Acting attorney general denies Adelson influence

Acting AG Whitaker Defends Wire Act Opinion, Denies Adelson Influence Before Congress

Matthew Whitaker Wire Act

Acting US Attorney General Matthew Whitaker on Friday testified that he had no involvement in the recent Wire Act opinion that emerged from the Department of Justice.

The nation’s top legal official delivered his statements during a contentious oversight hearing before the House Judiciary Committee, responding to contribution questions from Rep. Jamie Raskin (D-Md.).

Whitaker further testified that he has never met with casino magnate Sheldon Adelson, whose deep pockets are presumed to be at the root of this threat to regulated US online gambling.

The ongoing investigation from special counsel Robert Mueller was the primary topic of the hearing, but the Wire Act has suddenly become a polarizing issue once again.

Whitaker on Wire Act opinion

Since 2011, state lawmakers have been working with the understanding that provisions in the Wire Act apply narrowly to sports betting. The new opinion from the Office of Legal Counsel (OLC), however, erased that previous interpretation in favor of one that more broadly encompasses online gambling.

Raskin spent the majority of his time on this topic, questioning Whitaker about his relationships with anti-online-gambling groups and casino interests. Whitaker indicated that he was recused from involvement, but the interrogation did not sit well with him.

Responding to a subsequent question, Whitaker backtracked to the Wire Act:

The first OLC opinion that preceded the one we just issued in November was done — and the state of Illinois provided a white paper regarding the position on the Wire Act. So I think it is very consistent, and your inferences on how that process was corrupted or corrupt is absolutely wrong. And the premise of your question I reject.

Friday’s appearance before Congress is likely be a one-time thing for Whitaker as the nation’s number one attorney. Most expect the Senate to confirm Trump AG nominee William Barr as early as next week.

Where does Barr stand on online gambling?

Some anticipated that Sen. Lindsey Graham would discuss online gambling during Barr’s confirmation hearing in January, but the issue never arose. The nominee has yet to publicly weigh in on the Wire Act opinion, so his official stance is so far unknown.

On inference, though, Barr figures to be sympathetic to the existing landscape. Here are his comments on marijuana policy from that hearing for some context:

“We should either have a federal law that prohibits marijuana everywhere, which I would support myself because I think it’s a mistake to back off on marijuana. However, if we want a federal approach, if we want states to have their own laws, let’s get there and let’s get there the right way.”

Replacing “marijuana” with “online gambling” might provide clues into Barr’s viewpoint, as the two issues are similar from an enforcement standpoint. Both remain illegal under the current interpretation of federal law, while legalization and regulation have become commonplace at the state level.

Barr, a Republican, has earned a reputation as a devout advocate for states’ rights.

A case of curious timing

The mechanics that led to the new Wire Act opinion have begun to draw attention from major, mainstream news outlets.

The timing raises some eyebrows, for starters. The OLC released the opinion — dated Nov. 2 — during the partial government shutdown on Jan. 14. That fell within the transition period between attorneys general, with Whitaker simply bridging the gap between Jeff Sessions and his presumptive successor, Barr.

Reporting this week from Rachel Cohen and The Intercept describes what materialized as a “golden opportunity” for some advocates. Here’s an excerpt:

Knowing both Barr’s position on the Wire Act memo and that Barr was planning to give a states’ rights defense of marijuana legalization at his confirmation hearing, Justice Department officials scrambled. Acting Attorney General Matt Whitaker and other Justice officials met with their White House counterparts and described the plan to overturn the previous memo …

The night before Barr’s hearing, the Justice Department circulated a new legal memo attributed to Steven Engel, an assistant attorney general in the Office of Legal Counsel. That document conspicuously lacked a signature, leading some to wonder if this was even real or just a draft.

Sources have expressed similar speculation to Online Poker Report regarding whether the DOJ actually intended to release that late-2018 opinion. Whitaker is, notably, Sessions’ former chief of staff.

So why did ‘DOJ officials scramble’ to get this new interpretation published?

The Sheldon Adelson effect

Despite Whitaker’s refutes, many presume that anti-online-gambling mega-donor Adelson is the man pulling the strings behind the curtain. The Intercept laid out the ways in which the billionaire casino owner struggled to find traction for his stance over the course of nearly a decade.

“Adelson worked with [John] Boehner, [Harry] Reid, and Chaffetz for years trying to move legislation on this, and wasn’t able to get so much as even a hearing in the committees of jurisdiction,” said one Republican lobbyist, referring to the House and Senate judiciary committees. “He also tried to get [RAWA] inserted in must-pass omnibus legislation, but they could never get it through. Lawmakers knew it would look terrible to pass a bill that couldn’t even get a hearing in the committees of jurisdiction.”

When efforts to restore the Wire Act reached a legislative dead end, Adelson and company turned their attention to the Department of Justice.

Sometime after 2011, Washington attorney Charles Cooper began lobbying DOJ officials on behalf of Adelson to reconsider the scope of the Wire Act. Cooper is both a former head of the OLC and a former personal attorney for Sessions — Whitaker’s former boss.

The Wall Street Journal investigated the origins of the 2018 opinion, and The Intercept connected the dots. By May, a Cooper memo requesting a reinterpretation of the Wire Act had made its way through the division to the OLC.

Whitaker’s testimony on Friday confirmed that he and the attorney are acquainted.

What about Lindsey Graham?

Graham’s intentions are under some scrutiny, too.

The conservative senator from South Carolina is one of Adelson’s key sympathizers and a target of his political contributions. As the Washington Post reported in 2015, any hopes Graham had of funding a presidential run likely hinged on the niche issue of online gambling.

According to The Intercept, he had good reason for avoiding the issue of online gambling during Barr’s confirmation hearing:

Barr made his opposition to revising the 2011 memo known during his prep time for his confirmation hearings, people familiar with the deliberations said, which is why Graham ended up not asking him any questions about it, unlike the questions Graham posed to Sessions during his 2017 hearings. Asked whether the senator had advance knowledge of Barr’s stance on the question, Graham’s spokesperson did not respond directly to the question, and instead forwarded a public statement praising the new Wire Act policy.

Based on that reporting, it appears the new OLC opinion would likely not have been published under Barr’s oversight.

States pushing back against Wire Act opinion

Raskin’s questions speak to the underlying concerns about the Wire Act becoming evident at the state level.

Rep. Doug Collins (R-Ga.) has publicly expressed his desire to protect lottery programs in light of the new opinion. The US representative from Georgia gave OPR this statement last month:

“While the Department of Justice has updated its opinion on the Wire Act, the move shouldn’t put the Georgia Lottery or its investment in local students at risk. I believe that states still have the ability to regulate gaming within their own borders, and I’ll keep working to make sure that Georgians’ right to make these decisions for themselves isn’t curbed.”

A large group of lottery stakeholders representing nearly every US state also drafted a letter of opposition this week.

Officials in a couple states have taken more tangible action to oppose the new opinion. On Wednesday, the attorneys general of New Jersey and Pennsylvania sent a joint letter to the DOJ expressing “strong objections” on behalf of their constituents.

NJ’s Gurbir Grewal additionally filed a Freedom of Information Act (FOIA) request (here) seeking documents related to lobbying efforts in advance of the revised opinion. Adelson’s political clout is hardly a secret, but Grewal wants details about any role he may have played in this new opinion surfacing.

More from WaPo: Justice Department decision to issue legal opinion long sought by casino magnate Sheldon Adelson draws criticism

Eric Ramsey
- Eric is a reporter and writer covering regulated US gambling, sports betting, and DFS. He comes from a poker background, formerly on staff at PokerNews and the World Poker Tour.
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