SEN. LINDSEY GRAHAM, R-S.C., talked to U.S. Deputy Attorney General Rod Rosenstein “several times” about changing the Justice Department’s interpretation of a law that banned interstate betting, he told The Intercept. A 2011 Justice Department analysis of that law effectively legalized online gambling; last month, the department reversed that opinion.

“I’ve been pushing this from the day it came out under the Obama administration,” Graham said. “Sen. [Dianne] Feinstein and myself have been asking for them to change this absurd interpretation because it leads to the Wild Wild West.” Asked whether he’d spoken to then-Acting U.S. Attorney General Matthew Whitaker, who had recused himself from the issue, about it, Graham, in a brief interview in the Capitol, said, “I don’t know.” (On Thursday, the Senate confirmed William Barr as attorney general, replacing Whitaker.)

In 2011, the Department of Justice issued a legal opinion clarifying that the Wire Act, a federal law passed in 1961 to stop interstate betting, applied only to sports betting and not other forms of gambling. This announcement opened the doors for states to begin legalizing online gambling — now an industry worth hundreds of millions of dollars. Last week, The Intercept reported on the Justice Department’s recent reversal of its 2011 stance, a long-sought cause of Sheldon Adelson, the Republican billionaire casino mogul. The new Justice Department interpretation was released in the middle of the government shutdown, on January 14, the night before U.S. Attorney General nominee William Barr’s confirmation hearing.

Graham himself has been the Senate sponsor for the Restoration of America’s Wire Act, or RAWA, legislation that would effectively ban all forms of online gambling, since 2014. His advocacy on the issue coincided with an increase in political contributions from Adelson. In 2015, when Graham announced that he would run for president, it was widely understood that Adelson’s largess would be key to his campaign strategy.

In 2017, Graham and Feinstein, a California Democrat who had previously co-sponsored Graham’s RAWA legislation, wrote to Rosenstein urging him to overturn the Justice Department’s 2011 opinion.

As The Intercept previously reported, the deputy attorney general had wanted little to do with the gambling brouhaha, according to people close to him. “We’ve checked in over the last two years with Rod Rosenstein, and he’s consistently said he has no interest in this issue, that there’s more important issues going on,” said one gaming industry executive who opposes the ban. The Justice Department did not return a request for comment on Rosenstein’s involvement.

Several hours after The Intercept’s story was published last Friday, Whitaker appeared before the full House Judiciary Committee to testify on Justice Department matters. At the hearing, Whitaker, who had been acting attorney general since November, hotly denied having any influence over his agency’s new Wire Act opinion. Rep. Jamie Raskin, D-Md., specifically grilled Whitaker about whether Adelson had influenced the reversal.

“Your inferences on how that process was corrupted or corrupt is absolutely wrong,” Whitaker said. “And the premise of your question, I reject.” He also said that he has never met with Adelson or spoken to any of his lobbyists about online gambling.

Raskin’s line of questioning stood out in a hearing that focused primarily on the Trump-Russia probe. Raskin himself has received more than $38,000 since 2016 from individuals associated with law firms that represent national and international online gambling companies.

Before Whitaker came to the Department of Justice, he directed the Foundation for Accountability and Civic Trust, an organization that formed in 2014 to purportedly hold Democrats accountable for ethics violations. Whitaker was its sole employee, and he earned more than $1.2 million over three years. In November, the Center for Responsive Politics reported that a single six-figure donor “accounted for 100 percent of funding” raised by Whitaker’s old organization.

At Friday’s congressional hearing, Raskin asked Whitaker if he knew the identity of that sole donor and suggested that the money had come from Adelson. Whitaker said it was from Donors Trust, a conservative donor-advised fund, but that he has “no idea” who specifically donated the money.

WHILE RASKIN EMPHATICALLY defended the 2011 Justice Department interpretation of the Wire Act, saying that the statute’s language “plainly prohibits only sports betting,” the 2011 opinion actually has its own set of critics who say that it was issued on corrupted grounds. Eric Holder was the U.S. attorney general at the time, and despite having previously represented companies with ties to the gambling industry, according to a former U.S. attorney who dealt with him on those issues, he did not recuse himself from gambling matters.  

Michael Fagan, who served as an assistant U.S. attorney for the Eastern District of Missouri for 25 years, told The Intercept that he personally worked with Holder and his Covington & Burling colleague Lanny Breuer in the early 2000s while prosecuting forfeiture cases related to illegal offshore gambling.

“I can’t remember who they represented, some big multinational company, but I would say on at least two different occasions, they came to St. Louis to meet me and work out an agreement, and I had phone calls with both of them about this too,” said Fagan. “In the end, they agreed their client would forfeit a substantial amount of money in the hundreds of thousands or millions, I believe.” 

