The Osage Nation congressional committee investigating casino executive expenses and policies heard from seven current and former casino employees on Feb. 7 – but the star witnesses and main targets of the inquiry were no-shows.
Byron Bighorse, the chief executive of the casinos who resigned in December, and his wife, Jennifer Bighorse, the daughter of Chief Geoffrey Standing Bear and the casinos’ marketing director until the fall of 2021, were not served with subpoenas issued by the Congress’ Commerce, Gaming and Land Committee – and they did not respond to “invitations” that were not legally binding.
Byron Bighorse’s expense reports, which show that he spent nearly $400,000 in the three years that ended in December 2021 on booze, high-end meals, private jet travel, golf clothing and clubs, were described as “exuberant” by Brandy Lemon, the vice-chair of the committee, but some of her colleagues were harsher.
Committee Chair Jodie Revard described Bighorse’s spending habits as leaving her “overwhelmed with shock, disgust and anger,” while Congressman Billy Keene vented that the Gaming Enterprise Board had impermissibly stonewalled Congress from performing its duties.
“Make no mistake, this is public money,” Keene said, “We are dealing with significant institutional failures here.
“Power concedes nothing without a demand. It never did. And it never will.”
Congressman Joe Tillman was also harsh: “The Osage People were robbed.”
Stumpff: Did as instructed
The opening day of testimony started more than an hour late because the court reporter plugged the wrong ZIP code into her map app and wound up in Owasso (74055) instead of Pawhuska, but it finally got rolling around 10:15 a.m. with opening statements from committee members.
The first witness was Kasi Stumpff, who was Bighorse’s executive assistant for the past two years and remains the assistant to his successor, Kimberly Pearson.
Like many of the witnesses who came after her, Stumpff said that as far as she knew, Bighorse’s expense reports were not vetted or approved by anyone.
“I don’t think anyone approved the expense reports of Byron,” she said.
The committee also questioned her about her own expense reports, which included a $105 charge for flowers that were delivered to Jennifer Bighorse and a $649 charge for a “Nutridrip” intravenous vitamin infusion that both she and Sheryl Decker, Standing Bear’s assistant, got while at the National Indian Gaming Association convention in Las Vegas in July 2021.
“Almost all of my charges I was instructed to do [file as business expenses], including the Nutridrip,” Stumpff testified. “The purchase of the flowers was a sympathy purchase; she’d had a procedure.”
A year after the Las Vegas infusions – after the Gaming Commission had opened its own investigation into the expense reporting that blew up into a scandal in late 2022 – the Nutridrip expenses were ruled a personal expense, and Stumpff and Decker reimbursed the casinos for them. Other expenses such as the flowers and filling up her personal car with gas, she said, she was never asked to repay.
“To be perfectly honest with you I just wasn’t aware of every policy and detail,” Stumpff said. “I wasn’t compelled to know because I was doing what my bosses told me to do.”
Tillman pressed her with questions about taking a private jet to Las Vegas for the NIGA convention, apparently trying to put Chief Standing Bear on the jet with the entourage.
Stumpff denied it, saying that she, Byron Bighorse, Jennifer Bighorse and Decker were on the private jet – but not the chief, who subsequent witnesses said flew to Las Vegas on Southwest Airlines.
Decker testified after Stumpff and said Bighorse had invited her to fly on the private jet after her own commercial flight had been delayed. “Byron made arrangements so we’d get there on time,” Decker testified. “I did not make private jet arrangements.”
Decker was in the witness seat for only four minutes (until she was recalled in the afternoon) but Tillman spent most of that time suggesting Chief Standing Bear improperly accepted benefits from the casinos – which paid his and Decker’s registration fees for the NIGA Convention – that the chief never reported in his annual ethics report on gifts and benefits received.
Decker said it has been common practice for the casinos to pay the registration fees at such conferences and said they had never been expensed through the Office of the Chiefs.
Tillman also quizzed her about how the passengers aboard the private jet made it from the airport to their hotel.
“We all took the same car,” Decker replied.
Tillman: “Car or limo?”
Decker: “I believe it was an SUV.”
Comps and perks
Mike McGuire, the casino marketing director who took that helm after Jennifer Bighorse separated, filled the committee in on some practices that are somewhat peculiar to the casino industry, such as comping concert tickets, meals and hotel rooms to high rollers based on how much money they spend at the casinos.
The casinos have a corporate suite at the BOK Center in Tulsa and the Tulsa casino’s event center, he said, and casino managers are each offered up to two tickets to events there to share but casino executives can get as many tickets as they want (presumably with a limit at BOK to the number of seats available in the suite).
“People who get those tickets are high-worth players,” McGuire said.
Pearson, who was the Chief Operating Officer before taking over the CEO’s post in December, also faced questions about BOK tickets, which she had paid for using her casino credit card until she was elevated to her new job.
Keene pressed her on her thoughts about using credit cards issued to the casino for personal expenses.
“Do you think that any purchase with a company credit card is a private matter,” he asked. “Yes or no.”
Pearson: “Can you please define ‘private?’”
Keene: “If you use a company credit card is that a private expense,” Keene said. “Yes or no?”
Pearson conferred with Greg Laird, the new attorney for the Gaming Enterprise Board before she answered: “Yes,” she said, under Osage law, all financial information about the casinos is considered confidential, and she deemed expenses to be financial information.
