The Osage Nation Congress’ committee that investigated the expense reports of the former chief executive of Osage Casinos has issued its final report with three key recommendations – including one that the Osage Nation Attorney General investigate and prosecute not only the former CEO, Byron Bighorse, but also the former chairman of the Gaming Enterprise Board, Mark Simms.
It further recommends that the Attorney General “consider referring the case on to the U.S. Attorney’s Office for the Northern District of Oklahoma for investigation and prosecution under 18 U.S.C. § 666,” a federal criminal statute regarding the theft from government organizations, including tribes.
The report also recommends the Osage Nation Executive Branch develop orientation training for all board members so they comply with the Open Meetings Act and that the Gaming Enterprise Board implement policies to ensure that all casino employees’ spending is monitored to thwart abuses.
The congressional Commerce, Gaming and Land Committee approved transmitting the report to the entire Congress by a 5-1 vote, with Joe Tillman voting no, and Otto Hamilton, Billy Keene, Brandy Lemon, Paula Stabler and Jodie Revard casting yes votes.
The 14-page report also offers general and detailed “findings of fact” compiled by the Congress during its investigation that stretched over the past 18 months, culminating with the public release of 1,556 pages of documents in December 2022, followed by hearings in February of this year at which several witnesses were grilled.
The two primary targets of the report are Bighorse, the son-in-law of Principal Chief Geoffrey Standing Bear, and former Gaming Enterprise Board Chairman Mark Simms, who resigned from the board right before the congressional committee started its hearings on expenses in February.
Bighorse did not respond to a message seeking his response to the report and has largely remained silent since he resigned as CEO in December 2022. In February 2023, he did issue a statement to the Tulsa World declaring the congressional investigation a farce.
“This is a petty tribal political situation, and I am disgusted with the defamatory comments made against me and my family,” he told the newspaper.
“… I will not apologize for bringing incredible increased revenues for the Osage Nation. I did my job, and I did it very well.”
Mark Simms declined to comment.
Finding No. 1: Board should have been reviewing expenses but some kept them secret
The committee’s first finding was that the Gaming Enterprise Board failed to monitor Bighorse’s expenses, which amounted to about $400,000 in less than two years and included pricey dinners, alcohol, golf clothing and other items – generally without supporting documentation showing who was present at the numerous get-togethers.
The report says gaming board members testified in February that they didn’t know they were supposed to review monthly credit card and club expenses and that they had not done so. The Congress members found this to be in “direct contradiction to the by-laws of the Gaming Enterprise Board.”
The committee singled out a particular by-law that says the enterprise board “has the sole authority to hire a Chief Executive Officer of Osage Casinos and to set the terms of employment of that officer who shall report directly to the Board.”
Reviewing CEO expense reports is a duty that does not often fall to boards of directors of companies, public or private. In one survey by Peerosity, for instance, 64 percent of CEOs had their expenses reviewed by a company controller, auditor, chief financial officer, head of compliance or someone with a lesser title, and the remainder were reviewed by “the next level up.”
Large accounting firms recommend that boards of directors or a designee review CEO expenses intermittently to avert potential fraud.
The committee also notes that according to witness testimony in February, Mark Revard was denied access to view Bighorse’s expense reports when he was on the gaming enterprise board as a member. Only when he became chairman of the board was he able to see the expense reports, and only after he gained access to them did the exposé of Bighorse’s spending begin. Thereafter, the spending dropped dramatically.
The refusal to grant Revard access, the report says, shows the board was “complicit in the exorbitant spending by Byron Bighorse on personal purchases with casino money.”
The report acknowledges the gaming board members did not receive training but says that “any cursory view of the law and bylaws controlling the Gaming Enterprise Board would put Board members on notice that they were responsible for the oversight of the Chief Executive Officer … including how the Chief Executive utilizes the Casino credit card or spends money at country clubs paid for by the Casino.”
Not only were some members of the board kept in the dark about the CEO’s expenses, but even the casinos’ compliance officer, Patrick O’Brien, had no access to credit card or club billing, the report says.
“There was no way for him to audit those records, and perhaps mitigate the severity of the losses to Osage Casinos,” the report says. The congressional committee approached O’Brien – who left Osage Casinos in May to go to work for BOK – for help developing policies regarding credit card transactions. During a meeting, he made the comment that Osage Casinos had faced similar issues with expenses in the past and that something needed to be done internally.
“This is a reference to the incident in 2014 when Joe Olujic and Richard Lobdell utilized company resources for personal use, and now the current actions of Byron Bighorse, the report says. “… Only a few years later now, the Board failed to uphold its duty to review the CEO expenses again, resulting in these hearings.”
The report then gives Revard, a cousin of committee chairwoman Jodie Revard, an attaboy: “Mr. Revard knew to have someone reviewing those expenses before he was Chairman, but Mark Simms (the former chair) would not allow it, giving Byron Bighorse carte blanche, as Mr. Simms puts it in his testimony.”
