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INVESTIGATION: IRGC Chairman Responds

CEDAR RAPIDS (CBS2/FOX28) - CBS2/FOX28 has new information tonight in our investigation into questions regarding the Iowa Racing and Gaming Commission, its chair, and the casinos the commission oversees. 

Were taking a closer look at Lambertis business ties with a charity he strongly supports and big donations from Iowas casino industry to that very same charity. 

Ankeny attorney Jeff Lamberti is a veteran in Iowa political circles. A former Republican legislator, he has worked as a fundraiser and organizer for GOP causes.  Iowa Governor Terry Branstad appointed him to the Iowa Racing and Gaming Commission in May 2011, and appointed him Chairman of that organization in June 2012.  At the same time, Lamberti has been a strong supporter of Battleship Iowa, the non-profit group that operates the U.S.S. Iowa as a tourist attraction in California.  He serves as Chairman of the Battleship Iowa Board of Directors.

Lamberti and a woman named Becky Beach are partners in an Iowa corporation called Riverside Partners, Inc.; a for-profit entity according to filings with the Iowa Secretary of State.  Battleship Iowa hired them for fundraising services in 2010.

Fast forward to 2012, CBS 2 News has learned through a 2012 IRS filing by Battleship Iowa that the now Chairman of the Iowa Racing and Gaming Commission, Jeff Lamberti, guaranteed a loan to the non-profit in the amount of $300,000.  On the same filing, Lamberti and Beachs company, Riverside Partners Inc, is listed with a $500,000 loan to the non-profit.  Riverside Partners and Battleship Iowa say that money is owed for services they previously provided.

2012 is also the first year money comes to Battleship Iowa from Iowa casinos.

According to Battleship Iowa, since 2012, donations from Iowa casinos have totaled $250,000.

The combination of a large outstanding loan with casino donations as a possible funding source, led us to ask Cedar Rapids business attorney Gary Streit, who created the City of Cedar Rapids Ethics policy, about the relationship.

 The money that is contributed to the non-profit enhances the collectability of his note, is what it really means, said Streit

Mr. Lamberti is out of town, but CBS2/FOX28 spoke to him via phone today.  He insists his personal loan would never be paid with casino money given to the ship.

CBS2/FOX28S Tiffany ODonnell asked, How do you know?

Lamberti replied, Because thats what I did when I secured that loan, and everyone is under the  understanding that thats the policy of the board and quite frankly, I would never be allowed to be repaid out of those funds, because we have been very careful about keeping a wall between anything thats related to casino interest and anything that would relate to me.

Tiffany then asked, Is that documented somewhere?

Lamberti replied, You know, I dont know that its specifically documented.  Its certainly the understanding of everybody on the Board, and of course I would never accept it.

He says the same is true for the $500,000 outstanding balance owed to his company with Ms. Beach, Riverside Partners, Inc. 

Much like anything owed to me, that would never be paid out of gaming money, said Lamberti.

Then theres the question of who was doing the asking for the donations in the first place.  While Riverside Partners was hired to fundraise, Beach says she did it on her own.

Tiffany asked Beach Did you ask those casinos in 2012 for the initial donations?

Beach replied, You bet.  And that had nothing to do with Riverside Partners.

Tiffany asked, So how does that work?  You guys are partners.

Beach replied, Let me tell you how it works.  I send the ship an invoice from me and they send me a 1099 and I pay taxes directly on the money I receive from them.  It doesnt go through Riverside Partners, it goes directly to me personally.

Battleship Iowa Executive Director Jonathan Williams says neither the loan to Lamberti, nor the money owed to Riverside Partners, Inc. has been paid.

 Lamberti tells CBS2/FOX28, Riverside Partners, Inc., is no longer actively working for Battleship Iowa or any other clients.  He and Beach say the company still exists because they are owed money by the non-profit.  Both say they are not involved in Battleship Iowa for the money, but because they both believe in the cause.

The Cedar Rapids Development Group and Linn County Gaming Association sent us this statement Friday.

The Cedar Rapids Development Group and Linn County Gaming Association are disappointed and surprised that our proposal for Cedar Crossing Casino in downtown Cedar Rapids was not approved by the Iowa Racing and Gaming Commission (IRGC).  The proposal would provide a significant net economic boost to the State of Iowa,  Linn County and Cedar Rapids.  

Because of the overwhelming evidence supporting the establishment of such a facility in Iowas second largest city, our development group firmly believes that this project should be and will be approved at some point in the future.  As a result, we plan to continue our efforts.  Basically stated, we are not going away. We will continue to pursue this project for our community and the State.

We understand some questions have been raised regarding the relationship of the Chairman of the IRGC with those who were primarily opposing this project.  We do not have all the facts associated with such questions and therefore cannot, and will not, comment on them at this time. We are confident that others will determine the facts and take the appropriate action if any is needed.  For our part, we stand proud of our project, our community, and our investors, and we will remain so until this project becomes a reality.

We talked to the State Board of Ethics and they say no complaints have been filed.
 
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