As U.S. attorney general, Holder brought on his old partner Breuer to lead the Justice Department’s Criminal Division. It was Breuer who then asked the Office of Legal Counsel to revisit the agency’s position on the Wire Act, citing inquiries from New York and Illinois about selling online lottery tickets. Like Holder, Breuer did not recuse himself, despite his past involvement with companies tied to the gambling industry. Eventually U.S. Assistant Attorney General Virginia Seitz quietly issued an opinion changing the Justice Department’s long-held stance. Holder, Breuer, and Seitz did not return requests for comment. 

Seitz’s Wire Act interpretation hinged on a close reading of the punctuation of the law, as well as the fact that on the same day the Wire Act was originally enacted, Congress passed a separate statute regulating other forms of gambling. She said this suggested that the Wire Act was exclusively targeting sports betting.

Though the Office of Legal Counsel opinion is dated September 20, 2011, it was released on December 23, 2011 — the Friday before Christmas as lawmakers were leaving D.C. and one day after Nevada approved the first-ever state regulations for online poker. (Harry Reid, D-Nev., who was then Senate majority leader, would say later that legalizing online poker on the federal level “may be the most important issue facing Nevada since Yucca Mountain.” Reid’s 2010 re-election campaign was strongly backed by Caesars Entertainment Corp. and MGM, both of which wanted to establish national online poker sites.)

Seitz was an Obama appointee who had previously worked in the president’s old Chicago law firm, Sidley Austin. She returned there after leaving the Justice Department in 2013 and still works there. Newsweek reported in 2014 that Sidley Austin expanded its business operations in the gambling space after the 2011 Justice Department decision came down. Other Obama alumni got involved with the gambling industry too, with 2012 campaign manager Jim Messina joining the American Gambling Association in 2014 to work on “grassroots initiatives” that included online gambling. “Jim is as politically astute as they come and he will be a great resource for us,” AGA President Geoff Freeman told The Hill at the time. Today, Holder works as a partner at a law firm that represents MGM casinos.

THE CRITICISMS OF online gambling extend beyond Adelson’s vested interest in shutting it down. Les Bernal, the national director of the Washington-based Stop Predatory Gambling, a group that advocates against commercialized gambling, told The Intercept that there is “no grassroots movement” for online gambling. In March 2017, he sent a letter on behalf of his group’s members to then-Attorney General Jeff Sessions urging him to reverse the 2011 Wire Act opinion. “The error of the OLC opinion is conclusively established by the carefully-researched, well-reasoned law review article ‘Understanding the Wire Act: Why the Department of Justice Missed the Mark When It Overturned Fifty Years of Interpretation of the Act,’” Bernal wrote in his letter, referencing an article co-authored by Darryl Nirenberg, an attorney and longtime registered lobbyist for Adelson. In April 2017, Nirenberg delivered a legal memo to a top-ranking official at the Justice Department, outlining reasons to reverse the 2011 Wire Act opinion.

Bernal told The Intercept that his organization takes no money “directly or indirectly” from the gambling industry, does not work with Adelson, and opposes all forms of commercialized gambling. “I know Nirenberg is a lobbyist for Adelson, but on that specific law review article, his opinion was correct,” Bernal said.

Fagan, the retired assistant U.S. attorney who now teaches a course on international money laundering and corruption at Washington University School of Law, said he also was quite impressed by the Nirenberg article, despite the author’s ties to Adelson. “It’s quite good and shows very convincingly why the 2011 opinion is wrong,” Fagan said.

In 2015, Fagan spoke before Congress at a hearing for the Restoration of America’s Wire Act and submitted testimony criticizing the 2011 Justice Department opinion in detail. He called it “rushed, biased, and flawed by reliance on intuition rather than careful analysis.” Fagan also argued that Seitz’s opinion was worded to “favo[r] moneyed corporate interests” and that she had taken up this action less than 90 days after having been confirmed for her Justice Department job. He pointed out that Seitz, Breuer, and Holder all had “represented — and, presumably earned substantial fees from — huge clients, either to advocate for increased Internet gambling or to avoid liability for the client’s role in facilitating and promoting Internet gambling” and that none had disclosed those histories beforehand.

Bernal of Stop Predatory Gambling said many people were advocating for the Justice Department to reject its 2011 interpretation, though “certainly” Adelson’s voice helped boost the effort. He noted Americans lost $118 billion in personal wealth to government-sanctioned gambling schemes in 2018, with another trillion dollars projected to be lost over the next eight years. “A lot of people were outraged at how Holder’s Department of Justice acted in 2011,” Bernal said. “I think Adelson’s voice was influential but that he was the lynchpin is a phony narrative that the gambling industries in this country are pushing to try and get the new opinion flipped.”

This article is a reprint from TheIntercept.com.   To view the original story and comment, click here.