The former CEO of Osage Casinos essentially was free to spend as he pleased, the longest-serving member of the Gaming Enterprise Board told a Congressional committee on Feb. 9.
Straight out of the gate in his opening testimony, Mark Simms agreed with Jodie Revard, the chair of the Congress’ Commerce, Gaming and Land Committee that the bylaws of the gaming board, he sat on for nine years and chaired for six, say that the board “supervises” the Osage Casinos’ chief executive officer.
“It says ‘supervise’ but not getting down to the micromanagement of checking every receipt,” said Simms, who resigned from his post last month. “I’ve been on the board for nine years and we have never looked at the casino executives’ expenses.”
Revard responded: “What we are seeing is that the CEO doesn’t have any supervision and that, in my opinion, could be reckless. Who does supervise the CEO if not the chair or the board?”
“The board has been,” Simms said. “We watch all of the policies and procedures. We go through MICS, TICS and SICS.
“As far as looking at each expense of the CEO, we have never done it in these nine years – and this has been one of our downfalls and is why we’re here.
“We don’t have no policy to say this isn’t right. There’s nothing in the policies that says what’s ‘excessive.’
“In reality, the CEO has had carte blanche.”
The third and final day of testimony in the Congressional inquiry into the spending habits of former CEO Byron Bighorse, who resigned in December, featured some aggressive questioning of Simms, and board colleagues past and present: Board member Julie Malone, board Chairman Geoff Hager, and former chairman Mark Revard, the first board member to raise an alarm about Bighorse’s expense account in the fall of 2021.
The Commerce Committee is now waiting for a transcript of the three-day hearing and is expected to meet to decide what course of action to recommend to the entire Congress after it has the transcript in hand.
Bighorse’s expense reports, which were declassified and then released to the public in December 2022, show that he spent nearly $400,000 on food, drink, golf, travel, clothing, car detailing and other expenses between January 2019 and December 2021. Many of the charges that were paid by the casinos, including kids’ meals and golf clubs, golf shoes, sunglasses and sports clothes, appear to be personal. But they lack so many details that are required – like who he was entertaining and what was the purpose of an outing – that is hard to separate the legitimate expenses from the illegitimate.
Bighorse responds to Tulsa World
Bighorse has remained largely mute as the inquiry into his expenses has played out. But on Feb. 10, he broke that silence by making a statement to the Tulsa World.
“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 spent the last 17 years working my way up through the ranks of the Osage Casinos. In 2014, I had the honor of being selected by the Osage Nation Gaming Board through a comprehensive interview process to be CEO. A position that I held in very high regard, and I was overwhelmingly successful in my tenure as CEO. I successfully opened our flagship property in Tulsa and was able to expand this project within the first year. Every year of my career, I delivered record profits to the Osage Nation. My role was to create profits and excite people to come to the Osage Casinos. I built relationships with business leaders, tribal and elected officials, etc. I was the face of the company and responsible for promoting Osage Casinos to encourage people to conduct business with Osage Casinos and the Osage Nation. I will not apologize for bringing incredible increased revenues for the Osage Nation. I did my job, and I did it very well.”
Foot-dragging alleged in revising protocols
Some of the harshest questions and displays of indignation were reserved for the Board’s current chairman, Hager, who was brand-new to the board and at his first board meeting in the fall of 2021 when the alarm was sounded about Bighorse’s spending.
At that meeting, the board met in executive session and decided that henceforth, the board chair and another board member would review the CEO’s expense reports – which Hager said immediately put the kibosh on the profligate spending.
“That process solved the immediate problem and we’ve kept it in check since Mark Revard left the board,” Hager said. “… I agree we had a lack of oversight but I’d be remiss if I didn’t say that we took action that day and the data would show that action remedied that situation.”
Hager took heat for the board’s slowness in formalizing a permanent policy that has passed muster with the Osage Nation Gaming Commission, the regulatory arm that makes sure the casinos are operating above-board and in accordance with “MICS,” or Minimum Internal Control Standards set forth by federal regulators, the more stringent Tribal Control Standards or “TICS,” and the System of Internal Control Standards or SICS, that are essentially the specific policies and procedures that apply to the use of credit cards, travel, private club membership and a myriad of other matters.
Congresswoman Brandy Lemon asked why the board hadn’t sent revisions to the casinos’ director of regulatory compliance and to the Gaming Commission for approval.
“We are in 2023 and unfortunately we still do not have a permanent fix in place,” Lemon said.
“Yes, Ma’am,” Hager replied. “I apologize for the lack of expedience on this.”
