Bill would require corporations to disclose harassment and discrimination settlements

What’s that old saying? When your only tool is a hammer, every problem looks like a nail.

On Valentine’s Day Nevada’s first-term Democratic 3rd Congressional District Congresswoman Jacky Rosen, who happens to be running this year for Dean Heller’s Senate seat, filed a bill that would require all publicly traded companies to file with the Securities and Exchange Commission details about settlements involving sexual harassment and discrimination. It appears to be an effort to pry lose information about legal settlements like those kept secret about casino executive Steve Wynn.

The bill is titled Sunlight in Workplace Harassment Act (H.R. 5028).

Rosen and Democratic Sen. Elizabeth Warren of Massachusetts, who has introduced a companion bill in the Senate, put out a press release today.

“The flood of allegations of sexual misconduct against powerful individuals has created a moral imperative for all of us to shine a spotlight on these abuses of power in the workplace,” Rosen was quoted as saying. “This is a real problem for workers in Nevada and across the country, and Congress has a responsibility to take a leading role in putting an end to workplace sexual harassment and discrimination. Requiring public companies to report these settlements will help lead to greater transparency, safer work environments, and a more robust discussion of how to prevent workplace misconduct and hold people in power accountable.”

Perhaps the legal system is just not transparent enough. Why not a bill to limit sealed settlements?

The bill would require corporations to disclose “measures taken by the covered issuer and any subsidiary, contractor, or subcontractor of the covered issuer to prevent employees of the covered issuer and any subsidiary, contractor, or subcontractor of the covered issuer from committing or engaging in sexual abuse, covered harassment, or covered discrimination.”

Contractor or subcontractor covers a lot of ground. Disclosure presumably could include: “We fired the S.O.B.”

The bill also prohibits the disclosure of the name of any victim of sexual harassment, abuse or discrimination. So much for the right to confront witnesses against you. It is silent on whether the name of a harasser, abuser or discriminator could or should be revealed or not.

Sen. Warren was quoted as saying, “Our bill will help unmask secret settlements that provide cover for the powerful to get away with abuse, harassment, and discrimination, while simultaneously protecting accusers’ privacy. Congress has a responsibility to pass it right away.”

 Meanwhile, another Wynn Resorts shareholder has filed suit agains the board of directors for failing to disclose earlier information that resulted in the decline in value of company stock. The AP story lede states: “The board of directors of Las Vegas-based Wynn Resorts is facing another lawsuit from shareholders who allege they breached their fiduciary duties when they ignored what has been described as a longstanding pattern of sexual abuse and harassment by the company’s founder, Steve Wynn.”

The story quotes one of the litigants as saying, “These board directors and officers were duty-bound to protect employees and the company, yet they failed to confront allegations of predatory behavior.”

A little transparency is all that is needed.

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Is casino executive statement self-contradictory?

You might call it a self-contradictory statement.

Today’s Las Vegas newspaper reports on what knowledge the new Wynn Resorts CEO Matt Maddox had about allegations of sexual misconduct by former CEO Steve Wynn:

He (Maddox) said he was unaware of the misconduct allegations against Wynn until they were aired in numerous publications last month and that he first learned of a $7.5 million settlement payment to a Wynn employee when it surfaced in a court document in 2016.

And what did he think the $7.5 million settlement was for?

A lawsuit by a shareholder accuses the Wynn Resorts board of directors covering up Wynn’s alleged misdeeds after it learned by 2015 of a lawsuit filed by Wynn’s ex-wife Elaine Wynn. That lawsuit mentioned a “multimillion dollar payment” paid by Wynn personally due to “serious misconduct” on company property against a company employee.

A manicurist had accused Wynn of forcing her to have sex with him. It was recently brought out that suit was a described as a paternity case.

“The Board, however, eventually learned of the allegations of egregious misconduct involving the Company. Ms. Wynn’s lawsuit also accuses Mr. Wynn of using the Company “to fund his lavish lifestyle and personal politics” and displaying “reckless risk-taking behavior” that places the Company in jeopardy and has exposed it to legal challenges,” the recent shareholder suit states. “Thus, regardless of whether Mr. Wynn initially concealed the settlement and allegations of egregious misconduct involving the Company, the Board knew of the settlement and allegations of patently egregious misconduct involving the Company by at least 2015 and failed to act and continued to support and recommend to the stockholders Mr. Wynn’s continued leadership and compensation. The Board knowingly failed to investigate the allegations of patently egregious misconduct by the Chairman and CEO and Mr. Wynn’s suitability for his fiduciary positions and regulatory compliance and his suitability as a gaming operator. Knowing failure to act by the Board on the allegations of such egregious misconduct involving the Company constituted a knowing and intentional violation of its fiduciary duties to the Company for which the Director Defendants are liable.”

