Atlantic City: casinos, boardwalk and now sex tape

ATLANTIC CITY, N.J. (AP) - December 6, 2008 Even by the flamboyant corruption standards set by Atlantic City's government over the decades, this was one for the books. Former City Council President Craig Callaway was sentenced Thursday to three years in prison for his role in setting up council rival Eugene Robinson with a prostitute in a motel room and secretly videotaping the encounter. "From the inception of /*Atlantic City*/, there has been a culture of corruption here that has never washed away with the tide," said Virginia McCabe, an Atlantic City radio host who received the first copy of the sex tape. "It's what Atlantic City grew up on and handed down from one generation to the next." In addition to the crushing economic slump that's crippling the city's 11 casinos in the nation's second-largest gambling resort and threatening the construction of at least two others, the city got a dose of bad publicity last year when Mayor Bob Levy dropped out of sight for two weeks, earning the nickname "the Missing Mayor." When Levy finally did resurface, he resigned, admitting he had been abusing painkillers and that he had lied about his Vietnam War service in order to fatten his veterans' benefits checks. Levy was sentenced to probation, and has to pay back $25,000 in extra benefits he received as a result of falsely claiming he was in a special operations unit that worked behind enemy lines in Vietnam.

"The only thing that appears to be missing from City Hall in Atlantic City over the years is P.T. Barnum," said James Leonard Jr., a politically active lawyer. "The corruption, the sex, the Missing Mayor - it seems to be only in Atlantic City that they do it this vigorously.

"Atlantic City is a town whose origins are rooted in vice," he said. "It's like the temptations are just too great here."

Levy resigned in October 2007. Four of his eight predecessors also had been arrested on corruption charges.

Some council members haven't fared much better. As recently as 2006, one third of the nine council members were either in prison or on their way. One incumbent councilman is awaiting trial next year for his role in the Callaway sex video case.

In 1989 and 1990, four council members and the mayor were indicted in a bribery case. Only one councilman and the mayor, James Usry, were convicted.

Callaway had come to dominate the all-Democrat city government. His network of family and friends mastered the technique of soliciting and collecting absentee ballots in poor neighborhoods.

In more than one election, candidates who thought they had won, according to voting machine totals, ended up losing when hundreds or even thousands of Callaway's absentee ballots were counted. He also was arrested 25 times, with many of the cases involving his use of a bullhorn to shout down opponents. Once, he was convicted of throwing a brick at a political rival's van.

Callaway had been a leading candidate for mayor when the FBI nabbed him for taking $36,000 in bribes.

He pleaded guilty in that case, then had one piece of unfinished business: taking down Robinson, a council rival.

In 2006, he rented two rooms at the Bayview Motel, a nondescript lodging outside Atlantic City.

According to an FBI agent's court testimony in June, co-defendant Floyd Tally placed a camera hidden in a clock radio inside one of the rooms. A video recorder was set up in the adjacent room.

The agent said Callaway and his brothers, Ronald and David, paid a prostitute between $150 and $200 to lure Robinson to the motel and perform a sex act on him.

Councilman John Schultz allegedly arranged for a computer expert to help edit the video and blur the woman's face, the agent testified.

Prosecutors say Callaway and the others confronted Robinson with the tape and told him it would be released to the media if he didn't resign.

Robinson refused, and contacted authorities. He declined to comment, but has filed an invasion of privacy lawsuit against Callaway and several others. Robinson maintains the sex was consensual, and that money he gave the woman was to buy sodas.

Callaway is serving his three-year sentence for conspiracy to commit invasion of privacy at the same time he serves a 40-month federal prison term in the bribery case.

All the remaining defendants in the video case have pleaded innocent and maintain they had nothing to do with the taping. They are due in court Jan. 13.

McCabe has little hope Atlantic City's government will clean up its act, especially since Callaway's blackmail attempt didn't cost him any additional prison time.

"We have a history here," she said. "We don't give our criminals much punishment; we just give them publicity."

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