Station says its executives will refuse to testify at Missouri Gaming Commission hearing

Steve Green

Tuesday, Aug. 29, 2000 | 6:17 a.m.

Locals' casino giant Station Casinos Inc. of Las Vegas disclosed late Tuesday that its executives are refusing to testify at Wednesday's hearing of the Missouri Gaming Commission on bonus payments Station made to a St. Louis lawyer.

Station said the Missouri commission has no authority to compel its executives to testify.

In a brief filed Tuesday with the Missouri Gaming Commission, Station suggested that the former attorney, Michael Lazaroff, is prepared to testify that the $500,000 in bonus payments involves "improper contact" with former Missouri Gaming Commission Chairman Robert Wolfson.

Station's brief suggests that Lazaroff may implicate Station in an illegal scheme involving public officials to gain its Missouri gaming license.

But Station said this would be a lie and that it has done nothing wrong in Missouri.

"Based on questions asked of Station's executives by the MGC (Missouri Gaming Commission) staff, it appears that Lazaroff's new testimony will contradict his prior sworn testimony, his taped suicide message and his assurances to Station that he had never participated in improper contact with Mr. Wolfson," Station's brief said.

Lazaroff, who pleaded guilty to hiding from his law firm the $500,000 in bonus payments, tried but failed to kill himself when the scandal over the bonus payments surfaced.

Station said the hearing set to begin Wednesday in Kansas City is illegal because it does not afford Station a chance to defend itself.

"Station declines to participate in this proceeding, or compel any of its officers or employees to testify, because this public hearing is not being conducted in accordance with Missouri law or MGC regulations. The public hearing is not designed to elicit the truth concerning Lazaroff's activities. Rather, the staff appears intent upon diverting attention from its own long-time knowledge of and acquiescence in Lazaroff's activities by holding Station and other Lazaroff clients responsible for Lazaroff's actions that are now being recast by Lazaroff and the staff as improper."

Seven Station executives, including its CEO and chief financial officer, and one executive secretary were subpoenaed by the Missouri commission for Wednesday's hearing.

"Station Casinos has a long tradition of complying with regulatory bodies in the jurisdictions where it operates, but we also have a tradition of protecting our shareholder interests," said Charles W. German, a Station attorney with Rouse Hendricks German May of Kansas City. "For us to participate in this proceeding would place our executives in a position of debating the truth with a convicted felon and liar -- a man who cheated Station Casinos, his law partners, other clients and the Federal Election Commission."

In June, Lazaroff pleaded guilty to three felony counts in federal court involving fraud against his law partners, his clients and the Federal Election Commission. Lazaroff is scheduled to be sentenced Oct. 3 in Federal Court in St. Louis. As part of his guilty plea, Lazaroff has agreed to cooperate with the MGC and a federal grand jury.

"Station never hid the fact that it paid bonuses to Lazaroff," German said. "The United States Attorney's Office in St. Louis has stipulated and the MGC staff has confirmed that the entirety of the bonus payments were used for Lazaroff's personal purposes, and that not one penny went to any public official or was used for anything improper.

"Michael Lazaroff is an admitted and repeated liar," German added. "He now has every motive to lie in an effort to reduce his sentence. We simply won't be a party to that kind of proceeding."

In a letter to MGC Chairman C. E. Fisher delivered this morning, German requested the opportunity to speak at tomorrow's hearing.

"We would like the opportunity to point out to the commissioners themselves that their staff, in violation of the body's own rules and Missouri's laws, has staged a hearing that deprives Station of its basic rights to provide information, shed light on the testimony being debated, ask questions of Lazaroff or other witnesses, and defend against scurrilous accusations of a convicted felon desperate to stay out of prison," said German. "The company has already provided thousands of pages of documents, including confidential and privileged information. We have submitted to interviews and sworn, videotaped depositions. Yet we are not afforded common, constitutional protections and practices under the law."

Station's Missouri-based General Counsel of Midwest Operations Troy Stremming has said he is still considering the request to appear, Station said.