Star Tribune from Minneapolis, Minnesota • Page 5

Minneapolis Tribune July 27, 1979 5A GUSTAFSON: Gaming board seeks fines Continued from page 1A Chemical Westport, has invested several million dollars in the Tropicana. The acquisition was called, off after the FBI raided the Tropicana, Agos-to's home and nine residences in Kansas City In an attempt to find evidence that Agosto managed the Tropicana and that El Dorado's stock had been manipulated. The affidavit said Gustafson and John M. Morrison, chairman ofEl Dorado, "agreed to a story as to where the funds to finance the acquisition came from, to hide the fact that the funds may have come from El Dorado Itself, and to prevent the tracing of funds which might show that funds came from an improper source." It is not clear from the affidavit who the improper sources might be. Attached to the affidavit were transcripts of conversations, which were sometimes rambling and disjointed, between Gustafson and Morrison and Gustafson and Wayne Belisle.

Belisle is a St. Paul attorney who has represented Gustafson. In the first conversation, the affidavit said Gustafson and Morrison agreed to a story as to where the funds came from to finance the acqusition by Gustafson and Briggs. MORRISON: Urn, yesterday Fletcher told me, when we were talking about this, he said, um, the only thing I've asked to represent is that under the money to purchase the stock comes either from the company, they just came from other sources. GUSTAFSON: Right.

MORRISON: (unintelligible reply) GUSTAFSON: He's, he's never asked me to do that, by the way. MORRISON: He hasn't, huh? GUSTAFSON: No. MORRISON: And then I said, well, ah, what's the difference. You know, in an academic way. GUSTAFSON: Yeab.

MORRISON: And he says, well, he can't do that And I said, well, you know, I wouldn't have any Idea. And he said, well, Gus'll have to send a letter to that effect or something that said, and I just said, well, I'm sure there'll be no problem. But I wanted you to know. GUSTAFSON: No, ah MORRISON: that, so you can handle that any way you want to and I'll go along with it. GUSTAFSON: I told, ah, when, when, ah, Fairchild told me that, I said bullshit.

That letter'll never be signed. I said, number one, I don't know where the funds came from, but what, in other words, there's been no conversation for this and in other words we were sure as hell ain't going to put something in the file that's going to raise the flag. Fletcher is Ron Fletcher, an attorney who has represented El Dorado. He could not be reached for comment last night. Fairchild's identify could not be determined.

In his conversation with Belisle, Gustafson reiterated his conversation with Morrison and discussed further the El Dorado stock transaction. GUSTAFSON: said now I'll tell you it took a circuitous route and in other words, the money was, a lot of money was advanced, it was a Associated Press tafson has listed himself as the owner of those companies. The board also has filed notice of Its intent to put Agosto on Its list of people to be excluded from all casinos in Nevada. Agosto has sued the board to contest that action. The U.S.

attorney's office and the FBI in Minneapolis are known to be investigating Gustafson's involvement in the possible misapplication of the funds of the Summit State Bank of Richfield, 6500 Nicollet Av. S. Federal officials would not comment on the status of their investigation. The pen register on Gustafson's telephone was not directly related to the investigation of the Summit State Bank case. Gustafson owns the bank but resigned last year as chairman and a director just before four checks totaling $1,165,000 were returned to the bank.

He said he resigned so that he could "devote more time to my activities on the West Coast." Examiners from the Minneapolis Federal Reserve Bank examined Summit State about a year ago after the checks were returned. The checks, from an account held by Production and Leasing, were written by Agosto against uncollected funds, money that was still working its way through the bank clearing system. At the time, Production and Leasing had a contract with the Hotel Tropicana to put on the floor show there, and Agosto was Production and Leasing's president. The examiners concluded that the purpose of the account was to allow more time for checks to clear, particularly checks from the Hotel Tropicana to the Production and Leasing account. They said the Richfield bank had returned some Tropicana checks to the hotel and allowed others to be substituted or covered by funds transferred by wire.

The result of this back-and-forth flow of Tropicana checks was that the Production and Leasing account was regularly overdrawn by about $167,000, the examiners found. The Federal Reserve Board ordered the bank to stop those kinds of Piece of Skylab returns home U.S. Customs Inspector Oliver Seymour looked over a piece of the crashed Skylab Wednesday night at San Francisco International Airport. The piece, the largest recovered from the spacecraft, was found in Aust'llia after Sylab crashed two weeks ago. A private Australian firm ins to exhibit it throughout the United States.

