Emerald hearing advances with agent’s testimony

Nicole Ziegler Dizon

Friday, June 7, 2002 | 9:52 a.m.

CHICAGO -- Rosemont Mayor Donald Stephens had a bad feeling about casino executive Kevin Flynn after meeting with him in 1997, so he consulted then-Gov. Jim Edgar, who told him the company Flynn represented was going to lose its gambling license, according to testimony Thursday in the Gaming Board case against Emerald Casino Inc.

Board attorneys questioned the lead Gaming Board agent on the case, Kevin Pannier, about the Stephens meeting to support their contention that Flynn lied when he told investigators Emerald didn't consider building a riverboat in Rosemont until after a 1999 overhaul of state gambling laws.

Pannier also said Flynn told him he didn't have an active role with Emerald before July 1999, even though he was meeting with various business interests about moving a defunct riverboat license from the Galena area.

Pannier read parts of an interview the board conducted with Stephens about the 1997 meeting, which Stephens said was about moving the license from Galena to Rosemont. Stephens said he thought Flynn was an "arrogant, puffed up punk" and ended the meeting in less than 10 minutes.

"And I had talked to Jim Edgar about it subsequent to my meeting Kevin Flynn because, frankly, I didn't believe anything Kevin Flynn told me," Stephens said, according to his sworn interview. "And Jim Edgar told me they're not going to have a license."

The Illinois Gaming Board did vote against renewing the license of Emerald, then known as HP Inc., and was seeking to reclaim it through an administrative hearing in 1997. But that decision became moot in 1999, when the Legislature passed a sweeping gambling package that paved the way for Emerald to move its license to Rosemont.

In January 2001 the Gaming Board denied Emerald's request to move to Rosemont, claiming Flynn and his father, Donald Flynn, lied to investigators and that some shareholders had mob ties. Emerald appealed, setting the stage for the current hearing.

Emerald attorney Michael Ficaro objected to Thursday's testimony, arguing it was "rank hearsay" because the interviewees were not available for cross-examination that day. Administrative Law Judge Herbert Holzman allowed the questions.

"We've gone from kangaroo court," Ficaro said during a break in the hearing. "We're in Emerald City in the land of Oz."

Kevin Flynn notified the Gaming Board of his application to become Emerald's CEO in 1999 and told board investigators in a sworn statement that he had no active role in the company before then.

But Pannier said people he interviewed indicated Flynn was very active in negotiations to relocate HP's license.

Glenn Seidenfeld, CEO of Lake County Riverboat, said he talked with Flynn several times in 1997 about a proposed riverboat site in the county and that Flynn even visited the site. Asked about it later, Pannier said, Flynn told him: "Mr. Seidenfeld is a liar."

Pannier also said former Arlington International Racecourse owner Richard Duchossois and a representative for California billionaire Marvin Davis told him that Flynn reached a verbal agreement with them to split up percentages in a Rosemont boat if the 1999 law passed. When the law did pass, they said, Flynn told them, "Things change."

Davis is suing over the alleged agreement.

Flynn told the board in his sworn testimony that he never considered a deal with Davis and got angry when Davis' representative told him that HP was going to lose its license and that Davis would get that license and run a boat in Rosemont.

"All the people who have said the Flynns have lied have monetary, great monetary incentives against the Flynns," Ficaro said after the hearing.

He said Flynn was his father's "ears" at several meetings concerning HP before 1999 but never acted as an official -- a fine point because the board says casino officials must apply to them.