EDITORIAL: Federal probe taints gaming commissioner

Nevada's system of gaming industry regulation is known as "the gold standard." Today, there's a stain on the integrity of that system, one that calls into question the image of the industry and the people responsible for overseeing it.

As reported by the Review-Journal's Howard Stutz, The Sparks Nugget is under investigation by the U.S. Treasury Department's Financial Crimes Enforcement Network (FinCen) for failing to implement anti-money laundering programs. The investigation began while Michonne Ascuaga was CEO of the casino, responsible for all of its operations.

Ms. Ascuaga left that job after the sale of the casino and was appointed to the Nevada Gaming Commission by Gov. Brian Sandoval, who says he was unaware of the Nugget investigation. In fact, news of it only surfaced in a lawsuit filed by Sparks Nugget Inc. and members of the Ascuaga family against Wolfhound Holdings, which purchased the Nugget in 2013.

Ms. Ascuaga admits she kept word of the federal investigation from the governor, but claims she did nothing wrong. She and her attorney say the FinCen investigation was aimed at the Nugget, not at Ms. Ascuaga herself. That's akin to a driver whose car has run over a fire hydrant claiming the traffic investigation is focused on the automobile and not its driver.

"As a result, I did not feel it necessary to inform the governor,'' Ms. Ascuaga said in a statement. "Let me be direct — I did not purposely hold back information from the governor. I did disclose to Governor Sandoval and his staff the pending contractual litigation related to the sale involving the Nugget. I had no reason to believe that the litigation associated with the sale of the Nugget would become so hostile that it would result in this kind of personal smear."

That warped reasoning alone is enough to establish Ms. Ascuaga's unsuitability to serve on any important regulatory board. Lay aside the staggering arrogance and self-serving spin. Of course she withheld highly relevant information from the governor, information that, if known, could have cost her the appointment. She's not only embarrassed Gov. Sandoval, she's called into question the integrity of the commission. (As Mr. Stutz reported, Ms. Ascuaga voted in September to approve a $1.5 million fine against Caesars Entertainment for money-laundering violations.)

Will Ms. Ascuaga next argue that she's the perfect person to serve on the commission, since she understands personally what it's like to be accused of federal money-laundering regulations? Who better to police violations than someone whose company was suspected of committing them?

It's bad enough Ms. Ascuaga managed to sneak onto the commission. Members of the commission are expected to be above reproach in their personal and professional affairs, and Ms. Ascuaga obviously is not. Friday afternoon, she demonstrated the good sense to submit her resignation. Nevada's gold standard demanded nothing less.