The Wynn/Okada dispute flared up again over the weekend with a report that an investigation paid for by Kazuo Okada and conducted by a former Homeland Security director, called the allegations made in a report submitted by a former FBI director and paid for by Wynn Resorts Ltd. (WYNN), “deeply flawed.”
The report by former FBI Director Louis Freeh was used by the company to redeem some 24.5 million shares of Wynn stock at a 30% discount. It was reviewed at Okada’s direction by Michael Chertoff, who once headed the country’s Homeland Security office.
Chertoff concluded Freeh’s year-long investigation was “structurally deficient, one-sided, and seemingly advocacy-driven.”
Chertoff’s findings were made public by Okada, who used the comments as justification for his position that he was shorted some $800 million when the Wynn directors took advantage of the Freeh report to redeem his shares.
“This confirms,” said an Okada statement, “what I have maintained since the day the Freeh report was issued and the Wynn board moved to strip me of my stake in a company I helped found. It’s obvious that the biased report was part of Steve Wynn’s campaign to eliminate me as a rival to his power within Wynn Resorts.”
The dispute between the founding partners of the Wynn Resorts company developed when Okada attempted to get Steve Wynn’s support for a casino project in the Philippines. Wynn considered a Manila casino to be a competitor to the company’s Macau operations and rejected the idea.
Okada, through his Universal Entertainment company of Japan, elected to go forward with the Manila project and was granted a license to build and operate a casino entertainment complex. However, both Freeh’s investigation and other subsequent probes indicated Okada or his associates may have violated U.S. or Philippine laws by bribing regulatory officials in the Philippines.
A civil lawsuit between Okada and Wynn has been proceeding in Las Vegas but the U.S. Justice Department has asked that it be halted because it may interfere with the federal investigation.
In addition to the Okada allegations, the Justice Department reportedly is also reviewing a $135 million donation made to Macau University by Wynn Resorts Ltd.
Ray Poirier is the longtime executive editor at GamingToday.
Contact Ray at [email protected].