LAWRENCEVILLE, N.J. — New Jersey casino regulators Tuesday voted to give Hilton Hotels Corp. a reprieve from their Feb. 28 ruling that it was unfit to operate its nearly completed Atlantic City gambling resort.
In a 3-1 decision, the state Casino Control Commission granted the Beverly Hills-based hotel chain a rehearing on its license application. No schedule was set for the new hearings.
Hilton, a public corporation that operates three hotel-casinos in Nevada, will be allowed to introduce additional information and testimony in the New Jersey forum.
The subjects will be its long association with controversial labor lawyer Sidney Korshak and about governmental and internal investigations into allegations about management of its San Francisco Hilton in the 1970s.
Allegations of organized crime associations in both matters were cited as major considerations when the New Jersey commission rejected Hilton on Feb. 28 by a 2-2 vote. (A tie is considered a rejection under commission rules.)
Grand Jury Probe
Even the two commissioners who voted for Hilton said Feb. 28 that they favored rejecting some Hilton executives, including Henri Lewin, who is executive vice president in charge of Hilton's casino operations.
Lewin and his brother, Werner, presently general manager of the San Francisco Hilton, headed management of that establishment when it was the subject of a federal grand jury investigation in the late 1970s.
Henri Lewin and a Teamsters Union officer, Rudy Tham, were subsequently indicted by the grand jury on charges of Taft-Hartley Act violations involving free lodging, meals and drinks provided by Lewin to Tham at the Las Vegas Hilton. U.S. District Judge Harry Claiborne in Nevada dismissed the charges on Feb. 15, 1980. Judge Claiborne last year was convicted of income tax evasion in an unrelated matter.
New Jersey regulators indicated Tuesday that they are interested in hearing testimony from those who appeared before the federal grand jury in San Francisco, but they first want to review transcripts of their previous testimony.
A Hilton attorney told the commission Tuesday, however, that the company has been unsuccessful thus far in getting a response from federal prosecutors in San Francisco about turning over the grand jury transcripts to New Jersey authorities.
The commission also wants more information surrounding a 1977 internal investigation report by Hilton's security chief about allegations regarding the Lewin management operation at the San Francisco Hilton.
Happy With Reprieve
Hilton Hotels Chairman Barron Hilton, who attended Tuesday's commission meeting, said afterward that he was happy that the company was being given "the opportunity to provide additional proof . . . which will demonstrate that (it) meets the required criteria of good character, honesty and integrity."
Commission Chairman Walter Read set the tone of the meeting early when he said that he was convinced that "fundamental fairness" required a rehearing. He added:
"Who is going to be hurt? Who is going to complain if we allow a rehearing?"
Read, who voted in favor of Hilton's licensing on Feb. 28, said Tuesday that he will not hesitate to deny the application if Hilton does not prove its case at the rehearing.
However, Commissioner Joel Jacobson held to his earlier dissenting opinion, saying he saw no reason to change his mind or to send the commission into "sudden death overtime."
Carl Zeitz, the other commissioner who had voted to deny Hilton's license Feb. 28, delivered a key vote Tuesday to permit a rehearing. Valerie Armstrong, who has been appointed to fill the vacant fifth seat on the commission, probably will have been sworn in by the time new hearings begin, a commission staff member said.