VEGAS BETS ON BOTH PARTIES : GAMBLING INDUSTRY DONATES MILLIONS FOR POLITICAL CLOUT.

Byline: Sally Denton and Roger Morris

The city is as up front as it ever was, for it can deny neither its purpose nor its psychology. - Michael Ventura 

UNLIKE millions of Americans who come here each year seeking a windfall, Bill Clinton and Bob Dole have found a way to beat the proverbial Vegas odds. In the 1996 election, both candidates and parties are raking in Las Vegas money as never before, taking record contributions from gambling interests in this desert boom town.

As always in the casinos, however, the real game is largely hidden, and it's the house that wins in the end. Pursuing national influence that the gamblers of the Old Strip never presumed, the new Vegas connections have become an unprecedented force in American politics, with the public's losses yet to be tallied.

In June 1995, Dole went to Shadow Creek, gambling mogul Steve Wynn's 320-acre, $48 million private golf course near Las Vegas, a guarded preserve where the staff is sworn to secrecy and the few guest players, who are required to have a minimum $100,000 credit line at one of the Wynn casinos, are served caviar on the fairway. But Dole had no trouble gaining entry. At a $5,000-a-plate luncheon with gambling executives and other wealthy Las Vegans, the then-senator raised $500,000. Guests included Frank Fertitta and Blake Sartini of the Station Casinos and Jack Binion of Binion's Horseshoe Club.

In 1994 Wynn was also the host at a breakfast that gave $540,000 to the Republicans to capture Congress. As documented by the Center for Public Integrity in Washington, that cash was only a fraction of nearly $5 million that Vegas interests have poured into national races as well as ``soft money'' coffers of both parties since 1991.

Wynn has personally raised more than $1 million for the Dole candidacy, including some $90,000 from his family and employees.

Republicans were initially ahead in Vegas winnings but the Democrats soon hit their jackpot. President Clinton attended a lunch June 9 at the home of Las Vegas Sun Editor Brian Greenspun, a longtime friend and sometime Shadow Creek golfer whose wife, Myra, had recently given $35,000 to the Democratic National Committee. Executives of the Sands, Bally and Circus Circus, as well as the same Steve Wynn, gave some $650,000 to the Democrats.

Behind all this bipartisan good fortune are enormous stakes. Las Vegas leads the pervasive expansion of gambling throughout the United States. Amid the fiscal ravages of the 1980s, more and more states and localities turned to gambling for basic revenue, and the industry now wields the attendant political influence not only in Nevada but in 47 other states as well.

In what author Robert Goodman calls ``the pathology of hope,'' Americans are gambling their money as never before - and losing more than $40 billion a year. Uncertain of the present and future, suffering ``a collapse of confidence in the utility of work,'' as A. Alvarez wrote in The New York Review of Books, we now spend six times more on gambling than all other spectator sports combined, more on slot machines, cards and numbers rackets than on movies.

``We're not U.S. Steel,'' a colleague of Wynn's was quoted as saying about the industry's still-shady image. Indeed, the gambling industry also stands to be bigger. With 30 to 50 percent profits, double the average for most businesses, the trillion-dollar gambling industry is a power like few others in the nation's history.

To up the ante, the Vegas connections, including a powerful new Washington, D.C., lobby, intervene in government more overtly than ever. ``In the old days, casino owners just gave money to politicians and stayed in the background,'' John L. Smith, a columnist for the Las Vegas Review-Journal, said in an interview. ``Now it's an open orgy of power. If politicians don't give back what they want, they run them out.''

While Vegas casinos boast ``government relations'' departments and conduct polling for candidates, the industry's new American Gaming Association lobbies under the direction of Frank Fahrenkopf Jr., former chairman of the Republican National Committee and a Dole intimate. Vegas influence is also wielded by Republican notables like former Sen. Paul Laxalt of Nevada, a senior consultant to Dole, and by the candidate's finance chairman, John A. Moran, an associate of Wynn in philanthropic causes.

The industry's cash and lobbying have concentrated on two issues. In 1994, the White House floated a proposal for a 4 percent federal gaming tax as part of welfare reform. The potential billions from such a levy might also have slashed the deficit. Dole opposed the tax, which casino owners have likened to a reign of terror. Then, after what the Los Angeles Times described as a ``fierce lobbying effort,'' including a siege of the White House by several senators and representatives, Clinton quickly abandoned his proposal.

In Las Vegas last month, the president disowned the tax as an idea of ``someone well down'' in the Treasury Department. ``That was never a recommendation of my Cabinet,'' he told the Las Vegas Sun, ``much less of anyone in the White House.''

