Sunday, March 26, 2023
54 F
HomeLegalGaming Commission postpones decision whether to fine gaming board members

News Based on facts, either observed and verified directly by the reporter, or reported and verified from knowledgeable sources.

Gaming Commission postpones decision whether to fine gaming board members

Attorneys for both entities argue the merits of accusations against current and former gaming board members when it came to information about Osage Casinos executives’ expenses

The director of the Osage Nation Gaming Commission is recommending that the members of the Gaming Enterprise Board be individually fined for tardy responses they made as a board to four requests for documents in the inquiry into casino executive expenses, bonuses, employment and severance.

During a hearing March 2, commissioners decided to postpone any decision on those matters for 20 days. That delay will give both sides in the dispute time to brief and argue about a letter from the Enterprise Board’s lawyer that says the case against the board members should be dismissed because they cannot legally be punished personally for official actions they made as a board – a sanction that could set a precedent that could dissuade many from serving on Osage Nation boards.

Greg Laird, the enterprise board’s new attorney who replaced longtime adviser Dean Luthey, wrote that the Constitution’s sovereign immunity clause not only applies to the Nation but also extends to Osage Nation officials “when acting within the scope of their duties,” as the gaming board members have been.

Additionally, he argues in a five-page letter sent to Gaming Commission Director Elizabeth Hembree, the Constitution states that the branches of government shall be separate and that one branch cannot “exercise any power properly invested in either of the others.”

“Thus,” Laird wrote, “the Commission is acting outside the bound of its powers by prosecuting the Respondents individually for acts they performed in the line of duty as Board members.”

Former longtime Gaming Enterprise Board member Mark Simms at a Gaming Commission hearing on March 2, 2023. LOUISE RED CORN/Osage News

Laird also noted that the commission fined the enterprise board on Feb. 21 for failing to comply with another request for information (RFI) separate from the four RFIs at the center of the March 2 hearing. In that case, the gaming board had presented requested documents concerning former Osage Casinos CEO Byron Bighorse’s contract and separation agreement for review but initially refused to allow the commission to make copies. In response, the commission voted to fine the enterprise – not individual board members – $10,000 a day but the board quickly relented and turned over the documents, with assurances that the gaming board would not be held responsible if they were made public.

The enterprise board, Laird noted, “assert[s] this (going after the board as a whole, not individual board members) is the proper procedure for the Commission to sanction board actions. The Commission could have just as easily fined the Enterprise regarding the RFIs at question here rather than making personal attacks upon their finances or gaming licenses for actions taken on behalf of the Board as a whole.”

The Gaming Commission can issue fines to individuals up to $5,000 and suspend or revoke gaming licenses, but Laird also challenged whether the commission could wield that revocation power over board members because the Osage Constitution clearly reserves the right to remove board members to the Osage Nation Congress. “The revocation of a Board members [sic] gaming license is a de facto removal from the Board itself,” Laird wrote. “The Commission would essentially be usurping Congress’ role as the decider of who and when a person is removed from the Board.”

Cause for removal from a board position is limited to:

  • Willful neglect of duty, which is defined as three unexcused absences from board meetings;
  • Malfeasance in office (which is what some members of Congress allege because the board failed to curb Bighorse’s spending and poor expense reporting by failing to report the purpose and who was present at various dinners and other events he expensed;
  • Habitual use of drugs and alcohol;
  • Inability to qualify for the board, including the denial of a gaming license;
  • Revocation or suspension of a board member’s gaming license;
  • A felony conviction; or
  • A misdemeanor conviction involving moral turpitude while in office.

The hearing did not shed a great deal of light on the substance of the commission’s investigation into the gaming board; the two bodies have been meeting in executive session and the public hearing – which was slated for quite a while but publicly announced as an “emergency meeting” with less than 24 hours’ notice due to uncertainty about whether a court reporter would be available – offered bare-bones details.

