SUMMARY: U.S. pedestrian deaths are at their highest level since 1990. Possible explanations include wider roads, sprawling cities, heavier traffic in residential areas due to navigation apps and increasing distractions from digital devices. And according to victims’ families and safety advocates, the problem is a crisis state and local governments have been slow to address. Arren Kimbel-Sannit reports.
SUMMARY: The Washington National Cathedral in Washington DC, sustained major damage during a rare 2011 earthquake. Nearly eight years later, reconstruction is still underway at the country's second-largest church. Jeffrey Brown visited the landmark to learn more about the long and painstaking repair effort, including how it has been funded and what steps have been taken to avoid future disaster.
SUMMARY: In Santa Rosa, California, what's left of a mobile home park is still desolate after a 2017 wildfire. The former residents with homes still standing aren't allowed to live there, but they have also had trouble getting insurance money. Karla Carballo-Torres and Lorin Eleni Gill of UC Berkeley’s Graduate School of Journalism report.
SUMMARY: A string of tornadoes cut a path of destruction across parts of Ohio and Indiana Monday night. The twisters, some with winds of 140 miles per hour, flattened entire neighborhoods, killing at least one person and wounding dozens more. Millions are without power as officials scramble to uncover the scope of the damage and encourage residents to check on their neighbors. Judy Woodruff reports.
SUMMARY: Severe weather is devastating the American Heartland. Spring storms have led to at least eight deaths in Oklahoma, which has been hit by tornadoes and record rain. With more precipitation expected, state officials are closely watching levee systems for signs of a potentially catastrophic failure. Judy Woodruff speaks by phone with Oklahoma Governor Kevin Stitt about managing the situation.
SUMMARY: Violent weather has tormented regions from the Rocky Mountains to the Mid-Atlantic in recent weeks. In Kansas Tuesday night, strong tornadoes tore houses apart, littered an airport runway with debris and hoisted a car onto a roof -- but widespread flooding may be the biggest and most prolonged threat. William Brangham talks to atmospheric scientist Victor Gensini about the brutal spring weather.
William Brangham (NewsHour): My understanding is, there's been some reporting that climate change perhaps might be shifting where certain tornadoes might be hitting, hitting places that are not used to them.
Is that right?
Victor Gensini, Northern Illinois University: That's exactly right.
We did a study last October that looked at, well, the number of tornadoes across the United States really hasn't changed very much over the last 40 years, but where they're happening has been changing.
So places like Tornado Alley, Texas, Oklahoma and Kansas, we have been seeing a downward trend in some of those locations, and an increasing trend further to east in places like Mississippi, Alabama, Tennessee, and portions of the Midwest, which is a big deal for population density and vulnerability, of course, the exposure, as we have many more people living east of the Mississippi River.
SUMMARY: The U.S. has experienced its wettest 12-month period on record. Scientists warn that climate change is causing more intense storms, resulting in increased flooding risk for millions of Americans living near rivers and along the coasts. How can vulnerable communities prepare? Special correspondent Cat Wise reports on a radical approach some are exploring: relocation of the towns themselves.
You know a UFO has earned its "unidentified" status when cockpit transcripts from elite Navy fighter jets include this frantic pilot exclamation: "Holy s___, what is that?"
When Luis Elizondo ran a small team at the U.S. Department of Defense investigating military-based reports of unidentified aerial phenomena (UAP), he heard numerous such accounts—by some of the most highly trained aeronautic experts in the military. They describe objects that appeared to be intelligently controlled, possessing aerodynamic capabilities that far surpass any currently known aircraft technology.
Now pursuing his investigations as part of To the Stars Academy of Arts & Sciences, Elizondo is an integral part of the investigative team featured on HISTORY's “Unidentified: Inside America’s UFO Investigation," where they have continued to gather eyewitness accounts:
"It's white. It has no wings. It has no rotors."
"It didn't fly like an aircraft. It was so unpredictable—high g, rapid velocity, rapid acceleration."
"I didn't see a trail."
"It was going 70-plus knots underwater."
Those reports—from Navy fighter pilots, radar operators and other witnesses from the USS Nimitz aircraft carrier strike group incident from November 2004—were among a handful of shocking encounters the Unidentified team explored. When Elizondo ran the Defense Department initiative, called the Advanced Aerospace Threat Identification Program, or AATIP, he compiled a list of extraordinary, logic-defying capabilities most commonly associated with unidentified aerial phenomena sightings. He calls those traits the “five observables”:
READ MORE: When Top Gun Pilots Tangled with a Tic-Tac-Shaped UFO
1) Anti-gravity lift. Unlike any known aircraft, these objects have been sighted overcoming the earth’s gravity with no visible means of propulsion. They also lack any flight surfaces, such as wings. In the Nimitz incident, witnesses describe the crafts as tubular, shaped like a Tic Tac candy.
2) Sudden and instantaneous acceleration. The objects may accelerate or change direction so quickly that no human pilot could survive the g-forces—they would be crushed. In the Nimitz incident, radar operators say they tracked one of the UFOs as it dropped from the sky at more than 30 times the speed of sound. Black Aces squadron commander David Fravor, the Nimitz-based fighter pilot who was sent to intercept one of the objects, likened its rapid side-to-side movements, later captured on infrared video, to that of a ping-pong ball. Radar operators on the USS Princeton, part of the Nimitz carrier group, tracked the object accelerating from a standing position to traveling 60 miles in a minute—an astounding 3,600 miles an hour. According to manufacturer Boeing, the F/A 18 Super Hornet fighter jet typically currently reaches a maximum speed of Mach 1.6, or about 1,200 miles an hour.
READ MORE: UFO Stories
3) Hypersonic velocities without signatures. If an aircraft travels faster than the speed of sound, it typically leaves "signatures," like vapor trails and sonic booms. Many UFO accounts note the lack of such evidence.
4) Low observability, or cloaking. Even when objects are observed, getting a clear and detailed view of them—either through pilot sightings, radar or other means—remains difficult. Witnesses generally only see the glow or haze around them.
