Busload of Casino Workers at Branch of Ailing S&L; : Vegas Union Protests Gibraltar Loans

A busload of Las Vegas hotel and casino workers whose contracts expire June 2 traveled to a Los Angeles branch of ailing Gibraltar Savings & Loan Thursday to protest loans to casino operators that they say have helped stall wage talks.

Gibraltar was taken over by federal regulators March 31 amid a wave of withdrawals by depositors. John Carr, who subsequently was named chief executive, expressed bafflement at the Culinary Workers Union’s choice of the S&L; as a target.

“We don’t understand why they’re demonstrating in front of our branch (at 404 N. Fairfax Ave.),” Carr said. “We have no idea what they’re talking about.”

The Las Vegas workers charged that otherwise profitable casinos, seeking to expand operations or to defend themselves from corporate raiders, have “mortgaged” their profitability by issuing “junk bonds” and taking on other debt. The casino operators claim that, because of this indebtedness, they cannot meet the contract demands made by Local 226 of the Culinary Workers Union, AFL-CIO.

Gibraltar in 1986 joined a group of financial institutions, the union said, that provided $118 million to finance acquisition of the Stardust and Fremont casinos by the Boyd Group--a party to current wage-and-benefit talks. Gibraltar, the union charged, also loaned $3 million to two other Boyd-run casinos.

Then, when Boyd had trouble making payments, Gibraltar exchanged part of its loan for more than $5 million in high-interest but risky junk bonds, the union said.

However, Carr of Gibraltar said that the S&L; “has had no relationship with Boyd in two years” and that it holds no current loans to the group.

Union spokesmen said the Los Angeles trip was made to call attention to rejection of the union’s wage-and-benefit demands by the casino operators, who cite a high level of indebtedness. Local 226, which claims 28,000 members, is negotiating with 32 hotel-casinos in Las Vegas. The last contract negotiations, in 1984, resulted in a two-month strike.