Missouri judge drops perjury charges against former casino executive

Wednesday, Jan. 12, 2000 | 12:14 p.m.

Jackson County Circuit Judge Justine Del Muro took the action Monday in the case against Markland Rousseau, who had been a senior vice president of Hilton Hotels Corp.

The judge ruled that the horse racing law couldn't be applied in riverboat gambling cases.

County Prosecutor Robert Beaird said Tuesday that he would appeal in an effort to reinstate charges that Rousseau lied to the Missouri Gaming Commission at a 1996 pre-licensing hearing for the Flamingo Hilton Casino.

It is unclear how the dismissal will affect the fate of the Flamingo, which Hilton has tried to sell for a year. A Gaming Commission spokesman said Tuesday the agency had no comment.

At the 1996 hearing the commission questioned a $250,000 grant that Hilton paid in 1993 to a Kansas City firm with close ties to Elbert Anderson, then the chairman of the Kansas City Port Authority. Later that year the city agency selected Hilton over two other applicants to build a casino on city-owned land along the Missouri River.

Tom Bath, an attorney for Rousseau, said he and his client were pleased with the judge's decision. Bath said he hoped to dissuade Beaird from filing an appeal.

Hilton has long maintained that neither it nor any of its employees did anything illegal or improper.

Former Jackson County Prosecutor Claire McCaskill, now the Missouri state auditor, said she brought the charges based on the horse-racing statute because it was the only law that could apply in the Rousseau case.

"Nobody wants people to be able to lie to the Gaming Commission," she said. "It was the only statute we could proceed under."

Beaird, who succeeded McCaskill, noted that under a strict reading of existing state law it wasn't a crime to lie to the Gaming Commission when it was considering an uncontested riverboat gambling license. But he said he hoped to persuade the appeals court that applying the horse-racing statute, under which perjury is clearly prohibited, was a reasonable interpretation of the law's intent.

He said if the appeals court agrees with the Del Muro ruling, state legislators will have to modify the law. Beaird said the appeal could take 10 or 11 months and that if he's not successful he'll drop any further plans to prosecute Rousseau.

Rousseau, Hilton's advance man on the Kansas City casino project, arrived in town in late 1992 and in a matter of weeks established relationships with prominent Kansas Citians. He sought to line up support for the project in part by making grants to community groups recommended by Anderson allies.

"I was trying to find a competitive advantage," Rousseau said in a 1996 statement to the Gaming Commission.

In 1998 a Jackson County grand jury accused him of lying to the Gaming Commission about a $250,000 donation to KC Perspectives, a company operated by Michelle Lathan, in 1993. Lathan, who according to sworn testimony was Anderson's lover, also worked for a company owned by Anderson.

But in pretrial motions, Bath argued that the perjury charges themselves were flawed because Rousseau's statements under oath in 1996 were in response to "ambiguous and imprecise" questions that never dug to the heart of the matter - whether there was bribery between Hilton and Anderson or his friends, and if so, who solicited it.

In 1998, Hilton agreed to pay the federal government $655,000 in fines and penalties to avoid criminal charges that it provided financial rewards to an associate of Anderson in exchange for his political support for the casino.

Anderson is serving a prison sentence for an unrelated bribery conviction.

Mel Fisher, executive director of the Gaming Commission, told The Kansas City Star last year after the Rousseau indictment that he was prepared to recommend harsh disciplinary action against the company. Hilton then announced it was planning to sell the casino.

Fisher said the commission agreed to let Hilton off the hook because, "as a practical matter, Hilton has a right to appeal any action we might take, and we could conceivably be tied up in court for months or years."

The investigation of the Anderson matter raised fears among investors and throughout the gaming industry that Hilton was at the brink of being fined, suspended or stripped of its Missouri license. If so, other jurisdictions with Hilton casinos could have taken their own disciplinary actions against the company, jeopardizing the viability of the gambling and hospitality giant.

Hilton wrote the struggling Flamingo casino off its books as a financial loss in 1997. A deal to sell the casino to Donald Trump's organization collapsed in August, as did a more recent agreement with Station Casinos Inc.

A Hilton subsidiary still owns the Kansas City casino, despite spinning off virtually all of the rest of its casino empire into Park Place Entertainment Inc. last year. Las Vegas-based Park Place is handling the Flamingo sale for Hilton.