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Thursday, October 7, 2010

Bob Riley's $13-Million Debt Sparked Bingo Arrests in Alabama

Bob Riley

Gov. Bob Riley's desire to avoid paying a $13-million debt helped trigger Monday's bingo-related arrests in Alabama, according to a report from a Washington, D.C.-based investigative journalist.

Riley attempted to unlawfully pay the political debt with public funds, Wayne Madsen reports. But when that failed, the governor pushed U.S. attorney Leura Canary to pursue an indictment against his creditor, gambling magnate Milton McGregor.

McGregor was among 11 individuals that federal authorities arrested on Monday for alleged corruption connected to electronic-bingo measures in the Alabama Legislature. The real reason for the arrests, Madsen reports, is that Riley did not want to pay back McGregor's share of a $15-million political slush fund that had been built for an anticipated 2006 gubernatorial campaign against Democrat Don Siegelman.

Riley's plan to give a $13-million, no-bid computer-services contract to a Virginia-based company called Paragon Source was designed to help pay off McGregor, Madsen reports. But that plan was abandoned when a legislative review committee objected to the contract.

At that point, Riley pushed Canary, a long-time ally, to develop a plan for indicting McGregor. As so often seems to happen in Alabama, the whole seedy affair started over Republican efforts to beat Don Siegelman. From the Wayne Madsen Report (WMR):

Alabama sources report to WMR that Riley was intent on seeing McGregor indicted and jailed in order to welsh on a $13 million debt he owed to McGregor for a political slush fund set up for Riley's 2006 re-election campaign against the favored Democratic candidate, Siegelman. Siegelman's indictment before the election took the former governor out of the race but Riley had already had at his disposal some $15 million in a slush fund, $13 million of which was contributed by McGregor. McGregor was lured into the financial deal when he was told it was for an investment in a lucrative contract to provide machines for the Russian State Lottery. The pass-through company that was bidding for the supposed Russian State Lottery contract was Paragon Gaming, Inc., an entity that was involved in four Indian casinos in Canada and which also had a relationship with the Circus Circus casino in Las Vegas.

As we have reported previously, Homewood attorney Rob Riley (Bob Riley's son) and Birmingham businessman William Cobb "Chip" Hazelrig have been major figures with Paragon Gaming, which is led by Robert Sigler of Tuscaloosa. Reports WMR:

The principals involved in the Paragon Gaming deal with Russia included a member of Riley's immediate family and the family member's best friend who both operated out of an office in Oxford, Alabama. WMR's sources report that the Paragon Gaming "deal" with Russia also involved Dan Gans, the Chief of Staff to Governor-elect and then-Representative Riley, who was also a senior adviser to Riley's 2002 gubernatorial campaign against Siegelman, won by Riley amid charges of election fraud. Gans was also a lobbyist with the Abramoff scandal-plagued Alexander Strategies Group founded by former GOP House Majority Leader Tom DeLay's one-time chief of staff Ed Buckham. In addition, Michael Scanlon, Riley's former congressional press secretary and Capitol Campaign Strategies lobbyist partner of Abramoff who was convicted in the Abramoff scandal, was also reportedly involved in the Russian lottery contract.

However, there never was any Russian State Lottery contract and our sources report it was merely a cover for the creation of Riley's 2006 slush fund to finance his re-election campaign against Siegelman. Bill Canary was Riley's campaign manager in 2006. In 2007, when McGregor asked people close to Riley where his $13 million had gone, he was told "The KGB is looking for it." The KGB had not existed in Russia since the fall of the Soviet Union in 1991. The claim that the money had been stolen by Russia was false.

McGregor, understandably, was not happy about being bilked out of $13 million. That's when Bob Riley came up with the Paragon Source scheme:

Eventually, Riley attempted to make good on his $13 million debt to McGregor when a female friend of Riley's created a firm called Paragon Corporation, which had no employees, listed a cell phone as corporate contact, and essentially operated out of the trunk of Riley's friend's car. Paragon Corporation, according to our sources, was to receive a $13 million contract from Riley that was to be quietly transferred over to Paragon Gaming and back into McGregor's accounts. However, a leak about Paragon Corporation caused the conspirators in the money laundering operation to abandon the deal and McGregor ended up short of his $13 million investment.

