Courier-Post from Camden, New Jersey • Page 12

8A COURIER-POST, Monday, February 11, 19B0 OPERATION ABSCAM Shock waves of scandal worry casino investors Newark mayor keeping quiet about 'Arabs' fff NEWARK (AP) Newark Mayor Kenneth Gibson had no comment on a published report that he held a private meeting in Atlantic City with two "Arab" business figures who had been By LAUREL REID GRAVETT and JAMES C. LAWSON Of the Courier-Post The shadow cast on the state Casino Control Commission by the FBI's Operation ABSCAM may discourage investors from sinking their funds into the casino industry, according to some members of Atlantic City's investment community. "They might just use this as another reason to say no," said L. Edison Mathis, president of the Mathis Co. investment service firm in Atlantic City.

While the stigma cast on the casino commission probably would not affect larger concerns such as Ramada Inn and Caesars World, Mathis said, it could hurt smaller companies that are still in search of investors. making bribe offers to public officials. "As long as the sun rises in the of an Arab sheik during the annua! convention of the New Jersey League of Municipalities at Resorts International Hotel last November. The newspaper quoted sources saying real estate developer Joseph Silvestri, of Keyport, a central figure in the ABSCAM investigation, "bumped" into Gibson in the lobby of the hotel and told him he had some Arabs who wanted to give Newark some service. The sources said Gibson met for about 10 to 15 minutes with the two undercover FBI opera- east and sets in the west, we will have no comment," Gibson's spokesman Bernard Moore said yesterday.

KENNETH GIBSON report links him to ABSCAM tives. Moore would not confirm whether Gibson actually met with the pair, and if he did, what was discussed. The News of New York reported yesterday that Gibson met with the FBI agents who were posing as representatives ABSCAM details first became puTb-lic. Marks and other stockbrokers agree the situation has had no measurable effect on casino stocks, with the slight declines probably representing normal market fluctuations- Market analysts and brokers say they are watching casino stock prices and trading volume yery closely in anticipation of a downswing that could lead to profitable buying by speculatinng investors. "The casino stocks have been coming down in an up market," said Nicolas Mekosh, first vice president and manager of Butcher Singeiya Cherry Hill stock brokerage firm, "But it's not because of the investigation.

The stocks, as of late, haven't been as attractive as issues of the oils, the defense stocks, gold stocks, and drugs." A drastic downturn, Mekosh said, would allow, some courageous investors to get in at low prices. "I guess I would be a buyer if they declined," he added. While such a downturn hasn't, occurred, a mild decline is under' way. The trend began more than a month ago and shows no signs of coming to a halt, some brokers say. "The casino stocks have been weak this week, while the market, in general, has been dynamic on the upside," explained Mekosh "The market in general is doing good, but the casino stocks have not participated." But Marks also said the ABSCAM link may have the long-range effect of discouraging investors.

"They don't want to be involved in something with problems like this," he said. uu.i While the casino stocks haven't Legislature deciding on own probe Mathis said the situation particularly could discourage East Coast investors, many of whom already are hesitant to become involved in casinos. Operation ABSCAM, the FBI's undercover investigation into political corruption, reached the Casino Control Commission through one of its own members, Kenneth MacDonald, who was implicated in a $100,000 payoff to influence a casino license. MacDonald resigned from the commission last Monday, although he denied any wrongdoing. Suspicion also has been cast on commission Chairman Joseph Lordi.

Sen. Harrison A. Williams, who also was implicated in the ABSCAM probe, reportedly boasted during a videotaped conversation that he could influence Lordi's vote on the commission. Lordi also has denied any wrongdoing. Albert Marks, an Atlantic City investment banker and stockbroker, said while casino stocks have shown a modest decline at the end of the week, they were holding strong early in the week, when the fied federal sources.

Both senators deny the reports. Sen. Charles B. Yates, D-Burlington, the committee chairman, wants a special legislative counsel and full use of the eight-member committee's subpoena powers. "We have to look at whether there is a broad pattern here," Yates has said.

Among witnesses that seem sure to be called are Casino Control Commission Chairman Joseph Lordi and former Commissioner Kenneth N. MacDonald. MacDonald resigned from the panel a week ago after allegations linked him to $100,000 payoff by the phony shiek. Yates and Assemblyman Donald Albanese, R-Warren, committee vice chairman, are calling TRENTON (AP) The usual slow pace of the Legislature, still at the start of its new two-year term, is picking up with the advent of legislative hearings on the FBI's "ABSCAM" bribery probe. r.

The Joint Legislative Ethics Committee is i expected to decide today how to handle its independent probe of the two state legislators named in the FBI's wide-ranging influence-peddling invesitigation. Bi-partisan probes by committee members from the state Senate and Assembly will look into the activities of state Sens. Angelo Erri- chetti and Joseph Maressa, both Democrats representing Camden County. Both reportedly took payoffs from FBI agents posing as representatives of a millionaire Arab sheik, according to reports leaked by unidenti for Lordi to quit his job because, they say, the commission chairman should be subject to the same standards as MacDonald. Both concede, however, there is no hint of impropriety by Lordi.

