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Walsh accuses gaming chief of bias, demands recusal

Stephen Crosby.

Yoon S. Byun/Globe staff/file 2013

Stephen Crosby.

Mayor Martin J. Walsh is calling on the state’s top gambling regulator to recuse himself from any decisions about licensing a casino in the Greater Boston region, accusing him of bias against the city and its efforts to gain more influence over two casino proposals just beyond its borders.

“Throughout the process, Chairman [Stephen] Crosby has made several statements, which the city deems prejudicial,” Elizabeth Dello Russo, a lawyer for the Walsh administration, wrote in a blistering letter to the commission on Thursday.

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Dello Russo accused the commission of trying to “stack the deck” against Boston, to deny the city a fair hearing on its claim for more say over a Wynn Resorts casino proposal in Everett and a Mohegan Sun casino plan in Revere. The letter mentions a federal lawsuit by Caesars Entertainment that also accuses Crosby, chairman of the state gambling commission, of bias.

“Taken together, the pending federal lawsuit, recent commission statements, current press articles, and the commissions’ own actions, create a cloud over the proceedings when Chairman Crosby participates,” the city stated.

Crosby and the commission declined last evening to respond, through the commission’s spokeswoman, Elaine Driscoll. The commission’s legal staff is reviewing Boston’s letter, she said.

The relationship between the new mayor and the gambling commission is off to a bumpy start: Walsh last month unexpectedly upset the casino licensing sweepstakes by declaring to the commission that the city is a “host community” to the two casino projects under the 2011 state casino law, with rights to hold binding votes in Boston on the proposals.

The question of Boston’s status could have enormous influence on the development of the state’s nascent casino industry. If Boston wins “host” status, both casino projects would be in jeopardy: It is unlikely either development would survive a neighborhood referendum in Boston.

The mayor insists that the Charlestown neighborhood should vote on the Wynn project and that East Boston residents deserve to vote on the Mohegan Sun proposal.

The commission, in response to Walsh’s demand for “host” status, delayed its June target date for the award of the lucrative casino license, and set up a month-long process to sort out Boston’s assertions. The commission invited interested parties to submit briefs by Thursday on whether Boston qualifies as a host community for one or both of the casino projects.

Walsh, in the city’s letter, objected to the process, calling it “unfair.”

“The process . . . unreasonably limits and compromises the city’s ability to receive and present evidence in support of the city’s declarations as a host community,” and would violate Boston’s due process rights, the city told the commission. The Walsh administration also complained about an inability to present or cross-examine witnesses, pursue discovery, and to create “an appropriate evidentiary record” for a legal review in court.

“In sum, the proposed procedure represents a thinly veiled attempt to stack the deck against the city on the host community issue so that the commission” can issue the Greater Boston license “without the city’s interference in the process,” the city alleged.

The mayor’s spokeswoman, Kate Norton, warned that Walsh will not participate in a procedure he believes is unfair, and said that the city is “keeping all of its options open” in pressing its claims that it is a host community to the two proposals.

What happens next would appear to be up to the commission. The panel could move ahead and decide the host dispute without the city’s participation, and then defend the action in court if Walsh sues. Or the commission could come to some accommodation with the mayor. The commission received several briefs on Boston’s host community assertions in time for Thursday’s deadline, and intends to post them on its website by Friday, according to Driscoll.

Wynn and Mohegan Sun say their projects, while very close to the city line, are not in Boston, and therefore the city is not a host community.

Both casino companies say Boston qualifies for a lesser designation under the law that would permit Walsh to negotiate compensation to offset the negative effects of a casino, but would not give Boston neighborhoods the right to vote on the developments.

State casino law defines a host community as “a municipality in which a gaming establishment is located” or proposed. A gaming establishment, under the law, is “a gaming area and any other nongaming structure related to the gaming area and may include, but shall not be limited to, hotels, restaurants, or other amenities.”

Walsh has argued that both casino projects depend on Boston’s transportation network, and that the city is “a key selling point” of each project. The mayor also says that access to the Wynn development is over a private way in Boston and that the Mohegan Sun proposal at Suffolk Downs is “intimately related and cannot be disentangled from the Suffolk Downs site,” most of which lies on the East Boston side of the Boston-Revere city line.

On Thursday, Walsh raised an additional point about the Wynn proposal, urging the commission to investigate issues raised by recent Globe articles on the Everett property Wynn intends to buy, and lingering concerns about whether the sellers have undisclosed partners.

The Globe has reported that one co-owner of the proposed Everett casino site has refused a commission requirement to sign a pledge that there are no secret partners in the deal. The city of Everett is exploring a move to take the land by eminent domain and selling it to Wynn.

Andrea Estes of the Globe staff contributed to this report. Mark Arsenault can be reached at Mark.Arsenault@globe.com. Follow him on Twitter @bostonglobemark
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