If you think Wynn settles such matters easily, check out the bit at the end of a CNN story about his legendary tantrums.

In 2006 a member of a cleaning crew at Wynn Resorts sued Wynn, saying he assaulted her by grabbing her and pulling her and yelling at her over the job a cleaning crew was doing. She filed a police report but nothing came of it, CNN reported.

In the end the woman wound up paying Wynn’s attorney fees and other costs totaling nearly $16,000. She had to file bankruptcy.

“It wasn’t about money,” her lawyer told CNN. “To my feeling, it was just vindictive. … I think he wanted to send a message to anybody that might want to challenge Wynn Resorts or Steve Wynn: It won’t end well for you.”

Lawsuit outlines compendium of allegations against Wynn

If you thought the sexual harassment allegations against Steve Wynn were horrendous, wait till you read the lawsuit filed today accusing him and his compliant board of excess pay and benefits. The Nevada Independent has posted a copy of the 42-page suit.

Most of the claims in the suit by shareholder Norfolk County Retirement System, filed in Clark County District Court, have been reported at one time or the other but the compilation is eye-opening. The suit accuses Wynn, his board and company executives of poor corporate governance and breaches of fiduciary duty at the expense of shareholders.

The suit notes, for example, that Institutional Shareholder Services, Inc. has recommended withholding votes to re-elect members of the Wynn compensation committee, citing “Wynn’s sizable pay packages compared with other CEOs and a severance agreement equating to $330 million that ‘exceeds the upper parameter of acceptable amounts,’ according to a report from ISS last year. Glass Lewis & Co, another advisory firm, also recommended that shareholders vote against the Company’s compensation package, citing ‘poor overall design’ and ‘performance disconnect.’ In fact, Glass Lewis gave the Company an ‘F’ for its pay-for-performance practices for the last two years.”

This past year ISS gave Wynn Resorts its worst ranking for governance risk.

The suit also recounts that the company leases Wynn’s personal art collection for $1 a year, but pays the cost of insurance, security and taxes.

Of course, it also relates the recent allegations of sexual harassment against Wynn, noting the board’s knowledge of and lack of action. The suit says that Wynn’s former wife Elaine Wynn’s lawsuit “accuses Mr. Wynn of using the Company ‘to fund his lavish lifestyle and personal politics’ and displaying ‘reckless risk-taking behavior’ that places the Company in jeopardy and has exposed it to legal challenges. Thus, regardless of whether Mr. Wynn initially concealed the settlement and allegations of egregious misconduct involving the Company, the Board knew of the settlement and allegations of patently egregious misconduct involving the Company by at least 2015 and failed to act and continued to support and recommend to the stockholders Mr. Wynn’s continued leadership and compensation. The Board knowingly failed to investigate the allegations of patently egregious misconduct by the Chairman and CEO and Mr. Wynn’s suitability for his fiduciary positions and regulatory compliance and his suitability as a gaming operator. Knowing failure to act by the Board on the allegations of such egregious misconduct involving the Company constituted a knowing and intentional violation of its fiduciary duties to the Company for which the Director Defendants are liable.”

Wynn’s current employment agree, the suit notes, runs till 2022 and pays him $2.5 million a year.

Then there is this chart:

 

 

Should we have practiced journalism of rote regurgitation?

As in the case of the dog that did not bark, the solution to the mystery may lie in the answer to the question: Why?

On Monday the morning newspaper reported that 20 years ago the same paper, when I was editor, decided to “spike” a draft of an account about an ongoing lawsuit against casino owner Steve Wynn, apparently one claiming gender and age discrimination because one of Wynn’s casinos had created a policy requiring waitresses to lose weight and wear high heels.

I do not recall what was in the story or why it was not published, but I deeply resent implications and innuendo that the newspaper management at the time shirked its journalistic responsibilities. Monday’s story suggests the 1998 draft may have included accounts in court files by some plaintiffs that other women, not themselves, had been sexually harassed by Wynn. The story points out that reporting of court proceedings are protected against defamation litigation and quotes some journalism professor as saying, “Journalism has to be about courage.”

Apparently in the eyes of some, the journalism of verification has been supplanted by the journalism of rote regurgitation.

The code of ethics of the Society of Professional Journalists calls on journalists to “Take responsibility for the accuracy of their work. Verify information before releasing it.”

