Former casino mogul Steve Wynn has temporarily blocked the release of a Massachusetts Gaming Commission report that his attorneys claim contains documents that are protected by attorney-client privilege.
This could delay the planned presentation of the report to the commission early next month. Two weeks ago, the commission’s Executive Director Ed Bedrosian told the panel, “You will not be able to see the report until these issues are resolved. We need to resolve these issues to make sure that the report that is given the commission is the report that you will use in the adjudicatory hearing. That’s my best guess at this point.”
Wynn’s attorneys were fighting last week in a Las Vegas court for Wynn’s right not to have details of his personal life revealed in the MGC’s investigation of allegations of sexual misconduct. District Court Judge Elizabeth Gonzalez said she would hear arguments about whether the report includes confidential information that are protected but didn’t schedule a hearing date.
Wynn sued in Nevada court November 7 to prevent the release of the commission’s investigation of alleged misconduct with employees at Wynn Resorts, which is headquartered in Las Vegas. The investigation is being conducted by the commission to determine the continued suitability of Wynn Resorts International to keep its license to operate the $2.4 billion Encore Boston Harbor, which is building built along the Mystic River within sight of the Boston skyline with a June 2019 opening date.
Although Wynn no longer has any association with the company he founded, the commission is trying to determine if its current management did anything to shield Wynn’s alleged behavior with women from the commission when the license was granted to the company in 2013.
In a motion with the Clark county court Wynn’s attorneys argue: “As part of any injunction and to restore the status quo, (Gaming Commission Investigations and Enforcement Bureau head Karen) Wells and Mass Gaming should be ordered to return or destroy all of Mr. Wynn’s attorney-client privileged and protected materials and to refrain from the use of such materials for any purpose whatsoever. . . Allowing Defendants Wells and Mass Gaming to continue to review and utilize Mr. Wynn’s privileged communications and protected materials, which may then be incorporated into their forthcoming investigative report and released to the public will cause Mr. Wynn untold irreparable harm.”
Allegations against Wynn first were revealed in January in a Wall Street Journal exposé that quickly led to Wynn first resigning as CEO and president the following month and then completely divesting himself of all his shares. His name was removed from the casino his company is building in Massachusetts and its name was changed to Encore Boston Harbor. Wynn continues to deny all allegations. His civil lawsuit alleges that the MGC’s acquisition of documents from the company whose lawyers once represented him are a “grave breach” of his privacy and violate fiduciary duty.
Attorneys for the MGC argue that the Nevada judge lacks jurisdiction to prevent the release of the documents by a Massachusetts agency and that if the report is not released it could lead to the delay in the opening of the casino and deprive the Bay State of “millions of dollars in tax revenue every month” and 4,500 employees of jobs.
Complicating these matters is the fact that the commission is currently operating without a permanent chairman since the resignation several weeks ago of Stephen Crosby. Governor Charlie Baker has promised to appoint a new chairman soon.
Investigators have reportedly focused their attention on a 2014 mediation between a former Wynn Resorts employee who claimed wrongful termination and who allegedly accused the former CEO during a mediation—according to the court documents filed in Clark County.
The investigators requested files related to the investigation. In the filing by Wynn attorney Donald Campbell: “I am informed and believe that the Company’s request for our file related to the subject employment matter was prompted by Mass Gaming officials. At or about the same time Campbell & Williams received a written communication … requesting to interview me as part of the Mass Gaming investigation into Wynn Resorts.”
Campbell writes that he was brought into the case after the employee made specific allegations about Wynn. Campbell writes: “I was contacted by an inside attorney for the Company who advised that the claimant had made an allegation about Mr. Wynn during the mediation that came out of left field.”
There are no further details that have come to light, including the outcome of the mediation.
The Wall Street Journal piece earlier this year disclosed that Wynn in 2006 had made a $7.5 million settlement to a former employee, which the commission was not aware of when it issued the license. Part of the investigation is to determine how much Wynn executives knew about this during the commission’s suitability investigation and whether any of them took any actions to prevent the commission from finding out about the settlement.
The court records also show that the MGC investigators interviewed other attorneys who had represented Steve Wynn and Wynn Resorts, asking them questions that would have violated attorney-client privilege if they had answered.
The investigation has placed the company at odds with its former chairman, something that was made clear by a statement made by the company’s spokesman, Michael Weaver, who told the press, “Because Steve Wynn recently filed a lawsuit against the Company, the Massachusetts Gaming Commission and the Commission’s lead investigator alleging that the Company has improperly disclosed information regarding the mediation that is subject to Mr. Wynn’s claim of privilege, we cannot comment further.” Weaver added, “The Company does not believe it improperly disclosed information and will defend its decision to be fully transparent with the Massachusetts Gaming Commission.”
Some industry watchers speculate that the MGC may try to shift blame from the current management of the company, including its new generation of executives entirely to Steve Wynn in order to justify allowing the casino to open in June.
Sean Philip Cotter of the Boston Herald wrote last week that if the MGC takes that action: “That would allow them to maintain the costly status quo and avoid any responsibility for failing to detect his trail of sexual harassment issues, observers say.”
Cotter quoted New England gaming expert Clyde Barrow as saying, “They’ll put it all on Wynn. It’ll look bad for Wynn, and the commission will plead, ‘We didn’t know to look for it, and they withheld information.’ ”
The commission has planned to hold hearings once the official report is released before making a determination behind closed doors.
Barrow speculates that the MGC could argue that in 2013, when investigators first conducted its investigative colonoscopy of the gaming giant that the #MeToo movement did not exist and investigators didn’t spend much time looking into workplace sexual allegations.
Barrow said, “They weren’t asking about that at all. Massachusetts did follow the process that I think would have been considered standard anywhere in the country.”
Barrow concludes, “They’re probably going to come to the conclusion that yes, there was wrongdoing, yes, we probably wouldn’t have been found suitable if that’s what we were looking for, but they’ve also taken corrective action.”
MGM Springfield
The MGM Springfield casino, the state’s first casino resort, which opened in August, saw revenues decline for its second month of operation.
Figures released by the Massachusetts Gaming Commission showed that the casino made $22 million in September, an 18.5 percent decline from $27 million its first month.
The casino’s spokesman Saverio Mancini said the casino was making some adjustments, such as bringing in new machines to its high limit area, adding lower limit tables and even such mundane things as cutting the cost to rent a scooter.
The state’s other casino, the slots parlor Plainridge Park, also saw revenues decline to $13.5 million, compared to $14 million the month before.
