Seven weeks ago, the Pennsylvania Gaming Control Board's enforcement bureau deemed it a conflict for Mount Airy Casino Resort to hire the auditing firm that works for the Scranton area bank that embattled Louis DeNaples once chaired.
On Thursday, the board approved the hiring anyway, after Mount Airy officials said no other major firm is willing to take the job and the controversy that comes with auditing the books of the casino DeNaples built.
After a 45-minute hearing, the gaming board unanimously decided that Demetrius & Co. of Wayne, N.J., is qualified and can independently audit the financial books of the Monroe County resort. Demetrius also works for First National Community Bank in Dunmore, Lackawanna County, the bank DeNaples led.
In February, DeNaples was forced to step down from the bank board and casino, pending the outcome of criminal charges that he lied to gaming regulators about knowing reputed mobsters.
Mount Airy attorney Michael Sklar said any question about whether the firm can be independent is more perception than reality.
''Demetrius represents a stable of publicly traded companies,'' Sklar said. ''They're not going to go into the tank and jeopardize their good name for Louis DeNaples, Mount Airy or anyone else.''
The decision shows how complicated even routine matters like hiring an auditor can become, when cast in the light of DeNaples' current problems.
DeNaples, a wealthy Scranton area businessman, was awarded a license for his $415 million casino in Paradise Township in December 2006 while state police still were investigating whether he lied to gambling regulators about his ties to organized crime.
Dauphin County charged him in January with four counts of perjury. That set off a domino effect in which the gaming board suspended his license, appointed former Shippensburg University President Anthony F. Ceddia to take control of the casino until the charges are resolved and ordered DeNaples to remove himself from all casino business.
DeNaples' attorneys have said he is innocent.
On Feb. 20, the gaming board's Bureau of Investigations and Enforcement objected to the hiring of Demetrius, noting it defied the board's own rules requiring the auditor be independent, nationally recognized and experienced in gaming.
Demetrius met none of those, enforcement attorney Nan Davenport wrote in her brief to the board.
''Because Demetrius provides auditing services to a bank which Louis DeNaples was on the board of directors, Demetrius is not independent,'' Davenport wrote. ''The CPA firm cannot be affiliated with a licensee or any of its principals.''
She went on to write that ''Demetrius is not a nationally recognized firm'' and ''does not have expertise in the gaming industry.''
But Mount Airy officials said that although Demetrius is not a national firm, it does represent 17 publicly traded clients. In addition, Demetrius will hire Morowitz Gaming Advisors of Atlantic City to help with the audit.
Besides, Sklar argued, Mount Airy asked six of the nation's biggest auditing firms to take the job of auditing an operation that employs 900 people and is projected to generate $270 million annually in slots revenue. None of them wanted it.
And with the audit past its initial Feb. 29 deadline, there was simply no more time to keep searching.
''Frankly,'' said Mount Airy Chief Executive Officer Joe D'Amato, ''part of the problem is the public relations surrounding Mr. DeNaples.''
Satisfied with those arguments, Davenport said the enforcement bureau recommended the board ''waive'' its criteria and hire Demetrius. Instead, and without explanation, the board unanimously deemed that Demetrius met all of its criteria. It approved the hiring and gave Demetrius 90 days to finish the audit.
After the meeting, board members would not explain their vote.
''Got to run,'' Chairwoman Mary DiGiacomo Colins told a reporter as she darted from the hearing room.Copyright © 2014, Los Angeles Times