Judge Gives MGC Investigation Temporary Setback: Commission Confident Things Were Done Correctly

Legal advisors to the Massachusetts Gaming Commission (MGC) said they will wait for a written order from a Nevada judge before they decide whether they can potentially unveil part of the investigation into the suitability of Wynn Resorts to keep its gaming license – that coming after that judge ruled in favor of Steve Wynn again on Jan. 4 to hold up the public unveiling of the long-awaited investigation.

The investigation was triggered one year ago by press accounts of widespread sexual misconduct by Steve Wynn that was allegedly covered up by Wynn Resorts during the licensing process in Massachusetts.

Outside Attorney David Mackey, of Anderson Kreiger, reported to the MGC on Thursday, Jan. 10, that Judge Elizabeth Gonzalez had ruled in favor of Steve Wynn’s request for a preliminary injunction to bar the use of documents and interviews by the MGC for their inquiry. He claims they are protected by attorney-client privilege, and the judge has, at least, temporarily agreed with him.

“On Jan. 2, the judge issued a preliminary ruling granting Mr. Wynn’s request for certain of these documents and interviews be off limits,” said Mackey. “The judge did give the parties an opportunity at the hearing on Jan. 3 and 4 to discuss and make objections to her preliminary rulings…As the judge had done on the temporary restraining order previously, she immediately ruled at the conclusion of the hearing that certain material was off limits either as a result of Mr. Wynn’s attorney-client privilege or as a result of certain other rights…This order was issued by the court orally at the conclusion of the hearing. She will issue a written order confirming what she did orally which we expect to have in the next several days. That will confirm what happened in court. In the meantime, the case is going to continue in Trial Court in Nevada.”

Commission Enrique Zuniga asked if the public investigation could go forward without the use of the disputed materials – somehow unveiling in part what has been uncovered so that the matter can get underway.

Mackey said it would be hard to do so, particularly without the judge’s ruling in writing.

“I think we’re going to review carefully the specifics of the order and based on what we see in the judge’s order what is off limits and review what impact that would have on the draft report…,” he said. “We have a general sense of what she’s going to order, but there are very specifics lines of transcript about particular documents I think we want to see in writing before we go too far down the road in assessing its impact on what Director Wells has prepared.”

MGC Executive Director Ed Bedrosian Jr. stressed afterward to reporters that the ruling was only “preliminary” and that nothing was set in stone yet.

He also said the Investigations and Enforcement Bureau (IEB) was at an “end point” in their investigation when the Wynn allegation came in late October regarding the materials he believed had been given over inappropriately by Wynn Resorts. While Wynn Resorts had waived its attorney-client privilege to cooperate with the MGC, Wynn said there were matters from 2014 that he believed were private.

Later, after filing a lawsuit, his attorneys asserted that IEB Director Karen Wells had “flagrantly invaded” his privileged information – which he believes is covered under a Common Interest agreement with Wynn Resorts. A Common Interest agreement is when lawyers representing two different clients against a common defendant work together in sharing information and strategy.

He seemed to be particularly put off by interviews of attorneys in Nevada that Wells conducted throughout her investigation. However, Mackey said they believed there was no basis for his claims of being “flagrantly invaded.”

“We absolutely do not believe Mr. Wynn’s allegation that Director Wells somehow flagrantly invaded a Common Interest privilege is supported by facts here,” he said.

Mackey said Wells was very transparent during her interviews with those attorneys, who were represented by counsel and were, themselves, well-respected members of the Nevada Bar. He said they were told that Mr. Wynn had not waived his privilege, and if they were uncomfortable, they shouldn’t answer.

“(She said) if the witnesses had any concerns at all about these boundaries of attorney-client privilege, they should feel free to consult with counsel and only answer the question if they felt like they could,” said Mackey. “In fact, the witnesses did on occasion raise privilege issues and Director Wells fully respected that. In our view, none of the facts support Mr. Wynn’s statement.”

Mackey said they will have plenty of opportunities as the case rolls on to make arguments to persuade the judge to reconsider.

One of those arguments includes the idea that Steve Wynn recused himself from all involvement with Wynn Resorts before the MGC last year. Now, Mackey said, they believe he is trying to control the company through the courts.

“This lawsuit in Nevada was trying to have it both ways because he is attempting to assert control over Wynn Resorts cooperation with the investigation,” he said.

Another argument centers on whether courts in Nevada can tell the government in another state, here the MGC in Massachusetts, what they can and cannot do.

Mackey said there is legal precedent that allows such a thing, but the law says a state court should decline to go down that path.

In fact, he said, just last week a case before the U.S. Supreme Court – Hyatt vs. California Tax Board – referenced the Wynn vs. Wells case as a reason why such practices should be outlawed.

“As it turns out, Wynn vs. Wells was referenced by the lawyer for the state of California, saying it was the poster child for why states should not have power to review claims against sister states,” he said. “It’s not clear when we’ll have a decision on that case or how it will turn out, but it’s an interesting footnote.”

Commission Chair Gayle Cameron asked about the parallel investigation of Steve Wynn going on at the Nevada Gaming Control Board. She said she understood that the same documents and information had been given to them with little or no controversy – and certainly without any lawsuits.

“I don’t have a rationale for that…,” he said “You are correct. They have not taken any steps to claw this material back from them in Nevada.”

Leave a Reply

Your email address will not be published.