Station Casino execs appear to testify before Missouri gaming panel

Paul Sloca

Tuesday, Oct. 10, 2000 | noon

JEFFERSON CITY, Mo. - The president and CEO of Station Casinos Inc. refused to testify Tuesday at a Missouri Gaming Commission hearing into the activities of a St. Louis attorney who formerly represented the company.

The attorney for chief executive Frank J. Fertitta said a commission member's comment about the testimony of another Station official showed the panel is prejudiced.

Last month Fertitta and six other executives of the Las Vegas-based company refused to appear after being subpoenaed for an earlier hearing in Kansas City. That prompted the commission to vote to revoke Station's licenses in Kansas City and St. Charles, an action which is under appeal.

The commission later gave the casino executives another opportunity to testify and the company's Kansas City attorney, Charles German, announced at the start of Tuesday's hearing that they would do so, while maintaining that the proceeding was unauthorized and inappropriate.

"We do our best to protect our ability to operate," German said.

The hearing centers on allegations that St. Louis attorney Michael Lazaroff, who represented Station during the licensing process, used $500,000 in bonuses received from the company to improperly influence public officials on Station's behalf.

The inquiry has also dealt with Lazaroff's relationship with Robert L. Wolfson, former chairman of the commission, and whether that gave Station an unfair advantage in getting its licenses.

Lazaroff pleaded guilty in U.S. District Court at St. Louis to mail fraud and he was sentenced early this month to 30 days in jail and 90 days of home confinement. He testified at the commission's hearing in Kansas City.

Station's chief financial officer, Glenn Christenson, said during about 90 minutes of questioning that he was unaware of any contacts between Lazaroff and Wolfson that dealt specifically with Station's licensing. He said that as he understood it the contact was merely social.

"I know that Mr. Lazaroff and Mr. Wolfson were friends, and I know they would talk on occasion," Christenson said. "I don't remember anything specific about Station Casinos."

In response to several questions asking if he knew of any specific conversations or correspondence between the two related to Station, Christenson said "I don't recall."

Asked whether he was concerned that the two men might be violating state law by discussing casino-related issues, he said, "Those guys knew what the rules were."

Just before a recess, the current commission chairman, L.G. Ullery, raised questions about Christenson's lack of recall, saying, "It's a bother of mine."

After the break the commission called Fertitta, but he did not come forward. His attorney, Robert Morvillo, said Fertitta would not testify and cited Ullery's comment.

"The entire issue has been prejudged," Marvillo said, adding that the commission does not have authority to hold an open hearing on the matter.

Commission member Lynne Nikolaisen then recommended that the panel consider fining Station $1 million if Fertitta wouldn't testify.

"They are not cooperating with us," she said. "The cooperation is not there. I think it's penalty time."

Stan Mortenson, a lawyer for Station general counsel Scott Nielson, then said that Nielson also would not testify, saying that based on Ullery's comment he thought the attorney general's office was trying to pursue perjury charges.

Lawyers for Station raised questions about letters they said had been sent by the commission staff to the federal judge handling Lazaroff's case. They said they had not seen them but understood that Lazaroff's testimony before the commission was described as truthful.

That, the lawyers said, raised further concern about the commission's objectivity.

Commission members said they had not seen the letters either and said after a closed session that they would not review the letters. They said there was some question about whether the letters were public, and the panel was checking with the judge's office to see if they could be released.

"I don't feel these letters have any bearing one way or another," said Robert Smith, vice chairman of the commission.

But Morvillo said the letters had an impact on the brevity of Lazaroff's sentence, making them significant.

Just before the lunch break, Morvillo and Mortenson repeated that their clients would not testify, and they were then given subpoenas for both executives.