Syverson donors, business partner win big in casino deal

Illinois Capitol News

ROCKFORD, Ill. (NEXSTAR) — State Senator Dave Syverson (R-Rockford) went all in for a casino project that would directly benefit his business partner and top campaign donors.

Public records and communications obtained under the Freedom of Information Act show Syverson was in close personal contact with local and county officials during the pivotal moments leading up to the city’s decisive vote to award the casino project to an investor group that included his friends, campaign donors and associates.

In a text message to Winnebago County Chairman Frank Haney, Syverson wrote that the location Hard Rock proposed near I-90 “will mean $500,000 to $750,000 more for the county. We cannot afford to experiment and put dollars at risk to even think about downtown.”

The state gaming law that approved a casino license for six cities included a strict ban on local host communities or officials using their position “to secure or attempt to secure any privilege, advantage, favor, or influence for himself or herself or others.” Violating any of the ethical boundaries in the gaming law is a Class 4 felony.

Syverson, and Rockford Park District Board of Commissioners President Ian Linnabary both participated in a public campaign to urge local governments to pass resolutions in support of the Hard Rock casino investor group.

The Rockford Park District ultimately approved a resolution supporting the Hard Rock bid, although Linnabary did not vote on it and said he had a conflict of interest.

On August 20th, however, Linnabary and Syverson both supported the Hard Rock bid at a meeting of the Winnebago County Economic Development Council.

“Downtown is an appropriate area for a lot of different types of developments, but downtown is not the appropriate location for a casino,” Linnabary said, shrugging off ethical concerns raised at the meeting over the county government’s involvement in swaying the outcome of the city’s impending decision, and continuing to argue against the competing bids from two other developers who wanted to build a casino closer to downtown Rockford.

“The problem with going into a downtown location, despite what people would like or wish it to be, they are not economic generators,” Syverson said at the County meeting. “When a casino comes into an area, people go there, they stay there, they shop in the casino, they eat in the casino, and the restaurants and shops around it get devastated,” Syverson said.

“We know this because the empirical data, the overwhelming body of empirical data, tells us this,” Linnabary continued. “It tells us casinos, in order to create maximum economic impact need to be placed in close proximity to high thoroughfare areas. There is no higher visible area, there is no area that sees more traffic than the intersection of I 90 and East State Street.”

In an email, Linnabary wrote that those laws prohibiting him from getting involved do not apply to him because he is not an employee of the City of Rockford.

“I am president of the Rockford Park District Board of Commissioners,” he said. “The Rockford Park District and the City of Rockford are two separate and distinct legal entities that each exist by virtue of state law.”

Likewise, Syverson said the state law did not apply to him, or to adjacent communities or the county.

After Syverson and Linnabary built support for the Hard Rock location, local governments in Winnebago County, Love’s Park and Machesney Park all passed resolutions to support it.

However, Syverson chafed at Mayor Tom McNamara’s insistence that city aldermen abstain from talking to anyone about gaming until the city rolled out its own presentation.

“I’m the ‘go-to’ person for the city council to go to,” Syverson said. “I am a conduit of information.”

Syverson claims he complained to the Gaming Board and sought a ruling that would allow him to speak directly to the Rockford City Council, even as they were under a prohibition to speak to any lobbyists or agents of the casino operators.

“How could I be handcuffed?” Syverson asked. “You can’t tell aldermen they can’t investigate and talk to anyone they want.”

“The city did not prohibit aldermen from speaking with anyone,” responded Bobbie Holzwarth, an attorney hired by the city to head up the casino negotiations. “We did let them know that they would have the obligation to report the communications under the ethical conduct rules.”

The same law requires any public officials from host communities to disclose to the Illinois Gaming Board any communications they had with an officer or employee of the company competing to win the license.

Linnabary and Syverson both insist they are exempt from that law because they don’t work for the City of Rockford. However, state law defines a “host community” as “a unit of local government that contains a riverboat or casino within its borders.”

Linnabary, who is also the Vice Chair at the Illinois State Board of Elections, also worked as the lead lawyer for the Hard Rock project. One of his law firm partners, Jan Ohlander, is listed as an investor in the casino, and donated $500 to Syverson’s political committee.

Because the Rockford Park District and Winnebago County would contain the Hard Rock casino within their borders, that means Linnabary could have been legally required to disclose any communications about gaming he had with any investors, including Ohlander, to the Gaming Board.

Syverson also says the law doesn’t apply to him because he is a public official for the state, however the land for the casino is located in his district. Under a broad interpretation of the ethical laws, Syverson could also face similar disclosure requirements if he discussed anything related to gaming with his business partner Rick Nielsen, whose spouse Karen Nielsen is invested in the casino project.

