Michael Lazaroff

The Casino Beat

More than 20 years ago the RFT dragged its feet reporting on the Michael Lazaroff scandal. Some people prefer to forget about it.

Mobbed Up: On Oct. 14, 1992, St. Louis Post-Dispatch reporter Phil Linsalata revealed that Station Casino founder Frank J. Fertitta Jr. helped skim millions from Vegas casinos for the Kansas City Mafia. When a scandal later broke over the casino company’s illegal activities in Missouri in 1999 and 2000, the Riverfront Times failed to report on Fertitta’s ties to organized crime. Then-RFT managing editor Roland Klose is now an editor at the Post-Dispatch. The following story appeared on the Media Mayhem blog, Feb. 8, 2004. C.D. Stelzer is a former RFT staff writer.

If I had all this juicy information on Station Casino’s founder Frank J. Fertitta Jr. why didn’t I write the story? Why pass such rich material to a fellow reporter? Was I altruistic or just lazy? Well, it’s kind of a long story.
At a Riverfront Times staff meeting in late 1999, reporters were asked to submit issues that they were interested in covering. Among those I chose was the casino beat.
I had a good source — anti-casino lobbyist Steve Taylor. When I was still freelancing for the RFT in the  early 1990s, Taylor had provided me with accurate information. During this time, he was an environmental activist opposed to the Times Beach dioxin incinerator. I wrote a few dozen stories on the Times Beach Superfund Cleanup. One caught the DNR, EPA and their contractors cooking the books on the stack emission tests. Exposing this fraud won me top honors for investigative reporting in 1997 from the Missouri Press Association. Taylor leaked me reams of data that pointed to the corrupt practices. I knew I could trust him from experience. In his new job for an outfit called Casino Watch, he was down in Jefferson City during the legislative sessions, keeping tabs on the then nascent gambling industry. This meant he could relay developments in a timely manner.

But hard-hitting, timely casino coverage didn’t appear to be exactly what the RFT was looking for under the New Times ownership. After all, Station Casino, the gambling company that was ultimately kicked out the state and fined $1 million, ran full-page ads in the RFT every week. But at the time, I was still naïve enough to believe advertisers didn’t hold sway over editorial judgments.

A week after we submitted our choices for beat coverage, editor Safir Ahmed announced the selections that he and managing editor Roland Klose had made. I didnt’ get the casino beat. Bruce Rushton got it. (When I later wrote about the proposed Lemay casino, I pitched that idea to my editors as a St. Louis County

Roland Klose, former RFT managing editor.

development issue.)

As a result, when I got a tip in December 1999 from attorney Joe Jacobson that Michael Lazaroff, Station’s lobbyist/lawyer, was about to be busted for illegally meeting with Volvo dealer and state gaming board chairman James Wolfson, I handed it over to my editors. Within days of receiving the tip from Jacobson, Lazaroff attempted suicide. Lazaroff was then a law partner at Thompson Coburn. His office was next to former U.S. Sen. Thomas Eagleton’s.]

This was a huge story and we had a jump on the Post-Dispatch. Being a good soldier and following the chain of command, I alerted my superiors, who assigned Rushton to cover the story.  But I was still curious about the case. So I did some digging on my own. I soon discovered (and it wasn’t very difficult) that Station’s founder had past ties with the Mafia, Because of his mob ties he had been forced to put Station’s Missouri gaming license in his son’s name. Suddenly, a huge story grew much, much larger. Dutifully, I also handed over this information to Rushton, Ahmed and Klose.

What happened? Nothing.

Former RFT staffer Bruce Rushton.

The biggest story I ever uncovered in my career and these three sat on it for a full 11 months. When Rushton’s cover story finally did see the light of day on Nov. 1, 2000, it didn’t even mention Frank J. Fertitta Jr. It barely mentioned his son. Of course, there was no reference to organized crime. Leaving out Fertitta was like writing a story about the Anheuser-Busch brewery and leaving out the name of August Busch III. Even if Feritta’s ties to the Mafia weren’t deemed important, Rushton could have still dropped a short paragraph or a sentence into the body of the story. He didn’t. His story was over 5,000 words long. So the omission wasn’t because he didn’t have enough space. And the omission wasn’t because he was ignorant. So how many reasons for this “oversight” are left other than those two?

