NIXON HOPES TO CLOSE GAMBLING LOOPHOLES

Missouri Attorney General Jay Nixon said Monday he is working to close loopholes in the state's riverboat gambling laws. He termed riverboat gambling "a massive law enforcement responsibility."

Nixon said Missouri already has one of the strictest gambling laws in the nation, but he has contacted other states about their experience to ensure Missouri has enough safeguards.

"We need to be careful, look at it carefully, and learn from the mistakes of other states," Nixon said in an interview. "We have a chance to do this in clean fashion and should not pass up that chance."

Nixon is calling for statutory changes to prevent elected and appointed officials from obtaining ownership interests in gaming. Under current law, only elected officials are restricted and Nixon wants it expanded to include appointed officials as well.

Other changes would establish penalties for those officials who violate ownership laws, prevent anyone in the regulatory community from accepting employment with riverboat gambling for two years, prevent the use of police officers and other law enforcement officials from moonlighting with riverboat operators, and outlaw the use of confidential information for gambling stock manipulation.

Nixon said a bill sponsored by House Speaker Bob Griffin has many of the changes he wants. He expressed concern about stricter gambling laws in a letter to all state legislators on April 26.

Nixon also discussed efforts by his office to resolve the federal school desegregation cases in St. Louis and Kansas City. He said major court appearances are likely later this year and desegregation "is at a crucial juncture on both sides of the state."

In the Kansas City case, Nixon said he is seeking a writ of certiorari from the U.S. Supreme Court. Nixon wants to argue that a recent ruling by a three-judge federal appeals panel that student performance is a criterion for determining whether a school district operating under a desegregation remedy has met the obligations of the court conflicts with Supreme Court precedent.

In the St. Louis case, the attorney general hopes a trial can be scheduled late this year or early next to give the state a chance to prove that it has achieved unitary status.

"There will be a major effort on desegregation, and we are trying the case to win," said Nixon. "We have to prove that we have removed the vestiges of discrimination to the extent practicable and have provided equality of opportunity to the extent practicable."

Nixon is optimistic that major breakthroughs can occur on both cases soon, especially in St. Louis where an entire generation has been educated under a desegregation order.

Ultimately, Nixon said a federal judge will decide how to phase out desegregation in St. Louis.

On the Kansas City case, Nixon said the debate is focused on whether the constitution requires just equality of opportunity and not quality of output.

"The law requires equal access to programs but it does not demand equal academic results," said Nixon. "We believe the court is wrong to judge the success of desegregation by examination of student test scores, considering the enormous influence of such scores by outside factors beyond the school's control."

Under federal court order, Nixon said the state has spent $1.2 billion in Kansas City and has provided "world class" facilities. But Nixon said the state cannot be held responsible for whether those facilities provide certain academic results.

"We want to get back to a more sane approach of settling this case," said Nixon.

He is also challenging court orders that provide general salary increases for almost every employee of the Kansas City Metropolitan School District.

Said Nixon, "There is no legal or factual basis to assume that providing raises to parking lot attendants, custodians, cooks and other non-instructional personnel will reverse the affects of past segregation."

In explaining his proposals on riverboat gambling, Nixon said after traveling the state following the defeat April 5 of Amendment 3, he believes a big reason for the narrow loss was concern with "public integrity aspects of gaming."

Nixon said he was especially concerned by the opportunities riverboat gambling provide for laundering money, both by players and gaming companies.

"We need incredible cash controls. There is no reason we can't have the toughest laws in the nation," said Nixon. "We need to provide a safe atmosphere, clean games and limit peripheral crimes."

Disclosures earlier this year that four members of the St. Louis Election Board had interests in gaming companies illustrate the need to apply restrictions to appointed officials, he said. At the urging of Gov. Mel Carnahan, the four resigned from the board.

To avoid a "revolving door" form of government Nixon wants laws to state that no one involved in a governmental position that deals with gambling can work for a company until two years after leaving office. Nixon said this has been a problem in other states.

He said there is a potential for securities manipulation based on confidential information that would be addressed in his proposed legislation. For example, gaming securities dropped in value by nearly $800 million the day after the defeat of Amendment 3 in Missouri.

The election was necessary after the Missouri Supreme Court ruled that a state referendum approved in 1992 legalized riverboat gambling, but that only games of skill were legal. Games of chance need to be included in the constitution.

The court asked a Cole County circuit judge to review seven specific games to decide whether they are games of skill or chance. Nixon will represent the Missouri Gaming Commission in a trial to resolve that issue.

Eventually, the circuit court decision will likely end back in the Supreme Court.