The man who replaced Steve Wynn as CEO of Wynn Resorts last year as the company contended with the fallout from sexual assault and misconduct allegations against its founder was put on the hot seat during the second day of the Gaming Commission's hearing to decide if Wynn Resorts should still hold the Boston-area casino license.
Matt Maddox, who joined Steve Wynn to launch the company and build a gaming empire in 2002, was Steve Wynn's choice to succeed him as chief executive. Under questioning from the commission's Investigations and Enforcement Bureau on Wednesday, Maddox detailed how he became aware of various allegations against Steve Wynn and settlements associated with those allegations.
Maddox, who served as company treasurer, CFO and president before being named CEO, explained that when he learned of at least three different settlements and alleged incidents, he either did not believe the allegations to be true, was not concerned by what he was told about the settlement or did not think it was his duty to ensure that Massachusetts gaming regulators were notified.
In all instances, Maddox said others at Wynn Resorts had more knowledge of the settlements or allegations and that not all of the information revealed by the Gaming Commission's investigation was known to him before he became CEO.
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"Did you ever feel betrayed by your staff ... that all knew about this and yet didn't tell you as the president of the company? What does that say about your leadership that they think it is OK that all these things can be happening but yet you're never notified?" Commissioner Gayle Cameron, a former lieutenant colonel of the New Jersey State Police, asked Maddox.
The CEO responded by saying it shows "that there were a lot of different people that, I think, were trying to protect Steve Wynn and the last thing that they would want to do is tell me."
When Cameron asked him why those people would not want to tell him, Maddox said, "I think I'm known as a very straight arrow."
"One they can go right around," Cameron shot back, eliciting a gasp from at least one person in the hearing room.
Maddox first became aware of a settlement involving Steve Wynn in 2008, when he learned of a $700,000 payment made to a former employee of the company's cocktail service department. Maddox, who was CFO at the time, said the situation was described to him as "a long-term Mirage employee that had had some mental issues recently and that Steve [Wynn] and Elaine [Wynn] really wanted to take care of her because she had been such a good employee."
He told IEB investigators that he knew at the time the payment was made to an attorney rather than the former employee directly, but that it "raised no concerns" and that he was not told that the employee in question had filed a draft complaint with the company alleging she had been pressured into a sexual realtionship with Steve Wynn.
In late 2014 or early 2015, Maddox got a call from Maurice Wooden, who was then president of Wynn Las Vegas, telling him that employees in Wynn's spa felt uncomfortable after Steve Wynn and his wife, Andrea, requested a "sensual massage." Maddox said he didn't "know what that means." "It just struck me as odd," he said, and indicated that he told Wooden to tell Steve Wynn to "knock it off."
Under questioning from the IEB, Maddox said he was not told of complaints about Steve Wynn's "draping preferences" or "nude exposure" during massages at the Wynn spa. He said he did not loop in the company's human resource department, speak with any of the employees who felt uncomfortable or direct anyone from employee relations to speak with them.
It was in 2016 that Maddox said he first learned about the $7.5 million settlement Steve Wynn reached in 2005 with a former Wynn Resorts manicurist who accused him of raping her in his office and impregnating her.
Maddox said he was told by former Wynn Resorts General Counsel Kim Sinatra "that there had been a consensual relationship with Steve and an employee over a decade ago that was reviewed by gaming attorneys and outside attorneys and had been handled appropriately and there had been a settlement made." He said he doesn't recall if he knew the amount of the settlement at the time, but said he was never told in 2016 that the settlement involved an accusation of rape or paternity.
Asked by IEB deputy director Loretta Lillios whether Maddox was aware in March 2016 that Wynn Resorts notified gaming regulators in Nevada of some of the information about the 2005 settlement, he said he was not aware at the time. Lillios asked whether he could recall any discussions about informing Massachusetts regulators in the same way.
"No, and I'd say the main reason was I just was never in discussion about what we're notifying regulators about or what we're not," Maddox said. "Right or wrong, and wrong actually, I never thought about it. I thought that what needed to happen was happening."
He said that he talked to Steve Wynn in November or December 2017 about the allegation involving the manicurist and said Steve Wynn admitted to having sexual contact with a subordinate but was told that the manicurist initiated sex in Steve Wynn's office. Maddox said Steve Wynn framed the allegation as "continued litigation strategy" in an ongoing and contentious court battle involving his ex-wife, Elaine Wynn.
The Gaming Commission and its investigators also dug in Wednesday on what Maddox knew about the January 2018 Wall Street Journal article that laid out the alleged "decades-long pattern of sexual misconduct" by Steve Wynn before it was published.
Maddox agreed that he had advance notice of the article, had been freshly informed of the sexual contact between Steve Wynn and a subordinate employee and the associated $7.5 million settlement, knew that lawyers working for Wynn Resorts were attempting to squash the article on defamation grounds and even directly received an email about 10 days before the article was published from a former employee who suggested that something of a sexual nature occurred between her and Steve Wynn while she was an employee.
Lillios asked if, in the two to three weeks before the article and while Wynn Resorts knew the article would be published, anyone at the company thought to call Massachusetts regulators to alert them that potentially damaging information, whether true or not, was going to be reported.
"Through this investigation, I do not think that happened," he said.
Commissioner Cameron interjected into the IEB's line of questions to ask one of her own, based on Maddox's statement in a deposition to IEB investigators that, in the immediate wake of the Journal article, he thought that all the women were lying and that it was all part of a litigation strategy.
"I'm trying to understand this. You know about a settlement, you have a woman emailing you who has alleged something happened to her, you read about dozens of women who have made allegations who come forward, and you firmly believe that they all lied? That's what you stated to the IEB, that they all lied," she said. "I'm having trouble understanding that, I really am."
Maddex replied, "I would be if I were you, too. But when crisis hits, and I think almost everybody's immediate reaction unless you have the cold hard facts is typically denial."
He added, "It took me about five days to start to turn the denial into maybe there is something else here ... I understand how ridiculous that looks."
The Gaming Commission adjourned Wednesday at 5:10 p.m., planning to reconvene its hearing at 10 a.m. Thursday, when it will continue its questioning of Maddox.
"What I'm hopeful of is that our actions going forward will allow you to begin to rebuild trust in us," Maddox said at the outset of his testimony Wednesday. "The events that happened in the past shook us all to our core and I apologize that we're here today talking about it and I take responsibility for it."
Whether the five commissioners think that the steps Wynn Resorts has taken in the last year are sufficient for the company to maintain its suitability is an open question and may be the key to whether Wynn Resorts is allowed to open the $2.5 billion resort casino it has built in Everett.
