Ex-GOP Chief Is Gambling Industry’s Ace in the Hole

In 1931, eight years before Frank Fahrenkopf was born in Reno, lawmakers in his future home state gambled on two moneymaking schemes--quickie divorces and legal gambling.

They bet that the resulting windfall of tourists and dollars would erase Nevada’s Depression-era poverty. It paid off. Big time.

By the time Fahrenkopf came of age, neon-lit casinos towered over the Nevada desert and the darkness glowed with the orange-red and blue-green brilliance of prosperity.

“We would wear out the pockets of Levi’s usually within three or four months because we carried silver dollars,” he says, recalling his teen-age years in boom-town Reno. “We grew up with gambling. It became a way of life.”

Gambling continues to be a way of life for the GOP political insider turned Washington lawyer-lobbyist. As president of the American Gaming Assn., Fahrenkopf is the lead advocate for the nation’s $40-billion gambling industry.

The association is a $3-million lobbying operation, the first of its kind for an industry traditionally disinclined to band together. Gambling entrepreneurs are fiercely independent, often mistrustful of each other and unwilling to collaborate--even in their own best interests.

For that reason, Fahrenkopf was initially reluctant to accept the job. After working his way up through the ranks of state and national GOP politics to serve six years as chairman of the National Republican Committee during the Reagan administration, Fahrenkopf eschewed elective office and was poised to fulfill a personal ambition. He wanted to become a cloakroom power broker.

“I really enjoy being the person behind the scenes,” he says.

So when he walked away as party head, he inched closer to his dream job as a partner at Hogan & Hartson, a top Washington law firm. From that perch, he figured, he would dabble in national politics without the responsibilities of running for office.

But gambling was in his blood. The gaming industry is made up of old friends, some going back to his 17 years as a Nevada lawyer representing the likes of Wayne Newton and Las Vegas mogul Steve Wynn. They wanted him and wouldn’t accept his repeated refusals to join their team.

His old friends, Fahrenkopf recalls, argued that the gaming industry--so vital to Nevada and growing in other parts of the nation--was being threatened by “moralists” bent on its destruction.

“At first, I wasn’t interested,” he says. “But they kept coming back and talking to me.”

A run of bad political luck, meanwhile, was forcing the industry leaders’ hand. In recent years, anti-gambling groups staged a string of successful local ballot campaigns to stop new casinos and riverboat gaming operations. And President Clinton in 1995 floated the idea of a tax on gambling to pay for health care and welfare reforms.

Finally, Fahrenkopf got an offer he couldn’t refuse--a reported $800,000 annual salary to work exclusively for a consortium of 18 large-scale gambling companies.

“I’m a Nevadan,” he says, ticking off the reasons and the logic of his decision. “I understand gaming. I knew the players personally. They figured it was sort of a natural.

“I bring to them a knowledge of Washington and how it works,” he continues. “Particularly, I know how the Hill works. I have personal relationships with many members of the House and Senate on both sides of the aisle.”

But does lobbying former colleagues and political friends on behalf of gambling pose any ethical dilemmas? After all, the GOP describes itself as the party of “family values,” and a key constituency is the religious right.

Fahrenkopf shrugs and shakes his head, dismissing any concern that he’s tottering on an ethical edge.

“Realistically, the religious right in some sense gets beat up a little too much on this,” he says, adding that some of the most devout Christians have no opposition to betting games.

“The nature and depth of the antagonism against gambling will vary within the Christian Coalition, just as it does within the Republican Party,” he says.

Fahrenkopf is a true believer in the rights of Americans to place wagers and bet in games of luck. He can even summon patriotic history on the issue.

“Our research has indicated to us that in the Revolutionary War, the money to buy uniforms for our troops, to help them, to provision them, to buy bullets, came from lotteries in the Colonies,” he says. “So it was actually gambling that helped get this country started by raising the money to fight the Brits.”

What’s more, he is hopeful a nine-member federal commission is going to focus attention on legalized gambling that will ease public concerns about the oft-argued negative impact the industry has on individuals and communities. The commission, appointed by Clinton and congressional leaders, will soon initiate a two-year study of gambling.

“We’re hopeful this commission is going to put the organized-crime issue to bed,” Fahrenkopf says. “Organized crime [is] not involved in [the] legalized gaming industry. Gaming doesn’t cause crime.”