The state Senate and Assembly, meanwhile, are scheduled to hold routine sessions. Only two bills have been posted for consideration by the lower house. They are proposals for rules on marketing precious metals and a law that would certify delegates to the Republican National Convention. Thirteen bills will be up for votes in the Senate. Included in the upper house list is a bill that would extend driver's license implied consent to the taking of either blood or urine to determine alcohol or drug levels.

Baker: Act now on scandal WASHINGTON (AP) Senate Republican Leader Howard Baker says Qongress will lose its credibility if it does not act immediately on the ABSCAM scandal. "We can't wait, or Congress will go down the tube if we do," Baker said yesterday on ABC's "Issues and Answers." Several members of Congress and other officials have been implicated in the case, in which federal agents posed as representatives of Arab sheiks seeking favors from public off icials in exchange for bribes. The House and Senate ethics committees have decided to delay subpoenaing evidence while the Justice Department concludes its investigation. But Baker says the issue can't wait. "The country won't stand still long enough for these trials to take place in the ordinary course of events," said the Tennessee Republican.

He recommends creation of select committees by the House and the Senate, or a joint committee, to "look into the allegations and charges that have been brought in the public domain." Such panels also should "examine the interrelationship between the right of an individual citizen in a legal proceeding and the responsibility of Congress to monitor and discipline its own members," he said. Baker also suggested the congressional committee or committees look into the roles of the Justice Department and the media. "We have a fundamental question here," said Baker. "Are we in fact trying people on television?" Senate Majority Leader Robert Byrd, yesterday on NBC's "Meet the Press" characterized news leaks about the investigation as "reprehensible." Baker added that the scandal has complicated his campaign for the GOP presidential nomination. "Since the revelations in the newspaper of the charges against members of Congress," he said, "I have had a number of people come up to me and say, 'How do you expect to ask us to support you for president when you come from i i 5 jr J'lkW.

HOWARD BAKER wants investigative units Degnan to probe OK of Ritz Casino Continued from Page 1A the information from the federal government." Degnan said last week his office 5 -jess Ritz Associates, which is owned by Hardwicke, recently announced plans for a $75 million renovation of the Ritz-Carlton Hotel, located on the Boardwalk five blocks south of the Boardwalk Regency Hotel-Casino, and also operate a casino at the site. A license application would be investigated by the state's Division of Gaming Enforcement, which is a branch of the attorney general's office. "The Ritz will be the subject of an intensive background investigation as to who the owners are," Cannon said. "It is going to be a routine investigation," he added, "but we'll be focusing our attention a little bit more than we usually would." Cannon said the office will examine closely the renovation approval by the Casino Control Commission and building permits granted by Atlantic City officials. Investigators for the attorney general's office have been interviewing persons involved or connected with the FBI probe into government corruption.

Cannon would not disclose the names of those interviewed or in which level of government they were employed. Several persons in the office have been taken off other cases and assigned to the ABSCAM-related investigation, he said. Cannon said FBI officials have promised to cooperate in any state investigation but have not indicated when they will turn over evidence gathered during the federal government's two-year probe, he said. No meetings have taken place as yet between state and federal authorities. "The federal government is still involved in its investigation," the spokesman said, "and we don't have any hard information from them yet to go with." Part of the attorney general's investigation would be to uncover illegal activities which would be more difficult to prosecute on a federal level.

"The federal and the state rules of evidence are different," Cannon said of facts which can be brought out in a trial. "There may be some things which would be prosecuted easier on the state level. also would launch an investigation into bribery allegations against Kenneth N. MacDonald, who resigned last Monday as vice chairman of the state's Casino Control Commission. Sources say MacDonald and Camden Mayor and state Sen.

Angelo Errichetti took $100,000 from undercover FBI "ABSCAM" agents. The allegations have been denied. There are two other openings on the five-member Casino Control Commission. The terms of Alice Corsey, a Deptford homemaker, and Prospero DeBona, a Monmouth County lawyer, ended months ago. taken any drastic dips since news of the investigation broke earlier this week, it could have an affect im trading later, brokers say.

Marks speculated the adverse publicity surrounding ABSCAM and the casino commission may have a positive effect on Atlantic City gaming by making other states more cautious about venturing into casino gambling. "I can foresee in a sense in the reverse sense that it could be ben ef icial to gambling in Atlantic City, he said. "It might just scare the voters in New York, Pennsylvania, and With the casino control commis- sion involved in its own problems and lacking one member there; has been some concern about delays in hearings on casino projects. But commission spokesman Ben. Borowsky says the ABSCAM problems should have no impact on the' casinos up for review.

