With a $100 paper shredder, the $20 million deal between a casino company and two DuPage County political insiders would have remained a secret.
Instead, the details of what Patrick Durante and James Schirott stand to make if they land the Nevada company an Illinois riverboat gambling license were plucked from a garbage bin and tossed in a public court file for all to read.
Their story illustrates just how high the stakes have jumped since the state’s first riverboat casino opened in 1991 and underscores the key roles played by political insiders who represent casino interests in Illinois.
And, because state records containing such details are not open to public scrutiny, the story of Schirott and Durante provides a rare glimpse at the amounts of money a casino company is willing to wager to win an Illinois gambling license.
Once deemed a risky venture, Illinois riverboats now seem a sure bet. Last year, net gambling profits for the state’s 10 casinos ranged from $29 million for the East Dubuque riverboat to an eye-popping $203 million for the Empress in Joliet.
Accordingly, dozens of gaming companies and investment groups have set their sights on Illinois. They’ve turned the state into the site of a modern-day gold rush, with a casino license as prized now as a land claim was a century ago.
The casinos have mined the political landscape, enlisting individuals with top political pedigrees to represent them. Among the influential who have teamed up with gambling interests: former Gov. Jim Thompson, former Illinois Atty. Gen. Tyrone Fahner, former U.S. Attorneys Fred Foreman and Anton Valukas, former State Police Director Jeremy Margolis and former Cook County Circuit Judge Louis Garripo.
So when Primadonna Resorts, which owns three casinos along Nevada’s border with California, joined the rush two years ago, it Schirott and Durante, two men with close ties to the Illinois legislature’s Republican leadership, to act as its local prospectors for an Illinois license.
Schirott is an Itasca lawyer whose clients include his friend and hunting partner, Senate President James “Pate” Philip. Durante, an aide to U.S. Rep. Henry Hyde, is a Republican Party leader in the home district of his longtime friends, Philip and Lee Daniels, speaker of the Illinois House.
Primadonna’s offer to the two was tantalizing: Land us a casino license in Illinois, and we’ll give you about $20 million. Schirott and Durante said yes.
Their efforts for Primadonna include finding a suitable riverboat site, courting municipalities interested in a casino and overseeing the company’s lobbying efforts. Much of that business is conducted through their own company, Pete & Repeat, a name suggested by Durante’s mother who joked about the two friends repeating each other.
Last year, Primadonna saw Schirott’s and Durante’s efforts to land a riverboat in Des Plaines scuttled, but the company now is pursuing sites in Rosemont, Chicago, Calumet City and Calumet Park.
Documents detailing the negotiations between Primadonna and Schirott and Durante surfaced earlier this year after a former mental hospital patient went on a treasure hunt of his own. On several occasions, he pawed through the trash bins behind Schirott’s law office, unearthing correspondence and other items that had not been run through one of Schirott’s office paper-shredders.
The man included the documents with a lawsuit he filed against Schirott and others on an unrelated matter. The case, which alleged an incomprehensible conspiracy, was recently dismissed by a DuPage County judge as baseless. But the documents, which Schirott and Durante have verified as authentic, became part of the public record until the court file recently was sealed.
The details have caused some embarrassment for Schirott and Durante and spurred some controversy. The documents showed, for example, that some political campaign contributions made on behalf of Primadonna were improper.
Gambling interests have become a rich source of money for political candidates in Illinois, and Primadonna officials said the company donated about $50,000 to various political committees last year. But nine checks totaling $9,000 were issued by Schirott, Durante or their firm, Pete & Repeat.
Documents from the DuPage lawsuit included invoices in which Schirott and Durante sought reimbursement for some of those donations from Primadonna-a violation of state election law, which prohibits making donations in another’s name.
“I have tried to be very scrupulous about this whole thing, but we may have screwed up,” Schirott said of the improper contributions.
Following inquiries by the Tribune, Durante notified state officials of the errors and sent letters to legislators-including Daniels and Philip, whose committees each received improper contributions of at least $2,000-advising them of the mistake.
