Robert E. Lytle, who was director of the California Division of Gambling Control from 2002 until his retirement in 2007, is accused of violating California’s conflict of interest laws after he set up a gaming consultation business: Lytle Consulting.
Lytle is accused of obtaining confidential information on investigations of his clients and of misleading regulators about them. Lytle lists 28 clients, mainly card rooms.
Lytle could face administrative but not criminal discipline, and could lose the three gambling licenses he has from the Golden State. Lytle is part owner of card rooms in the Sacramento area, where he has a license as a “key employee.”
Lytle does face fines and the revocation of his gaming licenses, however.
The former enforcer of California gaming laws, who once worked for the California Attorney General’s office, is also seeking a license to be allowed to have part ownership in a card room in Chula Vista, San Diego County. The same card room was raided in October by a combined task force of federal and state agents. The FBI, the lead agency in the case, has declined comments on the ongoing investigation.
Lytle’s attorney has called the investigation, “a lot of smoke and not much fire.”
The state alleges that in 2012 Lytle illegally obtained confidential information from the bureau that he formerly headed, citing hundreds of phone calls, emails and texts between the two. He needed the information, say the allegations, to assist his clients. In one instance he asked for information on the criminal history of a person.
According to Attorney General Kamala Harris, “Lytle’s receipt of such information and documents potentially compromised the effectiveness, and undermined the integrity, of the bureau’s investigations.”
Lytle may have been acting for the M8trix card room in San Jose, whose owners have been accused by the Attorney General of hiding profits through dummy companies and other means.
The state also accuses Lytle of obtaining a job from the M8trix while he was still in charge of the bureau. He began working for M8trix the day after his retirement. He set up his consulting business in December of 2007.
That would violate the state’s three-year “cooling off” period that governs former officials and requires that they not represent anyone in the industry that they were regulating during those three years. However the state’s Business and Professions Code provide misdemeanors for such violations. The statute of limitations for 2007 has already passed.
Panelists on the California Gambling Control Commission, which is charged with whether to allow Lytle his gaming license and who will make the final determination on the Attorney General’s charges, are themselves facing possible conflicts of interest, say some industry sources.
One commissioner, Richard Lopes, is a personal friend and former colleague of Lytle. Another commissioner, Tina Littleton, has personal and professional relationships with members of the Attorney General’s staff investigating Lytle. In addition, Littleton is living with James Parker, the former bureau agent Lytle is accused of asking for leaked information about his client.
Lytle has denied speaking with Parker about M8trix while he was with the bureau, although he admits to having hired him as a consultant on M8trix after he left the bureau.
According to Joseph Kelly, co-editor of Gaming Law Review, “They’re both tainted.”