If someone walks through the front door and hands a reporter allegations of a salacious nature, the reporter would be obligated to verify. Just because someone makes the same allegations but launders them through court filings might sometimes protect the newspaper from litigation but does not absolve the paper from doing its job of responsibly reporting verifiable facts as accurately and fairly as possible. It is not about courage, it is about responsibility to the readers. (By the way, an online forum on responsible media warns, “The fact that documents are lodged with the Court in civil proceedings will not, of itself, attract privilege.” The privilege applies to evidence given in open court.)

The same due diligence would apply to the busboy as well as the wealthy casino owner.

As I said, I do not recall the specifics of this one incident 20 years ago, but the implication that the paper was lax in not reporting something just because it was filed in court is ludicrous and insulting and, dare I say, defamatory.

As for the credibility of the currently barking dog, former Publisher Sherman Frederick points out that longtime columnist John L. Smith resigned when the current newspaper management ordered him to never write about two of the biggest players on the Strip — Wynn and current newspaper owner and casino bigwig Sheldon Adelson — because they had unsuccessfully, repeat, unsuccessfully sued him over passages in books he had written.

 

 

 

 

Newspaper column: Resignation offers a glimpse into the state of newspapering in Nevada

The newspaper community in Nevada is a rather small clique of writers and editors, competing against each other for the hot news scoops and heart-tugging feature stories and precious pearls of political punditry. It is the competition that makes all the papers just a little better than they otherwise would be.

Writers and readers are a little poorer when one of the stars of the journalism craft in the state feels he must walk away in order to maintain his integrity and creditability.

A month ago, John L. Smith, who has written a general interest column four or five days a week for more than 30 years at the Las Vegas Review-Journal, resigned.

The situation offers readers a rare glimpse inside the nuanced world of Nevada newspaper journalism, which seldom gets any coverage and where credibility is often a matter of perspective, motives are suspect and excuses can replace sound judgment and diligent editing.

Smith was among a handful of writers at the Las Vegas newspaper who unearthed the identity of the paper’s new ownership in December — Sheldon Adelson, the billionaire casino owner and generous donor to Republican political candidates. All have since left the paper.

In a December column, Smith commented that Adelson is “precisely the wrong person to own this or any newspaper.”

John L. Smith doing commentary at KNPR.

In January, shortly after Adelson named a new publisher for the newspaper, Smith was told he could no longer write about Adelson because the casino owner had once unsuccessfully sued Smith over a couple of sentences in a book about casino executives called “Sharks in the Desert.” Smith protested but reluctantly followed orders, though he had written often about Adelson over the years since the suit was thrown out in 2008 as baseless.

Then a month ago, the newly ensconced editor of the paper, Keith Moyer, appeared at a weekend meeting of the local chapter of the Society of Professional Journalists to talk about the future of the paper. According to Twitter feeds posted during the meeting, Moyer publicly declared, “I personally think it was a conflict for John to write about Sheldon,” and, “As long as I’m editor, John won’t write about Sheldon Adelson.”

Smith replied with a Tweet: “Wasn’t I also sued by Wynn?” referring to a lawsuit by casino executive Steve Wynn over an ad for a book about Wynn called “Running Scared” that was dismissed by the Nevada Supreme Court in 2001.

The following Monday, Moyer told Smith he could not write about Wynn either. The next day Smith resigned, leaving a letter on desks in the newsroom saying in part: “I learned many years ago about the importance of not punching down in weight class. You don’t hit ‘little people’ in this craft, you defend them. In Las Vegas, a quintessential company town, it’s the blowhard billionaires and their political toadies who are worth punching. And if you don’t have the freedom to call the community’s heavyweights to account, then that ‘commentary’ tag isn’t worth the paper on which it’s printed. … If a Las Vegas columnist is considered ‘conflicted’ because he’s been unsuccessfully sued by two of the most powerful and outspoken players in the gaming industry, then it’s time to move on.”

One man’s conflict is another man’s job well done.

Adelson’s suit said “Sharks” made false implications that he “was associated with unsavory characters and unsavory activities.”

Adelson asked that the case be dismissed when Smith’s attorney, Don Campbell, obtained confidential Gaming Control Board records. “In short, Adelson’s claims were about to be exposed for what they were … false and vindictive,” Campbell said at the time.

Wynn sued when an ad for “Running Scared,” an ad Smith did not write, said the book ”details why a confidential Scotland Yard report calls Wynn a front man for the Genovese crime family.”

