Investigators Found a Culture of Secrecy, Failure to Follow Policies for Steve Wynn Complaints

The Massachusetts Gaming Commission (MGC) unveiled its
long-anticipated investigation of Wynn Resorts and Encore Boston Harbor and
reported they found a company culture that did not follow policies when
allegations were made against former CEO Steve Wynn, and also used extreme
secrecy to hide allegations and settlements involving him in several cases.

That,
however, was tempered also by a laundry list of changes that the company has
made in the last 14 months, including ousting Steve Wynn and implementing a
robust corporate governance structure.

“However,”
said Karen Wells, MGC Investigations and Enforcement Bureau (IEB) director,
“the past cannot be erased by these changes.”

That
set the tone for the unveiling of what had been found over the last year by the
IEB using thousands of pages of information, conducting hundreds of witness
interviews, and traveling to six states to produce the report. That report had
been held up with a lawsuit from Steve Wynn last November asserting
attorney-client privilege, but that suit was recently settled and that allowed
the unveiling to go forward Tuesday morning.

“In
evaluating the IEB investigation, it showed a pattern of certain employees,
including the Legal Division, disregarding policies when it came to allegations
against Mr. Wynn,” she said. “It showed they made great efforts at secrecy so
that it made it difficult if not impossible for gaming regulators to uncover
these incidents.”

Earlier,
she also said, “The investigation actually revealed a culture in the company
where employees hesitated to report sexual misconduct allegations against Mr.
Wynn. We found the company failed to safeguard the well-being and safety of its
employees.”

At
the outset of the investigation unveiling, Loretta Lillios, of the IEB, said
what happened at the company mattered. She bookended the impending report with
the idea that a gaming license is a privilege and not a right – noting that
companies have to always keep proper policies and conduct in place or risk
losing the license.

It
was a warning that all things were on the table, including the loss of Encore’s
license.

“The
IEB’s investigation revealed the company’s adherence to these criteria has been
called into question,” she said. “What happened at the company matters. It
matters to the women who have been directly affected by the allegations of
sexual misconduct. It matters to the workforce and employees here. It matters
to the Commission. It matters to the people of Massachusetts… After all the
evidence and testimony is presented, you will have ample information to apply
the law and make a sound determination.”

Wells
detailed for most of her presentation the allegations against Steve Wynn, using
a timeline to go through the allegations and the response to them. She started
in 2005 with the settlement paid to a manicurist at Wynn Las Vegas who claimed
she had been raped by Steve Wynn and was now pregnant as a result of two such
encounters. That allegation was detailed in the original Wall Street Journal
article in January 2018 that opened the entire sexual misconduct situation.

A
main issue, Wells said, was to not decide whether the allegations were true,
but whether the company responded correctly and whether it should have divulged
information to the MGC in 2013.

“The
Commission is not evaluating whether the allegations are true or false, but it
is evaluating the company’s response to the allegations,” she said. “A key
question for the Commission to consider is whether the company’s failure to
divulge derogatory information may have a role in suitability or the
suitability of a qualifier…We now know in 2013 at least three Massachusetts
qualifiers had knowledge of these allegations. They were Steve Wynn, Elaine
Wynn and Kim Sinatra…A key question for the Commission is whether this relevant
information should have been divulged on the front end rather than us having to
investigate this now.”

The
IEB also indicated that they tried to interview Steve Wynn several times, and
he declined. However, he did release a statement that was read by Wells to the
Commission.

“I
had multiple sexual relationships during my tenure at Wynn Resorts and made no
attempt to document them,” the statement read. “I do not believe any of the
specific details of these relationships are material to the issues I understand
are being reviewed by the special committee. I recognize some of the names
obtained in the witness questions, but have no memory of ever meeting or having
relationships with the women whose names are in your questions. I deny having
any relationship that was not consensual. During the time I was employed by
Wynn I was aware of a code of conduct and other policies. I was not however
familiar with the details of those policies.”

Many

of the key questions in the investigation included information garnered during
discovery in the case of Elaine Wynn vs. Steve Wynn, as well as in a case known
as the Okada case. Much of what was brought out in regard to the allegations
and the response to them came from that case.

For
Sinatra, who left the company in July 2018 with a multi-million dollar
severance package, it became clear she knew of the allegations against Wynn
during the 2013 suitability hearings. Yet, she did not divulge them, and the
investigation seemed to suggest she wasn’t clear as to what she remembered
knowing.

One
such exchange involved an e-mail chain where a letter detailing a hostile
working environment was described. That letter in that e-mail was up for
dispute as to whether Sinatra read it, read all of it, or if she even really
knew about it.

Much
of her responses, according to the report, were that she didn’t recall a lot of
information.

“I
don’t recall if I knew in `14,” she had responded when asked if she knew the
original 2005 case included a rape allegation of the manicurist.

Also
in question was how the company responded after the Wall Street Journal
article, including putting out an immediate statement of support letter for
Steve Wynn to employees. That statement also included a reference to the
article as being the latest strategy in Elaine Wynn’s legal case against the
company.

Wells
said that was put out before any investigation into the matter and without
consideration to employees that may have been affected by Steve Wynn’s alleged
behavior.

Wynn
Communications Director Michael Weaver said he would not do that again if he
were to do it over.

“Mr.
Weaver stated to investigators that if he was to do it over again, he would do
it differently,” Wells testified.

Maddox
also told investigators that he simply believed Steve Wynn.

“As
ridiculous as it looks now, we believed it,” Wells summarized. “We believed it.
I know it’s tone deaf.”

The
letter to employees went out with the input of Steve Wynn and others in the
organization, but was under the signature of Wynn Las Vegas President Maurice
Wooden – who indicated he was uncomfortable with the letter in his name but
felt he had no choice in the matter.

That
letter was followed up by what turned out to be an ill-advised Town Hall style
employee meeting tour by Steve Wynn and other company officials. It had been
reported in media accounts that employees at the Town Halls were asked to raise
their hands if Steve Wynn had assaulted or abused them. That had not been
confirmed before, but the IEB investigation revealed that Wynn Attorney Stacy
Michaels told investigators that she was present and that did happen.

• • • •

The
remainder of the first day of hearings focused on the new Board members and the
new members of the corporate hierarchy.

The
MGC listened to detailed presentations about each new Board member and each new
employee. Each told the story of how they had been recruited – some by Matt Maddox
– to serve on the Board in the aftermath of the crisis at the company.

All
of them were being reviewed by the MGC for suitability, and if they were
qualified to serve on the Board or work in their positions.

The
testimony by Wynn attorneys was to begin on Wednesday, where they would present
their case and ask questions regarding the IEB report.

• • • •

The
MGC did remind everyone that there would be no vote at the end of the
proceedings, nor would there be any sort of discussion of the report or testimony.

Instead,
when all of the information had been gathered, the MGC would deliberate in
private – with the option of asking for
more or additional information.

At
some point in the near future, they would issue their findings and their
remedies – including the possibility of stripping the license – in a written
report.

Link: 

Investigators Found a Culture of Secrecy, Failure to Follow Policies for Steve Wynn Complaints

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