Riverside CEO’s link to Lamberti draws scrutiny

Critic of C.R. project donated to Battleship Iowa fund led by gaming panel chairman

By Rick Smith, The Gazette
Published: May 4 2014 | 10:28 pm in Cedar Rapids, City Council, Government, Local News,

CEDAR RAPIDS — Casino owner Dan Kehl and lead Cedar Rapids casino investor Steve Gray haven’t seen eye to eye on much of anything, especially now concerning the optics in the latest chapter of their relationship.

Kehl, CEO of Riverside Casino & Golf Resort, on Saturday acknowledged that he has been an ongoing supporter and donor to the Battleship Iowa preservation fund, whose chairman is Jeff Lamberti. Lamberti also is chairman of the Iowa Racing and Gaming Commission.

Kehl has been the most outspoken of critics of a proposed Cedar Rapids casino, saying it would cannibalize business from existing casinos and devastate Riverside.

On April 17, the Racing and Gaming Commission agreed with Kehl and the commission’s market studies of the Iowa gaming industry and denied a state gaming license to Gray’s Cedar Rapids casino project.

The vote was 4-1, with Lamberti voting with the commission majority.

Ten days before the vote, Kehl attended a reception at the governor’s mansion, Terrace Hill, for the Battleship Iowa museum fundraising effort. Lamberti also was among the 25 or so on hand.

“We were invited to Terrace Hill to get an update on the museum from the director and other staff while they were in Des Moines (from California) to visit the Legislature,” Kehl said in a written comment Saturday. “We were honored to attend.”

Kehl did not specify how much or when he, his family foundation or the Riverside casino may have contributed to the Lamberti-led Battleship Iowa fundraising project. He said only that his initial contribution came after he first visited the battleship in Los Angeles in spring 2012.

“We have been financial supporters, like many other Iowans and Iowa companies, and plan to continue supporting this significant historical museum tied to Iowa,” Kehl said.

Kehl spokesman Jeff Link on Saturday said the Iowa Legislature in recent years had approved $3 million for the battleship museum, and the museum staff periodically comes to Des Moines to give lawmakers an update. The Terrace Hill reception preceded the museum staff’s report to the Legislature, he said.

On Saturday, Gray said neither he nor the seven members of the board of the Cedar Rapids casino investor group, Cedar Rapids Development Group LLC, has contributed to the battleship fundraising effort.

Gray said Kehl’s contributions and the Terrace Hill event on the eve of the key Racing and Gaming Commission vote “raises even more serious concerns that need to be fully understood.”

“We clearly believe that Cedar Crossing would have a positive impact on the state of Iowa, Linn County and Cedar Rapids, and we are both surprised and disappointed with the commission’s decision,” Gray said.

Cedar Rapids Mayor Ron Corbett said more.

“I just want to make sure that the city of Cedar Rapids and Linn County have been treated fairly in this whole process and that the scale wasn’t tipped against us,” Corbett said Saturday. “And I hope that isn’t the case as it relates to these contributions and the Terrace Hill event as it relates to a foundation specifically chaired by Lamberti.”

Corbett said he wanted to see the details of when Kehl and any other casino owners made contributions to Lamberti’s battleship fundraising endeavor. As for the Terrace Hill reception 10 days before the Racing and Gaming Commission vote, “it just doesn’t give the best appearance,” Corbett said.

He called Lamberti, an Ankeny attorney and former state lawmaker, a “seasoned politician” who probably “should have known better.”

“It’s not that cause that people are questioning,” the mayor said of Lamberti’s battleship fundraising. “It’s the timing and the relationship that the Racing and Gaming Commission chairman has to the organization. … A few more questions are going to be asked before the chapter is closed on this issue. The people of Cedar Rapids and Linn County want to make sure it’s a fair process.”

Lamberti did not return a call or an email Saturday.

In voting against the Cedar Rapids casino, Lamberti said the Racing and Gaming Commission historically had listened to its own market studies, and he wanted to do the same. A Cedar Rapids casino would hurt Riverside and other casinos and destabilize the gaming industry, he said.

Kehl also has ownership interests in Iowa’s newest casino, Grand Falls Casino Resort in Larchwood, which opened in 2011. He also led an investor group in January in the purchase of the riverboat casino in Davenport, which the group will replace with a land-based casino on Interstate 80.

Kehl fought the Gray-led investor group hard before the 2013 referendum in Linn County in which 61 percent of voters approved casino gaming.

In the run-up to the vote, the Gray-led Vote Yes campaign raised $1.92 million to counter $1.25 million in spending to vote down the referendum from the Riverside casino.

As for the USS Iowa, the battleship was launched in 1942 and served in World War II.


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