“what the hell.”
It was about 10:15 a.m. on a Tuesday morning, and Ray Finkelstein AO QC was frustrated with an uncooperative mic in the hearing room.
The previous federal court judge was expressing himself economically at the start of the final day of public hearings at the Royal Commission at the Melbourne Crown Resort Casino, which he has run since February.
The microphone on the bar counter wasn’t working properly, making it firm to hear closing requests from Crown’s attorney, Michael Borsky QC, about what Finkelstein should recommend to the state government about the struggling casino.
The subtle F-bomb and short delay returned the sound loud and clear, but the microphones weren’t the only frustration of the man known in Melbourne’s legal district as “The Fink”.
Crown is virtually subject to lifelong trial, with the licensing of its most lucrative casinos at risk, following Nine Entertainment and an investigation in New South Wales uncover money laundering and gliders taking place under their watch with Melbourne money digs.
In beforetime July, the company wrote to the Victorian Minister of Games, Melissa Horn, warning of dire consequences, both for Crown and Melbourne, if the license was withdrawn – a move Finkelstein said was an attempt to interfere with his investigation.
Fink was unmoved. “The way you can accomplish the goal of this letter and make sure that what you don’t want to happen doesn’t happen is to quit the commission completely,” Crown Resorts CEO Helen Konan said during the July 8 hearings.
“This is the only way you can accomplish the goal of this letter.”
Conan did not agree to this. “I think it was really for a bit more extreme caution, wishing the government would be alert to the fact that there could be such things in the coming,” she said.
Finkelstein was touched, but only to the ridicule. “I’m not sure how to read the letter in any other way than the way you suggested it, but maybe I’m not very pleasing at reading letters,” he said.
Another incident arises
The ailments revealed by the New South Wales inquiry, conducted by previous judge Patricia Bergen, may have been thought to have been quite enough for the stunned Finkelstein committee to deal with.
But Finkelstein’s team has uncovered more allegations of wrongdoing, and had to ask the government to extend the due date of its report from August to October.
The attorney helping with the investigation alleges Crown underpaid up to $480 million in government gaming taxes, and breached anti-money laundering rules as top players were competent to convert money deposited at Crown casinos into chips on the playing floor.
Just final week, Crown paid the state $61 million, which it said had been verified by two quality centers as the amount of tax owed (Finkelstein said he wasn’t sure, but it wasn’t tax court).
The casino’s handling of the gamblers’ problem also drew heavy criticism in the hearings.
On Tuesday, in the confront of this ever-growing short against his client, Borsky said “Crown learned a lesson,” adding that she had also “repented” and cooperated with the Finkelstein investigation.
Borsky laid out four unused acts of misconduct that the casino group now accepted had committed: paying less government gambling taxes; breaking the law by allowing hotel money to be used for gambling, which he admitted was “unethical and illegal under Victorian law, and may have involved the Crown’s handling of the proceeds of crime, specifically Chinese currency controls”; allow people to gamble for up to 18 hours at a time; and not to cooperate properly with the Victorian organizer of the games.
He said the company accepted its mistake “with humility and remorse” and apologized to the community.
Borsky begged for mercy, saying the crown had been cleansed of his act and could be trusted to make further repair himself.
The crown cites economic impact
For Crown, the stakes couldn’t be greater.
Stripping Crown of its Melbourne license would also deprive the James Packer-backed firm of most of the revenue from the Yarraside complicated.
In 2019, the final year prior two 60 Minutes Hurricanes and the Covid-19 virus wreaked havoc on its business, Crown secured $1.2 billion from Melbourne’s main game hall.
An additional $441 million came from the lofty-speed business, which has already been shut down due to allegations of money laundering and criminal involvement in unwanted ship operators, along with coronavirus travel restrictions.
The non-gambling hotel and hospitality sector contributed a relatively modest amount of $479 million. That’s all that would be taken out of Melbourne’s $2.15 billion a year process for Crown shareholders if Fink went for the nuclear option and the Andrews government agreed to it.
And Crown says that divesting so much of its business would jeopardize its financial arrangements.
In its letter to Horn, the company also suggested that withdrawing the license would hurt the Victorian economy.
The casino is the state’s largest employer, with about 12,000 workers, and Crown said their jobs could be at risk if the license is withdrawn.
On Tuesday, Finkelstein was unimpressed by the argument, saying the casino was profitable and could be run by someone else.
“If this is a profitable business, the way the industry works is forever someone stepping in,” he said.
He spoke of the need for Crown to confront some punishment, as he compared the company to a professional car thief coming prior a criminal court to ask to renege on a promise not to do it again.
“It’s not really how the system works,” he said. “It’s not just how the system works, not what the public expects.”
Department of Directors
Crown argues that much of the hurt has already been done.
The public exposure of wrongdoing has already stirred up the scythe among the upper echelons of the company.
Eleven directors signed a letter attacking the “lies” of “Campaign Nine” – a message that was criticized in the Bergen investigation – on July 31, 2019.
A little more than two years later, only two of those directors — previous Game Machines CEO Antonia Corsanos and previous senior general employee Gene Halton — have any continuing role in the company.
Jon Alexander, Packer’s confidant and boss, billionaire nominees Jay Galland and Michael Johnston, previous AFL chief Andrew Demetriou – who appeared to read from notes while giving evidence during the Bergin investigation, previous Qantas CEO Jeff Dixon, Kerry Packer’s old doctor John Horvath, and Adman – are gone. Harold Mitchell, and businessman John Boynton from Perth.
Helen Konan, the acting CEO who trusted Bergen to clean up the Crown Augean stables, will leave the company by the end of the month following being criticized by the consultant helping Finkelstein.
CEO Ken Barton resigned in February following it was found that he misled shareholders at an annual general meeting in 2019 about the nature of information being exchanged between Crown and Consolidated Press Holdings, which Bergin described as “completely inappropriate” and “appalling”.
Crown’s previous chief legal officer, Joshua Preston, resigned final year following evidence was presented prior the NSW investigation.
Barry Felstead, who ran Australia’s Crown Casinos, left at the end of the year and split his role, so that there are now individual CEOs for Sydney, Melbourne and Perth.
The man who took the position in Melbourne, Xavier Walsh, is also leaving the company this month following criticism at the Finkelstein Royal Commission for failing to properly handle the state tax rort once he became aware of it.
But none of that is enough, according to the consultant who helped Finkelstein, Adrian Finanzio QC, who said final month that the license should be revoked despite the grave disruption it could cause.
“The evidence reveals gross misconduct, unlawful conduct, and highly improper conduct encouraged or facilitated by a culture that has consistently placed gain overhead all other considerations,” he said.
Inquiries about lofty risk
It seems positive that Finkelstein will find, as Bergen did prior him, that Crown is unfit for a casino license.
But in New South Wales, Bergin refused to withdraw a Crown ticket to operate a casino in Barangaroo in Sydney Harbour, which has not yet opened.
The revocation of Crown’s license to operate its largest casino, with thousands of employees, in a location that has made its way into the heart of Melbourne’s social and economic life, is a vast request.
Finanzio also gave Finkelstein an option B – appointing a controller to oversee Crown management of the casino until such time as the company becomes eligible for a license in its own right.
However, the crown was now closer to the abyss than it had ever been prior.
Regardless of what Finkelstein decides, the company is facing more pain from another royal commission now underway in Perth.
Storm clouds are still over the crown, but when the hearing wrapped up on Tuesday, Fink appeared to be in a sunny mood.
“Thank you all very much for all your firm work,” he smiled.
“It was, at fewest, interesting.”