A federal grand jury slapped an Indiana casino executive with additional charges Tuesday for his alleged role in a scheme to funnel casino cash into an ex-state senator’s failed campaign for Congress.
John Keeler was already facing four federal charges for allegedly working with out-of-state political consultants to recruit straw donors when the new charges were unveiled this week. Those straw donors funded former state Republican Sen. Brent Waltz’s congressional campaign in 2015. They were then reimbursed with funds from Keeler’s casino company New Centaur LLC, according to federal prosecutors.
Now the Justice Department says Keeler tried to use those contributions to lower his company’s taxable income.
In a 2016 corporate tax return for New Centaur’s parent company Centaur Holdings, Keeler listed a $41,000 company payment to the out-of-state political consultants as a deductible expense. He also amended a corporate tax return from 2015 to include deductions for $79,500 in company payments to the consultants.
But authorities believe those payments weren’t deductible expenses at all. They believe they were funds the consultants routed into Waltz’s campaign coffers through straw donors, which would make them political contributions. Campaign contributions can’t be listed as a business expense under federal law.
IndyStar has requested comment on the allegations from Keeler and his attorneys.
The fall of casino heavyweights
Keeler, a lawyer and former Republican member of the Indiana House of Representatives, has held major positions in the state’s casino industry. After New Centaur LLC was sold for $1.7 billion to Las Vegas-based Caesars Entertainment in 2018, he joined forces with another Indiana casino giant, Rod Ratcliff, to launch Spectacle Entertainment.
Keeler was the acting vice president and general counsel for Spectacle when the indictment against him and Waltz, who is also being prosecuted for his role in the illegal contribution scheme, was unsealed in federal court a year ago. Keeler took administrative leave from the company following the indictment.
Spectacle partnered with Hard Rock International in 2019 to develop two new casinos in Gary and Terre Haute. A year later, the Indiana Gaming Commission stripped Keeler and Ratcliff of their gaming licenses in response to federal and state investigations shadowing their company. Ratcliff has not been charged with any crimes.
Hard Rock International has since bought a majority stake in the Hard Rock Casino in Gary, essentially taking over the facility from Spectacle.
Spectacle was hugely influential on legislation surrounding Indiana’s casino industry during the brief period it was run by Keeler and Ratcliff. The company lobbied the governor and state lawmakers to change state law and allow Spectacle to move two of its Gary casino licenses to more heavily traveled areas.
Lawmakers also reduced a fee Spectacle had to pay to the Indiana Gaming Commission for developing a new casino in Gary from $100 million to $20 million.
Private flights for Holcomb
IndyStar reported Ratcliff treated Gov. Eric Holcomb to two private jet flights in 2018 around the time Spectacle was pushing for changes to state gaming law. The trips were reported as part of half a million dollars Ratcliff and his companies contributed in 2018 to the Republican Governors Association, far more than any other casino operator or Indiana company.
The association contributed $7.6 million to Holcomb’s 2016 run for governor, making it a major financial backer of his campaign. An ethics review by the Indiana Inspector General found Holcomb did not commit any wrongdoing because the flights, which were directed to Republican Governors Association events, were provided to the association and not Holcomb’s office.
“It is what it is,” Keeler said, when contacted by IndyStar in 2019 in his role as Spectacle’s general counsel. “We belong to the RGA. We had an extra seat or two on the plane, the governor flew along with us. Not a big deal.”
The next hearing in the case against Keeler and Waltz is scheduled Oct. 14 in the federal courthouse in Indianapolis.
Call IndyStar courts reporter Johnny Magdaleno at 317-273-3188 or email him at firstname.lastname@example.org. Follow him on Twitter @IndyStarJohnny