Local News
HARRISBURG, PA - A grand jury investigating a Scranton millionaire and a reputed mobster is shaping up as a test of Pennsylvania's oversight and licensing practices of its fledgling casino industry. Namely its award of a license to the Mt Airy Casino Resort
The grand jury investigation taking place in Dauphin County Court is exploring whether Louis A. DeNaples, a Scranton's business and civic lreder, misled regulators during his successful bid to open a $412 million slots casino in the Poconos.
DeNaples won his license after assuring the state Gaming Control Board that he has no connection with reputed mob boss William "Big Billy" D'Elia.
Rumors of ties have dogged DeNaples for years, based on unproven information in old investigative reports.
Now the grand jury is digging into those stories again.
D'Elia has been haled before the grand jury to testify, along with a number of his friends and associates. One was Shamsud-din Ali, a Muslim cleric and deal-maker convicted in 2005 in the Philadelphia corruption scandal.
In effect, prosecutors, working with state police, are redoing the background investigation of DeNaples - even though the gaming board has cleared him.
They are excavating DeNaples' fraud conviction from 1978, combing through the gaming board's documents, and turning over uncorroborated allegations about DeNaples and D'Elia found in a six-year-old affidavit compiled by the Internal Revenue Service and state police.
If they turn up damaging information, it could cost DeNaples his license, and deliver a serious blow to the credibility of Pennsylvania's system for scrutinizing and selecting casino operators.
In addition, federal authorities are conducting an inquiry into a business associated with DeNaples, an investigation unrelated to his casino. Details of the federal inquiry are not known.
The DeNaples saga has exposed weaknesses in Pennsylvania's regulatory apparatus, and laid bare an ugly bureaucratic feud between the gaming board and the state police.
State police investigators are working closely with the grand jury. But if investigators had any negative information about DeNaples, they refused to share it with the gaming board during DeNaples' hearing, even after Gov. Rendell brokered a deal to make them cooperate.
This mess is in stark contrast with the system in other states.
In New Jersey and elsewhere, independent investigators handle casino background checks. In Pennsylvania, investigators were hired by the highly political gaming board.
New Jersey regulators have been quick to bar owners, executives and firms because of alleged past links to the mob.
Frank Catania, who led New Jersey's Division of Gaming Enforcement for five years, said DeNaples likely would have faced tough going if he tried to open a casino in Atlantic City.
"This is an industry in which you don't have a right to have a license," Catania said. "The industry has just got to be squeaky clean."
DeNaples, 66, is a dominant figure in Scranton, and an influential player in Pennsylvania politics.
He owns landfills, quarries, 35,000 acres, auto-parts and forestry-equipment dealerships, and more, almost 90 businesses. He once headed the board of trustees at the University of Scranton.
Even before the legislature approved casino gambling for Pennsylvania, DeNaples was considered a shoo-in to win a license. Soon after the bill passed, he moved to buy the defunct Mount Airy Lodge.
To obtain a license, all applicants had to meet the provision of the law requiring casino operators to be "of good character."
DeNaples cleared the hurdle and got a license in December - a decision upheld by the state Supreme Court - after three days of closed-door hearings and a background check by the gaming board's Bureau of Investigations and Enforcement.
First, the board had to discount a criminal case from DeNaples' past.
Because the case is so old, the conviction alone didn't bar DeNaples from getting a Pennsylvania casino license.
Legislators decided felonies didn't disqualify applicants, provided they had finished their sentences at least 15 years ago.
While DeNaples never again faced criminal charges, rumors of mob ties have followed him ever since.
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