Gaming commission dismisses Boston’s allegations
Official likens charges of wrongdoing by private investigators to a ‘children’s game of telephone’
IN THE LATEST blow to Boston Mayor Marty Walsh’s war on a proposed casino in Everett, the Massachusetts Gaming Commission dismissed the city’s allegations that investigators for Wynn Resorts improperly gained access to confidential wiretap files in the attorney general’s office.
“The [Investigations and Enforcement Bureau] conducted a preliminary inquiry into the allegations, and has determined that there is no factual basis to support the allegations and that any further regulatory investigation is not warranted,” says a report submitted to the commission on Thursday by Karen Wells, the interim executive director of the gambling commission, who heads the investigative bureau.
The allegations stem from a case involving three men, including convicted felon Charles Lightbody, charged with trying to conceal Lightbody’s ownership interest in land purchased by Wynn to site the casino. The allegations, which the defendants included in filings in federal and state court and Boston officials included in their suit against the Gaming Commission on the same day, charge that private investigators and former state troopers Joseph Flaherty and Stephen Matthews used their connections to get information in the attorney general’s office about the ownership long before Wynn officials acknowledged knowing about Lightbody’s involvement.
The city’s suit included affidavits from two retired troopers who say they were told that Flaherty and Matthews were hired by Wynn to look into the allegations in 2013 even though the company said they were unaware of the connections until months later.
Popeo told the commission Wynn decided against hiring Flaherty at the time but he said he retained him on his own “because we were blindsided” by the Lightbody ownership revelation. “I asked him to see what is the rumble in law enforcement circles,” Popeo said, adding Flaherty worked a total of 12 hours and never went to the attorney general’s office.
Both Flaherty and Matthews also submitted affidavits denying they ever worked for Wynn or went to the wiretap room.
“I do not know where the ‘wire room’ is at the Massachusetts’ Attorney General’s Office is,” wrote Flaherty, who is the son-in-law of former attorney general Frank Bellotti. “I have never reviewed any investigative files relating to any state or federal investigation regarding casinos.”
Wells said the genesis for the allegations was similar to a “children’s game of telephone,” where seeming innocuous and unrelated information was blown out of proportion as it was retold. She said the initial allegations stemmed from ill feelings by other former troopers toward Flaherty and Matthews and then spun out of control.
A spokeswoman for Walsh declined comment, citing the ongoing litigation.
In other business, the commissioners discussed two letters recently sent by the federal Bureau of Indian Affairs regarding the application of the Mashpee Wampanoag to take land into trust in Taunton for the tribe’s proposed casino. The first letter, sent to the Taunton City Council, seemed to indicate a decision would be made by late September, but the second letter backed off that.
John Donnelly, a lawyer representing a group looking to win the Southeast regional license for a casino in Brockton, said the letters show the “uncertainty” around the proposed casino and urged the commission to move forward with the process and take a vote supporting a private casino in the region without waiting for the tribe’s application to be settled one way or the other, which could take years. He said a vote would send a message of stability to potential investors.
“The day this letter comes, your financing, it seems, got a little hinky,” Crosby said.
Donnelly said that was not the case at all. “Financing is not an issue for this group,” Donnelley said emphatically. “There is no wiggle room” in that statement.
The commission, meeting for the first time in its new headquarters on Federal Street in Boston’s Financial District, also expressed concern over a levy by the Executive Office of Administration and Finance on the agency that is assessed to all government departments. The levy of $1.125 million, which comes out of the commission’s budget, is for indirect costs relating to salaries and benefits for agencies that do not receive federal grants. Commission finance officials say their actual indirect costs are just $5,500.Crosby said because the commission is funded by licensees, they should not be subject to the charge, which he said could rise to $30 million over time. Crosby said the cost is borne twice by licensees and he asked Administration and Finance officials to review the charge or explain why the commission is subject to it.
“This is real money,” he said.