So, how did a member of the Louisiana Public Service Commission (PSC) come to have a stake in the casino gambling business?
And why doesn’t his 2019 personal financial disclosure statement, required of all public officials by the Louisiana Board of Ethics, make no mention of his involvement in gaming operations in Mississippi?
Eric Skrmetta of New Orleans is being opposed by six challengers as he seeks reelection to the District 1 PSC seat in the Nov. 3 election. District 1 is comprised of all or parts of Orleans, Jefferson, Ascension, St. Bernard, Plaquemine, St. Charles, and the Florida parishes of Livingston, Tangipahoa, Washington, St. Helena and St. Tammany.
By way of bringing you up to date, this is the same Eric Skrmetta who has accepted some $47,500 in campaign contributions since 2011 from executives and their companies that provide prison telephone services at outrageous rates – rates that are charged to inmates’ families for collect calls.
Yeah, that Eric Skrmetta, who fought EFFORTS by the Louisiana Conference of Catholic Bishops to reduce those exorbitant rates six years ago and got really pissy with LCCB Executive Director Robert Tasman a-la Donald Trump debate style when Tasman attempted to read a statement on behalf of the LCCB.
Skrmetta barely squeaked by in his 2014 reelection bid, actually trailing by nearly 4,000 votes in the first primary before finally prevailing in a runoff.
But back to our story. Eric Skrmetta began looking into the development of the gaming industry in Mississippi in 1992 after gaming was passed in Louisiana and Mississippi. Eric Skrmetta, an attorney, was acting in his own interest and that of his father, Ray Skrmetta, according to a six-page ruling of the MISSISSIPPI SURPREME COURT on Feb. 28, 2002 affirming the findings of the Harrison County Circuit Court.
He began negotiating with several different gaming operators about the possibility of developing a casino on his father’s property. Eric, in his negotiations with Boomtown, Inc., made it clear that he wanted to be a partner in the proposed casino but Robert List, representing Boomtown, told Eric that he could not participate as a partner unless he had money to contribute.
In an attempt to work around that requirement, Eric suggested to his father that Ray Skrmetta waive two years’ rent in exchange for Boomtown’s granting Eric a 15 percent partnership interest. Boomtown agreed and on March 26, 1993, a letter of intent was executed that transferred to Ray “or his designee” a 15 percent partnership interest in lieu of paying the base rent to Ray Skrmetta for the first two years of the lease of the land. A couple of weeks after the letter of intent was signed, Eric signed a lease agreement. The actual partnership admission agreement which formally admitted Eric as a 15 percent limited partner in Boomtown was executed by Ray and Eric Skrmetta on July 7, 1995.
Like so many such agreements, it didn’t take long for things to veer off on a southward trajectory. Somehow, Eric had the impression that Boomtown would build a hotel on the property which would have enhanced its value. But the letter of intent signed by all parties made no reference to the future construction of a hotel, nor did the lease agreement or the amended lease agreement signed in September 1993 stipulate that a hotel would ever be constructed, though Boomtown CEO Tim Parrot did testify before the Mississippi Gaming Commission in June 1994 that there were plans to build a 150-room Days Inn hotel.
Boomtown asked to buy out Eric’s partnership interest in August 1997. Eric would admit during arbitration that he may have raised the issue of fraudulent misrepresentation, an echo of the allegation made by his father in his lawsuit against Boomtown. Eric Skrmetta eventually received $400,000 from Boomtown for his partnership interest.
But rather than fully divesting himself of all interests in Boomtown, he simply converted his ownership stake and the profits it would pay him into a lease agreement which pays 5 percent of Boomtown’s profits to his real estate holding company, Skrmetta MS, LLC, of Pass Christian, Mississippi.
MINUTES from the March 20, 2008 meeting of the Mississippi Gaming Commission reflect that an application for findings of suitability for Dennis Skrmetta and Eric Skrmetta was approved for a period of nine years. Minutes from the commission’s April 20, 2017, MEETING indicate an application for finding of suitability for Eric Skrmetta was again approved.
Both actions mean that Skrmetta was found suitable to be associated with a gaming license granted by the State of Mississippi under that state’s Gaming Control Act.
Moreover, DOCUMENTS filed with the Securities Exchange Commission (SEC) on March 23, 2007, by Penn National Gaming, Boomtown’s owner, say that Skrmetta MS, LLC would receive “rent equal to 5% of adjusted gaming win after gaming taxes have been deducted” on its 100-year lease agreement with Boomtown, and that “the landlord (Skrmetta MS, LLC) will subsequently purchase property owned by BTN (a wholly-owned subsidiary of Penn National Gaming) and certain other wholly-owned subsidiaries of the company in the vicinity of Boomtown Biloxi Casino for $12.8 million.
On March 23, 2007, BTN entered into an amended and RESTATED GROUND LEASE with Skrmetta MS, LLC. The lease amends the prior ground lease, dated October 19, 1993. The Amended Lease requires BTN to maintain a minimum gaming operation on the leased premises and to pay rent equal to 5% of adjusted gaming win after gaming taxes have been deducted. The term of the Amended Lease expires on January 1, 2093.
Boomtown is projected to pay nearly $51.4 million over the 100-year life of the lease to Skrmetta’s company – an average of a little more than $500,000 per year. And that does not include his 5 percent cut of gaming revenue from casino operations – amounts that never appear in Skrmetta’s FINANCIAL DISCLOSURE FORM.
In Louisiana, incredibly, there are no prohibitions to elected officials holding an interest in gaming enterprises but Skrmetta’s silent stake in Boomtown casino should certainly raise a few eyebrows.
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