Trump’s bid to buy KC casino stalled

Rick Alm

Monday, Aug. 30, 1999 | 11:24 a.m.

KANSAS CITY, Mo. -- The fate of Donald Trump's deal to buy the Flamingo Hilton Casino in Kansas City could be known by Wednesday, and right now things don't look good.

When the sale was announced in January, Trump and Hilton agreed that either side could walk away after midnight Aug. 31 if the deal hadn't closed by that date. Now it's unclear when or whether the state will approve the purchase.

Trump and Hilton officials would not comment this week on the deal, but one gaming industry source said Friday that Hilton Hotels Corp. had been quietly shopping its Kansas City casino elsewhere.

The Missouri Gaming Commission had been expected to wrap up its background investigation of Trump and approve the sale long before now. But executive director Mel Fisher admits those background checks have bogged down in detail.

"The Trump organization is rather complex and clearly presents a challenge," he said Friday. "We were obviously overly optimistic in the length of time we thought it would take to complete the investigation."

Trump Hotels & Casino Resorts Inc. agreed to purchase the Flamingo for $15 million -- about 15 cents on the dollar that it cost to build the purple and pink gambling palace a few miles north of downtown Kansas City, off Interstate 29.

The ownership change was quietly engineered late last year to take Hilton off the hook with the gaming commission over still-pending bribery and perjury allegations that have threatened Hilton's gaming licenses in other states. Gaming officials appeared more than ready to approve the deal and be done with Hilton.

But now a Hilton official, who asked not be identified, said the company hadn't heard from the gaming commission in months.

"We were hearing a lot more information several months ago," the official said. "That's all clammed up."

Missouri regulators earlier this year acknowledged a keen interest in the Trump companies' long-term debt -- $1.8 billion and one of the largest corporate debt obligations to be found in the gaming industry.

A Hilton subsidiary still owns the Kansas City casino despite spinning off virtually all of the rest of its far-flung casino empire into Park Place Entertainment Inc. last year.

Las Vegas-based Park Place is handling the Trump sale for Hilton.

Nine months ago Hilton jumped at Trump's $15 million purchase offer.

The previous summer Hilton had agreed to pay the federal government more than $500,000 in fines and penalties to avoid a criminal trial.

The government contends Hilton provided financial rewards to associates of then-Kansas City Port Authority Chairman Elbert Anderson in exchange for his political support for the casino that eventually was built on city-owned land.

One former Hilton official has been indicted on state perjury charges related to the payments and is awaiting trial. Anderson is serving a prison term for an unrelated bribery conviction.

The years-long criminal investigation raised fears among investors and throughout the gaming industry that Hilton was at the brink of being fined, suspended or stripped of its Missouri Gaming Commission license.

If so, other jurisdictions with Hilton casinos could have taken their own disciplinary actions against the company, jeopardizing the viability of the then billion-dollar, worldwide gambling and hospitality giant.