Wynn Resorts covered up sexual harassment al legations ......Thr ee former Wynn Reso rts ex ecu...

Wynn Resorts covered up sexual harassment allegations against CEO, report says - The Boston Globe

Wynn Resorts covered up sexual harassmentallegations against CEO, report says

By Mark Arsenault and Travis Andersen

GLOBE STAFF APRIL 02, 2019

DAVID L. RYAN/GLOBE STAFF

Representatives from Wynn Resorts were sworn in Tuesday at the Massachusetts Gaming Commisson’s threedayhearing.

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“Their efforts at secrecy made it exceedingly difficult, if not impossible, for gaming regulators

to detect potentially derogatory information through typical regulatory means, which rely

heavily on robust and voluntary self-disclosures by the applicant/licensee,” state

investigators wrote.

In painstaking detail, the 200-page report, the product of an investigation that began 14

months ago, described a litany of misconduct allegations against the 77-year-old Wynn.

The report also found a litany of failures on the part of former Wynn executives: to apply the

Wynn Resorts executives, aided by outside lawyers, covered up allegations of sexual

harassment and misconduct against founder Steve Wynn, creating a culture in which

employees were afraid to pursue complaints or believed that speaking up would be pointless,

according to a scathing report presented before the Massachusetts Gaming Commission

Tuesday.

As the commission began long-awaited hearings on whether the company should retain its

casino license in light of the coverup, state investigators said that former company officials

had carefully hidden numerous allegations against its ex-CEO — and in some cases their

settlements — for years.

company’s policies and procedures to Steve Wynn, to properly investigate complaints against

him, and to properly document the complaints.

Wynn Resorts did not contest the report’s basic findings.

“Failures at the company potentially diminished the company’s ability to safeguard the well-

being of its employees,” the report stated.



DAVID L RYAN/GLOBE STAFF Cathy JuddStein represented the Massachusetts Gaming Commission on the first day one the hearing on Wynn Resorts' casino license.

Hearings on how the company handled the complaints, and whether it ever misled the

commission, are expected to last several days. Wynn Resorts executives will seek to

demonstrate that the company remains fit to hold a casino license, which it needs to open its

$2.6 billion resort along the banks of the Mystic River in Everett. Named Encore Boston

Harbor, the casino is scheduled to open in June.

State law requires casino license holders to conduct themselves ethically and gives the

commission broad authority to determine which companies qualify. Character, reputation,

and integrity are all elements of “suitability.”

The commission, which regulates the casino industry in Massachusetts, launched its

investigation early last year after The Wall Street Journal published a report detailing

allegations of sexual misconduct against Steve Wynn. The billionaire casino developer

resigned, sold his stock in the company, and moved out of its flagship property on the Las

Vegas strip.



In his opening statement Tuesday, Wynn Resorts chief executive Matthew Maddox said the

public disclosure of the allegations against Wynn had left the company “shaken to its core,”

in crisis, and in denial.

As investigations began, “the denial changed, and I began to realize that there were many

victims — and those victims felt powerless,” Maddox said. “For that I am deeply remorseful.

They felt that they didn’t have a voice. That if they were to speak up they could be retaliated

against. Or if they did, it would not be investigated. For that I am truly sorry.

“I am sorry that our company did not live up to its values,” Maddox continued. “And when I

started to realize that truth, I took it very personally. And decided that no matter who the

CEO is of Wynn Resorts, or who the chairman is, that would never happen again.”

The company has replaced executives who failed to follow up on complaints against Steve

Wynn, turned over most of its board, and instituted new policies and safeguards, Wynn

Resorts officials have said.

DAVID L RYAN/GLOBE STAFF Karen Wells, Director of the Investigations and Enforcement Bureau, spoke on the first day of the Massachusetts Gaming Commission's threeday hearing on Wynn Resorts' casino license.



Karen Wells, who directs the commission’s investigations and enforcement bureau, which

produced the report, said that while the company’s positive changes are important,

“remedial measures . . . do not erase the past.”

The report found that in 2005, a manicurist at the Wynn Las Vegas alleged to management

that Steve Wynn had raped her and she had become pregnant. The manicurist reached a $7.5

million settlement with Wynn that was “structured for utmost secrecy” and prohibited her

from speaking about the matter, the report found. Several people told investigators that Steve

Wynn paid the settlement himself.

In a deposition for a separate civil proceeding, Wynn explained why he paid the settlement if

he denied the accusation, the report stated.

“That’s the question, isn’t it?” Wynn testified. “That was 97 days after the opening of the

Wynn Las Vegas at a cost of $2.75 [b]illion. . . . My name goes up on the sign at the

[insistence] of all my colleagues. And along comes this gal who had a turn with me, obviously

being advised on what to do, and says she is going to allege, which she alleged. And in a

complaint anything is legal and free of liab[ility] and other recourse. Anybody who is over 10

years old and knows what goes on in the world knows what happens next. The story gets

sensational.”

He asserted that the manicurist “initiated [the sexual encounter] when I was getting a

manicure about 10 yards from here in my office. Bad judgment on my part. All the rest was a

contrivance to extort money from me.”



DAVID L RYAN/GLOBE STAFF

President, CEO, and Board Member of Wynn Resorts Limited Matthew Maddox (left) sp oke to the commission on the

first day of the Massachusetts Gaming Commission's threeday hearing.

Three former Wynn Resorts executives, not including Steve Wynn, became aware of the rape

claim, the report says. None of the officials followed company policy and initiated an

investigation, and no reports were made to the board of directors.

The Wall Street Journal revealed the nature of the settlement last year.

The Massachusetts investigation uncovered additional settlements, accusations of

harassment, and allegations that Steve Wynn exposed himself to hotel staff.

Testimony Tuesday also suggested that local Wynn Resorts employees at Encore Boston

Harbor properly handled harassment complaints against an employee in 2017, during the

construction phase of the project, in contrast with the way some former company executives

in Las Vegas had handled complaints about Wynn.



Material from the Associated Press was used in this report. Travis Andersen can be reached

at [email protected]. Follow him on Twitter @TAGlobe.

© 2019 Boston Globe Media Partners, LLC

In a statement, Wynn’s lawyer, Brian T. Kelly, said Wynn “denies all allegations ofnonconsensual sex and nothing in this report changes that.”

“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,” Kelly said.

A review of the company’s finances found that Wynn Resorts retains solid earnings despite

holding a high level of debt, that there is no threat to the funding for the Everett resort, and

that the company’s financial stability has not been hurt by the scandal.

The hearings resume Wednesday with Wynn Resorts’ presentation, which is expected to

focus on the sweeping changes it has made.

Elaine Wynn, whose former spouse is Steve Wynn, remains a major company shareholder

and is expected to answer questions from the commission later in the hearing.

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