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Raimondo’s Neuman Was Managing DraftKings Legislation As Wife Applied for Top Job

Thursday, May 05, 2016

 

Governor's Chief of Staff Stephen Neuman

Governor Gina Raimondo’s Chief of Staff was negotiating legislation that impacted one of the most controversial companies in America -- just three weeks before his wife started her job for the very company as Vice President, GoLocal has learned.

Boston-based DraftKings is a “fantasy sports” startup company that is now valued in excess of $1 billion, and is under fire in many states for being an unregulated gambling venture.

A GoLocalProv investigation that included a request for public documents relating to meetings, lobbying, emails and conference calls between members of Raimondo’s staff and representatives of DraftKings unveils that Chief of Staff Stephen Neuman was actively involved in legislation as his wife was under consideration for the position of Head of Regulatory at DraftKings. Her hiring for the position was announced on February 22.

Timeline in Question

After Neuman’s wife was hired, only then did he seek an advisory opinion from the Rhode Island Ethics Commission on how to handle a potential conflict moving forward, but the letter seeking the advisory opinion did not speak to Neuman’s involvement in legislation during his wife’s hiring process.

The state’s ethics statute states, "A substantial conflict of interest exists if an official has reason to believe or expect that he, any person within his family, a business associate or an employer will derive a direct monetary gain or suffer a direct monetary loss by reason of his official activity.”

"Fantasy Sports" companies took in more than $3 billion in 2015

DraftKings is under fire in many states for bypassing state gambling laws. Presently, Arizona, Hawaii, Idaho, Iowa, Louisiana, New York, Mississippi, Montana, Nevada, and Washington State have banned/blocked playing DraftKings. 

For companies like DraftKings, and its competitor FanDuel, hundreds of millions of dollars are at stake as states deem whether these companies are games of skill (as FanDuel and DraftKings claim to be) or games of chance, as a growing number of regulators claim.

DraftKings and FanDuel are linked in their lobbying strategies and in Rhode Island they have hired high powered lobbyists. DraftKings is represented by Lenny Lopes, former top staffer in the Rhode Island Attorney General’s office who is paid $72,000 a year to lobby both the legislature and the Governor’s office. He has lobbied on behalf of DraftKings on ten different House and Senate bills.

Lopes and former Rhode Island Attorney General Patrick Lynch both lobby for FanDuel. Lopes is paid another $36,000 a year to lobby for FanDuel and Lynch receives $7,200 a year, according to state records

GoLocal Investigation: Meetings and Calls 

Email from Lopes to Neuman

Throughout January and into February of 2016, Neuman was involved in a series of emails about regulatory legislation that had material impact of DraftKings from Lopes. 

A meeting between DraftKings and Neuman

In February, Neuman’s deputy Matthew Bucci and Commerce’s Darin Early were scheduling conference calls with the CEO of FanDuel. FanDuel’s CEO Nigel Eccles was scheduled for a call on February 11, 2016 for a thirty-minute call. According to materials distributed prior to the call, the purpose of the conference call was to discuss state regulatory issues of the "fantasy sports" industry.

By March, Neuman’s wife had been hired and his name was no longer on memos or emails relating to meetings between Raimondo’s office and top officials of the two leading “fantasy sports” companies. 

On March 8, Lopes and Lynch were bringing Christian Genetski, the Chief Legal Officer of FanDuel and Sarah Koch, the Assistant Director of Government Affairs, to see Claire Richards of Raimondo’s staff. 

In April, the Ethics Commission issued a prospective advisory opinion green lighting Neuman separating from direct oversight of issues relating to his wife's new company and their legislation, but the Commission's decision was limited to guidance moving forward and not Neuman's actions while his wife was being hired.