Finding No. 2: Violations of the Open Meetings Act
Around March of 2019, the gaming board decided – during a break in a meeting or after it – to start paying Bighorse’s dues and expenses at the Patriot Golf Club in Owasso, according to the report. The board took no formal action to approve the expenses, therefore no official record exists of that approval.
“The Gaming Enterprise Board members seemed to lack an understanding of what constitutes a decision requiring board action,” the report says. “[Current Osage Casinos CEO] Kimberly Pearson, who has worked with the Gaming Enterprise Board for fifteen (15) years, stated that the Board often discusses issues in Executive Session and then fails to take any action on those issues in the public portion of the meeting.
“The Osage Nation Congress recently passed ONCA 23-55 requiring boards of the Osage Nation to provide orientation training to new board members, in order to address this issue.
“The people’s business must be conducted publicly and according to the law. The investigation into the expenses of CEO Byron Bighorse is the direct result of decisions being made in the dark.”
Finding No. 3: Former board Chairman Mark Simms ‘protected the expenses’ of Bighorse leading to Bighorse’s ‘personal gain’
“Once Mark Revard became Chairman of the Board, he was finally granted access to the CEO expense records,” the report says. “This leads the Committee to believe that the previous Chairman at the time, Mark Simms, was not only aware of the expenses, but he was also protecting those expenses from being reviewed by the Board.
“Mr. Simms stated in his testimony that he had a good relationship with CEO Byron Bighorse. Simms reiterated ‘We are real good friends’ in his testimony ….
“He also testified that he had his birthday party held at an Osage Casino facility and that Byron Bighorse paid the facility use fee …
“Mr. Simms went so far as to attempt to execute a new employment contract with Mr. Bighorse without Gaming Enterprise Board approval, and without even informing the other Board members of the new contract.”
On Sept. 8, 2021, just as his tenure as chair was ending, Simms signed off on an email approving Bighorse’s expenses, “which is clear evidence that he was seeing the expenses and he alone was approving them,” the report says.
In October of that year, Revard was elevated to chair and began examining the expense reports. “As a result, the spending of CEO Byron Bighorse dropped off significantly,” the report says. “Between April and August 2021 Byron Bighorse spent $91,793.42 on the Casino credit card averaging $18,358.68 per month during that timeframe under Mark Simms’ Chairmanship. After Mark Revard was elected Chairman, Mr. Bighorse spent $6,013.33 between September and December of 2021 averaging only $1,503.33 per month.”
The report fails to note that the clubs for which the casinos were paying – Patriot, Tulsa Country and Summit – all unilaterally canceled the casinos’ Bighorse memberships in late August and September 2021 due to an incident at the Summit Club, which also corresponded to the sharp decline in spending.
The report draws a biting judgment about the spending drop: “The logical conclusion is that Gaming Enterprise Board Chairman Simms was aware of Mr. Bighorse’s spending, guarded those expense records from the Board, and allowed Mr. Bighorse to take advantage of their relationship for his own personal gain.
“Mr. Bighorse knew what he was doing, and he knew it was wrong, which in the opinion of the Committee is the reason for his resignation. He was aware that he could not answer for his actions, which is why he avoided service of process of the subpoena issued by the Osage Nation Congress.”
The report continues: “Mr. Simms’ testimony that he did not review any transaction or policy on the monthly expenses of the Chief Executive Officer is, in the opinion of the Committee, an attempt to shift blame and avoid any liability for his participation in what was clearly a coordinated effort to allow the misappropriation of Casino funds to Mr. Bighorse for his own personal benefit.
“The total expenses of CEO Byron Bighorse for this three (3) year timeframe amount to more than $400,000. The Committee believes this is only a snapshot of the potential total personal purchase expenses of CEO Byron Bighorse, since there is a four-year period between December of 2014 when he was promoted to CEO and January of 2019 when the beginning date for receipts were produced to the Osage Nation Gaming Commission. The Gaming Enterprise has not opened its own investigation to discover the full extent of the damage caused by Mr. Bighorse …
“This issue warrants further investigation by law enforcement for embezzlement and conspiracy to commit embezzlement.”
Finding No. 4: Bighorse ‘abused his position’ as CEO to get $39,191 reimbursed for his personal membership at Patriot without gaming board approval
In June 2017, Bighorse joined the Patriot Golf Club, spending $12,000 of his own money for the initiation fee and $695 a month for dues. It was a personal membership so the gaming board had no reason to be informed about it.
Almost two years later, the board did learn about the membership and, once again during a meeting recess, members generally agreed that the casinos should pick up the tab for Patriot golf expenses, although they never formally voted on it.
There was no discussion about reimbursing Bighorse for the expenses he had incurred previously, but in April 2019, the casinos’ Human Resources Director, Kyle Revard, sent an email to Tim Steinke, the casinos’ chief financial officer.