5) Trans-medium travel. Some UAP have been seen moving easily in and between different environments, such as space, the earth’s atmosphere and even water. In the Nimitz incident, witnesses described a UFO hovering over a churning "disturbance" just under the ocean's otherwise calm surface, leading to speculation that another craft had entered the water. USS Princeton radar operator Gary Vorhees later confirmed from a Navy sonar operator in the area that day that a craft was moving faster than 70 knots, roughly two times the speed of nuclear subs.
No one has yet gotten close to crafts that display these traits, so their origins are still unknown. Are they a super-top-secret U.S. defense project? Do they hail from Russia? China? Or from even further afield? The only thing we do know is that their capabilities exceed any technologies currently in the U.S. arsenal.
READ MORE: Interactive Map: UFO Sightings Taken Seriously by the U.S. Government.
SUMMARY: Scandal has ensnared some of the nation’s top colleges, as prosecutors allege that wealthy parents conspired to help their kids cheat on college admissions tests and funnel bribes to college athletic coaches to secure admission into elite schools. William Brangham talks to Jeffrey Selingo, who covers higher education, about the stunning charges federal prosecutors brought on Tuesday.
SUMMARY: An explosive scandal around bribery and cheating in college admissions has prompted new questions about access, race and inequality in elite higher education. Judy Woodruff explores some of them with Daniel Golden, senior editor at ProPublica and author of a book on the unfairness of college admissions; and Rashad Robinson, president of Color of Change, an organization focused on racial justice.
SUMMARY: The economy, and the U.S. trade deficit specifically, is a major focus of President Trump’s agenda, driving his decision to impose tariffs on Chinese goods. But the latest data indicates the trade gap is actually growing, to its highest level in over a decade. Amna Nawaz talks to the Brookings Institution's David Wessel about rising American consumption and a healthy way to manage the deficit.
SUMMARY: Over 200 cases of measles have been confirmed in the U.S. in the past few months. About half of them occurred in the Pacific Northwest, leading Washington Gov. Jay Inslee to declare an emergency and the state legislature to propose further restricting, or even eliminating, inoculation exemptions. Nonetheless, opposition to mandatory vaccines remains fierce. Special correspondent Cat Wise reports.
SUMMARY: Officials have released the names of 23 people confirmed dead from a tornado that hit Lee County, Alabama, on Sunday. Rescue efforts are winding down, though many residents will face a long road to recovery after losing homes and livelihoods to the 170 mile-per-hour winds. John Yang reports and Judy Woodruff talks to Mayor F.L. “Bubba” Copeland of Smiths Station, one of the hardest hit areas.
SUMMARY: After a trial lasting nearly three months, the Mexican drug lord Joaquin Guzman, more widely known as “El Chapo,” was convicted Tuesday and now faces the possibility of life in prison. Prosecutors said that during Guzman's reign, the Sinaloa Cartel became the largest and most prolific drug-trafficking operation in the world. Nick Schifrin talks to Rolling Stone's Noah Hurowitz about the verdict.
SUMMARY: Layoffs at established newspaper chains and digital upstarts alike reflect the difficulty of the news business. The closing of local newsrooms can create "news deserts," areas with limited access to news outlets. Judy Woodruff talks to Steve Cavendish editor of the Nashville Banner, and Penny Abernathy chair of journalism and digital media economics at the University of North Carolina.
SUMMARY: An intense debate is underway over the benefits and drawbacks of using microchips, typically relied upon to identify ranch animals and pets, on humans. Advantages include fast communication of critical patient data to medical teams, seamless payment, and automatically opened doors. But skeptics warn of dire implications for privacy and ethics. Special correspondent Malcolm Brabant reports.
Operation illegally brought hundreds of women to U.S.
A group of travel agents has been charged with running illicit “birth tourism” schemes across Southern California that allegedly brought hundreds of pregnant Chinese clients to the U.S. illegally so they could deliver their children on American soil, according to court records made public Thursday.
The charges are the culmination of a long-running investigation by agents from the Department of Homeland Security and the IRS into three outfits operating for years in Los Angeles, the Inland Empire region and Orange County that charged as much as $100,000 for their clandestine services — a price tag authorities say Chinese parents-to-be readily paid to make sure their children would be citizens of what one company’s brochures called the “most attractive nationality.”
“These cases allege a wide array of criminal schemes that sought to defeat our immigration laws — laws that welcome foreign visitors so long as they are truthful about their intentions when entering the country,” U.S. Attorney Nick Hanna said in a statement. “Statements by the operators of these birthing houses show contempt for the United States, while they were luring clients with the power and prestige of U.S. citizenship for their children.”
Arrested Thursday morning were Dongyuan Li, 41, of Irvine, who was identified in court records as an executive at You Win USA Vacation Services in Irvine, as well as Michael Wei Yueh Liu, 53, of Rancho Cucamonga, and Jing Dong, 42, of Fontana [CA], who authorities said owned and operated a company called USA Happy Baby in San Bernardino.
The three face charges of conspiracy, immigration fraud, money laundering, identity theft and other crimes, according to indictments filed in U.S. District Court.
Li’s husband, along with her business partner, Chao Chen, and several others involved in the schemes also face charges, but are believed to be living in China, court records show. Chen, Homeland Security officials told the Los Angeles Times, pleaded guilty to some crimes and agreed to cooperate with investigators as part of a plea deal, but then fled the country as he awaited sentencing.
Also indicted Thursday was Wen Rui Deng, 65, an American citizen officials accuse of running a Los Angeles-based agency named Star Baby Care, which authorities believe to have been the largest birth tourism operation in the U.S. She, too, is in China, authorities said.
The indictments stem from a series of raids agents carried out in March 2015 on dozens of apartments used to house pregnant women and other locations linked to the birth tourism schemes.
Following the raids, several women and their husbands living in the apartments were ordered by a judge to remain in the country as material witnesses in the case. Many of them fled back to China, however, leading to charges being filed against them and an Irvine attorney who helped them escape.