The book itself reported that the New Scotland Yard report was “not entirely accurate” and was politically motivated and largely based on investigative efforts of U.S. authorities who did not reach the same conclusion.

I’ve always lectured reporters that every story should have a WSIGAD — why should I give a damn.

You may have never read the Las Vegas newspaper and never heard of John L. Smith, but all the journalists in the state know of his plight, and, when they contemplate covering the rich and powerful, there will be a hitch in their gait that will affect the news you get. That’s why you should give a damn.

Disclosure: I edited Smith’s columns for more than 20 years.

A version of this column appears this week many of the Battle Born Media newspapers — The Ely Times, the Mesquite Local News, the Mineral County Independent-News, the Eureka Sentinel and the Lincoln County Record — and the Elko Daily Free Press.

Editorial: Lawmakers should leave Nevada’s strong anti-SLAPP law alone

When your only tool is a hammer, every problem is a nail.

With lawyers, the solution to every problem is a lawsuit.

A bill to drastically alter Nevada’s strong anti-SLAPP law (Strategic Lawsuit Against Public Participation) breezed through the state Senate, where never was heard a disparaging word. The only testimony in the Senate Judiciary Committee was from a California attorney who helped draft the bill on behalf of Wynn Resorts, whose owner over the years has filed a few defamation suits against those who commented about him in a manner he did not like.

The Assembly recently heard nearly three hours of testimony for and against Senate Bill 444.

California attorney Mitchell Langberg and Senate Judiciary Chair Greg Brower said the bill restores balance to the state anti-SLAPP law because a 2013 revision went too far in favor of defendants. They argued that those who have been defamed  now face too great a burden to prove their case. Under the current law a plaintiff must show clear and convincing evidence of their claims. SB444 lowers the standard of proof to prima facia evidence and repeals a provision that awards $10,000 to successful defendants.

Langberg at one point seemed to imply that the only recourse for a person who had been falsely accused — in an Internet business review for example — was vindication by a jury. Can’t people effectively counter false speech with truthful speech?

Langberg recently had a defamation case brought by Steve Wynn in California dismissed because of that state’s anti-SLAPP law, which is not as strong as Nevada’s.

Langberg made a point of noting that the Nevada Constitution guarantees freedom of speech but also says people are responsible for the abuse of that right.

Article 1, Section 9 says: “Every citizen may freely speak, write and publish his sentiments on all subjects being responsible for the abuse of that right; and no law shall be passed to restrain or abridge the liberty of speech or of the press. In all criminal prosecutions and civil actions for libels, the truth may be given in evidence to the Jury; and if it shall appear to the Jury that the matter charged as libelous is true and was published with good motives and for justifiable ends, the party shall be acquitted or exonerated.”

Truth is a defense, but SB444 deletes a section of the current law that declares immune from litigation a communication “which is truthful or is made without knowledge of its falsehood.”

Both Trevor Hayes, a former newspaper business writer and now an attorney representing the Nevada Press Association, and John L. Smith, a longtime Las Vegas columnist and biographer, both testified the proposed change to the anti-SLAPP law could have a chilling effect on reporting and commentary across all media. Hayes noted that newspapers today are far less profitable and a major consideration before publishing a story would be whether it could cost the paper hundreds of thousands of dollars in litigation.

Before Nevada passed its anti-SLAPP law that awards court costs and attorney fees to successful defendants, Smith and his publisher were sued over an advertisement for a book about Wynn. The Nevada Supreme Court eventually dismissed the suit, but not before the publisher went bankrupt. Smith was denied any costs and attorney fees.

Attorney Marc Randazza, who helped draft the current law, said he would have no problem acting as an attorney for a person who believes he or she has been defamed, despite Nevada’s strong anti-SLAPP law, because he does his homework and makes sure he has the evidence.

“Frankly, I do get calls, frequently, from people who ask me, ‘Won’t you just file it? I know we don’t have much chance of winning, but we’ll drag these guys into discovery and they don’t want that,’” Randazza said. “When that happens I do hear the cash register ringing in my ears. And I think I could keep this case going for 18 months or so. I don’t use my law license that way. I won’t do it, because I believe in freedom of expression and I don’t believe in bullying people with lawsuits designed to suppress their First Amendment rights.”

The Assembly should bury this misbegotten and mischievous attempt to weaken Nevada’s law on free speech.

A version of this editorial appears this past week in the Battle Born Media newspapers — The Ely Times, the Mesquite Local News, the Mineral County Independent-News, the Eureka Sentinel,  Sparks Tribune and the Lincoln County Record.