“I talk to all of these guys,” Syverson said. “I’m the only guy with the information.”

Dr. Brian Bear invested in the Hard Rock casino, and donated $4,500 to Syverson’s campaign.

Alfred and Joseph Castrogiovanni are listed as casino investors, and combined to give Syverson’s campaign $2,500.

Local businessman Sunil Puri gave Syverson’s campaign account $17,056, and is listed among the casino investors.

No casino investor gave more to Syverson’s campaign than local construction boss Brent Johnson, who contributed $96,200, and is in line to win the general contracting work on the project, according to Linnabary.

The law also places a strict ban on local officials from host communities from accepting “any gift, gratuity, service, compensation, travel, lodging, or thing of value, with the exception of unsolicited items of an incidental nature, from any person, corporation, or entity doing business with the riverboat or casino that is located in the host community.”

Rockford alderman Natavius Ervins, a Democrat from the city’s 6th Ward, lists Ringland-Johnson as his employer and voted in favor of approving the casino deal. Ervins did not respond to multiple phone calls seeking comment.

Holzwarth said the city is still studying the ethical issues and would like more guidance from the Illinois Gaming Board or the Illinois Attorney General.

“One of the questions that I see is, ‘When is a casino located in the host community?’ We don’t have a casino that has been licensed yet. The city has certified an applicant to the Gaming Board, but the Gaming Board hasn’t licensed anyone, and there is no casino in the city of Rockford.”

“Once we have a casino, I suppose one of the questions will be, ‘How does language like this impact somebody who was elected before the casino bill was even in place?'”

On Saturday, September 28th, 2019, the local newspaper reported Mayor Tom McNamara wanted to send the Illinois Gaming Board multiple options, and rank them in order of preference, in order to have a backup plan in place.

“The mayor’s initial preference, and might have been his preference if we had three viable applicants, was to send more than one down so that we had backup if any of them did not make it,” Holzwarth said.

That weekend, ahead of a pivotal city council vote, Syverson used his state Senate letterhead and communications staff to lobby support for the city to select just a single developer, and urged the public to consider what he saw as disqualifying differences between his business partner’s bid and the other developers’ application, which he discounted as merely a “dream.”

“One of the most important elements of a gaming application, and required by the State, is the inclusion of a signed contract that the applicant has with a gaming operator,” Syverson wrote. The law that Syverson helped craft requires the Illinois Gaming Board, not necessarily the local government, to review a signed contract and analyze its economic viability.

“We were of course aware of [Syverson’s comments],” Holzwarth said, “but we tried our very hardest to focus only on the job before us in terms of what we needed to certify and the viability of the proposals that were being presented.”

At the time, only the Hard Rock project had signed a contract with an operator, although the other two applicants still had time under the law to finalize their deal.

The next Monday, the mayor had changed his mind, and backed a plan to certify and send only one casino application to the gaming board.

“The timeline was aggressive,” said Ron Clewer, one of the two developers who lost out on their bid for a Rockford casino. He said his company had land under control, had independent studies of his project already in motion, and that he had flown in an investor and a major casino operator to present their plans before the City Council, but “the decision had been made, so therefore there was no public discourse.”

“They flew out. Everybody on the decision making team knew I was in Vegas the week before,” Clewer said. “We provided them the initial letter of intent, a corrected letter of intent that Friday. We were of the belief we were able to bring the operator in that Monday, introduce them, and before the Council meeting there was going to be a Finance and Personnel meeting.”

“There were some last minute decisions to bring forward one on that Monday,” he said, and argued that if the city had used the same standard in its request for proposals that other Illinois cities used, his company would have stood a chance to compete for the work at the Gaming Board level.

“I know we could’ve pulled it off,” Clewer said. “Over the course of those weeks, we had four very seasoned, very good operators who truly understood our market.”

Instead, Clewer says the City of Rockford required applicants to have a complete project ready in place and ready to go months before the Gaming Board would have required those items, effectively expediting the timeline and elbowing other competitors out of the way.

“He was absolutely lobbying,” Clewer said of Syverson, although the Senator insists he was not paid by nor invested in the casino group.

In a phone interview on Monday, Syverson defended his activity, dismissed Clewer’s complaints as “sour grapes,” and argued against sending multiple proposals to the Gaming Board.

“Politics would come into play,” he said. “It would delay the approval. You’ve got to wait until two applications get finalized.”

“You want to send two applications down to Springfield and let Springfield decide? Really? And not let the locals decide?”

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