Commission asked to find disciplinary action unwarranted; appeal still to come

Wednesday, Sept. 20, 2000 | 9:29 a.m.

A 40-page memorandum prepared by the company's Kansas City lawyers commented in detail on testimony at a two-day public hearing last month.

It said any suggestion of wrongdoing by the casino company relied on the testimony of Lazaroff, which the company characterized as "the half-truths of an accomplished liar with his back to the wall."

Lazaroff, who had represented Station when it was seeking licenses for its casinos in Kansas City and St. Charles, has pleaded guilty in federal court in St. Louis to multiple felonies - including misappropriation of more than $800,000 in law firm expense account funds and other payments that included a $500,000 bonus he received from Station.

Gaming Commission Director Mel Fisher said he hadn't read the new document and had no comment.

The memorandum did not address any issues related to the commission's proposed revocation of Station's licenses for the Kansas City and St. Charles operations, which the company plans to fight. The commission proposed the action on a 5-0 vote after top executives of the company refused to attend the hearing.

But lawyer Charles W. German said he expected to have an appeal of the revocation action on file by next week.

German said that appeal would challenge the commission's authority to issue subpoenas for the hearing and question the fact that the subpoenas were simply faxed to corporate offices in Las Vegas.

"I see absolutely no legal basis upon which any licensee could be punished for failing to obey a subpoena that doesn't have a court order behind it," German said.

Fisher said Tuesday that Station executives informally agreed earlier to accept service of the subpoenas by fax.

The commission's inquiry last month centered on events surrounding Lazaroff's guilty plea in federal court earlier this year.

Lazaroff agreed to cooperate in the investigation while awaiting sentencing in exchange for leniency consideration in his expected 27- to 33-month prison sentence.

German argued in the memorandum that Lazaroff had admitted under oath to lying in the past to his law partners, to Station executives and to commission officials.

"The only evidence in the Missouri Gaming Commission's investigative record that even remotely insinuates wrongdoing by Station comes from the self-contradicting testimony of an admitted liar who has a powerful motivation to lie to the Missouri Gaming Commission," it concluded.

The hearings were intended to determine if Lazaroff used any of the bonus money he got from Station to improperly influence public officials on Station's behalf.

Instead, evidence was presented by the commission's staff establishing that Lazaroff spent all the money on himself.

The inquiry also looked at Lazaroff's relationship with former commission Chairman Robert L. Wolfson and whether that gave Station an unfair advantage in getting its licenses, as Lazaroff maintained.

Lazaroff testified that he and Wolfson had at least 100 private conversations and had a "tacit understanding" each would provide the other with useful information.

Wolfson acknowledged the frequent contacts with Lazaroff but testified he could not recall ever passing along any information.

And top commission officials testified that the agency's preferences - such as that any future casino project include a hotel - were common knowledge.

They also said Wolfson never attempted to improperly influence their decisions during his six-year term.

The commission is considering the testimony from the hearing and whether to take further disciplinary action against the company for its actions in connection with Lazaroff's activities.