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Frank Urges Delay on Online Gambling Rules

11/10/08 - The Hill - View Source

By Ian Swanson
Rep. Barney Frank (D-Mass.) has asked Treasury Secretary Henry Paulson to postpone issuing regulations opposed by banks and other financial groups that would implement a ban on Internet gambling.

The “midnight rulemaking” would “tie the hands of the new administration, burden the financial services industry at a time of economic crisis and contradict the stated intent of the Financial Services Committee,” Frank wrote in a letter to Paulson and Ben Bernanke, the chairman of the Federal Reserve.

Frank, a critic of banning Internet gambling, wrote that he was “deeply disappointed” that Treasury was proceeding “with what I consider to be unseemly haste” in issuing the regulations, which implement the Unlawful Internet Gambling Enforcement Act of 2006.

“I strongly urge you to delay implementation of these major, and deeply flawed regulations to permit the incoming administration the ability to review the consequences of such a significant policy decision, rather than unfairly being denied that opportunity,” Frank wrote.

Frank’s committee approved legislation that prohibits the regulations’ implementation, and would replace the proposed rules with a formal rulemaking process that would define the term “unlawful Internet gambling.” That bill did not clear the House or Senate.

The administration has been working to implement a host of regulations on a broad array of subjects before it leaves power, something typical of administrations on the way out the door. The administration’s proposed rules on gambling would go into effect on Jan. 19, according to Frank.

In April, representatives of the American Bankers Association and the Financial Services Roundtable, among other groups, raised their opposition to proposed rules implementing the gambling ban. They argued the rules would not prevent Internet gambling and would force banks to determine what kind of transactions constituted illegal Internet gambling.

Professional sports leagues, including the National Football League, lobbied for the Internet gambling law. Last week, Rep. Steve Cohen (D-Tenn.) asked White House Counsel Fred Fielding to detail the role a former NFL lobbyist had in the administration’s decision to move forward with the rules. In a letter, Cohen said Deputy Director of Public Liaison William Wichterman, a former NFL lobbyist, “had been a source of considerable political pressure to speed this regulation through.”

Cohen wrote that the appearance of a conflict of interest “is undeniable.”

Senate records show Wichterman listed as a lobbyist for the NFL in early 2008, when he worked for Covington and Burling LLP.

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