Wednesday, Oct. 21, 1998 | 11:17 a.m.
The Louisiana Gaming Control Board, with two members absent, gave its otherwise unanimous approval for construction to resume immediately on what had been touted initially as one of the world's largest casinos. The finished product tentatively would open around Nov. 1, 1999.
State Rep. Tony Perkins, R-Baton Rouge, had urged Gov. Mike Foster to get the board to delay a decision until a federal investigation of former Gov. Edwin Edwards has run its course.
Foster refused, stressing that the New Orleans casino project had nothing to do with an investigation that centers around the riverboat casino industry.
The gambling board declared that a partnership that includes gambling giant Harrah's Entertainment Inc. is suitable to run a gambling operation in the state. That clears the way for construction to resume on the partially finished gambling palace that was abandoned amid bankruptcy proceedings in 1995.
Gambling board approval came only after the board received assurances from a company executive that no one in or out of state government had demanded money to smooth the way.
Three of Edwards' friends and business associates have made plea agreements with the federal government, admitting they were involved in plans to pay the former governor to secure approval for riverboat casino projects. Edwards has denied any wrongdoing while acknowledging he expects to be indicted.
Edwards was in the first year of his final term in 1992 when he won legislative passage of a bill authorizing one land casino in the state (other than federally authorized Indian casinos) to be located on a downtown New Orleans site owned by the city.
"I hope I never have to go through another five years like this in my business life," Colin Reed, a Harrah's executive, told the board Tuesday.
There were disagreements between the city and state over who should lease the site and operate the casino. Even after those were ironed out there were problems.
In 1995, it looked as though the casino would become a reality. A temporary gambling hall was opened in New Orleans' municipal auditorium while construction on the permanent site began at the foot of Canal Street.
The temporary casino drew fewer gamblers than expected, leading the partnership to shut down the project and head to bankruptcy court for protection from creditors.
Over the last three years, the partnership was restructured. Harrah's will still operate the casino but will be a minority partner. Majority owners will comprise the investors who bought more than $430 million in junk bonds to finance the project.
A new operating plan was approved last week by a federal bankruptcy judge. The New Orleans City Council approved a new lease soon afterwards.
The board's refusal to delay approval upset opponents of legalized gambling. Walter Abbott, state spokesman for the National Coalition Against Legalized Gambling, put the blame on Foster. The governor ran on an anti-gambling platform but has supported the New Orleans casino, saying the state cannot back out on long-standing agreements to establish the casino.
"As far as I'm concerned Mike Foster is as filthy dirty as the rest of the Edwards crowd that he runs around with," Abbott said in a telephone interview.
During Tuesday's meeting, Reed was questioned at length by several board members who wanted to know if Harrah's was pressured to partner with certain individuals or hire particular consultants when it initially applied for the casino license.
Board Chairman Hillary Crain asked Reed why Harrah's agreed to partner with the New Orleans Land Development Corp., a group of businessmen with ties to Edwards. Reed said Harrah's thought it would be good for the state if the casino had local business partners.
"Were you given any impression that if you didn't combine with NOLDC you wouldn't get a license?" Crain asked.
"No sir," Reed said.
"Did NOLDC say they had an inside track?" Crain asked.
"If we had one inkling there was hanky panky going on, we would have been out the door," Reed said.
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