Station Casinos execs refuse to appear, licenses could be in jeopardy

Kelly Wiese

Thursday, Aug. 31, 2000 | 9:33 a.m.

KANSAS CITY, Mo. - After top executives of Station Casinos Inc. refused to appear at a Missouri Gaming Commission hearing about payments the company made to St. Louis lawyer Michael Lazaroff, the commission said it will seek to revoke licenses for its casinos in Kansas City and St. Charles.

The commission had issued subpoenas for the executives and other employees to attend Wednesday's hearing and when they refused to do so it announced it would begin the license revocation process.

Charles German, Station's Kansas City lawyer, said the company will request a full hearing on the attempt to remove the licenses. It has 30 days to make that request,

An independent hearing officer would present findings from such a hearing for the commission to consider, and if the panel proceeds with revocation Station could appeal to Missouri's Western District Court of Appeals and then the full Missouri Supreme Court, said Kevin Mullally, the commission's deputy director.

Only if those appeals were denied would the boats be forced to close.

Station operates Kansas City's biggest and most lucrative casino and another complex in St. Charles. The company's Missouri casinos generate $288.4 million a year in gambling revenues and employ 3,500 people.

The commission scheduled the rare public inquiry, which continues on Thursday, to take testimony about a $500,000 bonus Station Casinos paid to Lazaroff, who represented the Las Vegas-based company in its bid for state licenses.

Lazaroff, who testified for about four hours at Wednesday's hearing, pleaded guilty in federal court at St. Louis earlier this year to multiple felonies - including misappropriation of more than $800,000 in law firm expense account funds and other payments that included the $500,000 from Station. He will be sentenced in October, but his cooperation with the gaming commission could reduce his sentence.

Eight Station employees, including its top executives, were subpoenaed earlier this month to appear before the commission but the company announced Tuesday that they would not be there.

"This is not a proceeding designed to give the full story," German said.

The commission staff also said it plans to deny a licensing application from William Warner, a Station executive and one of a handful who are trying to buy the company.

German said the commission is bound by its rules to conduct such inquiries behind closed doors. He said the company had cooperated fully and turned over thousands of documents under the condition they be kept confidential.

Questions have been raised about whether any of Station's bonus money was used to improperly influence public officials in the licensing of the company's two Missouri casinos, in May 1994 and January 1997.

But Lazaroff denied during his testimony that any money was given to state or gambling officials.

Attention then shifted to his personal relationship with former commission chairman Robert L. Wolfson, and whether that affected Station's ability to win state gambling licenses.

There's a commission rule against communications between commissioners and license applicants or their representative on commission matters, other than on broad gambling topics.

But Lazaroff said he and Wolfson conversed many times, often on specific projects or issues important to Station or his other clients.

Commission staff combed through phone and fax records of communications between the two, which Lazaroff provided. He noted that commissioners are supposed to report such contacts to the commission.

He also said he and Wolfson gained from the shared information.

"It was a habit," he said. "A habit that when it was legal, was mutually beneficial."

He cited specific times when Station executives asked him to contact Wolfson to get a feel for the commission's attitude toward a proposal.

"I absolutely believe my relationship with chairman Wolfson provided Station Casino with more of a forum than they would otherwise have received," in winning the Kansas City location, Lazaroff said.

But he added that their tie alone would not have been enough.

German, with Station, later said that the company did not know about any improper conversations.

"We hire lawyers like Mike Lazaroff to keep us out of trouble, not get us in trouble," he said.

Later in the day, Wolfson told the commission that he had "no recollection" of any conversations w