Probe tests Pa. casino oversight

The probe, in Dauphin County Court here, is exploring whether Louis A. DeNaples, a power in Scranton's business and civic circles, 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 such a tie have dogged DeNaples for years, based in part 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 could not be learned.

Already, 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."

Kevin Feeley, a spokesman for DeNaples, declined to comment last week, as did John Donnelly, a DeNaples' lawyer. Previously, Feeley told reporters that DeNaples has "no connection with organized crime. He has no association with Shamsud-din Ali."

An influential figure

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.