AUGUSTA — The staff of Maine’s campaign finance watchdog agency is recommending an investigation into the financial reports filed by backers of a ballot initiative to open a casino in southern Maine.

In a memo to the five members of the Maine Ethics Commission, the staff wrote that the campaign’s primary financier, Miami resident Lisa Scott, and two ballot question committees connected to Scott filed late campaign finance reports. Also, a fourth committee failed to disclose the names and addresses of contributors to the campaign and filed reports that were “substantially non-conforming and, therefore, untimely filed.”

“While the commission could make findings of violations based on the information at hand and move on to the penalty phase of the proceedings, the staff believes that further investigation is warranted first,” says the memo to the commissioners, who are scheduled to take up the issue June 9.

If approved, the investigation would heighten scrutiny of a secretive casino referendum campaign that has been surrounded by controversy and already ranks among Maine’s most expensive ballot initiatives.

The referendum, which is likely to go to voters in November, is written to allow only one man, Lisa Scott’s brother, to build a casino in an unnamed location in York County. Shawn Scott is an international gambling entrepreneur who won voter approval to add slot machines to Bangor’s struggling horse track in 2003. He then sold those rights to Penn National – which still operates what is now Bangor’s successful Hollywood Casino – for $51 million as regulators scrutinized his businesses and associates.

Scott has collected massive paychecks “flipping” racetracks and gambling facilities across the country while being dogged by lawsuits and complaints about his business practices. And questions are now being raised about the campaign in Maine led by his sister.

The “Horseracing Jobs Fairness” campaign has spent an estimated $4.3 million on the initiative so far, even though the true campaign has yet to begin. The vast majority of that sum paid for petition circulators and referendum management firms to collect the 62,000-plus signatures needed to qualify for the ballot, a process that was beset by complaints about improperly maintained paperwork and unpaid bills.

Horseracing Jobs Fairness initially listed Lisa Scott as the sole donor to the ballot initiative. But amended disclosure filings, ordered by the ethics commission, show that she received all of that money via loans from two entities, Capital Seven LLC of Las Vegas, which was at least formerly owned by Shawn Scott, and Regent Able Associate Co. of Tokyo. The source of those funds was not disclosed until seven weeks ago.

In late April, the co-chairs of the Legislature’s Veterans and Legal Affairs Committee sent the ethics commission a letter requesting an investigation of the campaign’s finances. Sen. Garrett Mason, R-Lisbon Falls, and Rep. Louis Luchini, D-Ellsworth, referred to the involvement of Lisa Scott and a company affiliated with Shawn Scott, Bridge Capital, in an unsuccessful ballot initiative in Massachusetts that drew scrutiny from regulators.

“Because of the large amount of money involved in this campaign, and given the fact that both (ballot question committees) in Massachusetts and Maine involve similar backers – including Lisa Scott and Bridge Capital LLC – we urge the commission to begin an immediate investigation,” Mason and Luchini wrote. “Any potential findings could directly influence the decisions made by the VLA Committee, and the Maine Legislature, during this legislative session.”

The Legislature must either approve qualified ballot initiatives as written or send them to the voters for consideration. But Luchini and Mason are considering other options to prevent the initiative from going to voters, including an untried strategy of approving the casino and then immediately passing a bill to repeal it.

The treasurer for Horseracing Jobs Fairness, Augusta-based consultant Cheryl Timberlake, could not be reached for comment Friday evening.

The ethics commission’s staff is recommending reviews of, among other things, in the first phase of any investigation:

• Bank documents for Horseracing Jobs Fairness.

• Financial records for Lisa Scott and other ballot question committees related to the casino proposal.

• Emails or other communications between Lisa Scott, Cheryl Timberlake and others involved in the campaign.

• Documentation of the loans to Lisa Scott from Capital Seven and Regent Able Associate.

In comments filed with the ethics commission, attorneys for Lisa Scott and the ballot question committees argued that an investigation is unnecessary based on their reading of the Maine law. They also accused the ethics commission staff of failing to raise concerns about the financial filings during earlier meetings.

Attorney Bruce Merrill wrote that the financial filings were accurate because Lisa Scott and Horseracing Jobs Fairness “are synonymous,” and that all contributions to the campaign came from Scott’s bank account. If any technical amendments to the reports were needed, they were filed with the help of the commission’s staff, Merrill wrote.

“While (Horseracing Jobs Fairness) and commission staff have a difference of opinion as to the reporting requirements … no reports filed by HRJF ever misidentified contributors nor contained any material misrepresentations,” Merrill wrote. “HRJF respectfully submits that there is no legitimate basis for the commission to undertake a formal investigation of HRJF or its financial reporting activities at this time.”

Kevin Miller can be contacted at 791-6312 or at:

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