Originally created 10/25/98

Video poker looks to beat Beasley



AIKEN -- In the waning days of a bitter political campaign, Republicans have been scrambling to figure out why a London businessman would give more than 7,000 American dollars to defeat South Carolina's GOP governor, David Beasley.

The initial guess was that Philip Ryan must own a piece of some company that manufactures video poker machines, because people tied to that industry are pumping big money into the Democratic Party, the campaign of Mr. Beasley's opponent, Lancaster attorney Jim Hodges, and related organizations like Republicans for Hodges.

But Mr. Ryan is neither particularly sinister nor mysterious. He is married to Mr. Hodges' cousin and sent his latest $3,000 contribution from London because the New York bank he works for has transferred him there, according to Mr. Hodges' wife, Rachel. Mr. Ryan, who also gave $3,500 to the Hodges campaign, has nothing to do with the video poker industry that Mr. Beasley has vowed to fold, she said.

The assumption otherwise is just one indicator of the GOP's concerns about gambling money supporting Mr. Hodges' bid for governor in a campaign that calls for a state lottery to shore up public education. Mr. Beasley and the Republican Party oppose a lottery and lump it with the video poker industry as "organized gambling," and possibly organized crime, attempting to buy state government.

The Beasley for Governor campaign filed a lawsuit Thursday in state court at Greenville against two of the biggest spenders, claiming their expenditures are excessive, illegal and coordinated with the Hodges for Governor campaign. Circuit Judge Tom Ervin will hear the case Tuesday in Greenville.

With the election little more than a week away, the lawsuit asks for emergency relief -- disclosure and an order stopping any further "illegal" expenditures "to influence the outcome of the election for Governor of South Carolina in 1998."

It also asks that Fred Collins of Greenville and Alan Schafer of Dillon be forced to seek reimbursement from the Hodges campaign. Judge John Kittredge on Friday granted the campaign's motion to get an immediate hearing on a temporary restraining order on the two men's companies, according to Associated Press reports.

State GOP Chairman Henry McMaster, who calls gambling money the "crack cocaine of politics," said: "They just keep pouring the money in. All things being equal, the candidate with the most money wins."

Democrats say the video poker industry simply hopes to defeat a bitter enemy and politicians who agree with Mr. Beasley that the machines should be banned. The concept of buying political power is "bogus," said Dick Harpootlian, chairman of the state Democratic Party.

"They are using the power they already have as voters who have every right to contribute to the candidates of their choice. David Beasley knows he can't get elected by people willing to vote for him, so he hopes to get elected by people who will vote against video poker," he said.

The exact total of money the video poker industry has contributed to specific campaigns, including organizations like Republicans for Hodges and the pro-Confederate flag Southern Heritage Association, is not yet known, and may never be. "Soft money" and unreported donations below $100 each can't always be traced.

But the GOP found a minimum of 77 percent of donations to the Hodges' campaign of more than $1,000 the first six months of this year came from video-poker interests, ranging from big-time operators with machines in several counties to small mom-and-pop operations with one machine in the corner of a country store by the pickled pigs' feet jar. The amount: about $750,000. An additional disclosure filed last week contained more donations from people with ties to the industry.

Overall, the Democratic Party expected to hit $1 million in contributions from video poker entities this campaign year. And contributions to Republicans for Hodges included $17,500 or more from a single upstate family whose business interests include Drews Amusements. Most of the other donors to Republicans for Hodges had ties to the gaming industry as well.

Rusty DePass of the Richland County Republican Party said Philip Ryan's name was the only one the GOP hadn't tracked down late last week after the Republicans for Hodges disclosure came out. Since all the other names were tied to video poker operations, large and small, Mr. DePass said it seemed likely that Mr. Ryan was, too.

The report, filed with the state Ethics Commission, confirmed what the GOP already knew -- that signs inviting people to join Republicans for Hodges were erected by American Amusements of Columbia. The in-kind contribution of $2,100 listed on the ethics form is for "advertising signs, installation and delivery."

The disclosure revealed that Republicans for Hodges is "a fraud" that sullies the party's name by pretending to be associated with it, Mr. DePass and other Richland County Republicans said in a news conference.

"Republicans didn't finance this effort. It is being bankrolled by a handful of terrified millionaires who see their slimy income source going up in smoke. They have bled dry many of our poorest citizens who have been driven to despair in a futile quest to improve their lot in life by winning a game of chance that is clearly stacked against them."

People have a right to give to whatever party they choose, he said. The issue is calling themselves Republicans if they are not.

Scott Elliott, former chairman of the Richland County GOP and leader of Republicans for Hodges, said the organization was not formed to attract video poker interests, but he's not surprised that they flocked to it with money in hand.

"There is a fundamental unfairness involved here," he said. "These are people involved in a legal business, many of them mom-and-pop small businesses, who voted Republican last election -- lots of them anyway -- and gave money to David Beasley's campaign. Now he has had a burning-bush revelation in an election year and decided to put them out of business."

The irony is, he said, that bashing business is not Republicans' usual style or philosophy.

People who make their living from video poker are not the only constituency that Mr. Beasley has alienated, Mr. Elliott said. Others include those who want the Confederate flag to remain flying over the State House (Mr. Beasley once advocated taking it down); some educators who blame him for not improving public education; people who think he reneged on a pledge to get rid of vehicle property taxes; and even some opponents of video poker, who say it grew under Mr. Beasley's administration while he failed to regulate or tax it.

Even so, at last official tally, not even the infusion of money -- the most Democrats have collected in years, Mr. McMaster says -- put the Hodges campaign above Mr. Beasley's in total contributions. Mr. Beasley's donations totaled $4.7 million, and Mr. Hodges' totaled $3.4 million.

But in the last three months, disclosure forms showed, Mr. Hodges raised $1.5 million to Mr. Beasley's $905,000.

Mr. Hodges also dislikes video poker, says he would vote against it in a referendum, and promises to regulate and tax the industry if he is elected.

But members of the South Carolina Coin Operators' Association say that Mr. Hodges at least is up front. They are angry that Mr. Beasley accepted their money toward his last election, then led a fight in the Legislature to kill their business.

Contributors to Republicans for Hodges include George Harrison, a Darlington video poker operator who gave $5,000 to Mr. Beasley's last campaign and nothing to this one.

Some contributors donated the maximum $3,500 to as many pots as possible, giving to Mr. Hodges, to his party, to special-interest organizations and to groups opposed to Mr. Beasley.

Todd Bauer and Margaret N. O'Shea are reporters in the South Carolina Bureau of The Augusta Chronicle. They can be reached at (803) 279-6895 or scbureau@augustachronicle.com.