“Do you agree that we had red flags with the prior CEO’s expenditures?” she pressed, referring to the 2014 ouster of the top casino brass – a debacle that prompted little or no corrective legislation from Congress or the gaming board.
“Yes,” Hager replied after a long pause.
“Why the hesitation?” she asked.
“It’s a lot to be here in this environment,” Hager said. “As we get to questions that are heavy, I want to think about them.”
$465 shots OK for top brass; hotdogs a firing offense for rank and file
Lemon seemed incredulous when Hager failed to pronounce Bighorse’s expense claims for a Mother’s Day brunch, kids’ golf clubs and chicken-finger meals as illegitimate business expenses.
“Those are special examples, and I understand the optics, but they’re very difficult to comment on,” Hager said. “There are no names and business purpose. I could only answer in speculation. I would agree that it would be an extremely rare circumstance.”
“We have lower-level people who have been fired for eating a hotdog from the kitchen,” Lemon shot back, her voice breaking. “It makes me emotional.”
Lemon was riled up again 10 minutes later, when she asked Hager about Bighorse buying four shots of McCallan 30-year-old Scotch at $465 each during a dinner at Tulsa’s Summit Club in July 2021.
“Are you of the opinion that a $409 (sic) shot of whisky is a legitimate business expense that the Osage Nation casinos should pay?” she asked.
“I know it won’t be popular, but the answer is yes,” Hager said, again noting that the lack of documentation on the dinner expense made it impossible to determine whether the expense was legitimate.
He explained that in his own business, such investments in entertainment can yield large results. Three weeks ago, he noted, he spent $4,000 on dinner and drinks with a client who spends tens of millions of dollars with his company, Big Elk Energy. “I can only relate from my own personal business experience,” he said. “I understand the concept of business relationships and that you have to spend money to make money.
“The answer is yes, I would spend $400 for a drink to bring in $50,000 in business.”
Lemon dug in with her disapproval: “We are not the Ute Indians. We are not the Pequots. We’re nowhere near that level. And that’s all I’m going to say.”
Mischaracterizing the gaming bylaws
Some testimony on Day 3 was based on an incomplete characterization of the gaming board’s bylaws. After lunch, when Hager took the witness chair, Chair Jodie Revard immediately began questioning him about the bylaws.
“In those bylaws, it states that the chair supervises the CEO or supervises those that you hire, which is the CEO,” she told Hager. “At this time, are you supervising Mrs. (Kim) Pearson?”
Hager balked, asking if the bylaws said the chair or the board?
Revard: “Do you want me to read your bylaws to you?”
Hager noted that he didn’t have the bylaws committed to memory so Revard, reading from a paper in front of her, said: “It says on Page 2 of 9 under Article 3 it says, “The Chair shall supervise.”
She did not, however, read the entire passage.
The passage on Page 2 of the board bylaws specifies that the chairman “shall supervise office staff hired by and for the Board unless the Chair delegates this responsibility to another officer of the Board.”
Office staff hired by and for the board would be the board’s administrative assistant and other employees.
A later passage, on Page 8, says that the board has the “sole authority to hire a Chief Executive Officer of the Osage Casinos and to set the terms of employment of that officer, who shall report directly to the Board.”
Generally, boards of directors of a corporation are not hands-on supervisors who review the minutiae of the businesses they oversee but they hire the CEO and assess the general direction and strategy or a company, whether it is manufacturing widgets or beckoning folks to gamble.
The day after the hearing, Revard said that she had pursued her line of questioning because she wanted Hager to offer his interpretation of the bylaws – something she wanted from each current and past board member.
“The CEO clearly reports to the board but who – singular – supervises the CEO? Who is responsible for determining whether an expense is business related or personal? Who is approving travel? The bylaws should provide clear direction for the CEO. Without clarity, the supervision responsibility becomes unclear. Even the word ‘report’ could better be defined. Does that mean the CEO only ‘reports’ to the board?”
Setting a bad precedent with a separation package
Congressman Otto Hamilton quizzed Hager about his relationship with Byron Bighorse, eliciting information that Hager and Bighorse had been friends before Hager was appointed to the gaming board.
“Did that have anything to do with your appointment?” Hamilton asked.
“I cannot speak to that,” Hager replied.
Jodie Revard then stepped in and noted that Hager was named after Principal Chief Geoffrey Standing Bear, who is Bighorse’s father-in-law – and thanked Hager for being very honest about his relationships.
According to Hager’s mother, Alma Rennick Hager, he was not named after Standing Bear and she did not meet Standing Bear until her mid-30s.
Revard made a comment about how the board hammered out a lucrative separation agreement when Bighorse resigned in early December.
