Metro

Wynn Resorts executives say they’ve cleaned house after accusations against Steve Wynn

BOSTON, MA - 4/02/2019: Matthew Maddox President, CEO and Board Member Wynn Resorts Limited. speaks to the commission on the first day of the Massachusetts Gaming Commission's three-day hearing on Wynn Resorts' casino license held at the Boston Convention & Exhibition Center. (David L Ryan/Globe Staff ) SECTION: METRO TOPIC 03gaming
David L. Ryan/Globe Staff
Matthew Maddox, chief executive of Wynn Resorts, spoke to the state gaming panel Tuesday.

With the company’s casino license under harsh scrutiny, Wynn Resorts executives Wednesday told state regulators they have cleaned house in the year since sexual misconduct allegations against the company’s billionaire founder came to light, ousting employees who mishandled the complaints and building a new company culture from scratch.

“We launched a full back-of-house campaign, ‘We are Wynn,’ ” chief executive Matt Maddox told the Massachusetts Gaming Commission. “We are about 25,000 people, we’re not about a man.”

Maddox, who replaced Steve Wynn as chief executive in February 2018, apologized to the commission that the company’s failures had necessitated the hearing.

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“What I’m hoping is our actions going forward will allow you to build trust in us,” he said.

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Maddox’s remarks came on the second day of hearings on how Wynn Resorts handled sexual misconduct complaints against Steve Wynn and whether the company remains fit to hold a Massachusetts casino license. At stake is the future of the company’s $2.6 billion hotel and casino complex in Everett, Encore Boston Harbor, which is scheduled to open in June with a workforce of some 5,000 people.

Pat Greenhouse/Globe Staff
Commissioner Gayle Cameron was named interim chair of the Massachusetts Gaming Commission.

On Tuesday, the commission released a 200-page investigative report that concluded that some former Wynn Resorts executives had helped cover up allegations of misconduct against the casino mogul. Steve Wynn, 77, has denied “allegations of nonconsensual sex.”

On Wednesday, commission members and their lawyers peppered company officials with sharp and tough questions, homing in on instances when company officials could have done more to find the facts behind the allegations.

Maddox, who was questioned at length, denied knowing at the time about the settlements Steve Wynn signed with former employees who had made accusations against him.

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He acknowledged that he was aware of a complaint from members of the Wynn Las Vegas spa that Steve Wynn and his wife, Andrea, had requested a “sensual massage,” which had made employees uncomfortable.

Maddox said he told the hotel manager to tell Wynn to stop, and later was told the request might have been a misunderstanding.

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.

Maddox said that he knew a few weeks in advance about the January 2018 Wall Street Journal story that first reported a variety of misconduct allegations against Steve Wynn. He acknowledged that the company should have informed regulators that potentially derogatory information was going to be made public.

Maddox said he initially believed Steve Wynn’s explanation that the misconduct accusations against him had been concocted to hurt the company in litigation.

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Commissioner Gayle Cameron interjected that she was having trouble believing that.

“I would be, too,” Maddox told her. “It took me about five days to turn the denial into ‘maybe there’s something else here.’ I understand how ridiculous that looks.”

At the start of the hearing, the company’s new chairman, Philip Satre, conceded the obvious: The publication of the allegations against Steve Wynn “brought tremendous scrutiny on this company.” He took the point further, saying the scandal also put tremendous pressure and scrutiny on regulators, and “I regret that very much.”

BOSTON, MA - 4/02/2019: Elaine Wynn listens in on the report by Karen Wells, Director Investigations and Enforcement Bureau on the first day of the Massachusetts Gaming Commission's three-day hearing on Wynn Resorts' casino license held at the Boston Convention & Exhibition Center. (David L Ryan/Globe Staff ) SECTION: METRO TOPIC 03gaming
David L Ryan/Globe Staff
Elaine Wynn at the first day of the Massachusetts Gaming Commission's three-day hearing on Wynn Resorts' casino license.

Satre said he was recruited to the board by Elaine Wynn, a major shareholder and the ex-wife of Steve Wynn. He joined the board in August 2018 to help steer the company through its crisis. By the time he joined the board, the company was already deep into a transformation led by Maddox, he said. Steve Wynn had resigned, his stock was sold, and he had moved off the Wynn Las Vegas property on the Vegas strip.

Wynn’s voice — which used to be part of the hotel’s hold music in its phone system — was taken off any recorded messages and his image scrubbed from the back-of-the-house areas of the property used by employees.

“There was a concerted effort to make sure that the people who worked there did not have to see that on a daily basis,” he said.

Satre said he took encouragement that customers continued checking in to Wynn Resorts hotels as the scandal played out in the media.

“The product was not Steve Wynn,” he said. “He had an important role in creating it. But the product is what’s delivered by 25,000 employees.”

Asked if he had hesitation in retaining Maddox as chief executive, given his long ties to Steve Wynn, Satre said he entered the position with that exact question.

“I wanted to be confident that Matt was somebody who was his own person and not a executive modeling himself after his prior boss,” he said. “I satisfied myself . . . you just have to make an evaluation by talking, walking around, seeing how he deals with those issues.”

Wynn board member Patricia Mulroy faced questions on the board’s actions upon learning in 2016, through litigation, that Steve Wynn had personally settled a 2005 claim with a former employee. The board did not initially order an investigation into the settlement.

At the time, litigation had created an acrimonious atmosphere, Mulroy said, which affected the board’s thinking.

She said then-company lawyer Kim Sinatra said the $7.5 million settlement was a “single indiscretion” on the part of Steve Wynn.

Sinatra left the company last summer.

The company called as an expert witness Jennifer Marietta-Westberg, of Cornerstone Research, formerly of the SEC, who was hired by Wynn Resorts to analyze the extent and speed with which the company made high-level changes in the wake of the scandal.

She compared the Wynn Resorts response to that of 19 other major companies in similar crises, since 2014. “I found that some companies made more changes than others,” she said. “I found Wynn resorts made the strongest and swiftest response.”

Mark Arsenault can be reached at mark.arsenault@globe.com. Follow him on Twitter @bostonglobemark