White House Intervened in Case of Trump’s Casino Pal Steve Wynn
The move came just before the administration drafted new guidance that could have paid off for the gambling boss, and months before his resignation.
In the summer of 2017, the Trump White House asked for a meeting with a top official at the Department of Justice to discuss a sensitive legal and administrative matter involving a top Republican donor.
The donor, then-Republican National Committee finance chairman and casino magnate Steve Wynn, was embroiled in litigation involving Obama-era rules governing how companies could distribute tips gathered by their employees. Months after the meeting request, the Trump administration revised those rules to make them far friendlier to employers.
It is unclear why the White House made the request for the meeting with acting Solicitor General Jeff Wall, which was uncovered in a Freedom of Information Act discovery by the group American Oversight and has not been previously reported. Nor is it clear if Wall actually met with White House officials about Wynn’s case. Both the White House and the Department of Justice did not return requests for comment.
Top legal officials of past administrations said it was not uncommon for White House officials to meet with the solicitor general or top DoJ officials to discuss pending business before the courts. But the email still struck legal ethicists as problematic, as it showed the Trump White House eager to keep tabs on litigation directly affecting one of the president’s highest-profile donors.
“Once there is an actual case being litigated, the norm has been that the White House stays out of it. That’s the norm. For the legal ethics point of view, the lawyers handling that case cannot allow the White House to influence their independent professional judgement on behalf of the United States,” said Stephen Gillers, an expert in legal ethics and a professor at the New York University School of Law. “A lawyer at the Department of Justice who is approached by the White House regarding a pending matter… has to refuse to discuss it. Because that discussion cannot be allowed in any way to influence or appear to influence the decision of the Department of Justice lawyer.”
A legendary and controversial figure in the casino industry, Wynn had spent years embroiled in legal drama stemming from how his company, Wynn Resorts, chose to allocate the tips collected by workers at his casinos. At issue was a decision in 2006 to have those tips pooled and shared among both tipped and non-tipped employees, including supervisors. That decision, which compelled Wynn Resort workers to unionize, prompted legal action from tipped workers who alleged that Wynn was effectively violating the Fair Labor Standards Act by dipping into casino workers’ tips to compensate non-service employees. The case worked its way through the court system, during which it was adjoined with similar complaints.
The Obama administration Department of Labor issued regulations in 2011 saying that such tip-pooling was not permitted and the Ninth Circuit Court of Appeals upheld that ruling on grounds that the opacity of the law gave the department administrative leeway to issue such guidance.
When the Trump administration took over, the expectation was that the Obama-era guidance would be reversed. But there was a secondary track as well. Wynn Resorts had appealed the ruling to the Supreme Court and so had the National Restaurant Association, which had sued the Department of Labor over the matter.
In April of 2017, Department of Justice ethics officials asked that Wall be given an ethics waiver to participate in the NRA case. Scott Schools, who was a top ranking attorney at the Justice Department at the time, approved of Wall’s “participation in the NRA matter,” according to internal emails. In August of that year, Cynthia Shaw, the director of the Departmental Ethics Office, went back to Schools, this time asking him to clear Wall to work on the Wynn case in addition to the NRA one.
“Jeff just received a request to meet with the White House about both the Wynn Las Vegas and National Restaurant Association cases,” Shaw wrote. Schools, who has since left DoJ, again authorized Wall to work on the matter.
Wynn was then a major figure in Trumpworld. He had made a $729,000 in-kind contribution to the president’s inauguration in addition to joining the inaugural committee. He was subsequently made finance chair of the RNC, helping it raise a record sum that year. The influence that came with that status and fundraising, officials say, is what made the White House’s request to talk to Wall about the Wynn case so ethically thorny.
“During the early months of the Trump administration, it looked like Steve Wynn’s political connections were going to pay off,” said Austin Evers, Executive Director of American Oversight. “Whether Wynn got the advantages he was seeking or not, the records show that the Trump administration’s first instinct was to help a wealthy patron and senior official at the RNC. Two years later, the episode looks like an early crack in the foundation of the rule of law.”
Wynn Resorts, for its part, says it was never included in any White House discussions over the FLSA and the Trump administration’s efforts to revise it. “No one [at the company] is aware of any conversations with the WH on that topic,” spokesperson Michael Weaver told The Daily Beast in an email.
And Matthew Miller, a former spokesman for the Obama-era Department of Justice and a vocal Trump critic, noted that there is “nothing inherently wrong with the White House inquiring about the position DoJ intends to take on a case and being briefed by the Solicitor General’s office.” But, Miller still saw potential problems in the email. “Given that the underlying company in this case was run by the finance chair of the RNC,” he said, “it raises a number of questions about what the White House motivation was.”
Just over three months after Wall was approached with the White House’s request to meet, the Trump administration announced that it would reverse the Obama era tip-pooling guidance, pending notice of further rulemaking. Worker rights groups were aghast, with some arguing that the way the new guidance had been written would have effectively allowed employers to pocket workers’ tips.
Before the comment period on the new rule had ended, however, Wynn’s universe began to implode. On Jan. 27, 2018, The Wall Street Journal published a bombshell story detailing allegations that Wynn had engaged in sexual harassment for decades. That same day, Wynn resigned his position as RNC finance chair. Weeks later, he stepped down as Wynn Resorts CEO.
Amid heavy pushback, the Trump administration ultimately toned down the reach of its ruling. In March of 2018, it reached a compromise with Democratic lawmakers on the Hill that allowed for tip-pooling between service and non-service employees provided that both pools of workers were already paid the minimum wage. The compromise also prohibited employers from pocketing any of their employee tips.
“From our perspective it is a good change in policy and we were happy that the rule still keeps the tips out of the pockets of employers,” said Eva Putzova, director of communications at Restaurant Opportunities Centers United. “Obviously we know about the gaps that still exist in the restaurant industry between the back of the house and the front of the house.”