Madsen's reporting underscores the breath-taking corruption and hypocrisy at the heart of the Riley administration. In essence, Riley's anti-gambling task force has been nothing but a taxpayer-funded scam designed to help Riley avoid paying his financial obligations--to a casino owner. Perhaps even more breath-taking is the ineptitude of the Barack Obama Department of Justice, under whose nose this charade has taken place.

What really is behind Monday's arrests? It's a Republican political scheme that can only be described as "depraved." Here is how Madsen reports on Riley's actions after the Paragon Source plan fell through:

Riley, instead, opted to see McGregor indicted and sent to prison in order to ensure that the $13 million would never have to be paid back to the casino mogul. Riley's gambling task force operation was a way to force the federal government's hand to indict McGregor with the added bonus of seeing indictments brought against other Riley enemies in the state, including the four members of the Alabama Senate indicted along with McGregor.

16 comments:

domenique said...

This is unbelievable..When will the federal government wake up. Whats the over/under on the amount of days it will take Riley to be indicted once he leaves office

Karen said...

As a newcomer to this topic, I seriously need a flow chart to understand and keep up all these scummy Riley connections! Good blog!

Robby Scott Hill said...

It sure looks like Barack Obama has lost control of his own Justice Department. You need to do a post called Ten Signs Governor Bob Riley is usurping your Presidency. Are you sure you've still got a pair Mr. President?

Robby Scott Hill said...

I knew there was some shady shit going down behind the scenes. This tops the powder stash at the Montgomery Zoo. Wayne Madsen is my Honky!

Anonymous said...

River Bank & Trust, the bank that gave Sparks the unsecured loan of $500,000, has an interesting cast of characters as stockholders and board members. Stockholders include McGregor, Prattville Mayor Jim Byard, City Council President Dean Argo, City Council Pro Tem Dr. Tom Miller, Larry Puckett, Prattville City Engineer Robbie Anderson, Jim Ridling, etc. This bank, ladies and gentlemen, is the financial arm of both Republican and Democrat corruption involving taxpayer money. Dr. David Thrasher, Board Member and shareholder, was involved in investing in the Russian lottery with McGregor. Jim Ridling, Alabama Insurance Commissioner appointed by Riley in 2008, is on the BoD for RB&T. Ridling has an interesting history: http://www.naic.org/members_bios/alabama.htm. RB&T's BoD is a list of very wealthy and well connected people. http://www.riverbankandtrust.com/aboutus.html

We'll see where this goes.

Anonymous said...

This is the most absurd "spin" that I have ever read. Your article does not pass the sniff test......

Anonymous said...

Lions and tigers and bears, oh my!
There are BIG imaginations at work here! LOL,

Anonymous said...

make sense to me, hey is the PCI gaming connected here, after all I dont know what the P stands for and its the indian casinos in al, that it runs.

Redeye said...

Anonymous#1, is it unusual for banks to give unsecured loans?

Anonymous said...

There is no doubt that Riley caused all the arrest here, I hope that if what this article says is true that they hang Riley out to dry ( IN JAIL ). I would love to hear what Obama has to say about one of his D buddies.

Anonymous said...

If the FBI has taped conversations about exchanging money for a Senate vote, explain how this is political? It sounds pretty corrupt to most people.....

Anonymous said...

Redeye, I was merely pointing out that RB&T was the same bank that gave Sparks the half million loan - which is very, very unusual in light of the fact that he doesn't have the income nor the assets to put as collateral. Look for this bank in connection with the people that go down for the "Road Bill". The FBI never said this investigation was JUST about bingo.

Anonymous said...

Interesting that the link anonymous #1 provides is not a valid link. What kind of absurd drugs is he on? Is this part of the smear campaign that several Prattville City Councilmen have going against the other members
??

Anonymous said...

You have to leave off the period at the end, genius.

http://www.naic.org/members_bios/alabama.htm

Anonymous said...

Just follow Rob Riley's trail. He's the bully on the playground and Daddy is the principal of the school. This has to be the most corrupt family in Alabama.

Anonymous said...

This is unbelievable, all right, and I don't believe it! I guess they figure if they make it elaborate and hard to follow, people will think it must be true.