The investigation into the operations named in Thursday’s indictments began in 2013, when birth tourism operations were booming in Southern California and coming under increasing scrutiny by local officials and disgruntled residents. Officials were tipped off by anonymous letters sent to a federal immigration office and the Irvine Police Department that described a man operating a birth tourism business out of a luxury apartment building in Irvine.
The Carlyle Apartments happened to be across the street from a Homeland Security Investigations field office. From their windows, agents could see pregnant Asian women coming and going, HSI officials told the Times.
An undercover agent was dispatched to make contact with Chen, who was suspected of operating the business. The agent told him a cousin in China wanted to come to the U.S. to have a baby, officials said. Chen asked the agent for approximately $15,000 and instructed him to have his cousin call a number in China, according to the HSI officials.
A female HSI agent fluent in Mandarin called the number from a concealed number and, over several conversations, was coached on how to deceive U.S. immigration officials. She was instructed to fabricate a job and the name of the place she went to school, information the agency employee later used to complete an application for a tourist visa to the United States on behalf of the woman.
“Everybody wants to come to the U.S.,” HSI agents recalled the employee saying on the phone. “It’s crazy how many people I have to train, I’m overwhelmed.”
It is not known how many women were brought to the U.S. by the three agencies implicated in Thursday’s indictments. On her website for Star Baby Care, Deng boasted of having orchestrated 8,000 U.S. births since opening her doors in 1999, according to court records. Li and Chen told prospective clients they had successfully sneaked more than 500 pregnant women into the country, records show.
The investigation would later widen to include Star Baby Care and Happy Baby USA. The three companies followed a similar strategy, instructing clients on how to lie on tourist visa applications and putting them up in one of the dozens of apartments each operation leased across the region.
Although childbirth can be a legitimate reason to travel to the U.S. if the traveler provides the correct paperwork and evidence they can pay for their medical care, lying about the purpose of a visit can lead to charges of visa fraud. Customs and border protection agents at major ports of entry such as Los Angeles International Airport in recent years have tightened security for pregnant Chinese women and sometimes block them from entering the country.
Taiwanese, Korean, Turkish, and Russian mothers are also known to engage in birth tourism, but the practice has become particularly popular with the newly wealthy Chinese middle class.
Investigators found women paying the birth tourism agencies were told to come to the U.S. before their third trimester and to wear loose-fitting clothes in order to better conceal their pregnancies from immigration officials. For example, in a voicemail message to a customer in 2014 intercepted by investigators, Li said: “The main thing is they look and see if you look obvious (pregnant); can they see it? First thing is not to let them see it. Second thing is don’t deny it if they can see it, and just say that you’re still here for vacation and just show them the return flight ticket,” according to Li’s indictment.
After giving birth, mothers typically stay in the U.S. at least long enough to observe the Chinese custom of “zuo yuezi,” a monthlong regimen that restricts a new mother’s diet and lifestyle in order to help her recover from pregnancy.
On a document titled “Strategies to Maximize the Chance of Entry” that investigators discovered while searching You Win USA’s offices, Li and Chen spelled out the particulars of their strategy. They told women, for example, they would improve their chances of slipping past immigration officials by putting on their tourist visa applications that they intended to stay at the Trump International Hotel in Honolulu.
Liu and Dong, who ran USA Happy Baby, catered to wealthier clients that included Chinese government officials and charged as much as $100,000 for their services, authorities said.
The indictments also drew attention to the drain on resources at the hospitals where the women gave birth. After paying tens of thousands of dollars to the agencies that brought them to the U.S., the mothers often claimed to be uninsured or poor to receive a reduced bill for childbirth services, the indictments said.
Despite the subterfuge the mothers employed to come to the country, their children nonetheless are citizens under U.S. law and officials said they do not plan to try to challenge their citizenship.
In recent years, the practice has prompted some lawmakers, who oppose children of unauthorized immigrants automatically becoming citizens, to propose repealing birthright citizenship, which is enshrined in the 14th Amendment of the Constitution.
President Donald Trump last year claimed erroneously that the United States is the “only country in the world” that automatically confers citizenship to anyone born in the country. In fact, it is one of at least 30 countries that do so.
Mejia and Rubin write for the Los Angeles Times. The New York Times contributed to this report.
SUMMARY: Jobs in the trucking industry are increasingly threatened by technology and the rise of driverless trucks. But what explains the contradictory dynamic between fears of job elimination and a current shortage of truck drivers in the U.S.? The NewsHour returns to the unusual story of driver Finn Murphy, who left college and a literary family for the open road. Paul Solman reports.
SUMMARY: For decades, coal miners have been inhaling silica dust on the job. The extremely fine particles, generated when the quartz-rich limestone surrounding coal seams is cut, lodge in the lungs, obstructing respiration. According to a Frontline/NPR report, both the industry and the government understood the hazard for decades but did little to contain it. Howard Berkes of NPR joins John Yang.
John Yang (NewsHour): Judy, this is all due to minors inhaling silica dust.
While regulations about monitoring mine dust have been on the books since the mid-1970s, this new investigation finds that federal regulators failed to pay close enough attention to their own data. Since 2010, the government has counted 115 cases of advanced black lung nationwide.
But the NPR/"Frontline" investigation identified more than 2,300 cases in just five Appalachian states.
SUMMARY: As more states legalize recreational use of marijuana, edible forms of the drug are also becoming increasingly popular. But little research has been done on potential complications of consuming the substance, and some scientists believe they can cause hallucinogenic reactions. Special correspondent Lori Jane Gliha of Rocky Mountain PBS reports on the controversial trend.
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| Participants in the 2018 San Diego Women’s March carried signs as they walked on Pacific Highway. (Hayne Palmour IV U-T file) |
Trademark dispute, anti-Semitic remarks cause rift in groups
The third annual Women’s March arrives in San Diego Saturday with local organizers distancing themselves from national leaders, who are embroiled in controversies over anti-Semitic remarks and other issues.
