Wynn: The cancer spreads

Executives at Wynn Resorts must have thought they’d outmaneuvered all the regulatory torpedoes headed their way. Steve Wynn had been banished, his stock sold, two board members were on the way out. Then the Wall Street Journal launched a new set of ‘fish,’ and these will be harder to duck. The WSJ basically exposed a culture of corruption that pervaded Wynn Resorts, with an executive corps portrayed as being out to protect Steve Wynn’s predatory penis at all costs. For instance, Arte Nathan will no longer be the dean of human resources in Las Vegas if these allegations prove true. Nathan allegedly told one victim of sexual assault, “You need to keep your mouth shut.” He added, “Don’t try to make this something.”

And it’s not just Nathan. There’s CEO Matt Maddox, the most clueless man in Las Vegas, who formerly claimed to have been completely ignorant of Wynn’s much-rumored catting around. Now he admits he knew about a $7.5 million hush-money settlement to get Wynn out of a paternity claim. And the Steve Wynn saga is becoming even less legend and more factual as employee after employee goes on the record about having been preyed upon by “the most powerful man in Nevada.”

There’s Vice President of Hotel Operations Doreen Whennen, who sloughed off any complaints to COO Marc Schorr. Whennen would tell her flunkies to dig up dirt on the complaining women, in order to get rid of them, says the WSJ. There’s Kim Sinatra, the corporate counsel who’s known about the hush money since 2009 and  may have helped keep it quiet when Wynn Resorts was pursuing a license in Massachusetts. (She certainly didn’t volunteer the information.) “It was always the [complaining] person’s fault. Nobody really looked into it,” says Jorge Nielsen, former artistic director of the Wynn Las Vegas fashion salon.

Then there’s Schorr himself, whose alleged conduct toward female employees was highly inappropriate, whether it was talking about their breasts or giving them lingerie as presents. (Really, we thought those kind of antics went out with the Mob.)  There’s spa manager Elia Kent, whose attitude towards employee complaints is described as, “He is Mr. Wynn. How do you say no to Mr. Wynn?” There’s the oft-hyped employee hotline, which turns out to have been for accounting and securities issues. Employees with harassment complaints were told to go to their boss or HR. We see now how well that worked.

As the saying goes, the fish rots from the head down and Steve Wynn’s behavior was nothing sort of vile. Spa employee Joan Fernald was detailed to give Wynn a massage, which he allegedly took as a license to  have her masturbate him. (She didn’t.) “I knew that if I raised a stink I would be blackballed,” said former art-gallery manager Karen Parente of a trip to the Getty Center during which Wynn purportedly pressured her to initiate an affair. Parente was so traumatized that she moved clear out of Nevada.

Wynn’s misconduct, if true (and the accusers are so numerous that his protestations of innocence become increasingly untenable) dates at least as far back as his Golden Nugget years. It was there, during the 1980s, that he is alleged to forced employee Dora Barnum to fellate him, saying, “If you don’t want a job, leave now.” (Wynn’s harassment supposedly extended to late-night calls to the woman’s home.) Her supervisor, Dick LeVasseur was purportedly told and “didn’t believe me.” There seem to have been a lot people with a need not to know about Steve Wynn — and we seem closer to the beginning of this scandal than the end.

Already some chickens are coming home to roost. Massachusetts Gaming Commission Chairman Stephen Crosby minced few words, saying “as a practical matter … Wynn Resorts proceeds with this project on an at-risk basis.” Although the MGC is still investigating Wynn, this is the strongest indicator to date that Wynn Boston Harbor is a lost cause. In a stunning about-face, project President Robert DeSalvio said the company is “absolutely considering a rebranding of the project.” So much for the sanctity of the Wynn brand. But it may take more than removing four letters from a building to save the $2.4 billion project from being taken out of the company’s hands. Maybe Maddox should call Sheldon Adelson and see if the former Bostonian feels like going home again. In the meantime, the company is registering every Encore Boston domain name in sight. The moniker makes little sense: Wynn Resorts is new to Massachusetts, so to what is this an encore? But it’s a big improvement on Wynn Boston Harbor, which sounds like a dock facility.

Elaine Wynn, meanwhile, detonated a bombshell of her own, testifying in court that she informed Kim Sinatra in 2009 that her husband had raped a woman in 2005. Sinatra’s reply was that the incident “had been discussed by attorneys and that it was deemed not to have been an issue of concern for the company, that it had been handled personally, and therefore, it had been resolved.”

Sinatra lashed back, saying “I disagree vehemently with Elaine Wynn’s testimony. My recollection, which is clear, is that at no time did Elaine Wynn ever tell me that there was an allegation of rape against Steve Wynn. In the relevant conversation, in which she promised to destroy Steve Wynn and said she didn’t care if that reduced the company’s stock price to zero in the process, Elaine Wynn made an oblique reference to a settlement, and nothing more.”

Mrs. Wynn didn’t take the matter up with her fellow board members, prompting Wynn attorney Todd Bice to say, “We fundamentally dispute that Ms. Wynn was reporting this matter to the company as part of a governance issue as opposed to seeking information from Ms. Sinatra and sharing information with Ms. Sinatra as part of Ms. Wynn’s divorce case.” In the meantime, a second litigation settlement has cropped up (the MGC is going to be very interested in that). If you’re waiting for the other shoe to drop, be careful not to be crushed under a deluge of footwear.

For example, VitalVegas reporter Scott Roeben is working his sources and says “there’s a very real chance Wynn Las Vegas will also rebrand as the fallout continues. Wynn executives claim otherwise, but it’s becoming increasingly clear some executives at Wynn Resorts are full of what industry insiders refer to as ‘horse manure.'”

We’d agree with that.

P.S.: Roeben also reports that de-Wynned Paradise Park may jump back to the head of the development queue (presumably minus giant ape) and the company punts on Wynn West … at least until they can find something else to name it. “The odds of the hotel announced for the former Alon site has a roughly zero percent chance of being called by its original name, Wynn West,” Roeben writes. Will the current executive team and board of directors be around to see that happen? It’s a very good question.

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