Believe it or not, an earlier story by Rushton on Lazaroff didn’t even bother to mention Station Casino at all. Instead, it focused exclusively on illegal campaign contributions made by Lazaroff and his law partners. This story ran on July 12, 2000. Let me make this clear: Rushton — the casino beat reporter — wrote about a crooked casino lobbyist’s illegal activities but failed to even mention anything about Lazaroff’s largest client — Station Casino. By this point, Rushton already had been sitting on the story for eight months.

But it gets worse. After he wrote the less than definitive Lazaroff/Station’s story in the summer of 2000, the RFT sent him to Atlanta to cover a stock car race, as a part of a fluffy sports profile on some amateur driver.

Tipster Joe Jacobson.

I had been connected to the paper for a decade by this point and I never saw anything like that before. The RFT covers local issues mainly and only does limited sports coverage. It was unprecedented to send a reporter half way across the country to cover a minor sporting event. Unlike the Lazaroff/Station’s story, Rushton cranked out the race car story in a couple weeks. (Quantity not quality counts most at the RFT. Bruce had to keep up with his quota.) Then he went on vacation in August for two weeks just as the Lazaroff hearings were set to start.

His cover story wouldn’t run until November.

I remember the day he finally wrapped up the Lazaroff cover story. His spirits were buoyed. It was like a weight had been lifted off his shoulders. I saw him walking down the hall past my office. He was heading for the fire escape for a smoke break, as was his usual custom. But this time he hadn’t waited until he got outside to light up, and Bruce wasn’t smoking tobacco that day.

He bogarted the joint.

After prosecuting the mob trial in Kansas City for the Justice Department, David Helfrey moved across the state and set up shop as a white-collar criminal defense attorney.

Who’s Hiding What?

Don’t get distracted by the shell game, folks. Nobody hid the fact that Station Casino founder Frank J. Fertitta Jr. was an associate of organized crime from Riverfront Times reporter Bruce Rushton. The information was packaged neatly and placed in his hands — by me. I gave the same information to editor Safir Ahmed and managing editor Roland Klose, too.

But in the opus that Rushton wrote about attorney and gambling lobbyist Michael Lazaroff in the late fall of 2000, Rushton failed, for unknown reasons, to mention anything about Fertitta’s sordid past.

Flipper: Federal prosecutor-turned criminal-defense attorney David B.B. Helfrey.

He could have asked David Helfrey, Station’s outside counsel, about Fertitta, of course, because Rushton interviewed him. But apparently he chose not to ask any tough questions of Helfrey, who prior to becoming a criminal defense attorney, was a federal prosecutor in Kansas City. In that capacity, Helfrey was in a position to know about Fertitta’s organized crime background because FBI wiretap transcripts allude to Fertitta being involved in the Las Vegas skimming operation carried out by Carl Thomas, a casino executive who was recorded having conversations with Kansas City Mafia bosses Nick and Carl Civella among others in 1979. During the conversations, Thomas mentions Fertitta repeatedly as being a part of his crew, a crew that bilked the casinos out of millions and deposited the money into the hands of the Mafia families in Kansas City, Milwaukee, Cleveland and Chicago. The case became the basis for Nicholas Pileggi’s 1995 non-fiction bestseller Casino: Love and Honor in Las Vegas, which director Martin Scorcese made into a blockbuster movie, starring Robert DeNiro, Sharon Stone and Joe Pesci.