It is 8 feet long, 4 fe. and weighs about a ton. The Inspector decided not to im-pot a duty since the piece was just being returned to the United States. page 1A million five was advanced to HCI (apparently Hotel Conquistador, Inc.) and then ICI (unidentified) paid back some money that it, that it owed, it owed six million dollars to CFC (Consolidated Financial Corp.) and CFC advanced to the Tropicana Holding Co. and Tropicana Holding Co.

is, is buying all the stock. And I said the next check you get will be also from Tropicana Holding Co. So I said It didn't. It didn't come from your company, did It? And he (apparently referring to Morrison) said no, I know it. Well, I said that's what I'm, that's what I'm telling you and I said I'm not gonna sign any letters or, and I said that's something that Fletcher decided he wants to have a paper trail, you know, to, to protect somebody's ass five years from now.

And I said that's bullshit Belisle could not be reached for comment. The affidavit and other material have been sealed by U.S. Magistrate Robert Renner since January at the request of the U.S. attorney's office. The order sealing the documents expired yesterday, and a government prosecutor decided to allow the file to become public because files had been unsealed in Kansas City and Las Vegas.

The discussions between Gustafson and Morrison about the El Dorado transaction have not been reported previously. But much of the material in the affidavit and transcripts released yesterday was contained in files unsealed in Las Vegas in May and last month in Kansas City. Gustafson, as he has done previously, vehemently denied any connections with the Mafia. He said he has now sold the Tropicana to Ramada Inns, Inc. He said that his part of the transaction has been completed and that he is simply waiting for Ramada to complete its part.

A spokesman for the Nevada Gaming Control Board in Reno said yesterday that negotiations between Briggs and Gustafson and representatives of Ramada Inns, "look very positive." Ramada Inns said early this month that it had reached agreement in principle to acquire the Tropicana operation. No price was disclosed. The board is monitoring those negotiations, the spokesman said. An administrative action initiated by the board this month seeking revocation of gambling licenses and fines totaling $1.5 million from Briggs, Gustafson and five of Gustafson's companies is pending. The board's complaint, which is based on information developed by the FBI's wiretaps, charges that the Tropicana, Gustafson and Briggs allowed Agosto to participate in management.

The complaint asks fines of $200,000 each from Gustafson and Briggs, $500,000 from the Hotel Con-quistadore, which does business as the Tropicana, and $200,000 each from InnTernational, Tropicana Holding Tropicana Holding Co. and Consolidated Financial. Gus- New Orleans ex-mayor said to be next HUD chief Economy Continued from A related issue Is the international value of the dollar, which has been under heavy pressure. The decline of the dollar last year, which increased the price of Imported products, contributed between 1 and 2 percentage points to the 1978 inflation rate of 7.6 percent. Anthony Solomon, undersecretary of the Treasury for monetary affairs, said the administration is "determined to prevent any unjustified and inappropriate depreciation of the dollar" by taking "forceful action as required." He said further that a decline in the dollar's value Is not justified in view of prospects for sharp improvement in the American balance of payments.

He projected a 1979 deficit in the current account (trade and services) of $4 billion, compared with a $17 billion deficit last year. And he said there will be a surplus in 1980. Following the nomination of Volcker, president of the Federal Reserve Bank of New York, the dollar has strengthened over the last two days. The Consumer Price Index In June stood at 216.6, meaning that goods and services that cost $100 In 1967 cost $216.60 last month. In the last 12 months, the Inojex has increased 10.9 percent.

The 1 percent increase in June again eroded the standard of living of the average married worker with three dependents, underscoring the broader damage of inflation, Labor Department figures showed. The worker's spendable earnings what's left after deducting taxes and taking Inflation into account declined four-fifths of 1 percent. Over the year, those earnings are down 3.5 percent. Gasoline prices again hit consumers especially hard, Increasing 5.6 percent In June after a 5 percent increase in May. So far this year, prices tt the pump are up by an unprecedented annual rate of 60.8 percent.

Fuel oil prices also soared, increasing 8.6 percent in June following a 5.3 percent gain in May. In the first half of 1979, fuel oil prices have risen at an annual rate of 70.6 percent. Higher utility bills and mortgage of in Advertisement Fuel a Problem? Minnesotans have what's needed to produce all the fuel they want and can do it with solar energy. Prosperity beckons. Make Alcohol Fuel, Recipe and Procedure by Lance Crombie 118 pages $8.00 Order from Rutan Publishing, P.O.

