Ryan seeks to restore public faith in Pennsylvania Gaming Control Board

HARRISBURG - The powerful board that regulates Pennsylvania's nearly $3 billion casino industry took a hit after a grand jury report questioned whether it was too cozy with the gambling operators it was supposed to regulate and less interested with protecting the public's welfare than in boosting casino profits.

The scathing 102-page report by the state attorney general, released in late May, criticized the board's use of secret meetings and suggested the agency awarded licenses to unsuitable applicants and withheld critical information that deemed them as such. It also issued a range of recommendations on how the board should change to restore the public's trust.

William H. Ryan Jr., 62, who was second in command in the Attorney General's Office during the two-year probe, finds himself in an interesting position - he was sworn in Aug. 29 as the new chairman of the Pennsylvania Gaming Control Board.

As deputy attorney general and head of the criminal law division, Ryan believed that the seven-member gaming board should not investigate itself. He testified before the House Appropriations Committee in March that the Bureau of Investigations and Enforcement (BIE) should be moved away from the board. He hasn't wavered.

"On balance, I think it's a good idea to separate the BIE," Ryan said last week in his first interview as gaming board chair. "I think it makes sense putting it with a law enforcement agency, like the AG or the State Police."

The BIE investigates and vets casino applicants, operators, employees, and vendors.

"There is an argument on the other side that you increase efficiency by keeping it where it is," he said. "But on balance, it's safer for everybody by moving it."

The issue is before the General Assembly as Ryan starts his new job. State Rep. Curt Schroder (R., Chester), chairman of the House Gaming Oversight Committee, sponsored legislation passed by the House in February that would remove the BIE from the gaming board's jurisdiction.

The Senate has yet to take up the bill, but Schroder is hopeful that Ryan's arrival at the board will encourage the upper chamber to act on it.

Ryan's appointment, Schroder said, "signals a promising new direction at the PGCB."

"His law enforcement background has prepared him to take the reins of an agency that has been wrought with mismanagement and corruption," he said. "I am confident he will bring a fresh 'outsider' perspective to the agency that is much needed."

Ryan, who was acting attorney general for four months after Tom Corbett resigned as attorney general to become governor, said restoring the public's faith in the gambling board was paramount.

"This board is very important to the people of Pennsylvania," Ryan, dressed in a dark gray suit with a red-striped tie, said as he sat in the board's conference room in an office-retail complex that overlooks the state Capitol. "Right now, the best goal I have is the one that is the division statement, which is for 'the board to be the premiere gaming regulator in the United States, and to maintain and enhance the public's trust with honesty, integrity and credibility,' " he said, reading it.

"I don't think I can say it any better."

Ryan, who served two terms as Delaware County district attorney from 1988 to 1996, could pass as a college professor in appearance and mannerisms. He spoke in a monotone and rarely showed excitement.

He tackled questions he had command of and acknowledged when he didn't have enough information - such as on whether the second casino license intended for Philadelphia should stay in the city after the gaming board yanked it in December.

"No position," said Ryan. "I don't have enough information on that."

Same on whether the state should open more casinos - there are 10 statewide - when some, such as the Mount Airy Casino Resort, have already shown year-over-year revenue declines.

"It will be premature for me to try to answer that now . . . except to say, you always have to have a concern with any enterprise with market concentration," he said.

Ryan is the fourth chairman to take over the board since Pennsylvania legalized gambling in July 2004. He is the first chairman appointed by a Republican governor. The previous three were appointees of former Gov. Ed Rendell, a Democrat. Like all of them, Ryan is also an attorney. He succeeds Greg C. Fajt.

State Rep. Paul Clymer (R., Bucks), a staunch opponent of gambling because of what he regards as its negative social impact, said Ryan "will ensure crime and corruption will not get a foothold in the state's casinos" because of his background.

Kaytee Riek, new director of Casino-Free Philadelphia, hopes Ryan will lead the board to become more active in regulating casino lending practices. She said lines of credit were being issued to gamblers with little or no oversight.

"Ryan should take steps to address it and ensure the PGCB is regulating the casinos and not continuing the past policy of helping them make more profit," she said.

The attorney general's investigation looked into how the board awarded casino licenses and contracts for casino-related work from 2004 to 2006.

"Undeniably, the report does raise issues about integrity, and integrity of the process," Ryan said. "I am concerned that we maintain and enhance the public's trust in the gaming board itself . . . and we keep the protection of the interests of the people of Pennsylvania first and foremost."

Since the grand jury report came out May 24, Ryan said, the gaming board has identified 10 of the 21 recommendations that it said could be accomplished by unilateral action. They are outlined in a July 7 letter to various legislative committee chairs, including Schroder.

Among them: The board should post on its website all contracts, including contracts for legal work; it should create regulatory clarity about the role and function of the BIE and all information uncovered by the BIE about a vendor or casino applicant must be contained in the BIE's report to the board; and the board should submit an annual report listing its executive sessions and agendas.

"That's a start, but the board should meet all of the recommendations," Ryan said.

Attorney John Donnelly, who represents the Mount Airy, SugarHouse, and Rivers casinos in Pennsylvania, as well as several Atlantic City casinos, said Ryan's appointment "will assure everybody, including skeptics in the public, that there will be considerable law enforcement" by the board.

Ryan welcomes the opportunity. "The gaming industry is new here in Pennsylvania. It is controversial in a way that no other industry in the state is," he said.

"To me, it's what is new that we confront in life that makes life interesting, and it came at a good time."