Under fire for comments critics said indicated he had already made up his mind about his staff’s investigation of the continued suitability of Wynn Resorts to operate a casino in Everett, Massachusetts Gaming Commission Chairman Stephen Crosby resigned last week, effectively immediately.
The resignation comes as the commission prepares to contemplate how to deal with the results of its investigation. Commission Executive Director Ed Bedrosian said on September 13 that his investigators were in the final stages of their investigation of Wynn and the corporation’s executives who may or may not have tried to hide his indiscretions from the commission when it was deciding whether to grant Wynn a license.
In his letter of resignation Crosby said, “With a profound sense of sadness, regret—and yes, frustration—I am resigning as chair of the Massachusetts Gaming Commission, in order to give you the best possible opportunity to do your work without distraction.”
In a letter that indicated he felt he was being unfairly criticized, he wrote: “There has never been a shred of truth or accuracy to any charge of bias, favoritism, corrupt practice, ethics violations, or prejudgment in my execution of this job. I established our core value that our work must be ‘participatory, transparent and fair.’ I live that core value, as you do.”
But he added “Based on our experience, I have reason to expect that the commission’s objectivity—even if I recuse myself from the current proceedings—will be challenged.”
He noted that on September 17 he had received a letter from Steve Wynn that accused him of already making up his mind against Wynn and a week later the panel’s counsel got a letter from the Mohegan Sun’s attorney claiming that Crosby had already made up his mind in favor of Wynn Resorts in the suitability investigation.
Crosby was the longest-serving gaming commissioner, having been the first to be named to panel by then-Governor Deval Patrick shortly after the 2011 legislation that authorized four casinos in the Bay State. In those early days Crosby frequently stepped into hot water with his comments. Twice previously he had recused himself from the board’s decision-making because of a perceived possible conflict.
During his tenure as MGC chairman, it has issued licenses to the MGM Springfield, Plainridge Park Casino and Wynn Resorts.
The commission is in a somewhat unique position in that its decision-making about the location of casino licenses is not subject to review by the legislature or the governor. But at the same time it has been subject to a “Caesar’s wife must be above suspicion” standard, a standard Crosby has himself emphasized many times, including four years ago when he wrote: “I have said repeatedly over my years as Chair that the single highest priority for our work is that we protect the integrity of the decision-making process. And I’ve said repeatedly that the appearance of integrity as well as the reality of integrity is critical.”
Four years ago the commission was sued and criticized over the licensing of Region A. Crosby wrote about that: “I was often at the center of these lawsuits and accusations. As the Commissioners now prepare to receive and deliberate on the IEB investigation of the suitability of Wynn Resorts to hold the Region A license, the lawsuits, threats of lawsuits and false allegations have begun anew.”
Before Patrick appointed him to be chairman was the founding dean of the University of Massachusetts Boston’s McCormack Graduate School of Policy and Global Studies. He was also in charge of the state budget under two Bay State governors.
Crosby has always been a champion of the ability of gaming to do transformative economic work, and even in his farewell letter he emphasized that economic power: “We have done extraordinary work at the Gaming Commission, under the most daunting of circumstances. We have launched a mixed-use development project in Springfield, anchored by the casino, that has the potential to dramatically regenerate the economy of that rising post-industrial city. We built a casino in Plainville that has repatriated tens of millions of dollars of out-of-state spending and employed nearly 150 unemployed or underemployed residents.”
The ex-chairman concluded, “That is your work, and it has been phenomenal. It is also demanding, exhausting, intensely scrutinized, and at times challenged by people of both good will and ill will. I cannot let my role here make it all the harder for you to do your work.”
The Mohegan Sun was only the latest entity that had called for Crosby to disqualify himself in any deliberations involving the Encore Boston Harbor. The tribe, which had sued the commission, claiming it didn’t get an equitable opportunity at the Boston metro license in 2014, has argued that the MGC failed to fully investigate the Wynn organization or the sexual misconduct allegations against Wynn founder Steve Wynn, who now has no connection with the company, aside from having given it his name.
Steve Wynn was forced to resign and divest himself of his holdings after a Wall Street Journal report in January that wrote about allegations that he paid $7.5 million to a massage therapist who claimed he tried to rape her.
Last week an attorney for the Mohegan tribe sent a letter to the commission’s attorney calling for Crosby’s “immediate disqualification” from further participation. The tribe objected to this statement that Crosby made after the new Wynn CEO Matthew Maddox spoke of changing the company’s culture to make it more welcoming to women.
Crosby said, that there was by “all accounts (there was) at least one terrible predator.” and added, “this whole #MeToo thing and all the horrible transgressions that have come about by powerful men has changed everybody’s sensibility. And I’m sure Wynn’s sensibilities, Wynn Resorts’ sensibilities, have changed, too.”
This statement, the attorney wrote, “made before he has heard any evidence on these issues, cast greater doubt on the impartiality of the proceedings.”
Wynn is less than a year from completing the construction of the $.4 billion tower that overlooks the Mystic River and beyond that the Boston skyline.
Wynn is itself the subject of a lawsuit filed by the former owners of Suffolk Downs, the racetrack that competed, along with the Mohegans, with Wynn for the Boston metro license. The owners seek $3 billion in damages in the civil action that accuses Wynn Resorts of RICO violations, conspiring “to fix the application process, circumvent laws in place to present the infiltration of mob elements, and interfere and eliminate various regulations aimed at protecting the public at large.” It further alleges that “the license could not have been awarded to the Wynn defendants in the first place but for the RICO predicate acts which include those described herein.”
The Wynn response was short, that the “claims are frivolous and clearly without foundation.”
Also suing Wynn is the former owner of the Everett property, Anthony Gattineri, who claims he was forced to sell the property at a substantial loss in profits because of allegations, which later proved to be untrue, the one of the owners of the property was a known mob figure and convicted felon. Gattineri seeks $18 million.
Although the commission is independent, that doesn’t mean it is immune from public pressure—such as that from former Attorney General Martha Coakley, who said recently “Given what we do know now and what the Gaming Commission’s job is in terms of qualifying, I haven’t seen anything that they should have gotten the license in the first place on this issue alone or should have it now. They’ve changed a few people, they’ve changed the name of the building, but there’s no indication they’ve changed the culture.” Of course, her statement should be taken with a grain of salt since she is part of the legal team representing the Mohegans in the lawsuit against the commission.