Box 3585, Minneapolis, MN 55403 New York Times Service Washington, D.C. President Carter has selected former New Orleans Mayor Moon Lan-drieu, an early Carter supporter in 1976, as secretary of housing and urban development, White House officials reported Thursday. 4 Press Secretary Jody Powell declined to confirm the appointment, but a White House aide said Lan-drieu accepted the job at an afternoon meeting with the president In the Oval Office. If confirmed by the Senate, Landrieu would succeed Patricia Harris, who was named last week to replace Joseph Califano Jr. as secretary of health, education and welfare.

The Senate Finance Committee approved Harris's appointment yesterday. Landrieu, a former president of the U.S. Conference of Mayors, was New Orleans mayor from 1970 to 1978 and is credited with opening the city government to blacks. He also strongly supported federal revenue-sharing and aid to New York when that city nearly was bankrupt. Jerry Apodoca, a former New Mexico governor, will be named secretary of education when Congress establishes the department, according to a source familar with White House efforts to bring more minorities, particularly Hispanics, into administration positions of higher visibility.

MM BHMO-ISVt rates among other things increased housing costs 1.5 percent. Home financing costs rose 2.1 percent and maintenance and repairs nine-tenths 1 percent. But the one-fifth of 1 percent increase In food prices was the smallest in 11 months. In addition to the 1.3 percent drop in beef and veal, where there had been steep increases in the preceding eight months, prices also fell for pork, poultry and eggs. However, coffee prices rose In June after declining steadily since mid-1977 and prices for fresh fruits and vegetables Increased by 3.7 percent following declines in the previous two months.

Howard Hjort, the Agriculture Department's chief economist, said that, although supermarkets had begun passing declines in beef and pork prices from the farm to the consumer, retailers and meat wholesalers were still taking too high a cut. Hjort calculated that consumers may be paying nine cents a pound more than they should for beef and five cents a pound too much for pork. He also said government economists are concerned about increases in the cost of food at restaurants. Clothing prices declined slightly in June following no change in May. The drop last month reflected decreases in prices of women's and girls' apparel, offsetting a large increase In footwear and moderate Increases in other apparel Items.

At the White House, Press Secretary Jody Powell said the inflation rate is "far from acceptable levels," but that the figures "do indicate a trend the right direction." Powell said the figures on food prices "should furnish some relief for consumers." Senate Republicans call for tax cuts, new jobs Associated Press Washington, D.C. Senate Republicans offered their alternative to President rter's economic policies Thursday, urging tax cuts, a balanced budget and new job opportunities. The 39 Republican senators said the Carter administration "seems to lack either the ability or the will or both to deal with Inflation and recession. The GOP economic document left open such questions as the size of a proposed tax cut and when the federal budget should be balanced. And, In a reflection of deep divisions within the party, Sen.

Jacob Javlts of New York, who led the subcommltee that produced the document, said such "quick-fix measures" as wholesale tax cuts "will only paper over the problem and simply further fuel the fires of our double-digit inflation." The first test of the GOP plan is expected when the Senate Finance Committee begins writing its version of a "windfall profits" tax on the oil Industry. Sen. William Roth, said he would propose that cuts In Individual Income taxes be financed from that new tax. Come to us for Savings Plus For Information Call 866-3643 ant Hor.iE ODD SAVINGS 23 offices Moon Landrieu Apodaca, 45, a former high school teacher and coach, became the first governor of Spanish surname in 50 years when he was elected in 1974. He supported Carter in 1976 and is a close associate of White House appointments secretary, Tim Kraft.

Sources said J. Kevin Murphy, president of Trailways Bus Lines of Dallas, Texas, was under consideration as Transportation Department secretary. Carter consulted with Murphy on plans to deregulate bus transportation. Murphy supported Carter with an advertising campaign on the energy problem. A exchange Yes! A $100 CASH REBATE is yours, from Bell Howell-Mamiya Company.

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House-Senate conferees hope to fashion a compromise between It and a House bill for final congressional approval next week. One condition would have cut off about $75 million In annual payments to Panama if the president or Congress determined that country aided revolution in Nicaragua or other countries. Another condition would have asserted that Congress has the constitutional right to refuse to turn the canal or other property over to Panama although treaties, turning it over have been ratified. Boy playing priest sets fire A 15-year-old boy playing priest ln( Milan set his family's apartment on fire when he forgot to blow out "mass" candles in a bedroom, the city's police said Thursday. Riccardo Rusclca, whose parents were not at home at the time, was pulled from the blazing apartment by neighbors.

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