Fertitta’s tainted background is the reason that he chose to put Station’s Missouri license in his son’s name — Frank J. Fertitta III. Rushton knew this because I gave him a copy of a story by former St. Louis Post-Dispatch reporter Phil Linsalata from 1992, when Station’s was applying for the state license for the St. Charles casino. [In the 1992 story, Linsalata duly reported Fertitta Jr.’s Mafia ties.

Michael Lazaroff

Rushton also knew that Michael Lazaroff feared for his life and was given state police protection during and after the Missouri Gaming Commission hearings that were held in Jefferson City in the summer of 2000. He knew this because he was told as much by Steve Taylor, an anti-casino lobbyist who attended the hearings. I later confirmed Taylor’s recollection through Missouri Assistant Attorney Mike Bradley.

Why would Lazaroff be in fear of his life? Because another witness had died when asked to testify by the gaming board. Carl Thomas — the person who had direct knowledge of Fertitta’s organized crime connections — had been asked in 1993 to provide background information on his former employee to the Missouri Gaming Commission. Thomas traveled to Las Vegas from his home in Oregon to confer with Station’s executives in Las Vegas about the upcoming testimony. But he never made it to Missouri to testify. After his Vegas visit, Thomas returned to Oregon and died in a one-car accident.

Lazaroff’s own testimony refers to “Carl Thomas”, and the “Fremont” casino and “Argent” corporation, all of which were part of the Kansas City Mafia’s skim operation in Las Vegas in the 1970s. Rushton had a transcript of the Missouri Gaming Commission hearings in which Lazaroff made these references. He could have quoted directly from Lazaroff’s testimony. Instead, he chose to portray him as a clown.

At the hearings, retired FBI agent and former Gaming Commissioner William Quinn testified that he had

Frank J. Fertitta Jr., who died in 2006, skimmed casino cash for the Civella crime family of Kansas City.

talked to Helfrey, Station’s lawyer, on three occasions. Quinn already knew Helfrey because they had worked on the Operation Strawman cases together. Strawman was the FBI operation that resulted in the conviction of 19 Mafia members in the Midwest, including the Civella brothers of Kansas City, for skimming from the Hacienda, Fremont, Stardust and Tropicana casinos in Las Vegas.

The transcript of the Gaming Commission hearings, show that Quinn testified that on one occasion Helfrey asked him over the phone to meet with him and a Station’s representative. Quinn’s testimony shows that Helfrey had been retained after the Lazaroff scandal broke. In other words, Helfrey was already representing Station in a legal capacity. In short, Helfrey’s and Lazaroff’s legal services to Station Casino overlapped. They were both working for the same company at the same time. Moreover, if Helfrey and a Station’s representative had met with Quinn, it would have been comparable to Lazaroff’s violations in meeting with Gaming Commission chairman Wolfson. Such a meeting would have been in violation of the Commission’s “ex parte” rule, which was set up in 1994 to make sure that state gaming commissioners did not fall under the influence of the casinos that they were supposed to be regulating.
Quinn said he was concerned about his former colleague’s s suggestion and he refused to meet with Helfrey and the Station’s representative. Again, Rushton had the transcript of Quinn’s testimony. But instead of citing Quinn, he relied heavily on Helfey’s version of events in telling the story.

Nobody hid this information from Bruce Rushton. But he did manage to hide it from the public.

Wild’s Thing

A former Thompson Coburn partner — tarnished by the Michael Lazaroff scandal — now works as a lawyer for the University of Missouri. His duties include pitching the sale of Mizzou’s property in St. Charles County, a plan that could result in a controversial subdivision being built near the KATY Trail. As the plan edges forward, the school continues to rely on Thompson Coburn’s skills to oversee a wide range of its financial affairs. Mizzou says there’s no conflict of interest. 

Go Tigers!: Mizzou lawyers Kevin Hogg (left) and Steven R. Wild appearing before the St. Charles County County Council on April 9.

