Some Nevada lawmakers to return campaign contributions from PokerStars PAC

The fallout over $272,000 in campaign contributions from a political action committee funded by now-tainted online gambling company PokerStars continued Monday, with some Nevada lawmakers saying they would return the money.

Meanwhile, state Sen. Greg Brower, R-Reno, a former U.S. Attorney for Nevada who sought an investigation into PokerStars' political activities over the weekend, pressed Secretary of State Ross Miller to further the investigation.

The founders of PokerStars were among 11 individuals charged with bank fraud, money laundering and operating illegal gambling businesses in a nine-count federal indictment unsealed Friday in New York. The U.S. Department of Justice seized and shut down the American operations for PokerStars and two other online gambling companies, FullTilt Poker and Absolute Poker.

In a letter Monday, Brower asked Miller if PokerStars violated Nevada law with respect to recently reported campaign contributions and lobbying activities. Brower said federal law prohibits foreign contributions to federal, state and local campaigns. He plans to develop a bill that would put into state law a specific prohibition on foreign contributions, similar to the federal law.

PokerStars, which has headquarters on the Isle of Man, a British dependency, made contributions to 68 legislative candidates, constitutional officers, political party PACs and legislative caucuses. The contributions, made between Sept. 23 and Oct. 18, ranged from $1,000 to $10,000.

"I am working with (the legislative counsel bureau) as we speak," Brower said.

Deputy Secretary of State for Elections Scott Gilles said the office began an initial review Monday before receiving the letter from Brower. Reel PAC, which was funded by a $299,970 contribution from PokerStars corporate headquarters on Sept. 23, may be in violation of federal law.

"What we looked into this morning does not appear to be in violation of Nevada law," Gilles said. "We have forwarded the matter to our election integrity task force and we will give it an appropriate investigation."

Gilles said Miller won't be involved in the matter because his re-election campaign was given a $5,000 contribution from the PokerStars political action committee on Oct. 7.

"The secretary will be walled off from the investigation," Gilles said.

Miller said late Monday afternoon he was returning the contribution to PokerStars.

"The check has already been cut," Miller said.

Assembly Speaker John Oceguera, D-Las Vegas, who was given a $10,000 contribution by the PokerStars PAC, said he won't keep any money that came from the foreign company.

"As soon as we realized that there was a question, that this wasn't a U.S.-owned company and was a foreign owned company, we returned the money," Oceguera said.

He also said he would support repeating in state law the federal prohibition on foreign money in elections.

PokerStars gave $10,000 contributions on Sept. 29 to Republican Gov. Brian Sandoval and his Democratic opponent, Rory Reid. Mike Slanker, who worked for the Sandoval campaign, said Saturday the donation was returned last week after an internal investigation showed the PAC had one contributor "who was not an American citizen."

Edie Cartwright, a spokeswoman for Nevada Attorney General Catherine Cortez Masto, said the office has begun looking into whether a foreign corporation can fund a political action committee. While the review is just preliminary, Cartwright said, the initial finding was that state laws did not apply.

Cartwright said Masto and Miller discussed the PokerStars matter over the weekend.

Masto and Nevada Controller Kim Wallin were the only two state constitutional officers who did not receive campaign contributions from the PokerStars PAC, according to the report.

Reel PAC donated $3,000 to Lt. Gov. Brian Krolicki and $2,000 to Treasurer Kate Marshall on Oct. 7.

PokerStars, which is said to control more than 50 percent of the online poker market, is the primary backer of Assembly Bill 258, which seeks to legalize Internet poker in Nevada.

Assemblyman William Horne, D-Las Vegas, who introduced Assembly Bill 258, and Assemblyman Kelvin Atkinson, D-North Las Vegas, traveled to England last year to see the online gambling company's facilities. Reel PAC donated $7,500 to Horne and $5,000 to Atkinson.

Legislative Counsel Brenda Erdoes advised three legislators that it was appropriate for them to take "educational, fact-finding" overseas trips last year at the expense of an Internet poker company

The company hired former Nevada Assembly Speaker Richard Perkins, former Nevada gaming regulators Randall Sayre and Scott Scherer, public relations experts and financial experts to help gain support for passage of AB 258.

The nine counts in the 51-page indictment charged the 11 individuals with violating the 2006 Unlawful Internet Gambling Act, which prohibits banks and financial companies from processing Internet gambling transactions. Violations can bring up to 30 years in prison and hundreds of thousands of dollars in fines.

The U.S. government also filed a lawsuit seeking $3 billion in money laundering penalties from the website operators.

Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871. Review-Journal reporter Benjamin Spillman in Carson City contributed to this report.