“Women’s March San Diego and Women’s March Inc. are separate organizations,” the local group’s executive board said in a home-page statement on its website. “We do not benefit financially from, and are not governed by Women’s March Inc.”
Similarly, the North County Women’s March, which is hosting an event in Oceanside Saturday, calls itself “a grassroots organization inspired by, but independent from” the national group.
The statements come after months of turmoil surrounding what started as a massive show of unity. On Jan. 21/2017, millions of women took to the streets in response to the previous day’s inauguration of President Donald Trump.
People carried signs, wore pink hats and chanted, and the energy at some 600 marches around the country helped fuel subsequent protests, the #MeToo movement, voter-registration drives and a record number of women elected to Congress.
But questions of inclusivity have dogged the Women’s March from its outset, and they’re getting louder after a year of controversy about the treatment of Jews, financial transparency and an effort by national leaders to trademark the event’s name.
In Washington, D.C., where the national group is again staging its main event Saturday, a competing march is planned by a splinter group. Multiple marches are taking place in New York and Philadelphia, too. In some places, the agitation over diversity has contributed to cancellations of marches.
High-profile supporters have backed away from the national event, including the Democratic National Committee and the Southern Poverty Law Center. According to The Daily Beast, less than half of the nearly 550 partners who supported the 2018 march signed up this year.
March backers attribute some of the trouble to inevitable growing pains. But much of it stems from ties between the national group’s leadership and Louis Farrakhan, leader of the Nation of Islam, whose criticism of Jews has included calling them “termites.”
Tamika Mallory, one of the group’s four co-chairs, posted a photo of herself with Farrakhan at a Nation of Islam event. She’s credited the group with helping her after a relative was killed. Under the photo, she called Farrakhan “the GOAT” (greatest of all time).
She has since denounced anti-Semitism in writing and apologized for any harm she caused: “Every member of our movement matters to us.” But she has declined to condemn Farrakhan, which in some places has only fanned the flames of controversy.
“Jewish supporters of the Women’s March who are willing to overlook these egregious issues need to grow a moral backbone and confront evil whenever they see it rising,” Rabbi Michael Leo Samuel of Temple Beth Shalom in Chula Vista wrote in a commentary published last week in San Diego Jewish World.
On its website, Women’s March San Diego’s five-member executive board said, “We condemn anti-Semitism and any form of race or religion-based hate and will continue to work toward a more positive and just future.”
They added, “Since our inception, Women’s March San Diego has oriented our mission of harnessing the political power of diverse women and their communities toward creating transformative social change. We believe our diversity makes us stronger, and that working together is the best way to effect change.”
There has been some criticism of the local board’s makeup — “We don’t need another event that centers (on) white people,” one women wrote on Facebook — and the directors note on their website that “While diverse, we acknowledge there are essential voices missing from our table.”
San Diego leaders also oppose the attempt by the national organization to trademark the name “Women’s March,” which would give it control over how the brand is used.
National directors said they want to ensure a unified message for the dozens of like-named offshoots around the country, but many of the branches fear having to adopt national rules, being barred from using the name, or having to pay a fee for it.
Saturday’s rally and march here are scheduled to start at 10 a.m. at Waterfront Park in San Diego. Speakers include elected officials of various races, Native American leaders, a transgender advocate and a rabbi. North County San Diego Women in Solidarity is hosting a rally at the Oceanside Civic Center starting at 9:30 a.m. Participants are scheduled to march to the North County Transit Center before departing on the Coaster or a chartered bus at 10:30 a.m. to join the march in San Diego at noon.
And considering the turmoil surrounding the national organization, this year’s theme may carry added meaning: “Truth to Power.”
The Washington Post contributed to this report.
Legalizing video poker and slots was supposed to generate billions of dollars for the state. A decade later, that hasn’t happened. Now, legislators want to double down on gambling.
This story is a collaboration between ProPublica Illinois and WBEZ Chicago, co-published with the Chicago Sun-Times.
WITH THE LAST STREAKS OF DAYLIGHT fading on a mild October evening, the cars pulled up in waves at Piero’s Italian Cuisine, an old-school Las Vegas hotspot known for its osso buco.
Cadillacs with tinted windows. Taxis and rideshares. A black Bentley limousine and a white minivan. Men and women emerged, most casually dressed, there for the first of a series of posh, private events hosted by the video gambling industry during the 2018 Global Gaming Expo, North America’s largest gambling trade show. They included gambling executives, lobbyists — and about a dozen Illinois lawmakers.
The politicians had flown to Las Vegas to learn about the latest developments in the gambling industry and to discuss its expansion in Illinois, including proposals that would, among other items, license six new casinos in the state, legalize sports betting and increase the wagering limit on video gambling machines. The plans, lawmakers have said, would brighten the state’s gloomy financial picture without having to raise taxes or cut spending.
It wouldn’t be the first time Illinois has placed a big bet on gambling. Nearly a decade ago, state lawmakers legalized video gambling. Today, more than 30,000 video slot and poker machines operate outside casinos here, more than any other state in the country.
The machines, which legislators said would generate billions of dollars in revenue for the cash-strapped state, are spread out over 6,800 establishments, dotting highways and towns from Winnebago County in the north to Alexander County in the south. Step outside the borders of Chicago, where video gambling remains illegal, and you will see feather flags, billboards and neon signs advertising video slots and poker in bars and restaurants, truck stops and storefront gambling parlors.
Illinois now has more locations to legally place a bet than Nevada.
But the meteoric rise of video gambling has proven to be little more than a botched money grab, according to a ProPublica Illinois investigation of a system that has gone virtually unchecked since its inception. Based on dozens of interviews, a review of thousands of pages of state financial records and an analysis of six years of gambling data, this unprecedented examination found that far from helping to pull the state out of its financial tailspin, the legalization of video gambling instead accelerated it and saddled Illinois with new, unfunded regulatory and social costs.
