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Ban this conflict of interest

July 08, 2004

A provision in Pennsylvania's newly passed gambling bill that allows lawmakers to own up to 1 percent of any of the state's 14 planned slot-machine parlors should be repealed as soon as possible. Public service is just that, and any elected officials who feel they must own a stake in these facilities should seek a new career in the private sector.

The bill, signed on Monday by Gov. Ed Rendell, would place up to 61,000 slot machine at the aforementioned 14 locations.

The slots are expected to generate $3 billion in new revenues, though not immediately. About $1 billion of the new funds will be used to reduce the state's property taxes. That's so older residents who've passed their peak earning years won't be taxed out of their homes.

So why give lawmakers a stake in the gambling companies? The bill's authors say it would allow them to keep mutual funds or pension funds that invested in publicly traded gaming companies.

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If that's the intent, then put that language into the law. Given the revenue these parlors will generate, a 1 percent stake could be a substantial holding.

In a bid to blunt any criticism, Gov. Rendell has issued an executive order barring any member of his administration from holding "any financial interest" in a gambling company. However, the ban does not apply to members of the legislature.

Proponents of the bill, including state Sen. Robert Tomlinson, R-Bucks, say a lawmaker would be crazy to risk his or her reputation by getting mixed up ina gambling deal.

But this is 2004, when many people seem less concerned about what's proper and more about what they're allowed to do under the law.

What they shouldn't be allowed to do is hold gambling stocks. Pension funds are another matter because investment decisions aren't made by the employee, but by the pension-fund manager.

This matter could be covered by making it illegal for lawmakers to cast a vote that would enhance the value of their gambling-related pension funds. No system will be perfect and adjustments will be needed in the future. For now, let's agree that lawmakers shouldn't own any share of the parlors that will generate funds for the state.

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