“On March 27, 2019, the Osage Nation Gaming Enterprise Board approved the expenditure of Patriot Golf Club for CEO, Byron Bighorse,” the email said. “Since this approval was made after the above individual already had a membership, the Gaming Board has approved full reimbursement and any expenditures moving forward.”
But the Gaming Board had not agreed – even informally – to reimburse Bighorse for the $39,191 he had spent since 2017.
“According to the members of the Board, there was never any discussion of paying for previous years’ expenses or reimbursement …” the congressional committee report says.
“That leaves the question of whether Kyle Revard took it upon himself to send the e-mail regarding reimbursement or whether he was directed to send it by his boss, Byron Bighorse, so that Mr. Bighorse could take advantage of the lack of formal action by the Board.
“The Committee is convinced that it is the latter, but we did not have the opportunity to discuss this with Kyle Revard for more clarity. Tim Steinke, Chief Financial Officer at Osage Casinos, testified that he used the verbal statement of CEO Byron Bighorse that the Board approved of the reimbursement and the email correspondence from Kyle Revard to justify the payment.”
The report again reaches a pointed conclusion: “The issue warrants further investigation, because if it is true that Byron Bighorse directed the reimbursement without even an informal approval of the Board members, then he acted illegally to obtain Casino funds for personal gain.”
The report also suggests that when the casinos were footing the bill, Bighorse spent more money.
The $39,121 “is what CEO Byron Bighorse spent from June 30, 2017 to March 22, 2019 when he was paying for the membership out of his own pocket,” the report says. “Remember that included a $12,000 initiation fee, so he really spent $27,191.21 on dues and purchases during that time.
“In contrast, when he knew the Osage Nation Gaming Enterprise was going to pay the bill he spent $39,658.54 on dues and purchases in the next twenty-one (21) months, over twelve thousand dollars more …
“For those that might want to justify these expenses, one only needs to look at the reclassified Osage Nation Gaming Commission Report to find purchases of golf clubs, Lululemon clothing and golf lessons … The same types of transactions occurred at Tulsa Country Club.”
Finding No. 5: The Gaming Enterprise Board refused to cooperate with the Congressional investigation ‘to hide the excessive spending’ and keep Bighorse on as CEO
The gaming board has insisted that it balked at turning over expense records based on advice from their attorneys at the time, Graydon Dean Luthey, who has since resigned, and Terry Mason Moore, who still advises the board. As current board Chairman James Hager put it a few months ago, the board was between a rock and a hard place, because it would be violating legally binding confidentiality agreements by releasing what it considered private personnel records to Congress – or even the Gaming Commission.
The congressional committee investigating “found these arguments to have absolutely no legal merit,” the report says. Additionally, the committee took umbrage at the Gaming Enterprise Board’s circular argument that Congress can only review its actions, as revealed in a letter to Congress signed by then-Chairman Mark Revard.
“That Constitutional provision requires a Board action,” the letter said. “The actions of the Osage Nation Gaming Enterprise Board are reflected in the Minutes of the meetings of the Board which are provided to Congress. Your letter does not identify any Board action identified in the Board’s Minutes for which review is sought.”
The report found the statement spurious.
“As we now know, and suspected then, the Osage Nation Gaming Enterprise Board was conducting business without taking official Board action,” the report says.
“The most glaring example is the testimony about giving verbal approval of paying for the Patriot Golf Club membership of Byron Bighorse during a recess of a meeting, where no official Board action was taken … However, an action did occur, money was paid by the Casino to the Patriot Golf Club for Byron Bighorse’s membership based on that discussion as an unofficial action.
“The failure to take official action in a public meeting is an action reviewable by Congress under the Constitution.”
The report portrays the board – or its lawyers – as digging in their heels. “These arguments demonstrate just how much the Gaming Enterprise Board, or the attorneys assigned to them, did not want the Nation and its people to discover the misappropriation of funds by CEO Byron Bighorse and the role the Board played in that misappropriation,” the report says. “According to the testimony of former Chairman Mark Revard, he did not write the response letters, they were written by the attorneys …
“The attorneys assigned to and advising the Board at the time were Terry Mason Moore and Graydon Dean Luthey. They had no objection to the Osage Nation looking into the expenses of CEO Joe Olujic and CFO Richard Lobdell in August of 2014, just a few months prior to Byron Bighorse being promoted to the CEO position.”
In its final volley in the report, the committee sounds a warning: “It is the opinion of this Committee that if a board member refuses to acknowledge corruption occurred here, the Osage Nation is not in need of their services.
“There was not one receipt submitted by Byron Bighorse in all of the 1,556 pages that stated a business purpose or stated who was in attendance at a meal. Not one person has come forward to say they attended a business lunch with Mr. Bighorse, and Mr. Bighorse has offered no such information.”