Meanwhile, video gambling companies have exploited the deeply flawed legislation to reap hundreds of millions of dollars in profits, while the cities and towns that bear the brunt of the social costs related to gambling receive a fraction of those proceeds.
At every key point, state officials made decisions that undercut taxpayers and helped the companies that market video gambling. Lawmakers accepted a far smaller share of the profits than what’s charged in other states, giving the companies a much larger piece. They went forward with the program assuming the machines could be installed in Chicago — they couldn’t. They ignored the inevitable regulatory and social costs. And they did not anticipate the extent to which video gaming would cut into casino profits, which are taxed at a higher rate. The net effect: People in Illinois gambled a lot more, but most of the additional money ended up in the coffers of the companies behind video gambling.
As states and cities across the country consider gambling expansions to stabilize wobbly finances, Illinois’ experience with video gambling stands as a cautionary tale, a lesson that has become even more urgent since the U.S. Supreme Court in May opened the door to the spread of legalized sports betting.
Illinois lawmakers from both parties passed the Video Gaming Act in 2009 with little debate and unrealistic revenue projections. They did so during the depths of the worst financial crisis since the Great Depression, promising video gambling would help fund a $31 billion building program to create jobs and upgrade the state’s infrastructure.
Within months of the law’s passage, the state began borrowing hundreds of millions of dollars against the anticipated revenue. Bond documents claimed video gambling machines would raise $300 million each year to help cover the debt payments.
It wasn’t until 2017, eight years after the legalization of video gambling, that the state came close to collecting that amount. By then, video gambling had brought in less than $1 billion to pay the bond debt, $1.3 billion short of what lawmakers anticipated.
But the costs of video gambling had already exacted a heavy toll on the state.
As gambling moved outside casinos, tax revenue earmarked for state education funding dropped, resulting in a $70 million decline in education funding between 2013 and 2017.
The regulatory expenses for video gambling proved far higher than anticipated, forcing the state to divert $83 million from casino taxes to support the work of the Illinois Gaming Board, run by five part-time members.
In recent years, the gaming board has been plagued by accusations of questionable conduct, including bid-rigging and violations of the Open Meetings Act. Current board officials said that their legal issues stem from conflicting and often vague statutes and that there was never an intent to violate the law.
Not surprisingly, problem gambling has become a major issue in the state, one that affects hundreds of thousands of people with little response from Springfield. Numerous studies from around the world have found that access and density of gambling options drive addiction. Yet Illinois is one of only two states with legalized video gambling — the other is West Virginia — that has never conducted research to measure the prevalence of gambling addiction.
Despite pledges to increase funding for addiction services to match the massive growth in gambling outlets, the state spends less today than it did before legalizing tens of thousands of algorithm-driven machines so adept at making people play faster and longer they have earned nicknames like “electronic morphine” and “the crack cocaine of gambling.”
More often than not, these machines are found in lower-income communities, according to a ProPublica Illinois analysis of demographic and gaming board data. Devices can be found in Berwyn but not Oak Park, Waukegan but not Lake Forest, Harvey but not Palos Park. In fact, as the average income level of a municipality decreases, the average number of machines increases.
The companies that own and operate the machines, called terminal operators, have reaped nearly $2 billion in revenue since video gambling went live in September 2012. Recently, that largess has become concentrated in a handful of companies, with the top five terminal operators controlling nearly 50 percent of the video gambling market, according to internal gaming board reports.
The companies have made those profits in no small part because their trade group, the Illinois Gaming Machine Operators Association — which picked up the tab for the Las Vegas dinner — wrote the Video Gaming Act. The group declined comment for this story.
The General Assembly passed the legislation without scrutinizing the details, including the low tax rate on the machines. At 30 percent, with 25 percent going to the state and 5 percent to local governments, it’s much lower than most other states with video gambling. In West Virginia and South Dakota, video gambling is taxed at 50 percent. In Oregon, where the state owns and operates video gambling machines through the state lottery, the tax rate is 73 percent. Pennsylvania, which recently legalized video gambling but hasn’t yet gone live, has set a tax rate of 52 percent.
Even casino gambling here is taxed at a higher rate, with a progressive formula that can reach as high as 50 percent.
State and local politicians have benefited from video gambling. In 2010, the year after the Video Gaming Act passed, the industry’s lobbying arm contributed $131,205 to political campaigns, five times that of the previous election cycle. The group’s donations now total more than $830,000 since 2009. One company, Effingham-based terminal operator J&J Ventures, has contributed an additional $600,000 to state and local races, the most of any terminal operator, according to an analysis of state campaign contribution records.
Video gambling has been a boon for bars, restaurants, truck stops and some fraternal organizations as well, providing additional revenue that has undoubtedly helped proprietors and created or maintained service industry jobs. But while some individual businesses have made money from video gambling, the municipalities that have welcomed it haven’t fared as well.
That’s because the Video Gaming Act allocates just 5 percent of the revenue from the machines to local governments, even though they shoulder the bulk of the social costs related to gambling. Since 2012, the roughly 1,000 towns, cities and counties with video gambling have received $283 million in tax revenue, according to an analysis of gaming board data.
A ProPublica Illinois review of local financial records shows that even in towns saturated with video slot and poker machines, the devices in most cases accounted for roughly 1 percent to 3 percent of local revenue in 2017.
Rockford, for example, brought in nearly $1.6 million in tax revenue from the machines that year, more than any other local government. That amounted to about 1.3 percent of the city’s $129 million in general revenue, according to financial data submitted to the comptroller’s office.
In 2013, 63 percent of the state’s population lived in communities that banned the industry, mirroring statewide polls that repeatedly showed a solid majority of residents were opposed to it. By 2017, industry lobbying efforts and tight local finances had flipped the percentages so that 63 percent of the state’s population lived in communities with video gambling.
