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Client list raises questions about law firm

Date: 9/4/2012

By G. Michael Dobbs

SPRINGFIELD — Can the law firm that currently represents the city in its effort to craft a host agreement with a casino developer do that job effectively when in the past it has represented the interests of two of the developers in question? One Springfield city councilor doesn't think so.

After learning one of the principals of the law firm of Shefsky & Froelich, Cezar Froelich, has been a lobbyist for MGM Resorts and Penn National Gaming in 2006, 2008 and 2010, City Councilor John Lysak has cried foul and is calling for the Sarno Administration to hire a new firm.

Also, as of January, Shefsky & Froelich has MGM and Penn National Gaming listed as clients.

Lysak said, "Even if he [City Solicitor Edward Pikula] claims that there is not a conflict, it still doesn't pass the smell test. This is a very sensitive issue; people want to know that this is going to be a transparent process. Having a lobbyist that worked for two of these companies, who represents the city has muddied the process."

"It just doesn't look good," he told Reminder Publications.

Lysak is urging Mayor Domenic Sarno to seek fresh representation for the city.

On the firm's website, the dual nature of its expertise is described. "For the past 20 years, Shefsky & Froelich has offered innovative, comprehensive legal services to a wide range of clients in the gaming industry throughout North America and worldwide. In a heavily regulated industry like gaming, we knew early on that the best way to learn the industry was by starting from the inside — by working with state governments and their regulatory authorities to draft gaming legislation, rules, and regulations and serving as gaming counsel to these governmental authorities. Our lawyers then went on to develop an in-depth understanding of the operational side of the casino gaming business by serving as counsel to some of the largest gaming companies in the world. We have also acquired significant expertise in the financial structuring of gaming transactions.

In response to the criticism, Pikula issued the following statement: "When we retained a consultant we issued an RFP [Request for Proposal] and sought firms with a high degree of specialized knowledge and expertise in the gaming industry. The city recognized that this is new to Massachusetts, and we would most likely need someone from out of state who had performed similar services to other public entities in the past.

"Our consultant disclosed its broad experience in representing the industry as well as public entities in its response to the RFP and specifically pointed out the relationship with MGM in Illinois with regard to licensing, and the lack of any relationship with regard to anything to do with MGM in Massachusetts.

"At the time of the interviews, there was an indication that Penn-National may be involved, and that relationship was also disclosed. We discussed 'walling off' any of the firm's employees handling those matters from being involved with the scope of services provided under the contract with the city, and the consultant agreed to do so," he continued.

Lysak said, "This is just another example of why the City Council should be involved in the process. Government needs a check and balance system."

Sarno met with representatives of the developers on Aug. 27 in closed-door sessions. No member of the City Council was invited to attend.

However, both Sarno and Chief Development Officer Kevin Kennedy spoke at the City Council meeting later that day about the importance of a transparent, inclusive process.

"Citizens are very concerned with what may be coming to Springfield and we in government need to make sure that everything is on the up and up," Lysak said.


Questions have also been raised about any role that Charles Kingston might be playing in the selection of a casino developer and the writing of a host agreement.

Kingston is a political ally and friend of Sarno's, who was present at his re-election kickoff. He is a former city tax collector turned lobbyist who was convicted of tax evasion.

Unsubstantiated reports have indicated Kingston has played some sort of role in the on-going process.

When asked about Kingston, Bill Hornbuckle, president of MGM Springfield, said, "I can confirm with certainty that we have not sought Mr. Kingston's services."

Eric Shippers, senior vice president, of Penn National Gaming, also said Kingston is not a consultant for that company.

Shippers theorized the rumors might be "propaganda driven by our competitors."

Asking Sarno to describe what is Kingston's place in the casino issue, if any, the mayor's spokesman Thomas Walsh, said, "You have to discuss Mr. Kingston's business with Mr. Kingston."