“Your board paid him to leave while he was under investigation where his ethical behavior and spending habits were being scrutinized by regulators and Congress,” she said. “But the (gaming) board says, ‘It’s all flowers, we’re going to pay you to leave.’
“You voted to pay him to resign.”
That, Revard said, set a poor precedent and telegraphed a poor message: “This is the place to come to work: Buy shots, buy clothes, use casino credit cards for personal expenses.
She said that she viewed the lack of oversight over executive expenses as “malfeasance and willful neglect” and that it perturbed her that instead of punishing the CEO, “you paid him $600,000 for this behavior.”
Lemon echoed Revard later in the hearing. “It does look like we paid someone to leave our service, and we may need some reform,” she said. “Would you work with us on that, sir?”
“Yes,” Hager said.
Lemon followed up by asking Hager if he and the board would be willing to discuss the separation agreement with Bighorse as part of Congress and the Gaming Commission’s investigation – something the board has balked at, apparently because of confidentiality agreements built into that agreement as well as Bighorse’s employment contract.
“Are you still willing to work together in the hope of building trust with us? Because we do not trust you,” Lemon continued.
Hager sat silent for about two minutes.
“First, obviously I can’t speak unilaterally on something that would need the input of the whole board,” he said. “But there is an aspect or component … that I can’t discuss because of its sensitive nature. If we can assure that appropriate safeguards are in place to make sure we’re not in violation of something legal in nature, then yes, I would be willing to have that dialogue.
“Sorry it took so long.”
Networking for more business, or a conflict?
Hager also faced pointed questioning about the memberships that both he and Bighorse had in a group called Young Presidents Organization, or YPO. It is, essentially, an association of CEOs of large businesses that is used to network and build business, and has dues of $7,125 a year.
The gaming board approved a $130,000 sponsorship for an event that was not revealed but had to renege on because Hager, who is chair of the Tulsa chapter of YPO, talked it up to his board and the gaming board’s attorney later opined that he should have recused not only from the vote, which Hager did, but from all discussion of it, which he did not.
“I made a mistake,” Hager said. “I had not invited someone from the organization to talk about it. In the process of talking about it, I was the only person who could answer questions about it and that was considered advocacy for that sponsorship.”
Hager said that the casino’s YPO membership for Bighorse had rebounded to the casinos’ benefit: One YPO leader booked a holiday party at the Tulsa casino that “sent gaming off the charts and incredible number of hotel nights” thanks to the 700 employees who attended and booked rooms.
Lemon said she viewed the YPO membership, Hager’s chairmanship of it and the gaming board, and the sponsorship as a conflict of interest. “You could benefit from that also,” she told Hager.
Hager: “The only reason I’m even doing this is so the casino will receive the benefit.
“The final benefit to the casino is a no-brainer. We have already received revenue that would exceed the amount of the sponsorship that we never spent.”
Revard finished off the questioning of Hager, who was in the witness chair for more than 2½ hours.
“Are you currently on Governor Stitt’s workforce on economic development?” she asked.
“Yes,” Hager said.
“Yes or no?” Revard said.
“I said yes.”
The question set the stage for the final witness, Mark Revard, who Chief Standing Bear declined to reappoint to the gaming board in 2022, purportedly because Revard works for Gateway First Bank, a mortgage company Stitt founded in 2000. Stitt has a poor relationship with Native American tribes in Oklahoma, and Standing Bear has said that he felt uncomfortable with Revard’s relationship with Stitt through Gateway.
Always keep the lights on
Revard, the final witness, was invited to the hearing and appeared voluntarily. He was appointed to the gaming board by Standing Bear in 2015 and was elected chair in October 2021. He left the board in April 2022 after the chief declined to reappoint him.
“Did you have a conversation about why?” asked Lemon, who lead the questioning of Revard.
“I had lots of conversations,” Revard said. “But no communication from him (chief).”
Lemon: “Do you know why you weren’t reappointed?”
Revard: “I think he’s the only one who knows, but I have my opinions.”
Pressed, Revard pointed to the Stitt connection, but the timing of his departure, soon after he raised concerns about Bighorse’s expense, was an unspoken elephant in the room.
Congresswoman Paula Stabler asked Revard if he had ever seen executive expense reports before he became chair.
Revard said no, and then said he only saw them after he became chair and specifically asked for them after an incident at the Tulsa Country Club popped onto his radar.
“I asked for three months of Tulsa Country Club membership bills. I saw what was on those and that prompted me to cast a wider net,” Revard said.
Revard said the board never approved the $39,000 retroactive reimbursement for dues and purchases at the Patriot golf club that was issued in 2019, despite numerous statements from other casino executives that Bighorse had said the board had approved that payment.
