Nevada fine paid

Friday, Oct. 27, 2000 | 11:22 a.m.

CARSON CITY -- Station Casinos Inc. paid a $475,000 fine to the state Gaming Commission Thursday and promised to tighten control over its political activities to avoid a repeat of allegations that one of its vice presidents engaged in illegal campaign activities.

Scott Nielson, general counsel and vice president at Station, said Mark Brown, vice president for governmental affairs, made "mistakes and poor judgment" in his efforts to ensure Clark County Commissioner Lance Malone wasn't re-elected. Brown was upset because he felt Malone double-crossed Station on a zoning issue.

Nielson told the commission the behavior of Brown was done without the authority of other top executives.

Brown and political consultant Tom Skancke worked out a plan to distribute anonymous fliers criticizing Malone for changing his vote on allowing a casino in Spring Valley in Clark County. Station Casinos opposed the location of the rival club in that area.

Malone had received $40,000 in contributions from the clubs operated by Station, which in turn raised another $80,000 for his candidacy. But then he flip-flopped on his vote.

The law makes it illegal to distribute campaign materials without identifying who is behind it.

Brown has resigned and the gaming company cancelled a $5,000 a month retainer to Skancke. Nielson said Brown was not fired or forced out. It was a "mutual decision" by Brown and the company, Nielson said.

Gaming Commissioner Arthur Marshall said he has known Brown for a long time and added that he made a "terrible mistake." But in this case, Marshall said, "We are dealing with a case of corporate arrogance."

Commissioner Augie Gurrola said he thought the fine was excessive. He said five of the six counts in the complaint against the casino company involved Brown. "Mark Brown seems more culpable than Station Casinos," he said.

But Deputy Attorney General Jeff Rodefer said the company was responsible for the actions of its employees. And the company agreed to this fine in a negotiated settlement. It also paid $23,588 in costs spent by the state to prepare and process the complaint.

The complaint charged Station Casinos did not supervise Brown when he embarked on the campaign to discredit Malone. The company did not admit to the allegations but conceded the state could prove the case if it went to a hearing.

Station will submit a new plan within the next two weeks on how it will tighten its controls over these issues. Nielson said there will not be a replacement for Brown. Instead he will take over handling political donations and other duties. And he will report to the casino's compliance committee.

Station became a publicly traded company in 1993 and it has grown quickly, Nielson said. And that has resulted in giving some executives too much leeway not to follow company policies.

The company, he said, would continue to be involved in political issues and it has "learned a valuable lesson."

Commission Chairman Brian Sandoval said this was "an isolated incident that went too far."

The commission voted unanimously to accept the agreement, even though Gurrola voiced concern that the payment was too high.

There is still a court battle going in which the state seeks to impose $5,000 civil fines both on Brown and Skancke for violation of the law. The casino, the two men and the ACLU all contend the law is unconstitutional.