Latest Controversy

Neuman has been in the hot seat since his hire. As GoLocal reported, a number of high profile public and private sector individuals have been contacted regarding their interest in Neuman’s job. This year has been very difficult for Raimondo, with major issues in the year's first four months for the administration including:

  • The controversy regarding lowering the flag for Vincent Cianci’s death
  • Raimondo and staff using money from the URI foundation to fund a trip to the annual Davos conference in Switzerland
  • Tapping the Rhode Island College Foundation for funds to hire the State of Rhode Island's Chief Innovation Officer (CIO), Richard Culatta 
  • A series of deaths tied to DCYF failures
  • Failure to land General Electric
  • The RI tourism debacle
  • Raimondo’s inability to deliver Rhode Island for Hillary Clinton
  • Raimondo’s ownership interest in Point Judith Capital. While the Rhode Island pension system has lost 1.1 percent of its investment into a venture capital fund that Governor Gina Raimondo helped create, she and other investors have made millions from the fund during the same period.
 

Related Slideshow: Short List for Next Chief of Staff for Raimondo

Prev Next

Barbara Cottam

PRESENT JOB: Corporate Affairs Citizens Bank, Chairs Board of Education 

She is the front-runner for the position, but she turned down the job when the Governor was first elected and the job is a far bigger challenge now. 

Cottam has high-level experience having been at the helm of communications strategy for both Joe Paolino when he served as Mayor of Providence and for Governor Bruce Sundlun.

Question: Does she want to do a rebuild -- and run a campaign?

Prev Next

Eric Beane

PRESENT JOB: Deputy Chief of Staff

Presently, Beane is the Deputy Chief of Staff. Another former Governor O'Malley staffer with few Rhode Island connections, he was a trial attorney at U.S. Department of Justice, and was a staffer at DNC.

Question: Can Raimondo afford to leave her fate to another out-of-stater?

Prev Next

David Cruise

PRESENT JOB: Director of Legislation

The former Chief of Staff to Bruce Sundlun has Clinton administration, judicial, and municipal experience, and is widely respected and great depth of political knowledge. 

Question: Does he want to be a Chief-of-Staff again? Will Raimondo listen?

Prev Next

Rick McAuliffe

PRESENT JOB: Heads the Mayflower Group and is a lobbyist

The former Patrick Kennedy staffer -- and for the past decade, a federal and state lobbyist -- has had some controversial clients and hired Keith Stokes at his lobby shop after Stokes left EDC post-38 Studios.

Question: Will he give up the income -- and is he too close to the legislature?

Prev Next

Dan Connors

PRESENT JOB: Advocacy Solutions, Lobbyist/Lawyer

Senate Majority leader by the time he was 30, and quit the legislature shortly there after. He has previously served as Chair of the New England Board of Higher Education, chaired the RI Public Transit Authority Board of Directors, was on the State Investment Commission, and a member of the RI Refunding Bond Authority.

Question: He has no significant political office management experience -- can he adapt?

Prev Next

Henry Kinch

PRESENT JOB: Clerk of Court

Currently serves as the Clerk of the Court, former top staffer to Bruce Sundlun. Served on the Pawtucket City Council and ran for Mayor of Pawtucket. Knows politics and would be a big addition for Raimondo in a campaign.

Question: Would he leave the courts?

Prev Next

George Zainyeh

PRESENT JOB: Shechtman Halperin Savage/Lobbyist

Zainyeh is the most experienced chief of staff in the state having run Patrick Kennedy's office for a decade and came in for the final two years to create stability in the Lincoln Chafee administration.

Served in the House and ran twice for Mayor of Warwick. Well-liked and great at bringing order to difficult situations.

Question: Do he and Raimondo have any relationship?

Prev Next

Joe Shekarchi

PRESENT JOB: State Rep, Chair of House Labor, and Lawyer

Powerful in the House as the Chair of Labor. Has aspirations himself either as Mayor of Warwick, or Treasurer or Lt. Governor next time and is one of the top fundraisers in the state. Authored the bill to eliminate the master lever. Very strong relationship with Raimondo - huge trust factor.

Question: Would he give up so much for so little?

 
 

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