Meanwhile, Vegas interests still face a grass-roots backlash against gambling, embodied in an unusual alliance that includes the Christian Coalition, racetrack owners and liberal activists. Working with little money, the anti-gambling coalition has recently defeated the industry in more than 20 local elections on the expansion of gambling and has seized on the growing public concern over issues of addiction, increased crime and a general corrupting influence associated with gambling.

Congress is considering forming a Gambling Impact Study Commission to examine gambling's social effects. The industry has reason to fear such an inquiry into what many believe is gambling's scavenger economy: taking billions while giving back nothing of social or economic value.

But what Las Vegas seems to fear most is the commission's potential subpoena power, according to Bill Eadington of the University of Nevada Institute for the Study of Gambling and Commercial Gaming. Such power would afford for the first time a comprehensive probe into accusations of hidden casino ownership, profit-skimming, possible money laundering and organized-crime ties, and other corruption haunting the industry since its inception.

Saying it is scrupulously aboveboard and has been for many years, the new Vegas has spent millions in the past decade to change its public face from ``gambling'' to ``gaming,'' from ``joints'' to ``resorts'' and from ``nude revues'' to ``family entertainment.''

Despite the breadth of the anti-gambling coalition, Las Vegas has prevailed on the issue of subpoena power. The morning after dining with Wynn last April in Las Vegas, House Speaker Newt Gingrich told a Republican fund-raiser at Wynn's Mirage that the bill on the study ``should be modified so that the commission does not have the power to issue subpoenas.'' The Washington Post recorded his remarks.

He vowed to eliminate effective subpoena power in the final House-Senate conference committee version of the legislation. For his part, Dole had quietly supported a Senate bill in which subpoena power, as Democratic Sen. Paul Simon of Illinois put it, was ``completely gutted.''

Not to be left out, Clinton pledged during his June 9 visit here that he would not allow a ``witch hunt'' of gambling. He assured casino owners that he backed the emasculated Gingrich-Dole version of the commission's subpoena power.

Among the many influential political contributors in Las Vegas, the most visible figure is Wynn, who swiftly rose from modest means to spectacular wealth with the help of $160 million in Michael Milken's junk bonds and the patronage of E. Parry Thomas, a local banker with access to millions in Teamsters funds.

In 1982 the British government denied Wynn a gambling license after New Scotland Yard investigated allegations of business ties to organized crime. The inquiry was inconclusive but found the accusations ``so numerous and significant that it would be impossible to accept coincidence as a reasonable explanation.'' Wynn has angrily denied such connections, and New Jersey officials, reviewing much the same record, subsequently granted him licensing there.

Wynn admits he has been protean in his political wagers. Within weeks of addressing Nevada Republicans and extolling Dole as a ``good, solid-thinking'' man, the multimillionaire was promising to raise six-figure donations for Clinton. The switch reportedly coincided not simply with Clinton's lead in the polls but also with a golf game in late May.

Democratic Gov. Bob Miller of Nevada arranged for the president and Wynn to play together at the Congressional Country Club in Washington. The round took place just days before Wynn moved his bet to the president. ``I'm just one of those fence-jumpers,'' the casino magnate joked with a local reporter. ``I just see which way the wind's blowing.''

This does not mean that Clinton is losing out in the money game in Las Vegas. One of his longtime chief fund-raisers in Las Vegas is Elias Ghanem, an enterprising 57-year-old physician whose rise to prominence began as an on-call doctor for VIPs, including Elvis Presley and others at the Las Vegas Hilton. Today, Dr. Ghanem, who was close to Clinton's late mother, owns a chain of medical clinics and is a member of the Nevada Athletic Commission.

Beyond the politics of Las Vegas and its colorful characters lie deeper issues about the influence of this place and the ethic and future it represents. In a Psychology Today article, writer Michael Ventura paints a dark picture, claiming that the heedless rise of Las Vegas is rooted in ``the appalling cost we pay for the dominance of money.''

But if Las Vegas is worried about a ruling industry that creates nothing as it consumes a national fortune, it is not evident here. The Vegas backers of both candidates are watching a 1996 race in which they have all their bets covered.

No matter what happens in the next election, the Vegas connections win.

MEMO: Sally Denton is the author of ``The Bluegrass,'' a study of organized crime and politics in Kentucky, and Roger Morris is the author of ``Partners in Power: The Clintons and Their America.''

CAPTION(S):

2 Photos

Photo: (1--Color) no caption (Las Vegas)

Knight Ridder-T ribune Photo Service

(2) Steve Wynn

Golden Nugget chairman