New Louis Freeh Report Facing Familiar Scrutiny
Louis Freeh, the former FBI director who was commissioned to investigate the Penn State scandal last year, is back in the spotlight once again. Freeh was recently hired by Steve Wynn of Wynn Resorts, a multi-billion dollar corporation that owns four resort properties in Las Vegas and China. Wynn was looking to oust Kazuo Okada, primary shareholder in Wynn Resorts, from the company’s Board of Directors, and regain Okada’s stake in the company along the way.
Freeh’s report, which made some allegations about Okada and affiliations that he had, was later used as the driving force behind a shareholder vote that overwhelmingly decided to remove Okada from the board and retain his equity in Wynn Resorts. The feud between Okada and Wynn had been highly publicized within major financial media outlets such as Wall Street Journal. Soon after, Okada hired Michael Chertoff, former Secretary of Homeland Security, to lead an investigation of his own into the situation and into Freeh’s report.
If this sounds familiar, its because it is almost a carbon copy of the situation that unfolded at Penn State with the Paterno family’s report in response to the infamous Freeh report. The findings of Chertoff’s report almost mirror the Paterno report. A news wire was sent out by Okada’s Universal Entertainment Corporation last week, announcing the findings of Chertoff’s report, and the results were fairly interesting.
The summary of Chertoff’s findings are as follows:
The Freeh report was tainted by the timing and circumstances of its creation because the Wynn Board moved within days to act on its content and redeem Aruze USA’s 20 percent stake in the company without providing him the opportunity to respond to its allegations;
The Freeh report’s factual findings and inferences lacked objectivity and factual support;
The Freeh report was “based on unreliable accounts of interested witnesses and implausible inferences”;
The Freeh report’s legal analysis was superficial and inflammatory; and
Freeh’s investigative process was insufficiently documented and revealed a number of gaps.
Sound familiar? That’s because Chertoff’s gripes align almost perfectly with those of the Paterno report. Additional issues that Chertoff points out include the fact that Freeh “[relegated an interview with Mr. Okada] to an afterthought, making a sweeping and largely unexplained credibility determination against him, and neglecting to follow up on objectively verifiable claims that might support his account.” This is reminiscent of what happened with Freeh’s Penn State report, in which interviews with the three living men that he labeled as being an fault seemed to be considered as afterthoughts.
“This confirms what I have maintained since the day the Freeh report was issued and the Wynn Board moved to strip us of our stake in a company we helped found,” Okada said, “The Freeh report was prepared carelessly and improperly, and contains a number of clear errors. It’s obvious that this biased report was part of Steve Wynn’s campaign to eliminate me as a rival to his power within Wynn Resorts.”
Chertoff argued in his report that many of Freeh’s findings lacked factual support and that he acted “as an advocate first and as an impartial investigator second.” He called the report “structurally deficient, one-sided, and seemingly advocacy-driven”, adding that its conclusions were not credible and “[lacked] basic indicia of a credible investigation.”
One of the most flaring points in Chertoff’s report mentions that Freeh cited documents that are “of dubious provenance or otherwise unreliable” and that Freeh “[relied] on potentially biased interviews”. This was the crux of Freeh’s Penn State report, in which the documents used were no better than circumstantial at best and the interviews were all with potentially biased sources.
Make of this what you will, but it is at the very least interesting to note that Louis Freeh has at least one report that has been scrutinized like the one commissioned by Penn State’s Board of Trustees.