The gaming commission’s blind spots
By all accounts, Stephen Crosby is an honorable man.
But even honorable men have blind spots, and Crosby has a couple when it comes to appearances and his job as chairman of the Massachusetts Gaming Commission.
He took 10 months to disclose a friendship and past business relationship he had with Paul Lohnes, the co-owner of the Everett casino site that gambling mogul Steve Wynn wants to develop; and he took part in a controversial telephone call with Wynn, urging him to stay the course after Wynn threatened to drop out of the application process.
Because of blind spots like that, the process of determining who will get the license to operate a casino in the Boston area now proceeds under a small cloud of bias allegations made by Caesars Entertainment. Caesars went to court after gaming commission investigators questioned its suitability as a partner in a $1 billion casino proposal with Suffolk Downs and Suffolk Downs asked Caesars to drop out of the deal as a result. In a federal lawsuit, Caesars is charging that Crosby’s bias in Wynn’s favor hurt their application. Suffolk Downs is now trying to move forward with Mohegan Sun as its partner. The sole rival is Wynn.
Despite the lawsuit, Crosby sees no reason to recuse himself from the final licensing decision, and his fellow commissioners back him up on that decision.
“I have complete confidence in your outlook, your motives, your judgment, and the value that you bring to this process,” declared James McHugh, a fellow commissioner and a former judge, during a recent gaming commission meeting.
But McHugh’s personal stamp of approval is not the standard set forth in the commission’s “Enhanced Code of Ethics.’’ Neither is disclosure alone. According to the gaming commission’s ethics code, “Commissioners must recuse themselves from any licensing decision in which a potential conflict of interest exists. Commissioners, employees, and consultants must disqualify and recuse themselves, and abstain from participating or voting in any proceeding in which their impartiality may reasonably be questioned. . . ”
During a recent sit-down at the Globe, Crosby, accompanied by McHugh, insisted he can carry out his assigned task: to objectively measure what he calls the “wow” factor of the competing casino proposals. His fellow commissioners, working independently, will be judging other criteria, including financial and capital structure; job creation; regional tourism and economic impact; and mitigation.
With back-up from McHugh, Crosby declined to discuss any specifics relating to the telephone conversation with Wynn, which took place “in the company of another commissioner,” according to the Caesars lawsuit.
According to Crosby, that call wasn’t their only contact. “Wynn called me all the time,” he said. Indeed, Wynn called so frequently that Crosby said he eventually asked someone else to find out what the gambling mogul wanted to talk about.
He didn’t say what led him to screen Wynn’s calls. Nor did any queasiness he may have felt about them stop him from participating in the call cited in the Caesars lawsuit. It happened last October, again despite the commission’s ethics code, which states, under a section entitled “Prohibited Communications,” that commissioners “may not engage in communications that a reasonable person would view as likely to affect the commissioner’s judgment regarding an application or other matter pending before it in an adjudicatory proceeding or reasonably likely to come before it in such a proceeding. . .”
Wynn seemed to know the rules, even if he ignored them. On the basis of an interview with Wynn, a Las Vegas business publication reported that “because of strict, expanded ethics guidelines, company officials aren’t allowed to speak to regulators except in public settings.”
Asked about his communications with Wynn in light of the commission’s ethics code, Crosby said commission members “are very fastidious about not talking to people about topics we might be called upon to adjudicate. . . We are as scrupulous as can be.”
Fastidious and scrupulous he may be. Yet if Crosby finds more “wow” in Wynn’s proposal, a “reasonable person” representing Suffolk Downs might question Crosby’s definition of what that means and end up agreeing with Caesars about his alleged bias.
To avoid that, Crosby might feel compelled to find more “wow” in Suffolk Downs.
That’s what happens when honorable men can’t see past blind spots.