Revard said it had actually been his suggestion that the casino pick up with tab for Patriot, but that he never intended for it to be billed retroactively.
Under questioning, Revard said that he didn’t agree with the Gaming Commission’s report on expenses, which suggests that the gaming board should review all executive expenses as well as bonuses and other executive benefits.
Revard did not elaborate: “I’m not on the gaming board anyway so it’s not my problem. We should be able to work in an environment where the lights are always on, not where you turn the lights on and the cockroaches scurry to the corners.”
Revard admitted that when he was chair of gaming, he, too, didn’t cooperate with Congress
“I didn’t want us to end up here today,” he explained. “Maybe it was my ego. I thought I could manage this and get policies and procedures in place and get restitution if that’s a thing.
“I thought I could right the ship.”
Quizzed about whether any elected Osage officials had tried to influence him, Revard said that there were times he felt pressured by Chief Standing Bear.
“Missouri is an example,” Revard said. “He said that if we didn’t move quickly enough, he was going to form another LLC (to get it done). It was insulting to our board and to his son-in-law.
“I took it as a threat.
“That’s OK. He had his opinion and I had mine.”
Revard said he didn’t share Hager’s concern that the dust-up over expenses would hurt the Nation’s attempt to build a casino in Missouri at Lake of the Ozarks. He said that the casinos should emerge from current controversy improved: “I would say that when we come out of this we’re going to be at fighting weight.”
Time will tell.
As the Osage Congress members held their committee hearing Feb. 7-9, someone anonymously amassed news articles about the melee over expense reports and dispatched them to Missouri legislators – who hold the power to green-light an Osage Casinos in that state or to scuttle it, along with the investment the tribe has already made there.
Timeline of Events
During her opening statement as the Commerce, Gaming and Land Committee started its investigative hearings into casino executives’ spending, Chair Jodie Revard offered the following timeline of events:
- On Sept. 28, 2021, then-Chairwoman Pam Shaw of the Commerce, Gaming and Land Committee requested expense information from the Gaming Enterprise Board. The Gaming Board ignored the request.
- On Nov. 16, 2021, Chairwoman Shaw sent a written request to Gaming Board Chair Mark Revard for information, including “credit card statements and expense reports for the last two-year period for each casino executive.”
- On Dec. 16, 2021, Chair Mark Revard sent a response regarding the request for information, stating that legal counsel for the Gaming Board said the information is confidential personnel information, so the Gaming Board would not provide the documents.
- On Jan. 19, 2022, Chairwoman Shaw sent a third request for the information to Chair Mark Revard. Two months later, on March 7, 2022, Revard indicated that the Board would not provide the information for constitutional reasons.
- On March 21, 2022, the Congress requested that the Attorney General provide an opinion on the following question: “Are the Principal Chief and the Osage Nation Congress, as the representatives of the owner, the Osage Nation, entitled to see the expenses of Osage Casinos and wholly owned limited liability companies including the credit card statements and expense reports of the Executive-level employees?”
- On July 1, 2022, Congress received an opinion from the Attorney General, stating that yes, the Gaming Enterprise Board must turn over the information, “so long as the requests to review are done according to protocol set forth in the Osage Gaming Law and the Osage Nation Limited Liabilities Company Act.”
- On Aug. 8, 2022, Speaker Alice Goodfox on behalf of a unanimous Osage Congress sent a letter to Gaming Commission Chair Gary Weyl, requesting that he provide Congress with a report of the expenses of the Chief Executive Officer, Chief Financial Officer, and Chief Operating Officer of Osage Casinos for the time period of Jan. 1, 2019, to Dec. 31, 2021. The letter said that the report should include the actual detailed credit card statements, country club statements, expense reports, credit card and expense policies approved by the Gaming Enterprise Board with the resolution authorizing the policy, informal and formal arrangements made by the Gaming Enterprise Board with any of the executive officers to pay back money spent on personal items or services, and any other information relevant to the expenses afforded to the Chief Executive Officer, Chief Financial Officer, and the Chief Operating Officer. Congress gave the Gaming Commission 45 days to act.
- On Sept. 21, 2022, almost a year after the first request for information, we received a report from Chairman Weyl of the Gaming Commission with the information we demanded.
- On Nov. 2, 2022, Congressman Billy Keene moved to hold a committee hearing to investigate the Gaming Enterprise Board’s approval of the expenses of the Casino Executive Officers. The Committee unanimously voted in support. Soon after, Congress voted to reclassify the records and make them public. Within a week of this vote, CEO Byron Bighorse resigned.
CORRECTION: This article was corrected on Feb. 11, 2023, to reflect that Geoff Hager is not named after Geoffrey Standing Bear.