Former Spectacle VP Faces More Federal Charges in Indiana Campaign Case

Posted on: October 2, 2021, 01:12h. 

Last updated on: October 2, 2021, 04:17h.

Steve Bittenbender Read More
Expertise: Legislation, Sports Betting, Horse Racing.

John Keeler, the former Indiana gaming executive who was charged last year for his role in a federal election campaign contribution scheme, now faces additional charges in the case.

Keeler indictment
John Keeler, then a vice president with Spectacle Entertainment, presents plans for a new Gary casino at a 2019 Indiana Gaming Commission meeting in Indianapolis. This past week, Keeler was indicted on additional charges in connection to an illegal campaign contribution scheme federal authorities say included Keeler’s old company. (Image: Whitney Downard/CNHI News Indiana)

On Tuesday, a federal grand jury added two counts of causing false tax returns to be filed against the former state lawmaker and executive for Spectacle Entertainment and Centaur Gaming.

The new indictment states that Keeler aided in the preparation of Centaur’s tax filings for 2015 and 2016, and knew that more than $120,000 in business deductions taken in those years were fraudulent.

(A)s the defendant then and there knew, those payments were nondeductible expenses related to supporting a candidate for public office,” the indictment stated.

Authorities claim Keeler and campaign consultants for Brent Waltz’s 2016 run for an Indiana congressional seat were involved in a plan to take money from Centaur and funnel it directly into the Waltz campaign. The consultants and Waltz recruited individuals to donate to his run for office, while a consultant and an unnamed Centaur executive devised a plan to provide money through bogus business schemes.

Keeler received invoices for those schemes and despite knowing they weren’t legitimate expenses, approved the payments. The consultants took that money and gave it back to the recruited donors. But their names stayed on federal election contribution reports. That, authorities said, concealed to the public who actually funded the Waltz campaign.

Tax Charges May Add to Potential Keeler Sentence

The tax charges come with sentences of up to three years in federal prison and a fine of $100,000 if Keeler is found guilty. He already faces up to 20 years on charges he falsified corporate records and five years on three charges related to the corporate campaign contributions.

Federal law allows candidates running for US House and Senate races to receive funds from a company’s political action committee (PAC). In addition, the US Supreme Court ruled more than a decade ago that companies and other organizations could contribute to independent committees that promote or oppose candidates. That’s provided the organizations and the candidate campaigns they’re intended to aid do not work hand-in-hand with each other.

However, the Federal Election Campaign Act still prohibits companies and labor unions from contributing their own funds directly to candidates.

Waltz and Keeler have been indicted together, and federal prosecutors plan to try them together. However, Keeler’s attorneys have asked to separate the cases. In a filing last week, they said that while the charges are related to the same activities, neither Keeler nor Waltz acted together.

About the Spectacle Investigation

Centaur Gaming, which was founded by Rod Ratcliff, owned and operated Indiana’s two racetracks – the Indiana Grand in Shelbyville and Hoosier Park in Anderson – until Ratcliff sold them to Caesars Entertainment in 2018.

Later that same year, Ratcliff formed Spectacle Entertainment. Keeler served as the vice president and general counsel to both entities. Spectacle purchased the Majestic Star Casino in Gary with the intention of moving the casino off Lake Michigan to a land-based development in the northwest Indiana community.

The Majestic Star had two licenses, one for each boat it operated. The 2019 expanded gaming law that authorized the in-land Gary casino also required Spectacle to surrender the second license. The law awarded that license to Vigo County, and voters in the west central Indiana community overwhelmingly approved a referendum in November 2019 to accept the license.

Spectacle Entertainment was the only company to bid on the Vigo County license a month later. It proposed building a Hard Rock casino in Terre Haute. Hard Rock International was also Spectacle’s partner for the new Gary casino, Hard Rock Northern Indiana.

In January 2020, just two weeks after breaking ground in Gary and a month before the Indiana Gaming Commission was set to award the Vigo County license, the commission learned that Centaur Gaming was connected to a federal investigation into illegal campaign contributions.

The IGC started its own investigation. In May 2020, the commission awarded the casino license a venture run by Terre Haute businessman Greg Gibson, Ratcliff’s partner in Spectacle. But it did so only after Keeler and Ratcliff stepped away from the project.

Keeler then lost his gaming license after being indicted initially a year ago. Ratcliff has never been charged in the federal case, though IGC officials have said that he’s connected. The commission’s own investigation then found additional violations by Ratcliff and the company. That led to the state agency suspending Ratcliff’s license in December 2020.

After seeking to revoke his license, the commission and Ratcliff reached an agreement in March that ended his tenure in the state’s gaming industry.

The IGC investigation caused a delay for Hard Rock Northern Indiana’s opening. The $300 million venue eventually opened in May. Hard Rock became the majority stakeholder in the venture in August after the commission weighed not renewing Spectacle’s license.

The Vigo County license became available in June after the IGC voted not to renew the license for Gibson’s company. Four companies submitted bids for it last week, including Hard Rock, with Gibson a partner on its bid.