Phil Linsalata

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.