State clears Elliott in Orleans probe

By Alexandra Berzon (contact)

Thursday, Dec. 18, 2008 | 2 a.m.

The involvement of a top Gibbons administration appointee in the investigation of a double fatality at the Orleans last year was not illegal, the Nevada attorney general’s office has ruled.

“There does not appear to be sufficient evidence to file criminal charges relating to the misconduct of a public officer,” Chief Deputy Attorney Conrad Hafen wrote in a determination made in September and released to the Las Vegas Sun on Wednesday.

Following a report in April, the attorney general office’s public integrity section opened an investigation to determine whether to bring public corruption charges against Mendy Elliott, then the director of the Business and Industry Department, which oversees the Occupational Safety and Health Administration.

Elliott had taken the highly unusual step of involving herself in OSHA’s investigation of Orleans owner Boyd Gaming after two workers were killed and a third was seriously injured.

Elliott is now deputy chief of staff for Gov. Jim Gibbons.

“We are pleased, though not surprised, that the AG’s investigation confirmed that former Director Elliott acted appropriately in the Orleans case,” Business and Industry spokeswoman Elisabeth Shurtleff said in an e-mail.

A Nevada Occupational Safety and Health Administration inspector originally found that Boyd had “willfully” disobeyed safety laws, a rare finding that means the company knew what it was doing was dangerous and a violation of safety laws.

The men were overcome by fumes inside a manhole. Boyd had been warned repeatedly about the danger of not having a policy to deal with the confined spaces of manholes, but had taken no corrective action, the inspector determined.

But after several meetings — including one with Elliott, state administrators and Boyd officials — OSHA’s violations were downgraded to “serious” and the fines were cut sharply.

Boyd agreed to overhaul its safety procedures with help from OSHA’s consultation division, a service normally reserved for smaller companies.

As part of that service, OSHA’s enforcement division cannot conduct regular inspections of Boyd properties for several years.

The department said it was the first time in at least seven years that officials higher than OSHA Chief Administrative Officer Tom Czehowski became involved in an investigation.

Elliott maintained her role was minimal and appropriate. In an interview last spring, she told the Sun that she attended just one meeting on the case and her only suggestion at that meeting was to say that when Boyd and department officials met again, they should come to an agreement within 10 days instead of dragging out the case.

Elliott said that after the settlement, she called Gibbons’ chief operating officer, Dianne Cornwall, to brief her on the case.

The attorney general’s office said in the memo that its investigation included numerous interviews and a review of relevant documents. It relied in particular on statements from John Wiles, an attorney for Elliott’s department.

Wiles told investigators he determined the alleged violations against Boyd Gaming were not as strong as OSHA had originally believed and may not have been sufficient to prove willful intent from Boyd. Wiles told the attorney general’s office that it was his decision, and not Elliott’s, to settle the case.

“Given the statements by Wiles, there is no evidence to support a finding of undue influence by Director Elliott or anyone else,” the attorney general’s office found.

An investigation by the U.S. Labor Department released this year found that Nevada OSHA did not violate state policy in the Orleans investigation. But the department said the case raises “significant concerns,” and it determined Nevada OSHA should review and revise its policies to prevent such an occurrence from happening again. Nevada OSHA responded to the federal government that it would not comply with the request.

Last week, Debi Fergen, the mother of one of the workers who died in the Orleans accident, sued Boyd Gaming for wrongful death. In the suit, she claimed the company had acted with intent by ordering her son, Travis Koehler, into the manhole to try to save another victim.