Chair Revard quizzed Pearson about the casinos’ cooperation with the congressional inquiry. Revard said that when police officers went to serve a casino controller, Jake Taylor, with a subpoena, they were informed he only worked two days a week – and when police asked which two days he did work, casino staff refused to say.
“Do you, as the new CEO, have a policy of not cooperating with Congress?” Revard asked.
Pearson: “I don’t believe we have a policy and I am unaware of the situation.”
Sitting in the audience, Taylor piped up: “I’m here.”
Changes have been proposed
During her testimony, Pearson said that she has proposed changes to expense, travel and club membership policies, including the rule that if expense reports fail to identify guests being entertained, or lack an original receipt, they are rejected – regardless of whose report it may be.
As for her own expenses, Pearson said that she requested that Tim Steinke, the casino’s Chief Financial Officer, review and approve her expenses – and vice versa.
The committee also questioned her about casino donations and sponsorships, including a statue that was bought at a charity event for the Tulsa Air and Space Museum.
Pearson said that there’s no formal policy on donations but that monetary donations are approved by the gaming enterprise board, but lesser ones, like donating water to firefighters, are made directly by the casino.
“We look at all of our donations objectively – whether it benefits the casino,” she said.
As for that Rosie the Riveter statue that the casino bought for $500 at the Tulsa Air and Space auction: It’s standing in the casino office, she said.
The committee’s questions often jumped around, and Pearson bounced right along with them. Tillman asked about whether the publicity had harmed the casinos and the gaming board’s efforts to expand into Missouri with a casino at Lake of the Ozarks.
“It has been harmful,” Pearson said. “I’m not privy to all of the specifics but it is my personal take that this has caused some harm to our operation.”
“We’re not approvers, we’re processors”
Testimony from Steinke, the CFO of Osage Casinos, cut to the chase about one of the realities of the casinos’ expense saga. He said that entry-level employees process most of the expense reports and that in his career he had rarely if ever seen a low-level worker challenge a top executive about such details as who the executive had dined with, what they drank, and so forth.
He said he didn’t question Bighorse about the expenses because Bighorse repeatedly told him that his expenses were approved by the Gaming Enterprise Board.
In hindsight of the investigations by the Gaming Commission and Congress, it now appears that the gaming board never took any formal action to approve Bighorse’s expenses, not even a $39,000 retroactive claim for expenses from 2017-2019 that contained golf shop, club storage, meals and expenses listed simply as “family” on a spreadsheet that Bighorse submitted himself.
“I was told by Byron that it was approved by the board so we processed it,” Steinke said. “… I don’t have oversight of the CEO. They don’t report to me.”
Retorted Chair Revard: “Within the documentation we have, there are 805 receipts with no documentation. That’s really alarming to me.”
One committee member pressed questions about why they couldn’t get an answer about whose responsibility it was to approve the CEO’s expenses.
“We’re not approvers. We’re processors,” Steinke replied. “The policy has been changed since Kim Pearson edited it.”
Revard observed: “Processing, but minimal oversight. You sound more like a controller than a CFO.”
Former COO Cooper: Bighorse was warned
Former Chief Operating Officer Joe Cooper was the last witness on the list for Tuesday’s hearing, and he was greeted warmly and invited into the Congressional chambers when he arrived. He was an invited witness who had not been subpoenaed.
Cooper worked for Osage Casinos from 2005 through mid-2020, starting off as a swing shift manager in Tulsa and working his way up to COO in 2015. He left in July 2020, he said, because the workplace environment had become “toxic.”
“I knew there was excessive spending but I didn’t see the receipts,” he said.
Cooper said that he warned Bighorse to watch his expenses because credit card spending on personal items had been behind the exodus of the former administration at the casinos.
“He just acted like he was OK with it,” Cooper said.
Cooper also said that Bighorse was infrequently in the office, although he acknowledged that a CEO often spends time out.
“We had an executive trainer managing us for the last two years,” Cooper said. “It changed the dynamics of the management of the company.”
Cooper said the upshot of that was that as COO, he lost control of operations – so he left.
“A lot of my responsibilities were being undermined to a certain degree,” Cooper said.
When asked about the “return on investment” for casino sponsorships and donations, Cooper declared the value of community goodwill was hard to measure in dollars and cents, noting that some causes, like the American Heart Association or Habitat for Humanity, are inherently good causes to support.
Cooper was also questioned about whether he thought Bighorse was “untouchable” because he was Chief Standing Bear’s son-in-law and because he was close with Mark Simms, who chaired the gaming board for years and who recently resigned as treasurer of the board.
Cooper said that he never felt any pressure from the gaming board or from Chief Standing Bear regarding Bighorse’s treatment.
“I’m sure he had a lot of interaction with his father-in-law but as far as business goes, not that I am aware of,” Cooper said. “Everything went through the board.”
Testimony continues Wednesday and Thursday, Feb. 8 and 9, beginning at 9 a.m. On Wednesday, Gaming Commission Director Elizabeth Hembree and casino regulatory compliance officer Patrick O’Brien are slated to testify; on Thursday, members of the Gaming Enterprise Board – Simms, Julie Malone and Chairman Geoff Hager are on tap, as is former Gaming Board chair Mark Revard, the latter being an invited witness who was not subpoenaed.