"It has certainly not affected the, work of the commission at all he- -said yesterday. Borowsky said it still is not definite whether a scheduled Feb. 28 hearing on a permanent license for Caesars' Boardwalk RegerJCy-casino will be delayed. Gov. Brendan T.

Byrne was' expected to appoint a new member to the commission today. I New amendments to the state's' casino laws have extended amount of time a casino may operate under a temporary license from' nine months to a year, Borowsky said. If the hearing were postponed beyond the mid-March expiration" date of Boardwalk Regency's temporary license, the casino could request a second extension. Boardwalk Regency, which opened last June, currently is operating under a three-monflr -extension of its original six-fnotfth-temporary license. A spokeswoman for the casino's parent company, Caesars World Inc.

of Los Angeles, said the company is awaiting word on the status of the upcoming heading. "We want our permanent she said. Bally's Park Place casino, which; opened Dec. 29 under a four-month temporary license, also could request extensions and is not likely to be affected by any ABSCAM-related delays, Borowsky said. Holiday Inns already with one casino hotel project in Atlantic City's marina area, has announced it is pulling out of a proposed 530 mil lion, three-casino hotel across the street.

But compamy; officials said the decision has noth- ing to do with the FBI probe. Holiday Inns officials said the; firm had an agreement with Metro-' Goldwyn-Mayer Inc. and Hotels Inc. to cancel its plans to' build a 500-room casino hotel that' was to have been built by Harraht of Nevada. A Holiday Inns-Harrah's merger has already been approved by boards of directors of both firm and await a vote by Hilton and MGM officials empha sized yesterday they would continue their plans for two casino hotels oa the marina site.

JOHN D. DEGNAN Acts in wake of ABSCAM ABSCAM UPDATE Names still surfacing but no charges filed yet ance men are said to have bribed high officials in Louisiana and other southern and western states. A Baton Rouge, newspaper reported yesterday that Louisiana Gov. Edwin Edwards Jr. and 12 ranking state officials have been summoned to appear before a grand jury this week in connection with the Brilab investigation of bribery and insurance kickbacks in four states.

Results No formal charges have been filed against any of the persons linked to ABSCAM, although a customs investigator was arraigned in Brooklyn, N.Y., last week on a federal bribery charge stemming from the investigation. In New Jersey, state Casino Control Commissioner Kenneth N. MacDonald resigned his post last week after his name surfaced in connection with the scandal. Other New Jersey public officials linked to the investigation include Sen. Harrison A.

Williams, U.S. Rep. Frank Thompson Camden Mayor and state Sen. Angelo J. Errichetti and state Sen.

Joseph A. Maressa, all Democrats. Elsewhere, public officials named as subjects of the investigation include U.S. Rep. John M.

Murphy, U.S. Rep. Rayomond Lederer, U.S. Rep. Michael O.

Myers, U.S. Rep. John Murtha, and U.S. Rep. Richard Kelly, R-Fla.

Inquiries under way The New Jersey Attorney General's office will continue its own investigation this week of ABSCAM allegations which may be prosecuted on a state level. Investigators for the office began interviewing persons involved or connected with the FBI probe, but a spokesman for Attorney General John Degnan said last night he could not disclose the names of those interviewed or in which level of government they were employed. Last week, Degnan said he would launch an investigation into bribery allegations against Kenneth MacDonald. vate Atlantic City meeting with two bogus Arab businessmen who were actually FBI agents. Gibson was drawn to the encounter by Joseph Silvestri, whom he met at the New Jersey League of Municipalities meeting in Atlantic City last November.

Gibson, to date, had not reported the meeting, and he declined, through an aide, to comment yesterday. Meanwhile, major FBI undercover investigations of organized crime were reported under way in at least five other cities, including Phildelphia. In all, the FBI is said to be conducting more than 50 major, long-term undercover investigations across the country focusing on political corruption and organized crime. Among them is a probe investigating allegations that Mario T. Noto, former No.

2 man in the Immigration and Naturalization Service improperly helped a reputed New Orleans organized crime figure avoid being deported. That probe, in turn, stemmed from another sting operation which came to light on Saturday: Operation Brilab. In that investigation, FBI agents posing as insur- Operation ABSCAM is the code name used by FBI undercover agents who posed as representatives of fictitious Arab sheiks during a far-reaching investigation that has implicated 20 public officials, most from New Jersey and Pennsylvania, in a $500,000 bribery scandal. The code name is a contraction of the fictitious "Abdul Enterprises," and the slang word "scam," a fraudulent scheme. The FBI agents apparently paid out bribes while claiming to represent a wealthy Arab sheik seeking investments, an Atlantic City casino gambling license and legislation allowing him to stay in the United States if forced from his homeland.

Meetings between the public officials and FBI agents in expensive Philadelphia and New York hotel suites, in a fashionable Washing- ton townhouse and aboard a yacht reportedly were videotaped. Update Newark Mayor Kenneth Gibson is the latest public official to emerge in the ABSCAM case. The New York News reported yesterday that Gibson had a pri I.