Wynn leaders questioned about response to misconduct claims

Massachusetts gambling regulators are questioning Wynn Resorts leaders Thursday about what they knew about allegations of sexual misconduct against company founder Steve Wynn.

The state's gaming commission resumed its interrogation of new company CEO Matt Maddox, who took over after company founder Steve Wynn resigned last year and has been a close confidant of the billionaire for years.

Regulators are also expected to question Wynn's ex-wife Elaine Wynn, who co-founded the company and remains a major shareholder.

Thursday is the third and potentially final day of public hearings as regulators weigh whether the company is still suitable to hold a state casino license. A written decision is expected later and has implications for Encore Boston Harbor, the Boston-area resort the company hopes to open in June.

The commission opened the hearings Tuesday after releasing a 200-page report by its investigators that concluded company executives concealed and failed to take action on allegations against Steve Wynn for years.

Steve Wynn has denied the sexual misconduct allegations and told investigators his "multiple relationships" with company employees were all consensual. He resigned as CEO last year and sold off his shares in the company after the allegations were detailed by The Wall Street Journal.

On Wednesday, the five-member casino panel began questioning Maddox, who has been with the company since its founding and was even best man in one of Steve Wynn's weddings.

Under questioning from regulators, Maddox denied knowing about the specifics of private settlements Steve Wynn had reached with former casino employees who had accused him of sexual misconduct until those details became public years later.

He said Wednesday that he had been aware of a settlement made with a cocktail server in 2008 while he was serving as the company's chief financial officer. But Maddox maintained he was told the $700,000 payment was to help a financially struggling employee and not the result of a sexual relationship with Steve Wynn.

Maddox said he was also made aware of at least one of a number of complaints made by spa workers at Wynn Las Vegas about Steve Wynn's conduct during massages. Maddox, who was company president at the time, said he told the then-president of the casino to tell Steve Wynn to discontinue the behavior.

Maddox acknowledged he should have informed regulators about the allegations ultimately revealed by The Wall Street Journal in January 2018 because company officials were aware of the reporting weeks prior to publication.

Company board members, meanwhile, acknowledged they failed to investigate after learning in 2016 about a $7.5 million settlement Steve Wynn had paid to a former employee in 2005.

Board member Patricia Mulroy testified Wednesday that the settlement first came to the board's attention in 2016 during a lawsuit brought by Elaine Wynn, who by then was in a bitter feud with Steve Wynn and the company board.

Mulroy said the company's then-legal counsel assured them the incident was an "outlier" and that Wynn had personally paid the settlement with no liability to the company.

She also maintained the company's legal counsel never told board members the allegations involved a former manicurist who claimed she'd become pregnant after Wynn raped her, and that company officials never made the board aware of other settlements.

"The word 'rape' was never said," Mulroy said.

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