State cooks the books, media freeze-dry the facts


From the 5-28-00 Sparks (Nev.) Tribune

As Lily Tomlin once said, no matter how cynical you become, it's hard to keep up. If any question remained about the gambling industry controlling state government, Nevada cynics now have the smoking gun. It came wrapped in reeking newspapers.

Early last week, veteran Associated Press Carson City Bureau Chief Brendan Riley published a story about the state gaming abstract.

"State to release gaming report this week," stated the headline in the May 25 business section of the Reno Gazette-Journal.

On the same day, both the Carson City Nevada Appeal and Las Vegas Sun headlined with this: "Report suggests Nevada casino slump - but only on paper."

Riley's story noted that the gambling industry had lobbied some new accounting tricks into the annual report which turned an increase in net profits into a decrease. The report was delayed five months while the books were cooked.

In the revised version of reality, casino net profits dropped sharply from $1.13 billion in 1998 to $876.6 million last year. Had the previous accounting methods been preserved, profits would have soared to $1.3 billion, a new record.

The accounting change permitted the deduction of extra costs formerly absorbed at the corporate level of the multinational companies which own most of Nevada's largest casinos. By allocating some of the parent company costs to local operations, they were able to drastically understate profits.

"The clubs are taxed on gross revenues, so the revisions in net income don't mean they'll pay less," Riley reported, "but Sen. Joe Neal, D-North Las Vegas, who's pushing for higher taxes, won't be able to point to billion-dollar net profits in arguing that the clubs can afford to pay more," Riley's story continued.

The accounting change also paves the way for the industry to approach zero tax liability should the Nevada teachers union's net profits tax initiative pass in the 2002 election. The industry is leaning toward supporting not only the teachers' proposal, which leaves gaming almost untouched, but also a sales tax on services such as laundry, auto repair and day care.

Sen. Neal is circulating an initiative to increase gross gaming taxes on the largest, most profitable casinos in the Reno-Sparks, Elko, Lake Tahoe and Las Vegas areas.

"Bill Bible, head of the Nevada Resort Association, says Neal shouldn't cry foul because the discussion on changing the report's format began a year ago, before Neal started his petition," stated Riley's AP story.

Actually, Neal advocated raising gaming taxes and threatened a petition long before last year.

The gambling industry has facilitated tax and fee increases on just about every other aspect of Nevada life while holding itself harmless from new taxation since 1987. During the same time, it has lobbied tax breaks for itself on high-priced works of art, casino lucky bucks and funny money.

The most responsible headline on the state publication was printed by this newspaper last Thursday: "Nevada casinos report $876.6 million in fiscal '99 net profits."

Perfect. Just the facts. Readers could peruse the entire story for details.

But last Friday, the gambling-industrial complex got the result it wanted from cooking the books, courtesy of the state's two largest newspapers.

"Report shows drop in casino profits," blared the Reno Gazette-Journal business page in a slightly updated re-run of Riley's Thursday story.

"Gaming income declines," headlined the Las Vegas Review-Journal.

Anyone who read further would have discovered the shell game. But many would retain only the headlines. Roughly half a million readers, about a third of the state's population, were thus exposed to corporate propaganda presented as fact under color of government office.

Sen. Neal need not be bothered. Initiative petitions allow citizens to circumvent the system.

The gambling-industrial complex has expended untold amounts of money flailing about with feckless pre-emptive strikes against him. A couple of weeks ago, I reported an oblique letter from former Congresswoman Barbara Vucanovich, R-Nev., to rural county residents.

She warned of some nefarious Las Vegas senator trying to raise taxes on the poor gambling industry. She used the word "radical" three times. She also warned of "state controlled programs" which could never be changed.

That was the second-best of all the lies. Initiative petitions, such as Neal's or the teachers', can be modified by the legislature three years after passage.

Vucanovich sunk to her lowest by threatening local health clinics should Neal's initiative pass.

The computer-generated letter was modified for each county, e.g., replacing "Storey County Health Clinic" with "Humboldt County Health Clinic" or "Mineral County Health Clinic." Those facilities do not exist. I checked with local residents and phone books.

This is not surprising behavior from Vucanovich. In 1984, responding to a concerned grandmother's letter about teen gambling on U.S. military bases, Vucanovich wrote that slot playing is "healthy" and "cost effective" recreational activity which keeps young soldiers "off the streets and away from drugs and other illegal activities."

Vucanovich's husband was an executive for the slot manufacturer supplying machines to the military. Bally's Corp. had also made large donations to her campaign.

Veteran wire service reporter Cy Ryan's story was distributed statewide. The Reno Gazette-Journal stopped the press and pulled the story from its Reno-Carson editions. When I brought it up later in my campaign against her, people refused to believe she'd say such a thing, even when presented with the original letter bearing her signature. I still have it.

Be well. Raise hell.

NevadaLabor.com | U-News | C.O.P. | Sen. Joe Neal
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© Andrew Barbano

Andrew Barbano is a member of Communications Workers of America Local 9413 and editor of U-News, where the past four years of columns may be accessed. He manages Sen. Neal's website. Barbwire by Barbano has originated in the Sparks Tribune since 1988.

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