Despite all the broken promises of video gambling, some lawmakers are now pushing for another big bet on the industry, with some members of the General Assembly eyeing an expansion vote in the early days of Gov. J.B. Pritzker’s administration. Many Chicago politicians also want to open the city to gambling; all the front-runners in the city’s Feb. 26 mayoral primary support some version of a casino, and some want to bring in video gambling as well.
That’s why the crowd gathered at Piero’s in October, enjoying dinner at the iconic, white tablecloth restaurant featured in the Martin Scorsese mobster film “Casino.” Among them was the co-owner of the industry’s primary lobbying firm, which shepherded the Video Gaming Act through the legislature in 2009: Joseph Berrios, former chairman of the Cook County Democratic Party and the longtime county assessor until being voted out of office last year.
Berrios is an ally of House Speaker Michael Madigan, the lead sponsor of the Video Gaming Act in the House before ceding that role to Democratic Skokie Rep. Lou Lang. Lang was a staunch gambling proponent before he resigned from the General Assembly this month.
As he stepped from the cab that October night, wearing a white guayabera, Berrios paused for a moment before entering the restaurant.
“We’re an industry running strong,” he said. “After January, we’re going to be looking at a bunch of things to make us a lot stronger and a lot better.”
A Rushed New Law
On the afternoon of May 21, 2009, the crowd packing the gallery overlooking the ornate Illinois House chambers, with its gilded ceiling and crystal chandeliers, became so raucous that Rep. Art Turner, the Chicago Democrat presiding over the session, had to issue an admonishment.
“I’d like to ask if we could tone down the noise and also remind the guests in the gallery that we do not allow clapping and shouting,” he reprimanded the gambling supporters and labor leaders who had gathered to watch the final vote on a bill to generate revenue for a $31 billion spending plan, dubbed Illinois Jobs Now!
Less than 48 hours earlier, a five-page proposal tinkering with an obscure provision of estate tax law had morphed into the 280-page bill now before the House. Included in the revenue-generating legislation was the Video Gaming Act, the largest gambling expansion in Illinois since the creation of the state lottery in 1974. Lawmakers were counting on video gambling to generate nearly a third of the revenue for Illinois Jobs Now!
It was a critical period for the state and its politicians.
For more than a decade, Illinois’ fiscal issues had prevented the General Assembly from funding infrastructure projects.
The 2010 election loomed, and the state was reeling amid the worst economic downturn since the Great Depression. Unemployment had reached double digits. Homes were being foreclosed. Public sentiment across the country had soured on incumbents, giving rise to the Tea Party movement and making politicians from both parties skittish.
Months earlier, Gov. Rod Blagojevich had been arrested on corruption charges and impeached, becoming the fourth governor since the 1970s — both Democrat and Republican — to be indicted.
Supporters of the gambling law told their colleagues it would help fund the $31 billion building program to create jobs while repairing roads, constructing schools and completing other infrastructure projects across the state.
Illinois Jobs Now! gave incumbents positive news to run on.
Introduced by Senate President John Cullerton, a Chicago Democrat, the bill represented a rare display of bipartisanship in Springfield, with Republican leaders signing onto the proposal as lawmakers heaped praise upon one another for working across party lines.
The bill passed both chambers by large margins.
Along with legalizing video gambling, the bill increased sales taxes on a host of products, including candy and liquor, while boosting fees for vehicle licenses and registrations. Bond documents show that legislators projected $1 billion overall in annual revenue, with $300 million coming from video gambling.
The gambling industry had spent years lobbying to legalize video gaming, but opponents — a coalition made up largely of church leaders — had managed to block previous efforts. This time, the lobbyist for anti-gambling forces only learned of the bill that day, leaving opponents just an hour before the measure was introduced.
The Illinois Gaming Board, the state agency tasked with regulating the new industry, didn’t receive much more notice. It had learned about the legislation the week before — even though the law would increase the complexity of its work and exponentially expand the number of entities it oversees without providing any additional funding or staff to do it.
“We were not consulted prior to its passage, so we had no knowledge of what was in the bill,” said Aaron Jaffe, a former state legislator and Cook County Circuit Court judge who was then the board’s chairman.
Madigan declined a request for an interview for this article. Cullerton could not be reached. Tom Cross, the House minority leader when the Video Gaming Act passed, said he voted for it but is not a staunch supporter of video gambling.
“It’s not something that I think is good for the state,” he said.
Former Senate Minority Leader Christine Radogno, who was part of the leadership team that negotiated the Illinois Jobs Now! legislation, said lawmakers should have spent more time examining the video gambling industry.
“Certainly, in hindsight, it should have been studied more,” she said in an interview. “My personal assessment is that it seems like a very lonely and unhealthy thing to be doing. I have no doubt that it preys on problem gamblers and vulnerable people.”
Pat Quinn, who had become governor less than six months earlier, after Blagojevich’s impeachment, had previously denounced video gambling as “a bad bet.”
Running for re-election, Quinn reversed course and signed the bill into law on July 13, 2009.
In a recent interview, Quinn said the need to stimulate Illinois’ economy during a historic economic downturn trumped his reservations about video gambling. He added that he insisted on an “opt-out” clause that would allow municipalities to block video gambling in their towns.
“I wasn’t particularly excited about video gambling,” he said. “It’s very hard to get legislators to vote for funding. I had to make a decision, and it was imperative to get people back to work.”
Unintended Consequences, Immediate Shortfalls
The speed and lack of planning that marked the legalization of video gambling created a cascading series of unintended consequences that continue to plague the state today.
The legislature assumed video gambling would be up and running within a year of the bill’s passage, to quickly begin generating revenue. Instead, it took three years.
The liquor industry, which bristled at the tax increase for alcohol also contained in the bill, tied up the legislation in court, claiming the General Assembly had violated the state constitution by passing multiple substantive measures in a single bill. Regulatory hurdles also contributed to delays.
And lawmakers had counted on tens of thousands of machines being installed in Chicago to meet their revenue projections. But they somehow failed to take into account a century-old ordinance that banned gambling in the city without a referendum, which then-Mayor Richard M. Daley never embraced.
