Wednesday, October 04, 2006

The Politics Of Gambling Stock Price Manipulation

Perhaps the biggest scandal from last Friday wasn't the Mark Foley Congressional Page scandal. The public may be most likely to comprehend and understand this scandal, but a far more serious matter in which the worldwide prices of gambling stocks was manipulated overnight and some dropped dramaticly has been given far less publicity because it is so complicated and far more difficult for the public to understand.

In Washington, D.C. , a powerful lobby for the American casinos in Las Vegas and Atlantic City exists called the American Gaming Association. Frank J. Fahrenkopf, Jr., who was the former National Chairman of the Republican Party for six years during the Ronald Reagan years is the head of this powerful American casino and slot machine manufacturer lobby association. The lobby for American casinos spends an average of $1.8 million or more in recent years to influence Congress for pet projects of the American Gaming Association such as limiting Native American casinos and of course, internet gaming. It's all about dollars and cents that casinos in Las Vegas and Atlantic City have been losing would-be gamblers to the Native American casinos, internet gambling and state lotteries to fund schools, etc.

A powerful American casino and slot machine manufacturer lobby headed by a powerful Republican such as former RNC head, Frank Fahrenkopf, Jr. are able to exert great influence on individual members of Congress through phone calls and campaign donations. It should have come as little surprise when Republican Congressman from Iowa, Jim Leach introduced some legislation strongly supported by the American Gaming Association called The Unlawful Internet Gambling Enforcement Act last Friday that outlawed credit card and bank payments for internet gaming activity.

The World Wide Web is indeed an international transaction and information highway. In much of the world, there is little or no moral objections to online gambling transactions. But instantly the effect of the Leach bill was to manipulate and absolutely ruin the value of worldwide internet gambling stocks, which are traded in London in their stock exchange. But the effect is being felt worldwide, and affecting investors all the way to Bangkok. Overnight many people worldwide are now financiallty ruined by this American casino industry scheme to manipulate worldwide stock prices of gaming stocks. Those with mutual funds, pension or private investment in internet gambling stocks in London are now financially ruined as the value of their stocks has hit rock bottom. But at the same time the value of fanancially challenged American casinos stocks has hit new recent highs since Friday.

Harrah's which has been financially challenged by the Native American casinos, state lotteries and of course, internet gambling has seen a big value increase in their stock since Friday. But the problem is also that the company appears to be up for sale for around $15 billion dollars. And there has been at least one complaint to the Securties And Exchange Commission since Friday that claims that some rampant insider trading was involved in some 90 day futures in Harrah's stock that brought in a 9 to 1 dollar return between Friday and Monday.

The public is more able to grasp the Mark Foley scandal, but far less able to understand a massive stock value manipilation scandal that Republicans helped to arrange with their surprise Friday vote to ban internet gambling and to help dome assist inside traders and to raise the value of Harrah's stock and make more secure some bids to buy the company itself by appearing to be more financially secure since the Friday vote.

But things don't just stop there. Former Texas Governor George Bush claims that he will sign the internet gambling ban bill. But it turns out the biggest bidder in the $15 billion dollar bid to buyout Harrah's turns out to be a Texas turnaround investment company, Texas Pacific Group. This company has a history of using politicians to achieve financial ends. A Portland Oregon indepent newspaper Willamette Week won an award for a feature on how Texas Pacific group once intended to buyout Portland General Electric, an Enron company, and fire workers and slash important customer service in a bid to buy and then resell the company. Now that Congress has helped to manipulate the stock values for American casinos such as Harrah's, Texas Pacific Group can make a huge profit by buying the company, laying off some workers and cutting costs, and then reselling the company to another party.

This is way things work back in Washington where you have 60 lobbyists for every member of Congress. Big money is spent to lobby or influence Congress. Congress passes special interest bills to help select interests and manipulate stock prices and to assist inside traders, and big investment groups buy and resell businesses for big profits. And the best that some in Congress can do is tell voters to "stay the course" and re-eelect the same old bunch of rascals in November to keep doing the same thing.


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