Mass. regulator resigns day before meeting on Wynn
The Massachusetts Gaming Commission lost its chairman a day before discussions about its investigation of Steve Wynn and Wynn Resorts Ltd. were to begin.
Stephen Crosby resigned Wednesday in the wake of accusations that he would be biased in decisions concerning the investigation.
Massachusetts regulators are working to determine what punitive measures, if any, to take against Wynn Resorts. Steve Wynn, the casino operator’s co-founder, resigned as CEO in February amid reports that he harassed and assaulted female employees over decades. He has denied all accusations.
The company’s
$2.5 billion Encore Boston Harbor resort is about nine months away from completion.
CROSBY
The resignation is effective immediately. Crosby declined a request for an interview.
‘Mitigating the losses’
In his resignation letter, Crosby said the accusations that he would be biased in determining how to complete the Wynn investigation are unfounded. It is unclear how the resignation will affect the process, but a legal expert expects the investigation and hearings to go on.
Carliss Chatman, a visiting law professor at Washington and Lee University in Lexington, Virginia, said she thinks Crosby’s resignation appears to be an “advice-of-counsel kind of moment.”
“It was probably done so that whatever decisions the board makes after these hearings are viewed as legitimate,” said Chatman, who is visiting from the Northern Illinois University College of Law. “He’s mitigating the losses and mitigating the damages. He’s also probably thinking about individual liability. And sometimes the appearance of impropriety is as bad as it actually being inappropriate.”
Past accusations
In his resignation letter, Crosby said he has seen accusations of bias before.
“It was about four years ago that the Gaming Commission was battered by lawsuits and accusations of bias in the matter of the Region A (Boston area) licensing process,” he said. “I was often at the center of these lawsuits and accusations.
“As the commissioners now prepare to receive and deliberate on the investigation of the suitability of Wynn Resorts to hold the Region A license, the lawsuits, threats of lawsuits and false allegations have begun anew,” Crosby said.
Crosby was scheduled to preside over a commission meeting Thursday morning to discuss the hearing process. He was expected to outline the procedure for the release of the investigation’s results and how the commission would deliberate to determine what penalties, if any, it would impose on the company.
The commission has the authority to suspend or revoke Wynn Resorts’ gaming license in that state and fine the company.
By Massachusetts law, the commission chairman is appointed by the governor.
Gaming Commissioner Gayle Cameron could not be reached for comment.
Massachusetts investigation
The investigation is looking into reports of sexual misconduct, as well as whether other executives were aware of the allegations and when. Investigators have focused on Steve Wynn’s failure to disclose during a licensing hearing in 2014 a $7.5 million settlement payment of a 2005 paternity claim to a former employee.
Crosby said he received a fourpage letter Sept. 17 from L. Lin Wood, an attorney for Steve Wynn, accusing Crosby of being biased against Wynn personally.
He also received a five-page letter Tuesday from attorneys for tribal casino operator Mohegan Sun demanding that Crosby be disqualified from participating in the adjudication of the Wynn suitability hearing.
“Chairman Crosby’s comments evidence a hardened prejudgment and bias in favor of Wynn,” the letter says. “It is clear from these comments that Chairman Crosby has already decided” the case.
Crosby also referenced a six-count, $3 billion racketeering lawsuit filed against Wynn Resorts, Steve Wynn and current and former Wynn Resorts executives Sept. 17 by Sterling Suffolk Racecourse LLC. The lawsuit claims the company coerced regulators into awarding it the eastern Massachusetts gaming license.
Nevada investigation
The state Gaming Control Board in Nevada is conducting its own investigation of Steve Wynn and Wynn Resorts. Chairwoman Becky Harris has indicated Nevada investigators would disclose their findings after the Massachusetts hearing. The board could then file a complaint through the attorney general’s office for consideration by the Nevada Gaming Commission.
Harris, who learned of Crosby’s resignation after talking with a reporter, said she doesn’t expect Nevada’s efforts to be delayed as a result.
A third investigation by the Wynn Resorts board of directors has been completed, but the company has not disclosed its findings.
Crosby praised the work of his fellow commissioners in his letter.
“That is your work, and it has been phenomenal,” he said. “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.”
Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702477-3893. Follow @Rickvelotta on Twitter.