Gaming Commission Director Elizabeth Hembree with Prosecuting Attorney Victoria Holland at a Gaming Commission hearing on March 2, 2023. LOUISE RED CORN/Osage News

Essentially, the commission accused three current gaming board members and two others who recently resigned of dawdling in their response to four commission requests for information to which the board had access: Expense reports for casino executives, purchase of a membership in a networking group called Young Presidents Organization or YPO, purchases at various golf, country and dinner clubs, bonus payments, and the employment and separation agreements between the casinos and Bighorse.

The enterprise board in fact produced all of the documents that were requested, according to Hembree and board chairman Geoff Hager, but did not do so within the commission’s deadline; the requests were made on Nov. 3, Dec. 23, and Dec. 29, with respective response deadlines of Dec. 2, Jan. 6 and Jan. 11.

Hembree testified at the hearing that during the course of the investigation, the gaming board’s then-attorney, Luthey, and the new casino CEO, Kimberly Pearson, indicated that the information that the commission sought “would not be forthcoming” at all. The enterprise board members themselves did not make such statements, and ultimately did provide the information, including documentation about the reimbursement from Bighorse of some personal expenses he had claimed at the Patriot Golf Course in Owasso. Those records were delivered to the commission on or about Feb. 9.  

The enterprise board’s defense of its actions was straightforward and to the point: It had made its decisions collectively and on the advice of its lawyers. And much of that advice was delivered in executive session, which Osage law prohibits publicly discussing, in addition to being protected by attorney-client privilege.

Laird also said that the Gaming Commission’s own code dictated that the case against the gaming board members be dismissed: The law says that a notice of alleged breach of commission rules by management officials, which he said includes board members, must describe the steps needed “to effect a cure” of the breach. “The discontinuance or correction of the alleged breach shall constitute a cure thereof, except where such alleged breach constitutes a criminal violation by the manager or the primary management official,” Laird said, reading the regulation.

“There’s no testimony that the response to these PFIs is a criminal violation,” Laird said. “Ms. Hembree even said that she filed (the charges against the board members) because she believed they had no intention of responding.”

At this point, Laird added, all of the commission’s requests have been fulfilled, at utter maximum four months late, and in fact less.

“The farthest date (for the earliest request) was Nov. 2, and today is March 2,” he said. “The regulation states that this is the cure.

“The charges should be dismissed and we should all get on down the road.”

Louise Red Corn

Title: Reporter


Twitter: @louiseredcorn

Languages: English, Italian, rusty but revivable Russian

Louise Red Corn has been a news reporter for 34 years and a photographer for even longer. She grew up in Northern California, the youngest child of two lawyers, her father a Pearl Harbor survivor who later became a state judge and her mother a San Francisco native who taught law at the University of California at Davis.

After graduating from the U.C. Berkley with a degree in Slavic Languages and Literatures with no small amount of coursework in Microbiology, she moved to Rome, Italy, where she worked as a photographer and wordsmith for the United Nation’s International Fund for Agricultural Development, specializing in the French-speaking countries of Africa.

When the radioactive cloud from Chernobyl parked over Rome in 1986, she escaped to New York City to work for the international editions of Time Magazine. She left Time for Knight-Ridder newspapers in Biloxi, Miss., Detroit and Lexington, Ky., During nearly 20 years with Knight-Ridder, she was a stringer (freelancer) for The New York Times, The Wall Street Journal and Parade Magazine.

In 2004, she married Raymond Red Corn and moved to Oklahoma, where she worked for the Tulsa World before she bought the weekly newspaper in Barnsdall and turned a tired newspaper into the award-winning Bigheart Times, which she sold in 2018. She hired on at the Osage News in early 2022.

Throughout her career she has won dozens of state, national and international journalism awards.

Red Corn is comfortable reporting on nearly any topic, the more complex the better, but her first love is covering courts and legal issues. Her proudest accomplishment was helping to exonerate a Tennessee man facing the death penalty after he was wrongfully charged with capital murder in Kentucky, a state he had never visited.


In Case You Missed it...

Upcoming Events