UPDATED: This article was updated from a previous version after Mark Simms rescinded his resignation from the Gaming Enterprise Board on Jan. 24, 2023.
The Osage Nation Gaming Commission voted Jan. 20 to hold hearings Feb. 15 as part of its inquiry into the spending practices at tribal casinos.
The commission also refused to accept the resignation of a person identified only as “Licensee No. 6832,” presumably longtime Gaming Enterprise Board member Mark Simms, who tendered his resignation from that board the same day, only to rescind his resignation four days later.
“I am presently working on an 8A contract for my company, Accent Pest Control, Inc. in Bartlesville, OK and I cannot afford to have my gaming license in jeopardy (sic),” Simms wrote in his resignation letter of Jan. 20. “This would affect my ability to get the contract.”
Simms has been on the gaming board for nine years and chaired it for six. Graydon “Dean” Luthey Jr., a longtime attorney for the gaming board and attorney at Tulsa-based GableGotwals, also resigned, shortly before Simms did. Terry Mason Moore remains on board as the other gaming board lawyer.
On Jan. 24, about half an hour after the first version of this article was published, an email from GEB Chairman Geoff Hager contained a letter from Simms rescinding his resignation.
“I submitted the resignation letter on January 20, 2023. I also submitted my letter to the Osage Nation Gaming Commission on the same day to surrender my gaming license but they voted not to accept the letter,” Simms wrote.
“As I have spoken with you and each Board member you all have expressed the respect for me and have encouraged me to stay on the Board. Thus, I would feel honored to come back to the Gaming Board and help deal with these uncertain times so we can continue making record profits for our Osage people.”
Luthey’s resignation comes just as the Gaming Commission and the Osage Nation Congress’ Committee on Commerce, Gaming and Land prepare for investigative hearings on casino executives’ expense reporting. The congressional hearings are set for Feb. 7-9; 15 people have been subpoenaed and yet more have been invited to appear voluntarily.
The Commission hearings on Feb. 15 will involve members of the Gaming Enterprise Board; Chairman Geoff Hager said he expected all five members to appear before the commission, including Simms, whose gaming license gives the commission jurisdiction and leverage over him – likely explaining the reason the commission refused to accept his resignation.
Elizabeth Hembree, the director of the Gaming Commission, was enigmatic when asked if the commission had the power to reject resignations.
“We have accepted resignations in the past,” she wrote.
The Osage News pressed: “That raises more questions. Is the licensee trying to relinquish his license or resign his position? How can a person be forced to stay in a position?”
Hembree: “We only license individuals and vendors.”
Attorney General Clint Patterson drew a distinction between Simms’ resignation from the board and the tendering of his license: “I do not see [that the Gaming Commission has] any power of the resignation but they do have power over his license.”
‘We’re not rogue agents’
Hager, the chair of the gaming board, said he doesn’t foresee the Gaming Commission revoking licenses of board members for failing to comply with the commission’s current request for documentation. (That request appears to center on the employment and separation contracts inked by the board and former casino Chief Executive Byron Bighorse, whose expense reports struck Congress members and many others as being extravagant – caviar, $460 shots of whisky, pricey golf garb, and private jet travel – and poorly documented because he rarely listed the names of those he was hosting at dinners and other events.)
“I would be concerned if I didn’t already know that the issue of compliance is being taken care of and will be resolved by the date of the individual hearings,” Hager said.
“We’re not rogue agents. We are not in defiance to be in defiance. This is not a group that wants to engage in rebellion. We’re going to comply.
“We will be complying with ONGC requests now and moving forward. The current delay is caused by the concern that by complying with the Commission’s request – as required by law – that the documents will be made public – which breaks a different law – and also injures the enterprise that we are entrusted to keep and ensure the continued delivery of significant revenues to the Nation.
“This becomes more difficult when strategic partners of the enterprise lose confidence in our ability to keep their information confidential.”
The need for balance
Hager said cooperation with regulators is not as simple as it seems due to the push-pull of competing laws, like confidentiality agreements in contracts versus Congress’ right to examine documents – and Congress’ power to make them public. He said all of the governmental bodies need to find the proper balance to work together.
“In some portions of the Constitution and/or Osage statute … we find that any proprietary documents of the gaming operation are to remain confidential,” Hager said. “This is understandable since it’s currently the sole funding mechanism for the Nation. Anything that would jeopardize our enterprise by divulging key information about specific partner relationships, purchases, etc. should be avoided completely.
“That said, certain governmental entities should absolutely have access to information afforded them by Osage law, but that access needs to be counterbalanced so that such access doesn’t lead to the breaking of another law which is what we see here in the recent public disclosure of proprietary gaming documents.
“It wasn’t necessary. Any concerns could have been dealt with in an executive session without bringing this information into the public domain.”
Promises made, then forcibly broken
When Congress declassified and then released 1,556 pages of expense reports and ancillary documents in early December, Hager said the repercussions were swift.
“In one of our key expansion opportunities, we almost lost our entire team the day after the public disclosure,” he said. “Not because they feared some exposure of impropriety, but because they do not want to operate in an environment where their confidential information – contacts, expenses, etc. – can be made public without any notice, potentially revealing key competitive information to other clients, competitors, etc.
“It’s no way for a professional business to operate, having no way to provide key partners with any guarantee of confidence in proprietary information.
“Furthermore, many of our contracts have non-disclosure clauses which also opens us up to lawsuits if confidential information is made public.”
Underlying the tension between the right to know and the right to privacy is the question of whether Congress properly reclassified the documents as public. When they voted to make them public, legislators never sought input from the individuals whose records were released – a requirement a plain reading of the tribe’s Open Records Act required. The Act says Congress can make confidential documents public “after providing notice and an opportunity to be heard to interested parties in executive session ….”
While Congress was in touch with the gaming board over the records, it never gave any formal notice to any of the casino executives or employees whose expense reports were released. However, Congress maintains they do not consider the gaming executives named in the report as “interested parties.”
Audit: No material issues, including regarding expenses
Hager, a Pawhuska native who operates a successful manufacturing company that supplies the natural gas industry, said he, like all of the members of the enterprise board, wants to move forward and expand the casino business rather than dwell on issues that have been resolved.
The casinos recently received a clean bill of health regarding their annual audit, the ninth year in a row they have received an “unqualified” audit that found no material issues.
“Even with specific requests to look into the expense issue, the verdict from the auditing firm is that they were not material,” Hager said.
Nonetheless, both Congress and the Gaming Commission are continuing their inquiries.
“We’re not being defiant to be defiant,” Hager said. “When it comes to gaming, everything we have as a Nation in terms of financial stability is on the line. We consider it a great burden and do not take this situation lightly.
“We want compliance with all Osage laws and we want to ensure the continuance of gaming revenues without losing key partners in the process due to our own internal issues and publicly disclosing confidential documents.
“We’re not here to hide any improprieties.
“We want the confidence of the Osage people.
“We all swore an oath.
“And we hope that record year-over-year profits and tribal distributions, combined with nine years of clean audits by firms chosen and engaged by the ONGC will speak for itself. We have solid leadership and a clear vision for the future.
“What we need now is to put the past to rest and focus on the future …
“Procedures have been strengthened, and we will be glad when we can again refocus on the task in front of us, which is expanding the enterprise so that our people can realize the multigenerational prosperity that awaits us on the other side.”
Osage News Editor Shannon Shaw Duty contributed to this report.