Most controversial, however, is the $20 million in fees that Primadonna pledged to pay the two DuPage men if they successfully landed the company a gaming license.
The head of the Illinois Gaming Board said the $20 million is an “excessive sum,” one so high that it suggests an effort to buy influence. He said that the expenditure could serve as grounds to deny Primadonna a license.
“Any organization that believes we’re selling licenses-and that they ought to pay for it-doesn’t deserve to be licensed in this state,” said Michael Belletire, the regulatory agency’s administrator.
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Casino companies that apply for a state license, and those that hold the existing 10, routinely submit detailed business expenditures to the board for review.
The records, however, are not open to public scrutiny.
Belletire said he reviewed the paperwork on file for Illinois’ 10 license-holders. The files contain amounts the companies have paid to lawyers and consultants.
Nowhere, he said, could he find an arrangement between local representatives and a casino company that was as lucrative as Primadonna’s offer to Schirott and Durante. He declined to release details on what other casinos were paying their consultants.
But Schirott and Durante said the offer wasn’t even the highest they’ve received.
In all, they said, seven casino companies approached them with deals to act as their local representatives. One dangled an ownership interest worth approximately $6 million a year, they said.
Sigmund Rogich, a Primadonna director and former special assistant to President Bush, said the company hired Schirott and Durante because they are respected by Republicans and Democrats alike and “have a history in Illinois that’s untainted.” They offer expertise and “instant credibility,” Rogich said.
Their relationship with the General Assembly’s two top Republicans doesn’t hurt either, he said.
Before the gaming board can award any more casino licenses, the General Assembly first must pass a law to expand gambling. As leaders of the legislature’s two chambers, Philip and Daniels would play a pivotal role in that debate.
Among the documents culled by the former mental patient and included in his lawsuit was a December 1993 letter from Schirott to Rogich that outlined the fees under negotiation.
In addition to hourly fees paid while pursuing a license, Schirott and Durante would each receive $950,000 if Primadonna won a license, plus “no-cut consulting contracts” of $450,000 a year for 20 years, the letter said. In all, they would each gross $9,950,000 each. During the 20-year period, the two would provide legal work, public relations, lobbying and other services either directly or through hired employees, a Primadonna representative said.
Durante and Schirott declined to divulge the final terms but acknowledged that the total package added up to about $10 million each.
“It’s substantial, but I think it’s worth the investment,” Rogich said. “I think if you measure it over 20 years, it certainly reads better than if you take the lump sum.”
Even a tiny piece of a riverboat can mean boatloads of money. DuPage County Board President Gayle Franzen earned about $1.2 million in 1993 for his 2 percent stake in the Empress, according to figures distributed by a legislator last year.
Franzen declined to comment on his investment results.
Primadonna’s pursuit of an Illinois license included the hiring of other local political players to serve as consultants or lobbyists, the court documents show.
Others hired included Carolyn Miller Kulie, a DuPage County Board member and state Department of Public Aid employee who is a close Philip ally; David Loveday, a former Daniels press secretary; former state Rep. Gene Hoffman (R-Elmhurst); and Charles Vaughn, a former Republican floor leader of the DuPage County Board.
Even with local clout, Primadonna has experienced its share of setbacks.
The company’s efforts last year to buy land along the Des Plaines River from the Catholic Archdiocese of Chicago were abandoned when negotiations collapsed in July. Then, in November, voters shot down an advisory referendum on gambling in Des Plaines.
Philip, the Senate president, said he did not learn until recently that Schirott and Durante were working for Primadonna. “They have never talked to me about riverboats, neither of them,” he said. As for the $20 million success fees, Philip said “that is a lot of money.”
“In my wildest dreams,” said Philip, who is undecided on whether more casino licenses should be issued, “I would have never thought there was that much money in it.”
His friend, Durante, has a different perspective.
“If a boat is going to make $50 (million) to $100 million a year . . . I’m making peanuts,” Durante said.