Inside Asian Gaming

inside asian gaming December 2015 36 Blast from the Past “It looks like Sheldon is shooting himself in the foot when it comes to the FCPA,” says a source with ties to the regulatory authorities in Macau. For what it’s worth, Mr Wynn is also a major Republican donor. Similarly outspoken in his dislike for the Obama presidency, he acknowledged “urging” his 12,000 Las Vegas employees to vote for Mitt Romney. Love Gone Sour In January 2011, Wynn’s independent directors led by former Nevada Gov. Bob Miller, who chairs the board’s Compliance Committee, undertook the first of two risk assessments of the Philippines. Their conclusion was that corruption is “deeply ingrained” in the gaming industry there and that newly elected President Benigno Aquino wasn’t likely to do much about it. The committee also claimed to have evidence leading to “reasonable suspicion that persons acting on Okada’s behalf had engaged in improprieties,” possibly a reference to the allegations currently swirling around Boysee Soriano. According to the company’s 2012 lawsuit, these findings were presented at a board meeting the following month with Mr Okada present. Steve Wynn announced at the meeting that he’d been invited by Mr Okada to meet with Mr Aquino. The independent directors responded that “involvement in the Philippines was inadvisable” and recommended against it. The meeting with Mr Aquino was canceled. Mr Okada was “embarrassed and angry”. The committee’s second investigation, commissioned that August, went further, declaring that it had “identified anomalies and improprieties in Universal/Okada’s dealings in the Philippines”. The findings included concerns that Mr Okada was “engaging in acts that would render him unsuitable under Nevada gaming regulations, and breaching the fiduciary trust duties he owed Wynn Resorts”. Sometime around the end of October, Washington, D.C.-based Freeh, Sporkin & Sullivan was brought in “to examine Mr Okada’s efforts in connection with the creation of a gaming establishment in the Republic of the Philippines”. Specifically, the board wanted something definitive on whether Mr Okada “may have breached his fiduciary duties to Wynn Resorts; engaged in conduct that potentially could jeopardize the gaming licenses of Wynn Resorts; and/or violated the Wynn Resorts compliance policy”. It’s difficult to imagine that Mr Okada couldn’t have known at this point that his days at the company were numbered, for his first written request for corporate records relating to the University of Macau donation was submitted on 2nd November. Three more requests would follow, on the 17th, the 29th and 12th December. On 11th January of this year, he went into state court in Nevada to demand the information. He also wanted to see records relating to the status of his substantial equity holding as a result of the 2009 divorce settlement between Steve and Elaine Wynn, who is also a director, and records explaining how the company had spent some $30 million he says he provided back in 2002 to get the Macau business off the ground. It was almost exactly one month later, on 13th February, that the Securities and Exchange Commission, which jointly enforces the FCPA, came calling, requesting through its Salt Lake Regional Office that the company “preserve information relating to the donation to the University of Macau, any donations by the Company to any other educational charitable institutions … and the Company’s casino or concession gaming licenses or renewals in Macau”. The irony is somewhat striking since, to hear Wynn tell it, the company’s standing with regard to the FCPA has been of paramount concern going back to 2008. That was the year a Philippines subsidiary of Aruze USA won one of four no-bid licenses from PAGCOR to develop a resort casino on land reclaimed from Manila Bay and christened Entertainment City. Louis Freeh’s background is indicative of just how much this had come to worry the board. His law partners include two retired federal judges, one of whom used to head the SEC’s Enforcement Division. Mr Freeh had been a US attorney and US District judge prior to joining the Clinton administration in September 1993, where In January 2011, Wynn’s independent directors led by former Nevada Gov. Bob Miller undertook the first of two risk assessments of the Philippines. Their conclusion was that corruption is “deeply ingrained” in the gaming industry there and that newly elected President Benigno Aquino [pictured here] wasn’t likely to do much about it. … but not quite kingmaker