In 2016, attorney Steven R. Wild left his partnership at the St. Louis silk-stocking law firm of Thompson Coburn to become a public servant. At his former firm, he had specialized in finance and real estate law for 17 years, cutting $1 billion in complex agreements that melded public and private interests.  Wild’s new employer — the University of Missouri — acquired his legal acumen for an annual salary of $130,000, a pittance considering his level of expertise.

It was a serious mid-career move for a lawyer of his prowess, a choice that must have demanded considerable deliberation. But for Mizzou, at least, the decision to hire Wild was a slam dunk. The university was well aware of the law firm’s sterling reputation because it has been a client of Thompson Coburn for decades.

With the exception of one incident earlier in his career, Wild possessed impeccable credentials, too. Wild’s intimate familiarity with the law was matched by decades spent forging professional contacts in the legal and business worlds. Mizzou hired a consummate insider, a Vanderbilt-educated lawyer with one of the top law firms in the state.

All of this would be academic, if not for the role he now plays in the controversial land sale approved by the St. Charles County Council last week. On June 25, the council voted five to one, with one abstention, to allow the University of Missouri to sell property in its Missouri Research Park to NT Home Builders, a St. Charles-based residential development company owned by real estate tycoon Greg Whittaker.

The proposal had been the subject of discussion before the Council for months, and Wild was one of the university’s point men. When he attended the April 9 St. Charles County Council meeting in support of the university’s property sale, his presence did not go unnoticed. Council Chairman Dave Hammond kowtowed and offered laurels. Hammond was so accommodating he bumped up Wild and another university barrister to appear before the council ahead of the attorney representing the developer, an ingratiating gesture that signaled the clout that the Mizzou’s  legal team wields. When viewed from council’s side of the dais, nothing about Hammond’s fawning behavior was inappropriate  On the contrary, it was a display of courtesy and decorum. Wild’s role didn’t even require a speaking part. All he had to do is show up. The public performance, scripted by Roberts Rules of Order,  could not have appeared more innocuous.

What’s gone down behind the scenes, however, is anybody’s guess because council’s executive sessions are held behind closed doors.

A state Sunshine Law request for information submitted to the university last week by StlReporter  — asking for details of the sales agreement between the university and the developer — was denied by the school’s custodian of records. “This is the final response to your Sunshine Law request,” wrote Paula Barrett, the University of Missouri’s Custodian of Records. “The documents responsive to your request are closed.” Barrett cited fine print in a state statute that prohibits the public from being informed of the terms of the sale of public property before the state closes on it.

As if  these stealthy maneuvers were not enough, there’s another nettlesome problem with the deal that hasn’t been broached until recently. The land the school is intent on ridding itself of is adjacent to the Weldon Spring Conservation Area, which is contaminated with radioactive waste. The Department of Energy has declared that area safe for recreational purposes, but unsafe for full-time residency. During months of public discussion, this thorny detail was never mentioned by the university.

With its reputation hanging in the balance, Mizzou is counting on its rainmakers in its legal department to quickly close the sale and simultaneously maintain some semblance of public trust. It’s a tricky act to pull off.

To assure the public that the university’s actions are beyond reproach, Wild is required to recuse himself from any cases involving Thompson Coburn, says Christian Basi, a University of Missouri spokesperson. “In a nutshell, there is no conflict of interest,” says Basi. While a partner at Thompson Coburn, Wild never engaged in any legal work involving land surrounding the golf course, Basi says, referring to the property where the residential development is planned. Wild’s professional experience, says Basi, is a “strength,” and his presence “adds experience to the office of general counsel at the university.”

But that’s where the curtain falls. The university stopped short of revealing any details of the sale, citing the confidentiality clause of the state statute. Upholding the letter, if not the spirit of the law, Mizzou is not obligated by law to reveal details of the deal until its done.

Thompson Coburn is equally reticent. Reached for comment on last week, Bill Rowe, a spokesman for Thompson Coburn, declined to give details of the law firm’s relationship with the university, citing client-attorney confidentiality. But the spokesman confirmed that the University of Missouri remains “a significant client in a variety of areas.” Lack of transparency surrounding the deal, including withholding the sale price from the public and declining to consider other offers, has led to rumors of political corruption.

