Gambling is the number one rainmaker in California politics.
A week ago, the political watchdog group California Common Cause released an extensive report detailing the emergence of the gambling industry as the top political donor in the state. But only three days after the report's release, the group removed it from its Internet site and was forced to submit a retraction of sorts for implying that Governor Gray Davis and state lawmakers had failed to disclose donations from the industry.
The report, called Stacking the Deck, assessed all contributions made by card clubs, horseracing organizations, Native American tribal casinos and Nevada casinos to state candidates over the past two election cycles. The 225-page report concluded that the industry as a whole spent $15.7 million on candidates and officeholders in California from 1995 to 1998.
Spending by the gambling industry dwarfs spending by other interest groups. Combined contributions from the Golden State's other top contributors - the state teacher's union, the Correctional Peace Officers Association, the Consumer Attorneys of California and the California Medical Association - totaled $12.8 million over the same period, according to Common Cause.
"The gambling industry has surpassed all the traditional influence buyers now and ranks as the top political donor in the state," said Calif. Common Cause executive director Jim Knox.
Common Cause also filed a formal complaint with the state Fair Political Practices Commission alleging that it found 332 campaign reporting violations in which recipients or donors failed to report over $1.5 million in gambling contributions.
Gov. Davis, who was on the list, was implicated for apparenly failing to properly disclose nearly $170,000 in donations, primarily from Indian tribes which operate casinos.
A spokesman for the Democratic governor denied the allegation - and, in a letter to Common Cause, provided proof that the governor had reported as required.
"This charge is absolutely, categorically false - and you should be ashamed of yourself for making such a serious allegation without even attempting to verify the supposed 'facts' on which it is based," wrote Garry South, the governor's senior political advisor. South also accused the group of seeking "cheap and sensationalized headlines" with "flimsy" and "slipshod" research.
In fact, the funds were misreported by the donors.
Knox said his group received "lots" of complaints about the report from politicians. On Thursday, his group released a statement acknowledging its errors and offering an apology the Davis and three other state lawmakers who were specifically implicated in the report. The press release was not posted on the Common Cause Internet site.
"As far as we know, 331 of the 332 reported discrepancies still remain potential reporting errors," said Knox, "the discrepancies represent potntial violations. It is the job of the Fair Practices Commission to investigate and determine if reporting violations did occur."
The prompt and indignant response from the governor's advisor suggests that even if no direct influence occurs between the gambling industry and state lawmakers, the appearance of such a relationship is growing.
This week, after Gov. Davis proposed to spend $30 million to build a new four-lane interchange leading to a desert casino owned by a major campaign donor, he met immediately with criticism of practicing pork barrel politics.
"The governor clearly went through and identified projects he wanted," Republican state assemblyman Scott Baugh told The Los Angeles Times.
A Davis spokesman told the newspaper there was no connection between donations and the decision to include the project, citing instead concerns for safety and easing congestion.
Rich with casino revenues, California's Native American tribes have pushed through two statewide initiatives in the past few years to expand gambling on reservations. A proposition passed last March allows the governor and tribes to negotiate gambling compacts on tribal lands and authorized the use of slot machines and other games. Though funded with more than $20 million in tribal money, the proposition received a great deal of public support and won with a decisive two-to-one majority.
According to the Common Cause report, 53-percent of contributions to political campaigns came from the gambling industries were given by Indian tribes. In what Knox calls a "blanket strategy," the tribes give to virtually all the sitting legislators from both parties.
"Ten years ago, we didn't even have the funds to take care of our own people, let alone donate to campaigns," said Barbara Gonzales Lyons of the Agua Caliente Band of Cahuilla Indians, which runs a casino near Palm Springs. Her tribe gave $1.6 million to candidates from 1995 to 1998, making it the second largest political donor among the tribes.
Noting that there are no Native American lawmakers in the state capital of Sacramento, Gonzales Lyons believes it's more important for the tribes to contribute politically.
"Nobody took notice of us before," she said.
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CBSNews.com staff CBSNews.com staff