Months before casino applicant Louis DeNaples received his casino license, the Pennsylvania State Police realized that DeNaples may have lied to gaming regulators – but kept it secret from regulators, the State Police acknowledged today.

That decision meant that the Pennsylvania Gaming Control Board was in the dark about the potential perjury when they voted in December 2006 to give DeNaples a license to open a USD 412 million Poconos slots parlor.

This week, DeNaples was charged with perjury based in part on the same information that state police knew then.

In interviews today, current and former state police officials said the agency decided it could not share information about a potential crime with the gaming board – even though, under a deal brokered by a judge, police were supposed to be passing along any potentially damaging information about DeNaples.

State Police Deputy Commissioner Frank Pawlowski defended the agency’s decision today. Even though troopers signed cooperation agreements with the gaming board, Pawlowski said it could not share its suspicions because it immediately launched its own inquiry into possibly perjury by DeNaples. That inquiry eventually merged into the grand jury probe.

„We’re not going to compromise any ongoing investigation,“ he said.

He also said that although state police suspected that DeNaples had perjured himself, it took further work by the grand jury to make a case.

Thomas A. Decker, former head of the gaming board, said he was astonished at the revelation that the information had not been shared.

„I’m totally stunned,“ he said.

He added: „If it’s true that Mr. DeNaples lied, they [state police] did a horrible disservice to the citizens of this commonwealth.“

If the state police had shared their suspicions, Decker said, the gaming board would have delayed any vote on giving DeNaples a license and would have reopened its investigation of his background.

Retired State Police commander Ralph Periandi, who preceded Pawlowski as head of gaming investigations, also confirmed that state police had decided not to pass on its perjury suspicions.

At issue is whether DeNaples lied to the gaming board about his relationship with Imam Shamsud-din Ali, a Philadelphia cleric convicted of racketeering and extortion in the City Hall corruption case.

In a 2002 phone conversation recorded by the FBI, DeNaples, Ali and others talked about a business deal in which DeNaples‘ landfill would accept debris from demolished Philadelphia rowhouses.

In the conversation, DeNaples said he was interested in the deal, and Ali in turn told DeNaples that he had lined up a coveted parking spot for DeNaples‘ daughter near the University of Pennsylvania.

Yet, in his 2006 testimony before the gaming board’s lawyers, DeNaples said he didn’t remember Ali and had only vague recollections of meeting „two black people“ about the deal.

„To me, all black people look alike,“ DeNaples told the lawyers.

On Oct. 4, 2006, the gaming board e-mailed the transcript of DeNaples‘ testimony to the state police – with areas highlighted for the troopers to check out.

Because the gaming board investigators were not sworn law enforcement officers, they had no legal right to see confidential information such as the FBI transcripts.

But under a deal brokered by a federal judge, in May 2006, state police agreed to review such information, and, if they found anything damaging, to go back to the judge for permission to turn it over.

In fact, state police did suspect that DeNaples might have committed perjury, according to Pawlowski and Periandi.

They opened their own criminal investigation of DeNaples. And, they said, because the matter was then an ongoing criminal investigation, they could not tell the gaming board about it, after all.

Pawlowski said the decision to withhold the information was endorsed by Assistant U.S. Attorney Frank Labor. Labor said that he would not comment, citing secrecy rules.

Moreover, Pawlowski said, troopers at that stage had only suspicions, not proof.

„We didn’t have a smoking gun or anything we could give gaming at that particular time,“ he said.

„We didn’t sandbag anybody,“ he said. „An ongoing investigation is not going to be compromised, for a licensing, for employment, or, for that matter, for another criminal investigation.“

State police turned over their suspicions to Dauphin County Prosecutor Ed Marsico, and it became the basis of one of four perjury charges leveled by a Dauphin County grand jury against DeNaples.

Those charges, in turn, prompted the gaming board to immediately suspend DeNaples‘ license and to decree that he could not even enter the casino he opened Oct. 15.

The failure of the state police to share the information comes against a backdrop of a long-running feud between the troopers and the gaming board. The state police have been resentful that they were not given the prime responsibility for investigating casino applicants; instead, the Gaming Board has relied on its own unit of civilian investigators.

The dispute has even sparked a pending lawsuit by the union for state troopers. Decker alluded to the disagreement in a barbed comment.

„It seems that somebody really dropped the ball on the part of the state police,“ Decker said, then added:

„Somebody dropped the ball here. Or there’s another motivation.“

State police said their only motivation was to protect the investigation.

A lawyer for DeNaples has denounced the charges as a „shameful witch hunt“ and said the casino owner would fight them.