Tuesday, April 30, 1996 | 11:59 a.m.
Horseshoe executive Ted Binion took the witness stand today at his reinstatement hearing and denied using drugs while he was suspended from the gaming industry.
"Mr. Binion, I want you to tell the (Nevada Gaming) commission if you have used illegal drugs since 1994," asked Binion's attorney, Mark Ferrario.
"No, I haven't," Binion replied.
Binion had signed a Sept. 15, 1994, stipulation with the State Gaming Control Board to remain drug free and out of the Horseshoe's operations during the 18-month suspension.
Binion said hair tests he took showing traces of drugs could have been influenced by the drug use of his live-in girlfriend, Sandra Murphy. He called witnesses Monday who testified that environmental factors can affect hair tests.
Binion said today that he saw Murphy use marijuana "about five times" at his home, and he smelled marijuana another 20 times.
He also testified that he found cocaine paraphernalia in his home and that Murphy had acknowledged using cocaine there. Murphy asserted her Fifth Amendment right against self-incrimination and refused to testify at a closed-door investigative hearing last month before the Control Board.
Meanwhile, reputed underworld figure Herbie Blitzstein was prepared to take the Fifth today and not answer questions at the hearing.
Blitzstein's longtime lawyer, John Momot, informed the attorney general's office that his client, though subpoenaed, would not cooperate.
A former top lieutenant of the late Chicago mobster Anthony Spilotro, Blitzstein took the Fifth last month when hauled before the Control Board.
Binion, whose license was suspended because of drug abuse, testified at a public deposition April 10 that he has been in Blitzstein's company about 25 times within the past year.
The Control Board contends Binion helped Blitzstein circumvent normal Horseshoe procedures to cash more than $11,000 in checks at the casino New Year's Day.
The board has recommended Binion be banned permanently from the casino industry for violating the 1994 stipulation.
"It's the position of the board that Mr. Binion has struck and it's time to leave the industry," said Chief Deputy Attorney General Donald Haight in his opening argument Monday before the Gaming Commission.
Then, Haight ripped up a copy of the 1994 stipulation and added: "Essentially, what Mr. Binion and his attorneys are asking is that you take the stipulation and throw it out."
The five-member commission, meeting without its chairman, Bill Curran, who has removed himself from the case because of a possible conflict, began taking testimony Monday in its effort to decide Binion's fate.
Both sides spent most of the day debating the merits of the drug testing procedures set up to monitor Binion.
The debate focused on the validity of hair testing that Binion and his lawyers contend don't accurately measure whether someone has used drugs.
At least three separate hair tests in October and December showed traces of marijuana and cocaine in Binion's system.
The Control Board's expert witness, director of toxicology at Associated Pathologists Laboratories, which conducted most of Binion's hair exams, testified that he believed the results showed the casino executive was using drugs.
But two witnesses Binion called -- Yale Kaplan, a forensic toxicologist at the University of Maryland, and Frederick Smith, a chemistry professor at the University of Alabama, Birmingham -- testified that hair testing is not reliable.
The said they could not say with any certainty that Binion had used drugs.
Binion's witnesses also supported Binion's contention that the traces of drugs found in Binion's hair could have come from second-hand sources.
Last month, Binion told the SUN that cocaine might have accumulated in his hair from contact with drug users encountered on the adult nightclub circuit.
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