Archive for Thursday, October 26, 2000

Hearing slated for troubled casino

Station Casino to defend itself before Missouri regulators in influence-buying case

October 26, 2000

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— Station Casino will have another chance to defend itself against allegations that a former company lawyer used his influence with a Missouri Gaming Commission official to help secure licenses.

The Gaming Commission on Wednesday unanimously approved staff recommendations to allow Station to present evidence and cross-examine witnesses in the case involving the company's St. Charles and Kansas City casinos.

At stake are Station's licenses for the two facilities. The St. Charles casino license expires on Dec. 27 and the Kansas City casino license is up Jan. 15.

Patricia Churchill, general counsel for the five-member Gaming Commission, said there is evidence to show that St. Louis attorney Michael Lazaroff used his influence with former Gaming Commission Chairman Robert Wolfson in securing licenses for the two casinos in the early 1990s.

Churchill also said there was evidence to indicate that Station executives should have known about the improper contact but chose to do nothing about it, and that bonuses paid to Lazaroff were based on his influence over Wolfson.

Station has 30 days to respond to the decision.

"I would like to see what the evidence would be," said Robert Smith, the commission's vice chairman. "I think we are proceeding in the right direction."

The commissioners also raised questions about the failure of top Station executives to appear at an August hearing in which Lazaroff and others testified before the commission.

"I think we both have black eyes," said commission member Lynne Nikolaisen. "I don't think there's been a lot of cooperation from Station."

Earlier this month, those same executives agreed to testify under protest. They denied that the company had benefited from Lazaroff's ties to Wolfson.

Charles German, a Kansas City-based lawyer for Station, told the commission the facts of the case were not grounds for failing to renew the company's licenses.

"These particular allegations that we see before you are unsupported," German said. "There are things that happen in a company that do not necessarily mean the company is bad."

He added that many of the statements made by Lazaroff in August don't stand up to closer scrutiny.

"There's just no substance to Mr. Lazaroff's story," German said. "The actual facts and evidence before you does not support this action."

German said he would be reviewing specific pieces of evidence including internal correspondence of Gaming Commission staffers, which he said show bias on behalf of the commission.

Meanwhile, an attorney representing Las Vegas-based Ameristar Casinos Inc., which announced last week that it will buy the casinos, made a brief presentation on their license applications Wednesday.

David Stanze, a lawyer for Ameristar, said the ongoing battle between Station and the commission will not affect the company's interests.

"We are just not part of this process," said Stanze.

He said the $475 million sale of Station is still pending.

Stanze added that he hopes the commission will move quickly on the licensing applications.

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