Huffington Post Blogger Wants Answers about Casino M8trix

The city’s poised to deny for the second time a Public Records Act (PRA) request from a journalist who wants to glimpse the behind-the-scenes workings of Casino M8trix.

John Hrabe asked the San Jose Police Department’s Division of Gaming Control for background materials, correspondence about applications for permits and licensing and other documents relating to M8trix owner Eric Swallow, his newly opened high-rise casino and M8trix predecessor Garden City Casino.

The Huffington Post blogger and freelance investigative journalist says he wants to answer questions about the casino’s “complicated financial structures,” out-of-state cash flow and problematic employment practices. He questions why Swallow tried to intimidate San Jose police, citing a San Jose Inside article in which he’s quoted as calling the head of the gaming division, Richard Teng, an idiot.

“After reading San Jose Inside’s coverage of Casino M8trix, I decided to do some digging on my own,” Hrabe said by phone Tuesday. “The city of San Jose is withholding vital public documents about its dealings with Eric Swallow and Casino M8trix. But, as a one-man investigative blogger, I lack the resources to challenge the city in court.”

Hrabe also calls Swallow’s surveillance practices into question and asks for any correspondence with the city that relates to it. Swallow uses a tracking technology created by one of his other companies, Profitable Casino, that’s installed on card tables at Casino M8trix, according to city reports.

“The city’s observation is supported by an interview with Casino Enterprise Management in August 2008, which claimed, ‘Swallow has created a system that virtually thinks like a human and tells the dealers where to go based on performance, which is really revolutionary for our industry,’” Hrabe writes.

The request also covers any evidence of potential labor violations, Hrabe says, citing a Mercury News article reporting that Swallow laid off a fifth of the workforce at Garden City Casino when he bought it in 2007. The gambling mogul has since been named as a defendant in several wrongful termination lawsuits.

Other stipulations in the petition: That the city supply records of Swallow’s last-minute gambling license withdrawal in 2007, information that came up in the city’s background search on Swallow and records of allegedly misleading statements about Garden City’s leasing agreement.

The Rule and Open Government Committee rejected Hrabe’s Freedom of Information Act request last month, saying it doesn’t want to risk disclosing proprietary financial information about a private company. Plus, other companies could lose confidence in the city, which might prevent them from filing for business permits and licensing if they see the city giving out such information to the press, according to the memo signed by David Vossbrink, the city’s communications director.

Hrabe, who successfully obtained information from three prior FOIA requests, appealed the latest denial and challenged the city’s assertion that it would violate trade secrets, so the committee will reconsider the request when it meets Wednesday.

“This overly broad response is wholly inadequate and demonstrates that the city failed to consider each request independently,” Hrabe writes to the city after it turned down his latest records request. “For example, Mr. Swallow’s record of labor violations, such as firing employees and rehiring new employees that are disproportionately younger, non-disabled, non-Hispanic and non-Mexican … would not constitute a protected trade secret. Furthermore, the public good of preventing age, sex and racial discrimination would outweigh any concerns for Mr. Swallow’s privacy under the State Constitution.”

The city appears to be pandering to Swallow, Harbe writes, despite the casino’s lawsuit and previous efforts to quicken the licensing process.

On Feb. 8, M8trix filed state and federal lawsuits accusing the city of treating it unfairly.

“Given Mr. Swallow’s history of complicated financial structures and cold, calculating treatment of casino workers, it is reasonable to infer that this lawsuit is a deliberate attempt to force the city’s hand on regulatory matters,” Hrabe writes in his appeal.

If Hrabe doesn’t get the information he wants, he will pursue legal action, he says.

“The legislature has recognized under the Gambling Control Acts the substantial public interests at stake with the licensure and regulation of gaming establishments,” Hrabe continues. “With a clear example of intimidation, it is necessary to review whether other employees are fulfilling their public duty or merely serving as a rubber stamp for Eric Swallow and Casino M8trix.”

Other items from the Rules and Open Government Committee agenda for March 6, 2013:

• Since San Jose has the highest concentration of Vietnamese-Americans of any city in the United States, Councilmember Kansen Chu worries that official visits from the Socialist Republic of Vietnam could stir up civil unrest. He’s asking the committee to allow the City Council to consider a resolution banning them in the interest of the community’s peace of mind.

In 1999, a SoCal city saw more than 50 days of continuous public unrest when Vietnamese-Americans protested a flag-raising by Ho Chi Minh sympathizers. Some 15,000 people took part in the demonstrations, which cost the city $750,000.

The resolution up for consideration recognizes that “many citizens and residents of Vietnamese descent residing in San Jose risked their lives to escape from communist-occupied Vietnam following the fall of South Vietnam on April 30, 1975, and came to The United States in their search for freedom and democracy.”

Further, “the anti-communist sentiments held by the members of the Vietnamese-American community in Northern California State and particularlt in San Jose City are as strong, if not stronger, than those held anywhere else in the world.”

Milpitas is considering a similar resolution.

• The committee’s most faithful penpal, David Wall, wrote on the public record about his wife’s recent run-in with a registered sex offender creeping around his neighborhood and how San Jose cops came to the rescue.

• City leaders will meet on March 18 to talk about how to implement San Jose’s “green vision.”

WHAT: San Jose Rules and Open Government Committee meeting
WHEN: 2pm Wednesday
WHERE: City Hall, 200 E. Santa Clara St., San Jose
INFO: Kathy Carrillo, 408.535.1254

Jennifer Wadsworth is the former news editor for San Jose Inside and Metro Silicon Valley. Follow her on Twitter at @jennwadsworth.

4 Comments

  1. Hallelujah! Mr Hrabe is going to get an eye full. Especially once he sees how Eric Swallow and Garden City (Cardroom and construction co) have OWNED Pete Constants agenda and support for the last several years. It seems so obvious, when a council person lobbies so vigorously for a casino that is not in his district(any longer). Constant’s public calendar is rife with meetings, lunches, and phone calls with Swallow and his mouthpiece (errr lobbyist) Sean Kali Rai.
    Josh, if you and Mr Hrabe collaborate on this story, you can bring down the whole “House of cards”

    Fist comes Georgie, then comes Pete, then comes….wow, the list is too darn long to fit into a nursery rhyme stanza.

  2. Maybe some lawyers out there can offer an answer to a question I’ve always had about the Public Records Act:

    Is there recourse if a governmental entity gives up a document that the public agency could have withheld?  Is someone allowed to take legal action against the public agency?  If so, what is the threshold for accountability?

    My impression has been that there is not a lot of downside to taking a liberal interpretation of the Public Records Act, and when a public entity decides to take a very restrictive interpretation, it’s because someone has something to hide.

  3. Labor violations are taking place in Inglewood right now at the Hollywood Park Casino. Not sure who to alert first – the Attorney General or the Labor Board.

    Even Mr. Swallow, (I would hope) would not approve of how things are being managed.