This much is not secret: Mizzou has bet its financial future on the soundness of Thompson Coburn’s advice. In 2014, for example, the law firm handled the issuance of nearly $300 million in revenue bonds for Mizzou. The stakes have risen even higher in recent years. Declines in enrollment have strapped the university’s coffers. As its fiduciary, Thompson Coburn is bound to make decisions based on the interests of its client’s longterm solvency. The highly valued acreage in St. Charles County overlooking the Missouri River is among the university’s disposable assets. It is easy to understand why any financial advisor would counsel the school to sell given the circumstances. Whether such discussion took place is uncertain. 

The ties that bind Thompson Coburn and Mizzou together go beyond the bottom line, however. There is a personal side to the longstanding affair, too. Wild’s former law partner Tom Minogue — the chairman of the firm– is a proud graduate of the University of Missouri St. Louis and currently sits on the Chancellor’s Council at UMSL.

Be True to Your School: Thompson Coburn Chairman Tom Minogue

For months, the contentious issue has spurred critics to send hundreds of emails to their elected officials, demanding the plan be scrapped. Adversaries have packed the gallery at St. Charles County Council meetings, and also posted informational notices along the KATY Trail. Moreover, the St. Charles County Planning and Zoning Commission sided with the opponents, recommending rejecting the plan 8 to 1 earlier this year. Nevertheless, the county council inexplicably gave the green light to the plan last week, allowing the sale of the property to move forward.

By law, real estate transactions are a matter of the public record, but the negotiations preceding the closure of the deal are not. This rule is applicable even when the one of the sales parties is a state-owned, public institution. It’s a loophole that allows Mizzou, in this case, to hold secret talks and withhold all the details of the sale of public land from taxpayers. In most situations, deals like this would probably not raise an eyebrow. But building a pricey subdivision near a popular state park and a state-owned conservation area is an exception to that rule. Adding to the controversy is the Department of Energy’s restrictions on nearby land use, which prohibits full-time occupancy on adjacent property due to the presence of radioactive contamination. To seal a sketchy deal like this requires masterful salesmanship and extensive legal skills.

As an associate, Wild honed his skills at Thompson Coburn, learning the art of the deal by following in the footsteps of more senior members of the firm. Beginning in the late 1990s, he cut his teeth hashing out complex real real estate issues, including representing the St. Louis Marketplace in litigation related to the city of St. Louis’ use of tax-increment-financing to take residences through eminent domain for a private retail development. Michael Lazaroff, Wild’s mentor, was the mastermind behind that boondoggle.

Lazaroff left Thompson Coburn in 2000 in the wake of a corruption scandal that rocked the law firm. He was disbarred and pleaded guilty to pocketing $500,000 in under-the-table payments from Station Casino from 1994 to 1996. Station Casino has a dark past. Its founder was a known associate of the Civella crime family of Kansas City, and was implicated in

Former Thompson Coburn partner Michael Lazaroff.

skimming money from Las Vegas casinos in the 1970s for the Mafia. In 2000, hearings conducted by a special investigative committee of the state legislature probed illegal meetings Lazaroff held on behalf of his client — Station Casino — with the then-chairman of the gambling commission.

At the same time, Lazaroff was also convicted for making illegal political campaign contributions that involved Wild’s cooperation. Wild and three other lawyers took part in the scam. With Wild’s cooperation, Lazaroff skirted federal campaign finance laws that then limited the amount of contributions by having his colleagues contribute money for him and then reimbursing them. The donations were made to the campaigns of then-Democratic presidential candidates Al Gore and Bill Bradley. The secretary of former U.S. Sen. Thomas Eagleton, a senior partner at Thompson Coburn, was also implicated. Wild and the others involved in the illegal bundling of contributions issued an apology and were not charged.

That was 18 years ago. Nothing much seems to have changed in the intervening years.