The General Assembly borrowed against the projected revenues anyway. Within a year, Illinois had issued nearly $2.5 billion in general obligation bonds — loans backed by state revenues — before it had received a single penny from video gambling.
By the time video gambling machines were turned on and players could start betting, in September 2012, the state had borrowed more than $5 billion. Debt payments reached about $340 million that year. Yet video gambling brought in just $30 million to cover them. The shortfalls meant the state had to draw from other sources.
With the budget already running massive operating deficits, the failure of video gambling to generate projected revenues exacerbated the state’s fiscal woes. Credit rating agencies began downgrading Illinois’ debt. That increased borrowing costs as pension payments and unpaid bills butchered the state’s balance sheet.
The state’s financial picture became so bleak it borrowed more than $1 billion between 2010 and 2013 to cover debt payments for capital projects that had been completed years earlier, spending future tax dollars to pay old bills — plus interest.
“The way the General Assembly constructed the capital program, by relying on video gambling revenue that failed to materialize, accelerated the state’s financial crisis,” said Laurence Msall, president of the nonpartisan Civic Federation, a government research organization.
Though lawmakers said money from video gambling and other new taxes and fees for Illinois Jobs Now! would fund $31 billion in building projects, those revenue streams have accounted for $10.5 billion in spending.
Video gambling revenue, plus other taxes and fees included in the law, was supposed to go into a special fund to pay down debt from Illinois Jobs Now! Legislators even passed a separate measure that required it. But records from the state comptroller’s office show that through 2017, just over half of the $4.8 billion collected in the capital projects fund actually went to cover the debt for Illinois Jobs Now!
Legislators wrote other laws to divert more than $600 million to pay down debt for an earlier building program, Build Illinois, which itself was supposed to be covered by sales tax revenue. An additional $1.5 billion went directly to the general fund, which is used to pay for the state’s day-to-day operations.
The legalization of video gambling also triggered another shift in the state’s revenues, one that led to a drop in education funding. While the bulk of video gambling revenue goes to fund Illinois Jobs Now!, most of the state’s casino revenue flows into the Education Assistance Fund, which provides grants to public elementary and secondary schools, colleges and universities for building projects and other expenses.
But when video gambling became legal, gamblers no longer had to travel to the state’s 10 casinos to place a bet. Between 2013 and 2017, state revenue from casinos in Illinois declined 15 percent, from $462 million to $393 million, as income from video gambling machines grew nearly 900 percent, from $30 million to $300 million, state records show.
The cannibalization of casino revenue contributed to a 22 percent decline in the amount of money going to the Education Assistance Fund between 2013 and 2017, leaving fewer dollars for the state’s struggling schools.
In fact, video gambling has caused the overall percentage of gambling industry profits going to the state to fall. That’s because the state levies a progressive tax on casinos that can reach as high as 50 percent. The more casinos make, the higher their tax rate.
Video gambling is taxed at a flat rate of 30 percent regardless of how much the industry makes. As more gamblers turned to video slots and poker, the state’s cut of gambling profits dropped.
In 2007, when casino revenue peaked at $1.9 billion, the industry paid about $819 million in taxes, a rate of 42 percent. By 2018, revenue from casinos and video gambling brought in $2.8 billion, up 42 percent, but the state’s share of the money was $891 million, up just 9 percent.
Much of the growth in gambling revenue came as the country began one of the longest economic expansions in U.S. history and as video slot and poker machines saturated the state, more than tripling between 2013 and 2018.
Researchers say it is unwise to count on gambling revenue to remain steady over time because it is a form of discretionary spending. That’s especially true if the economy slows.
“You cannot count on revenues from gambling; they are highly volatile and often deteriorate quickly,” said Lucy Dadayan, a senior research associate with the Urban-Brookings Tax Policy Center at the Urban Institute, who has spent years examining state and local gambling revenue around the country. “If we hit another recession, then definitely gambling revenue is going to be one of the first to be hit hard.”
Underfunded, Overwhelmed Regulators
Before the introduction of video gambling, the Illinois Gaming Board’s duties were limited to licensing and regulating the state’s 10 casinos. Each casino has a cap of 1,200 “positions,” the number of places to make a bet inside, including slot and poker machines.
Six years later, the board oversees more than 30,000 additional positions, the equivalent of 25 more casinos. And those positions are scattered across more than 6,800 locations in nearly every corner of the state.
Yet when the General Assembly passed the Video Gaming Act, it set aside no money for additional staff or resources to implement the law and oversee the industry.
Jaffe, then the chairman of the gaming board, opposed video gambling, in no small part because he felt there was no way to regulate the industry, he said.
“It’s just too big of a job,” Jaffe said. “In order to regulate it, you need a bigger board and more people. It’s absolutely ridiculous to think you can do a proper job with the resources available.”
Long before a handful of legislators and lobbyists decided it was time to legalize — and tax — video gambling, the industry had been thriving illegally.
For decades, bars, restaurants, bowling alleys and fraternal organizations housed video slot and poker machines billed as “simulated gambling devices.” Most had amusement tax stamps from the state revenue department and didn’t pay out. Instead, the machines produced printed slips showing how much was “won” or “lost.”
But the machines were widely known to be used for illegal gambling, with payouts coming from envelopes of cash stashed under the table or behind the bar. In most cases, operators split profits 50-50 with establishment owners, just as they do under the Video Gaming Act.
Known as “gray” machines, for their nebulous legal status, video gambling had long been associated with Chicago-area organized crime. Less known were the tight-knit groups of amusement companies from other parts of the state that ran “gray” machines while providing establishments with jukeboxes, pool tables and other coin-operated devices.
Lobbyists for these amusement operators drafted the Video Gaming Act, according to industry insiders and lawmakers, creating licensing guidelines and determining how profits would be divided among operators, establishments, local governments and the state.
Those operators also began entering into video gambling contracts with their existing clients well before the board could set up a regulatory structure or conduct the thousands of investigations needed to make licensing decisions.
