A report on Missouri Gaming Commission license investigations, so secret only the five commissioners themselves have seen it, is the fruit of “imaginary” allegations from Chairman Mike Leara, a fellow commissioner said Monday.
Dan Finney, in a statement to The Independent, said the report “finds the allegations unsubstantiated and does not identify the informant” who charged that commissioners were not getting all the information needed for licensing decisions.
“I suspect we launched a $400K investigation into a felony at the Missouri Gaming Commission which never occurred, based upon allegations cast by Chairman Leara’s imaginary friend,” Finney wrote in his statement.
Leara, reached by phone Tuesday morning, rejected Finney’s criticism and said he has not accused anyone of committing a felony.
“That is not true,” Leara said. “Mr. Finney knows that is not an accurate statement and for some reason he is making a statement like that that involves personnel matters that we have talked about as a body. There is no imaginary friend.”
Graves Garrett, a Kansas City law firm run by some of the state’s most well-connected Republicans, was hired to conduct the investigation during a closed session of the commission on April 17, 2020. The report was delivered to the commission at its Jan. 27 meeting.
The commission has denied The Independent and other media’s requests for the report, stating it is a closed record covered by attorney-client privilege. During a Feb. 18 hearing of the House Budget Committee, the commission’s Deputy Director, Tim McGrail, told lawmakers that no one on the commission staff has read the report.
Leara on Tuesday said he would like to make a summary of the report public and will discuss whether the full report, minus information that identifies individual employees or licensees, can be released.
But the commission hasn’t had a full discussion of the report, he said, so it may not happen at Wednesday’s meeting.
“We have not as a body have conversations yet as to what we have been given, what the conclusions are and what directions we want to go,” Leara said.
The notice for a closed portion of the meeting notice lists “Matters Subject to Attorney Client Privilege” and “Records Protected from Disclosure by Law” as topics that will be discussed.
Speaking to the budget committee, McGrail told lawmakers it is a closed record based on advice from General Counsel Ed Grewach, “outside counsel” and Attorney General Eric Schmitt’s office.
Schmitt’s office, however, has not provided any direction on whether the report is an open or closed record, spokesman Chris Nuelle wrote in an email to The Independent.
Nuelle said he made inquiries and found nothing. The Independent has requested a records search of communications to confirm it.
“To the best of my knowledge, the Attorney General’s Office did not provide guidance as it relates to the disclosure of the report, nor has the Missouri Gaming Commission asked for our guidance on the disclosure of the report,” Nuelle wrote.
There has been no recent advice from Schmitt’s office, Leara said. McGrail has not been involved in closed meetings discussing the report and his statement may have been a reference to guidance given when the report was commissioned, he said.
“Since he was not involved in discussion of that report, he may not have been entirely clear about it,” Leara said.
The subject of the report is the commission’s process for investigating license applications. Every person who works for or makes a substantial investment in a casino in Missouri and every company that provides games, leases property or has an ownership interest must obtain a license.
Licensees are required to keep the commission informed of issues that could impact their license, such as a new major investor or when an employee is arrested.
The basic allegations made by Leara, Finney said in an interview, was that “commission staff was scrubbing reports so we would approve a licensee,” improperly omitting material gathered by the Missouri State Highway Patrol’s Gaming Division.
Under the statutes governing the commission, anyone who “knowingly makes a false statement of any material fact to the commission, its agents or employees” is guilty of a felony punishable by up to four years in prison.
What Leara was doing with the investigation, Finney wrote in his statement to The Independent, was accusing civilian gaming staff of covering up findings from the patrol investigators, which would violate the law.
“Every current and former member of the staff with whom I’ve spoken called the allegations unsubstantiated,” Finney wrote. “The MSHP has told me they have no evidence of criminal conduct by the staff.”
That is not the conclusion of the entire commission, Leara said.
“Mr. Finney does not speak for the commission as a body,” Leara said. “The commission as a body has not come to any conclusions of that nature.”
The report was commissioned at a time of tension on the commission as casino revenues dried up because of COVID-19 related shutdowns that began in March 2020. Executive Director David Grothaus was already engaged in a campaign to cut costs by reducing the commission’s reliance on the patrol’s 125-member Gaming Division.
Grothaus was responding to a long-term trend of diminished attendance at casinos. Fewer people entering casinos meant less money for host communities and commission operations. It also meant less money for Missouri veterans homes, which receive surplus funds. Transfers for veterans programs fell from $22.5 million to $19 million in fiscal 2019 and, after casinos closed in March, to $8.8 million in the year that ended June 30.
Grothaus resigned April 1, 2020, accusing the patrol of engaging in “guerrilla warfare” to protect the jobs supported by commission funds.
Leara, a former state lawmaker, was appointed to the commission in the fall of 2019 and Grothaus has said Leara showed a bias toward the patrol’s position in the dispute.
“That is absurd,” Leara said. “In fact, when I came there, there would probably be someone from Highway Patrol who thought I was carrying out the mission of someone who wanted to get rid of them.”