Report: Wynn executives hid misconduct allegations for years

By PHILIP MARCELOFeaturesAssociated Press

For years, executives at Wynn Resorts concealed allegations of sexual misconduct against company founder Steve Wynn, according to a long-awaited report by Massachusetts casino regulators released Tuesday.

Continue Reading Below

The 200-page report by the state's Gaming Commission doesn't make a recommendation about the fate of the company's Massachusetts casino license or its nearly $3 billion Boston-area resort slated to open in June.

But it said recent reforms touted by the company — notably the resignation of Steve Wynn as CEO and the ousting of every official who knew about the allegations but failed to report them — do not "erase the fact that the corporate failures revealed in this investigation are significant, repetitive and reflective of the company's historical governance practices."

"Inaction and failures," the report concluded, contributed to a culture "where employees were reluctant to report allegations against Mr. Wynn to management."

Steve Wynn wasn't in attendance Tuesday and did not submit to interviews with investigators. He acknowledged in a statement to investigators that he had "multiple consensual relationships" with employees while leading the company, said Karen Wells, head of the commission's investigations unit, as she broke down the report for the five-member gaming commission Tuesday.

Brian Kelly, a Boston-based lawyer who represents Steve Wynn, stressed his client isn't the focus of the hearings. Regulators are considering how long company officials were aware of the allegations and how they responded, rather than the truth behind the claims.

"Mr. Wynn denies all allegations of nonconsensual sex and nothing in this report changes that," Kelly said in a statement. "In fact, the Commission and its investigators have acknowledged today that it's not their role to decide the truth or falsity of those allegations and that Mr. Wynn's conduct is not the focus of their hearing."

The report was released as the commission opened a series of hearings this week on whether Wynn Resorts can continue to hold a state casino license. The hearings, which will continue Wednesday with further testimony from Wynn Resorts officials, have implications for Encore Boston Harbor, the company's Everett casino.

Casino officials Tuesday didn't dispute the facts of the report, and new CEO Matthew Maddox told the commission he's "deeply remorseful" for the harm inflicted on the accusers.

"I am sorry that our company did not live up to its values," he said in brief opening remarks to the commission. "The transformation that we've gone through and the changes that we've made, I hope, will help all of you regain trust in us. We want to make you proud as a licensee here in Massachusetts."

The state commission launched an investigation last year after The Wall Street Journal published a report chronicling allegations of sexual misconduct against Steve Wynn, many by former casino cocktail servers and spa workers.

Many of the incidents detailed in Tuesday's report were previously reported by The Wall Street Journal and a subsequent investigation by Nevada casino regulators, who recently handed down a record $20 million fine to Wynn Resorts but allowed the company to keep its casino license.

Similar to Nevada's findings, Massachusetts regulators largely found company officials were aware of many of the allegations but failed to report them to internal investigators or take other steps mandated in the company's policies. Wynn officials also failed to disclose to state regulators settlements reached with some of the accusers as it sought a casino license in 2013, the report found.

Among the incidents the company failed to disclose was a $7.5 million settlement that Steve Wynn paid in 2005 to a former salon employee who alleged she'd become pregnant after Wynn raped her.

Steve Wynn also paid a cocktail server $975,000 in a private settlement after she alleged he'd pressured her into a non-consensual sexual relationship around 2006.The company also paid a $700,000 settlement in 2008 to another former cocktail server over a sexual relationship she had with Steve Wynn.

And in 2014, just weeks before Massachusetts would award the company a casino license, it paid out $9,000 to a former cocktail waitress who alleged Steve Wynn had raped her in 2005. Company executives were also aware of at least three other complaints against Steve Wynn from casino massage therapists at the time, investigators found.

Margaret "Dee Dee" Myers, a White House Press Secretary for former President Bill Clinton, was among the newly appointed members of Wynn Resorts' board of directors who testified Tuesday.

Gaming commission members asked her specifically how her time in the Clinton administration, which faced its own sexual misconduct scandals, compared to the crossroads Wynn Resorts now faces.

"It was a different time, but I will say that the personal behavior of leaders has a tremendous effect on the organizations they lead. That was true 25 years ago and it's true today," said Myers, who is now an executive at Warner Bros. Entertainment. "One of the things we need to do as a board is to set an example of how you can move forward. How do you take a company that wants to be better and make it better?"

___

Follow Philip Marcelo at twitter.com/philmarcelo.