Does any of this sound familiar?? At least the Board of Trustees knew who to hire to cover THEIR Butts–even if it meant throwing Penn State and Joe Paterno and State College under the bus. The Board of Trustees was interested in ONE Thing–keeping themselves protected at the expense of everyone else. Failure of their fiduciary duties and so much more!!
Universal Entertainment Corporation announced that Judge Michael Chertoff, the former U.S. Department of Homeland Security Secretary, has issued an assessment castigating last year’s report by Former FBI Director Louis J. Freehconcerning the affairs of Japanese gaming entrepreneur Kazuo Okada and his
affiliated companies. According to Judge Chertoff, the Freeh report was”structurally deficient, one-sided, and seemingly advocacy-driven.” Moreover, its conclusions, “simply are not credible.” Instead, Judge Chertoff found
Freeh’s report to be “deeply flawed” and “lack[ing] basic indicia of a credible
Freeh’s report was prepared on February 18, 2012 at the behest of Wynn Resorts, Limited. At the direction of Steve Wynn, Wynn Resorts turned around and used the report that same day to rationalize the forcible redemption of 24,549,222 shares of Wynn Resorts held by Aruze USA, Inc., a company whose ultimate majority owner is Mr. Okada. At the time, Aruze USA was the largest single shareholder in Wynn Resorts, owning close to 20% of Wynn Resorts’ outstanding stock.
Although Aruze USA’s shareholdings had a market value of at least 2.7 billion U.S. dollars at the time, Wynn Resorts provided Aruze USA with just a non-transferrable, fully subordinated, $1.9 billion, ten-year note in exchange. Wynn Resorts’ stock price rose $6.71, or 5.9%, per share the next day, providing tremendous financial gains to Steve Wynn and the other Wynn Resorts Directors who had just stripped Aruze USA of its shareholdings based on the Freeh report.
Statement from Kazuo Okada
In response to the independent analysis provided by Judge Chertoff, Universal Entertainment founder and Chairman Kazuo Okada said, “This confirms what I have maintained since the day the Freeh report was issued and the Wynn Board moved to strip us of our stake in a company we helped found — that the Freeh report was prepared carelessly and improperly, and contains a number of clear errors. It’s obvious that this biased report was part of Steve Wynn’s campaign to eliminate me as a rival to his power within Wynn Resorts.’”
According to the summary, the Freeh report’s most significant shortcomings include:
-- Timing that implies that Wynn Resorts commissioned the report for a clear purpose: to justify ousting Mr. Okada from the Board and redeeming Aruze USA's 20 percent stake in the company at a substantial discount; -- Consistently pairing grave and far-reaching conclusions with scant and unreliable supporting evidence and incomplete investigation and analysis, including broadly alleging a "practice and pattern" of Foreign Corrupt Practices Act (FCPA) violations without sufficient detail to meaningfully evaluate these incidents; -- Reaching legal conclusions through deficient legal analysis, including asserting a bad faith, possibly criminal violation of Philippine law while ignoring key aspects of the legal analysis Wynn Resorts commissioned from a local law firm; and, -- Failing to provide any meaningful explanation of its process and citing documents that are of dubious provenance or otherwise unreliable, as well as relying on potentially biased interviewees. Excerpted from the Wall Street Journal, April 22, 2013