort has been plagued with fraud allegations.

There had been rumors that Scott might try to locate a new casino at Scarborough Downs. His company was in talks to buy the racetrack – the same company that he once sued and that once sued him – but a deal never materialized.

Although the ballot initiative as written allows only Scott or his associates to build a casino, his sister Lisa Scott has emerged as the face of the latest effort.

Late last month, she tried to allay lawmakers’ concerns. After amending the finance reports for the ballot question committee, Lisa Scott said they were an honest mistake.

“(The committee) did not understand the statute at issue to require Lisa Scott to identify the original sources for contributions made to her … as such all the monies were identified as coming from Lisa Scott,” the committee wrote in a statement, two days after lawmakers asked the ethics commission to investigate the committee’s finances.

Scott also said her family was committed “to bringing tens of millions of dollars in new revenues for education, health care and the horse-racing industry, as well as nearly a thousand new jobs to Maine.”

So far, about $4.3 million in donations has been collected and spent, much of it in the signature-gathering needed to place the question on the November ballot.

The latest campaign filing shows the committee had just under $700,000 left.

But as Lisa Scott was trying to be more transparent, a Maine lobbyist hired to promote the casino muddied the waters. Daniel Riley, who told lawmakers in March that he was working for Bridge Capital, the Saipan-based company owned by Shawn Scott, said this month in a letter to lawmakers that he’s actually working for a different company, Universal Capital, and doesn’t know who owns it.

Riley did not respond to requests for comment, but the revelation only frustrated lawmakers further.

Luchini and Mason are united in opposition to the referendum and are exploring all options – some unprecedented – to stop it.

“This casino case reflects poorly on the citizens’ initiative process,” Luchini said. “It essentially allows one wealthy person to pay to put a law on the books that helps them.”

They have a few options:

They could do nothing and hope the measure fails on its own.

They could pass what is known as a competing measure, which would put another question on the ballot and force voters to choose between the two.

One drastic option, one lawmakers acknowledged they are strongly considering, would be to pass a bill in the Legislature authorizing a casino in southern Maine. That would effectively nullify the referendum question. They could then repeal the bill they just passed.

Luchini and Mason admitted there is no precedent for the pass-and-repeal option but said drastic measures may be needed to stop Scott’s efforts.

“This ballot question committee has been so fraudulent from beginning to end,” Luchini said. “They have shown a blatant disregard for Maine laws and, frankly, should know better.”

Eric Russell can be contacted at 791-6344 or at:

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