Congress

Democrats tried to ‘blackmail’ casino owner to let employees unionize, conservative group claims

Lawmakers say ethics accusations by Foundation for Accountability and Civic Trust are baseless

Rep. Mark Pocan, D- Wisc., speaks with reporters as he leaves a House Democrats' caucus meeting in February. Pocan is one of 14 Democrats who wrote a letter to a casino mogul that a conservative ethics watchdog group says was part of an effort to coerce him to allow employees to unionize. (Bill Clark/CQ Roll Call file photo)

A conservative watchdog group asked the Office of Congressional Ethics on Thursday to review whether 14 Democratic lawmakers and one Republican inappropriately used their office to try to coerce a Las Vegas casino mogul into allowing his employees to unionize.

In May, Wisconsin Rep. Mark Pocan and 13 other Democrats wrote a letter to Frank Fertitta III, the CEO of the Las Vegas-based casino management company Red Rock Resorts Inc., urging him to “respect the rights of employees” at the company “to form a union and collectively bargain.”

Republican Rep. Brian Fitzpatrick of Pennsylvania sent Fertitta a similar letter the following day.

Both letters mentioned a pending piece of legislation — co-sponsored by most of the signatories — that would tweak a part of the 2017 GOP tax code overhaul that inadvertently more than doubled the depreciation period for  renovation and remodeling projects.

Red Rock had written to Congress in December asking it to correct the “drafting error” on the renovation depreciation schedule in the 2017 tax overhaul. In the letters, the lawmakers say the bill would impact tax implications for Red Rock’s then-recently completed $690 million renovation project on the Palms Casino Hotel in Las Vegas. 

FACT alleges the lawmakers mentioning their support for Red Rock employees’ unionization efforts and their support for tweaking the tax bill in the same letter amounts to “implied blackmail.”

[Ethics working group to hash out what kind of company service is off limits]

“[T]he House Members seemingly sought to coerce a private citizen’s behavior by linking their request with pending legislation before the House,” Kendra Arnold, FACT’s executive director, wrote on Thursday to OCE, the non-partisan entity with sweeping authority to review allegations of misconduct involving House staff and lawmakers.

“The House Ethics rules prohibit this type of implied blackmail or quid pro quo,” Arnold added. “The public expects, and the rules require, Members to take legislative action based upon merit and not for their own political purpose,” such as advocating for an employer to let his employees unionize, Arnold wrote.

Many of the lawmakers — six of whom represent districts in Nevada or New Jersey, two states with legalized gambling — dismissed FACT’s accusation that they solicited a quid pro quo in exchange for their votes on the measure, HR 1869, to amend the property renovation tax provision. 

The Democrats’ letter “simply asked for Mr. Fertitta and Red Rock Resorts to comply with the law and respect all applicable labor protections. The OCE complaint is a baseless allegation — there was no quid pro quo,” Conor McCabe, a spokesman for Pocan, said in a statement.

Most of the lawmakers who co-signed Pocan’s letter were listed as co-sponsors on the bill, the Restoring Investment in Improvements Act, weeks before they sent the letter to Fertitta urging him to let Red Rock’s employees unionize, signaling their support of the legislation.

Kevin Gerson, a spokesman for Nevada Rep. Dina Titus, one of the co-signers, said FACT’s complaint letter to OCE “is a dishonest attack from a dark money right-wing group with a history of making baseless accusations against Democrats.” 

While listed as a non-profit, FACT derives much of its money from conservative donors and has ties to conservative political organizations such as the preeminent GOP opposition research firm America Rising, The Washington Post previously reported.

Former Acting Attorney General Matthew Whitaker, a close ally of President Donald Trump who succeeded former AG Jeff Sessions in an interim capacity this past winter, led FACT as executive director from 2014 to 2017.

“Congresswoman Titus has a long and unequivocal record of fighting to fix the qualified improvement property provision,” Gerson said, adding that Titus co-wrote a letter as far back as November 2018 with Florida GOP Rep. Gus Bilirakis asking House Democratic and Republican leadership to address the error in the 2017 tax code.

Fitzpatrick has not yet responded to request for comment.

Thousands of citizens reach out to OCE each Congress to review allegations of misconduct by lawmakers and their congressional and campaign staffs. If OCE concludes that a review merits a formal investigation by Congress, it refers the case to the House Ethics Committee.

One congressional ethics expert interviewed by CQ Roll Call does not think this is such a case.

“This is a frivolous complaint ... and should be dismissed by OCE as such,” said Craig Holman, an expert on governmental ethics for the non-partisan good-government group Public Citizen. “There is no threat by the lawmakers to vote for or against” a measure to amend the 2017 tax code’s property renovation provision in either of the letters, he said. 

Holman read the letters as “highlighting the tax benefits enjoyed by Red Rock and an encouragement to share the spoils” by allowing them to collectively bargain as part of a union.

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