His body language remained professionally understated at all times, but I’d swear I saw an almost imperceptible sigh from attorney David Krakoff last week in District Judge Elizabeth Gonzalez’s courtroom.
Krakoff, of the estimable Washington, DC law firm Buckley Sandler, is currently locked in a battle of wits and writs with attorneys for Las Vegas casino mogul Steve Wynn against billionaire businessman Kazuo Okada, Universal Entertainment, and Aruze America. On a busy morning before the court, Krakoff had come in large part to asked to withdraw as attorney for Okada. The attorney intended to continue to represent Universal in its war against Wynn over the ouster of Okada from Wynn Resorts, Inc. and the forced sale of the Japanese slot machine king’s 20-percent stake in the Las Vegas casino company.
Okada has been stuck playing defense under a steady of damning allegations, including published reports that his move to develop a multibillion-dollar casino resort in the Philippines had drawn an investigation by the FBI into possible bribery and violations of the U.S. Foreign Corrupt Practices Act. Okada has denied any wrongdoing and returned fire at Wynn business and political activity in Macau, where the company has an immensely lucrative casino resort.
Trouble for Okada is, the hits just keep coming. Last month he was ousted from the Universal board — that’s the company he founded back in the late 1960s — after an audit revealed millions in suspicious transfers of company funds through a subsidiary to a company that was controlled by Okada. Officially, the company is calling the movement of approximately $20 million “fraudulent acts.” A short time later, Okada’s name was wiped from the board of the Universal subsidiary that operates the Okada Manila casino. Around that time, the state Gaming Control Board acknowledged it was investigating.
Those developments put Team Okada in a predicament that raised potentially sticky ethical issues and a possible conflict of interest. How could Krakoff continue to represent the embattled Okada and the enraged Universal?
The answer was simple. He couldn’t. And he filed to withdraw as Okada’s legal representative. Thus that sigh of relief I thought I noticed.
Anyone who suspected for a moment that the matter would end there hasn’t been paying attention to this case. Wynn’s team of attorneys wasn’t about to let Krakoff or the defendant off so easily. Using a powerful and persuasive analysis by legal ethics scholar Ronald Rotunda, they pressed for a full hearing on the matter, which surely would have resulted in further scrambling by Universal. Although the judge didn’t agree that a more probative and painstaking proceeding was appropriate, the issue gave Wynn’s attorneys a chance to swing away at Okada-Universal and the mortifying upheaval on the executive board.
“We don’t care who represents the defendants as long as whoever is representing the defendants does not impact our rights,” Bice said. “This is where Mr. Krakoff and our side have a fundamental disagreement about this standing issue.”
Krakoff took care to request the need to withdraw without declaring a conflict, which was duly noted by the animated Bice: “I submit that the elephant in the room is no one is telling the court that they have a conflict.”
But it’s not an issue Universal is willing to investigate, back to the time Okada was still on the Wynn board. Bice asked aloud why the Japanese company was only willing to go back five years in its inquiry into Okada’s actions and include the allegations contained in Wynn’s original lawsuit. He asserted it “shows how these companies, Aruze and Universal, will look the other way about his corruption when it serves their ends.”
Without winning the morning’s sparring session, Bice certainly raised a few welts. To wit: “They have a conflict. They can pretend like they don’t, for right now, but it doesn’t change the facts.”
And just in case anyone imagined the matter was resolved, Bice added, “The information about Mr. Okada and his own company saying that he is unfit and that he is corrupt is directly relevant. And it’s after-acquired evidence that you’re darn right we’re going to be pursuing.”
It appears there will be no relief in sight for Okada and whoever represents him next.
John L. Smith is a longtime Las Vegas journalist and author. Contact him at jlnevadasmith@gmail.com. On Twitter: @jlnevadasmith
