Hedged

Trump Bets on Casino Hired Gun for State Department

Ethics experts are aghast at the State Department’s decision to hire a former casino consultant with Russian ties.

When Jonathan Galaviz left his job at a casino consulting firm to go work for the Trump State Department, he didn’t have any concerns about job security. The firm—which consults for at least two Russian state entities, according to its website—proudly announced that Galaviz would be back after his stint at State. Galaviz himself consulted for a Russian government corporation on casino gambling.

It’s a situation that has left ethics experts baffled.

“We look forward to welcoming back Jonathan to GMA after he completes his service with the Trump administration,” Global Market Advisors managing partner Steve Gallaway told a casino trade publication when Galaviz took the State Department job in April.

Until Tuesday afternoon, the company’s website listed Galaviz as its chief strategist.

“Note: Mr. Galaviz is currently on unpaid leave from GMA while serving in the Trump Administration in Washington DC on a full-time basis at the U.S. Department of State,” read his bio page.

The Trump administration hasn’t shied away from ethically dicey situations. But ethics experts say this is one of the strangest.

“I’ve never seen this arrangement, to be honest with you, for somebody who is taking a position in the U.S. government to be on unpaid leave from a for-profit entity,” said Virginia Canter, the executive branch ethics counsel at the Citizens for Responsibility and Ethics in Washington.

“It borders on recklessness. It exposes him to some serious potential for conflicts of interest,” she added. “This arrangement carries a high degree of risk and he will probably need a lawyer following him around to make sure he understands each and every day what he can and cannot participate in.”

According to his LinkedIn page, he’s an advisor “focused on various high-level strategic initiatives.” A State Department official told The Daily Beast that Galaviz was based as of June 11 at the State Department’s J Bureau, which includes the Office of Global Criminal Justice, the Bureau of International Narcotics and Law Enforcement Affairs, and the Bureau of Democracy, Human Rights, and Labor. The official also said Galaviz has received guidance on his recusal obligations, and that he was listed as a Transition Team advisor as of Feb. 8, 2017.

Steven Galloway, the managing partner at GMA, told The Daily Beast that there are no conflicts of interest regarding Galaviz and the consulting firm, and that “Jonathan and GMA have completed the necessary paperwork to ensure full compliance with all applicable rules.”

Galloway also gave this explanation for why his bio page said he was on “unpaid leave”: “In terms of the webpage, that was an old archived webpage created during Jonathan’s professional transition. Due to a technology error, it apparently was still showing. Our IT department has fixed the error.”

The Galaviz bio page was removed shortly after The Daily Beast emailed Galloway asking about it.

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Galaviz did not respond to requests for comment.

Before it was taken down, Galaviz’s bio page summarized his extensive corporate experience, including work with Caesar’s Entertainment and Goldman Sachs. A Bloomberg profile of Galaviz said he is known in the casino industry for a 2004 paper “outlining the tourism benefits of casino gaming legalization in Singapore.”

Galaviz’s former firm, GMA, boasts that it consults for foreign governments around the world on public policy issues related to tourism and gaming, including countries in North America, Europe, and Asia. Its current clients, according to the site, include a host of gaming industry powerhouses with interests around the world: Wynn Macau, helmed by RNC Finance Chair and Trump inaugural committee member Steve Wynn; Great Canadian Gaming Corporation; the Marina Bay Sands five-star luxury hotel in Singapore; ASF Consortium, an Australian investment firm that includes Chinese government investors; Nash Dom Primorye, a state-run Russian construction investment firm based in Vladivostok; and the Primorsky Territory government, also in eastern Russia. The firm also consults for the government of the state of Victoria in Australia and for Ontario’s lottery and gaming commission.

A press release from Nash Dom Primorye noted that the entity hired Galaviz’s old consulting firm, Galaviz and Company, as “designated public policy advisors” to provide “guidance on global best practices.”

Shortly after the election, Galaviz wrote an op-ed for TheStreet arguing that Obama was too critical of Rodrigo Duterte, the president of the Philippines, over his brutal drug war that has left thousands dead. Galaviz described Duterte’s practices as “questionable,” and said Obama’s criticism of them was unnecessary.

Galaviz’s firm consults for businesses that invest in the Philippines, including Bloombery Resorts & Hotels Inc. and Macquarie.  

“To put it in context, it would be like if Duterte opined every time America’s Drug Enforcement Agency had a shootout with drug dealers in the U.S.” he wrote. “American policymakers would have a fit.”

All of this raises concerns among ethics watchdogs.

“We have witnessed revolving door examples that cause heartburn, but this example might take the cake,” said Scott Amey, general counsel for the Project on Government Oversight. “While I respect Mr. Galaviz’s desire to engage in government service, we need to ensure that he’s promoting the public’s agenda. The potential for conflicts of interest, especially when his employer has his bio online and states that he’s on leave, is higher than usual. Let’s hope that he doesn't stack the deck in favor of his employer and its clients.”

But while it worries watchdogs, Galaviz’s set-up with GMA got him a round of internet-high fives from people in the casino industry.

“If Galaviz’s recent activity is any indicator, he will be focusing on Pacific Rim issues,” wrote industry blogger David McKee on his site. “I’ve met Galaviz and read his work at every opportunity, and don’t think the Trump administration could have done better. And Global Market Advisors is keeping Galaviz’s seat is warm for when his diplomatic duties are over. Who could ask for anything more?”

—with additional reporting by Katie Zavadski