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Marc Crisafulli, an executive vice president at Twin River, says his company was threatened by Gov. Gina Raimondo's chief of staff to back off trying to bid on the state lottery contract.
Marc Crisafulli, an executive vice president at Twin River, says his company was threatened by Gov. Gina Raimondo's chief of staff to back off trying to bid on the state lottery contract.
Marc Crisafulli, an executive vice president at Twin River, says his company was threatened by Gov. Gina Raimondo's chief of staff to back off trying to bid on the state lottery contract.
TRWH
October 30, 2019
‘The Honorable Senator William J. Conley, Jr.
Chairman Senate Finance Committee
Room 313, State House
Providence, RI 02903
Dear Chairman Conley:
Thank you for allowing me to appear before the Senate Finance Committee last week to
the proposed IGT legislation and Twin River Worldwide Holdings, Inc.’s strong
fon to it. As you know from my testimony, this is an issue of critical importance to Twin
River, our 2500 Rhode Island employees and the taxpayers of this state, particularly in view of
the over $170 million we have invested in Rhode Island in the last two years. For those reasons, I
genuinely hope that you and your fellow committee members will support an open, competitive
bidding process to ensure that Rhode Island secures the best possible deal.
As Iam sure you recall, the evening ended with an inquiry from Senator DiPalma about
the contents of a letter authored by our CEO and President, George Papanier, which was released
publicly by the Office of the Governor after we had already reached a settlement on our
Regulatory Agreement with the State, which I further detail below. The letter referenced a threat
we received from a member of the Governor’s staff, and after we received the threat and we
publicly opposed the IGT legislation, the tenor of discussions with the State changed
dramatically. The letter did not name the individual, nor did I at the hearing, despite the specific
and repeated requests from Senator DiPalma, Senator Ciccone then stated at the hearing he
‘would pursue a formal investigation,
As | indicated during my testimony, I was the recipient of the threat and I was reluetant to
provide the name out of fear that it would impede the good progress we were making with the
Department of Revenue and the Department of Business Regulation, After an extended period
of difficult negotiations, we completed an initial agreement with the State which was good for
the RI taxpayers and good for Twin River. We resolved our disagreement over the application of
the Regulatory Agreement, including the leverage ratio, without either side having to make any
admission, Twin River agreed to make a payment of $180,000 to the State and further agreed
that we would invest $12 million for capital improvements in our Lincoln facility for items
approved by the Lottery. In addition, under our contract we have a right to reset the percentage
rate of net VLT income we receive from the State as a result of the effect of Massachusetts
competition. This would cost the taxpayers millions of dollars. After back and forth with the
‘Twin River Worldwide Holdings, Inc. 100 Twin River Road, Lincoln, RI 02865 401.475.8474,Page 2
Department of Revenue we agreed to delay asserting that right until June 30, 2020 as part of this
agreement.
More importantly from our perspective, and we believe from the perspective of the
Rhode Island taxpayers, the State and Twin River agreed to work together to finalize an
Amended Regulatory Agreement by November 13, 2019, and we outlined the framework of that
deal if we reach agreement: in exchange for updating the Regulatory Agreement, including
adjustments to the leverage ratio which will allow Twin River Worldwide Holdings to invest and
continue to grow nationally, Twin River will invest an additional $24 million into the Lincoln
facility, in a manner approved by the Lottery, and will permanently waive the right to reset the
rate under our contract, We are continuing to work closely with the State and we are optimistic,
that the permanent deal will be finalized on or before November 13" given the extraordinary
benefits to the taxpayers of the additional investment and the waiver of reset rights.
Because of these ongoing negotiations and our belief that finalizing that deal is in
everyone’s best interests, including the Rhode Island taxpayers, I did not want to escalate matters
any further by disclosing who threatened me. Since then, I have listened to press interviews by
Senator DiPalma, including his appearance on the Tara Granahan show on Monday, October
28", He, and others, have continually underscored the need for full transparency and diselosure
in this matter and Senator DiPalma indicated that he was going to continue to pursue this matter
‘until he discovered the truth.
Regrettably, I also heard the Governor repeatedly deny this unfortunate incident occurred
and she has even gone so far as to accuse Twin River and myself of, in effect, lying. The Tara
Granahan Show replayed a statement by the Governor during her interview with Senator
DiPalma. In that audio clip, the Governor stated that my allegation of a threat was “clearly
baseless and untrue.” She made that statement without speaking to me or anyone at Twin River
to learn what happened or to investigate the basis for our assertion.
After thinking very carefully about this and recognizing that Senator DiPalma will
continue to relentlessly pursue the truth, { have decided to share more details about the incident
and to respond directly to the Governor's assertion without waiting for further formal process
In response to Senator DiPalma’s question, the answer is that Brett Smiley, the
Governor's Chief of Statf, is the member of Governor Raimondo’s administration who issued the
threat on June 27, Mr. Smiley called me on my cell phone from his cell phone. He explained to
me the details of the IGT legislation, including some last-minute changes that were made around
the VLTs. He asked me not to go scorched earth and oppose the deal. He informed me Twin
River would not receive anything directly regarding the VLTs. He then stated that the broader
relationship between Twin River and the State is important, they are our regulator, they know we
need their help because of the leverage ratio to grow our business, and they want to be helpful,
but if we oppose the IGT deal they will not be cooperative with us.Page 3
Mr. Smiley's message was crystal clear: If Twin River opposed the IGT legislation
which was being introduced that day, we would suffer regulatory consequences with the State. It
is our view that there should never be any correlation or connection between our regulatory
relationship with the State and our right to oppose legislation which harms us. | relayed this
message to my leadership and we decided to proceed with our opposition to the no-bid, 20-year
deal and we issued a statement opposing the legislation. 1 received an angry call from Mr.
‘Smiley expressing disappointment that we openly opposed the deal. In total Mr. Smiley called
me three times on the afternoon of June 27".
Tremain at the committee’s disposal to provide any further detail it may wish to receive
concerning this unfortunate occurrence and appreciate the patience you have afforded me in
recognizing the importance of full disclosure in this matter.
Sincerely,
A MOG
Mare Crisafulli
Executive Vice President, TRWH.
President, Rhode Island Operations
MAC/mmt
ce: Senator Louis DiPalma
Senator Frank Ciccone