Once the law passed, the gaming board was tasked with sorting out these relationships while attempting to keep unsavory operators — including those with ties to organized crime — out of the industry.
The board estimated it would need a staff of 350 to do the job, according to internal agency reports. Yet the number of workers has never topped 286 and dipped as low as 233 in the past three years, even as the industry has grown. At one point, the board had a single lawyer to help regulate what has become a highly litigious industry.
Often, the board must face off against companies that have more resources, time and expertise than the state. One reason for the lack of resources: The Video Gaming Act fails to provide enough money to cover the regulatory costs.
The law designates 75 percent of licensing and administrative fees to pay for investigators and attorneys to vet licensing applications as well as write and enforce rules. But those fees are much lower than other jurisdictions. Pennsylvania, for example, charges $25,000 to apply for a terminal operator’s license. The price in Illinois: $5,000.
The owners of licensed establishments, such as bars and restaurants, pay just $100 annually to maintain a license and, until December, paid nothing at all to apply for it, even though the board expends extensive resources on licensing decisions. Last month, legislators passed a law instituting a $100 application fee.
“We clearly have some fees that are shockingly low,” said Illinois Gaming Board Chairman Donald Tracy, a Springfield attorney, appointed by former Gov. Bruce Rauner in 2015. “Why would you do that if you’re trying to get revenue for the state? I guess you have go back and ask who drafted this legislation. If it’s gaming lobbyists, maybe that explains why the fees are so low.”
Lang, the Skokie Democrat who sponsored the bill, overestimated how much fees would bring in, telling fellow lawmakers they would provide $4.5 million a year for regulatory expenses. Instead, fees have never generated more than $3.4 million. Lang did not respond to a request for comment.
Even if the administrative fees had met projections, regulating video gambling has turned out to cost far more. Legislators never studied how much it would cost to regulate video gambling, even though board members say the industry now makes up the vast majority of the agency’s work.
In 2013, the first full year of legalized video gambling, state financial reports show the board spent $15 million regulating the industry. Those costs reached $17 million by 2017. Yet fees set aside for regulatory expenses averaged just $2.9 million during that time, leaving a total shortfall of more than $83 million over five years.
Filling in the funding gap: casino revenue. Yet casino revenue has been in decline. That decline, coupled with the state’s budget woes, caused the gaming board’s budget to fall more than 6 percent between 2013 and 2017, despite rapid growth in the number of video gambling machines and locations around the state.
“My view is that there should be some kind of professional study to review the licensing fees and the taxes, and I have suggested that,” Tracy said.
What’s more, a month before the Video Gaming Act passed, Quinn signed an executive order removing the board from under the Illinois Department of Revenue and making it a stand-alone agency.
Jaffe, then the board chairman, had requested the move, arguing the Revenue Department’s control of the gaming board slowed hiring and other moves the board wanted to make. But when he made the request, Jaffe was unaware the board’s responsibilities would soon greatly expand.
One of state government’s largest agencies, the Revenue Department provided oversight and supplemented policy decisions with an army of analysts, lawyers and technical experts.
Without that support, an underfunded agency overseen by five part-time board members — who receive $300 a meeting — found itself regulating a sprawling industry with little supervision. The vague law and its weak administrative rules made licensing and contract decisions seem arbitrary, leading to a series of missteps.
In at least two cases, the board reversed decisions to permanently bar people from the industry whom it deemed unfit, after court challenges claimed the moves exceeded the board’s legal authority.
A ProPublica Illinois review of meeting minutes and interviews with two board members, including Tracy, found the board’s former administrator entered into a legal agreement with a video gambling operator from Louisiana without board knowledge or approval. The former administrator, who left his position in March after 16 years, declined to comment.
And in May, a Cook County Circuit Court judge ruled in a lawsuit that the board had violated the Open Meetings Act by improperly going into a closed session, then misrepresented what happened in meeting minutes.
ProPublica Illinois has filed a Freedom of Information Act lawsuit seeking a recording of the closed session at the center of that case.
In a statement, Tracy disputed the judge’s ruling but said the board has changed its procedures for going into closed session. He also said that conflicts between the Video Gaming Act and the Open Meetings Act have made the board vulnerable to lawsuits from the well-funded industry.
“We have a statute that is somewhat sparse, to be kind.” Tracy said in an interview. “And we’re talking about high-stakes licenses that have tremendous potential value. As a result, when we say no, we get sued.”
In another lawsuit, a Cook County judge froze an exclusive state contract to test video gambling machines and ordered the board to reconsider the contract after evidence suggested gaming board staff gave preferential treatment to a New Jersey-based company. The contract was rebid, though Tracy denied the board had shown preferential treatment.
The board’s government attorneys often have little expertise in gambling litigation compared to the industry’s more experienced, high-priced lawyers, Tracy said.
“There’s just so much money in this industry,” he said. “We are litigating against people with the very best lawyers, companies that can put unlimited amounts of time into these cases and spend hundreds of thousands of dollars litigating against us.”
Another Push to Expand
The rush to legalize video gambling in hopes of generating quick, painless revenue battered the state’s finances, left unfunded social and regulatory costs and exposed the gaming board to a barrage of legal challenges.
None of that has stopped some members of the General Assembly from pushing yet another massive gambling expansion bill as they continue to forage for ways to bring in revenue without raising taxes or cutting spending.
In the more than nine years since the Video Gaming Act passed, the influence of the industry has only increased. And lawmakers seem ready to make many of the same mistakes. At hearings last fall on a new gambling expansion bill, there was no discussion about whether the gaming board can handle a larger workload and little acknowledgment of the social costs of gambling.
Now, as newly sworn-in legislators open the 101st General Assembly, with a rookie, billionaire governor who was a longtime investor in Elgin’s Grand Victoria Casino, here’s what lies on the table: sports gambling; six new casinos; and, for the video gambling industry, higher wagering, bigger payouts and even more machines.
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