‘Rocky Top’ scandal hangs over charity gaming debate
NASHVILLE (AP) — For Secretary of State Riley Darnell, one experience with the corruption, scandal and death that came with Tennessee’s last foray into state-regulated bingos and raffles is enough.
It was the late 1980s, and Darnell — then a state senator — watched as a fellow legislator and the secretary of state committed suicide over their roles in a charity gambling scandal.
Another lawmaker went to prison, along with a dozen bingo operators and suppliers who also were convicted. The scheme involved professional bingo parlor operators who raked in thousands of dollars a day for putting on fund-raising events for charities, but gave only a small share to the nonprofit groups.
Now, some 15 years later, Darnell believes legislation pending in the General Assembly may be setting Tennessee up for another “Rocky Top,” the code name for the federal investigation into the corruption.
The current bill, one of three related measures under consideration by lawmakers, would again allow charities to raise money through raffles and other games of chance. It will be debated Monday night by the Senate.
To stop a “Rocky Top” repeat, Darnell is leading the push for almost a dozen changes to the bill that he says would safeguard charities from being overrun by unscrupulous third-party operators. In its current form, Darnell says the bill would allow fund-raisers to be “easily controlled by criminals” because it doesn’t mandate criminal history checks of those conducting them.
He also believes 35 percent of the event’s gross proceeds should be mandated to the organization’s “charitable programs” to ensure the fund-raiser is truly doing what it is supposed to do. Currently, the bill doesn’t require charities to set aside a minimum amount.
Darnell’s office will be charged with regulating whatever charity games are approved.
“If the problem does materialize that we’ve identified, they come looking at me, the so-called regulator, even though I didn’t have that authority — asking ‘Why didn’t you do something?'” Darnell said. “That’s why I’m coming at this on the front end.”
Darnell first presented his changes last week as an amendment to the powerful Senate Finance Committee. But it was quickly shot down at the urging of bill sponsor Jim Kyle, who also serves as vice chairman of the committee, and sent on for consideration by the full chamber.
Kyle, D-Memphis, has repeatedly encouraged his colleagues to pass the measure quickly so legitimate charities like the Girls and Boys Clubs of Knoxville and St. Jude Children’s Medical Center in Memphis can conduct events this year. For that to happen, lawmakers must approve the list of applicants before the session ends in late spring.
The bill looked likely to continue its rapid push to passage until Gov. Phil Bredesen’s administration — concerned with the same issues as Darnell — took steps to slow its progress last week.
That prompted a resurrection of Darnell’s proposed changes, which will be addressed Monday in several amendments sponsored by Sens. Randy McNally, R-Oak Ridge, and Roy Herron, D-Dresden — both of whom were also in the Legislature when Rocky Top happened.
One of Herron’s amendments would take Darnell’s suggested operator regulations one step further by banning them altogether — something Bredesen’s staff was considering last week.
“If a civic club wants to do one of these events, they can do it, but they can’t hire someone to do it for them,” Herron said.
A related amendment by McNally wouldn’t go as far; it would only prevent operators from being paid a percentage of the proceeds collected during an event. Charities would still be allowed to use companies to buy necessary supplies and services, such as the rubber ducks Knoxville’s Boys and Girls Clubs use in the duck races they conducted annually until they were declared illegal in 1997.
Both Herron and McNally say they aren’t sure how their colleagues will receive the changes, but are hopeful that by making them aware of “potential problems in the legislation, they’ll want to make the needed reforms,” Herron said.
“I saw what organized gambling can do with little ol’ bingo by violating the laws. It frightens me to think what organized crime and organized gambling could do with this proposed lack of law,” Herron said. “… The potential for corruption is enormous. The potential for abuse even within the proposed law is staggering.”
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