About the only positive thing that can be said about the New Jersey report brutalizing MGM Mirage for its handling of an internal Pansy Ho investigation is: Nothing bad was said about current big boss Jim Murren.
The same can’t be said about the Las Vegas-based gaming company’s former General Counsel Gary Jacobs, the point man for MGM Mirage’s effort to slither into the Macau market.
New Jersey authorities portrayed him as deceitful and provided plenty of compelling examples in the 74-page report calling Ho an unsuitable partner for MGM Mirage. Jacobs, 64, hasn’t spoken to the news media about the report.
Jacobs left the company abruptly in December before the confidential 2009 report became public in March. However, company officials already had seen the report and knew the allegations about Jacobs. MGM Mirage officials disagree with the report’s findings and say many of the issues raised already have been resolved. The fact is, Jacobs is gone. He returned to the Los Angeles law firm from whence he came in 1998.
Nevada sources say no gaming regulators here “suggested” the company dump him. But he had little credibility left, I’ve been told by insiders. “New Jersey took exception to his less-than-candid approach,” one gaming source said.
MGM Mirage started trying to find a way to get into the Macau market in 2001 but was shut out until the company began negotiations with Stanley Ho, the Hong Kong billionaire long suspected of ties with Chinese triads through his Macau casinos.
When Nevada regulators nixed that idea, the MGM Mirage substituted daughter Pansy Ho and struck a joint venture agreement with her in 2004.
Nevada regulators approved it in March 2007, after construction of the MGM Grand Macau already was under way. Pansy Ho was deemed an independent woman by Nevada authorities.
But not in New Jersey. Officials there had trouble with her associations, and one major issue was that daddy was the source of 90 percent of “her” money for the partnership.
In March, New Jersey officials said she was unsuitable. Forced to choose between New Jersey and Macau, MGM Mirage made a wise business decision. So long, New Jersey. The company will sell its half of the Borgata resort in Atlantic City.
But forget about the Hos.
Reading what the New Jersey regulators said about the “pervasive and persistent” regulatory failings of MGM Mirage was the real shocker. Most of the failings were blamed on Jacobs.
The report claimed Jacobs was aware of derogatory information about Pansy Ho as early as 2003 yet didn’t share it with the company’s compliance committee, which is supposed to give an unbiased opinion of business relationships and partner ventures to make sure they are in compliance with local, state and federal laws.
Jacobs tried to shift the blame for that to Bryan Wright, assistant general counsel and a member of the compliance committee.
Except the report says Wright didn’t have access to the background and due diligence reports. Wright left the company in July 2008 for another job.
Kyle Edwards, the head of security, left in October 2007 to open his own business. He testified he was told to give his information to Jacobs only. However, he was also a member of the compliance committee.
Terry Lanni, who was running the company during the Macau push, didn’t recall some of the information others told the New Jersey Division of Gaming Enforcement. He retired in November 2008 and is now battling cancer.
Many top-level people involved with the Ho investigation are no longer with the company. Lanni. Jacobs. Edwards. Wright. Even Philip Wang, a vice president of Far Eastern marketing. All gone.
But not before MGM Mirage got what it wanted.
Jane Ann Morrison’s column appears Monday, Thursday and Saturday. E-mail her at Jane@reviewjournal.com or call (702) 383-0275. She also blogs at lvrj.com/blogs/morrison.