1 1 STATE OF NEW JERSEY 2 CASINO CONTROL COMMISSION 3 - - - - - - - - - - - - - - - - - - - 4 5 Petition of Adamar of New Jersey, Inc., (Adamar) 6 for renewal of its casino license and other matters 7 (PRN 2140705, 2910706, 2910708) 8 Volume 3 - AM Session 9 - - - - - - - - - - - - - - - - - - - 10 11 Monday, November 26, 2007 12 Atlantic City Commission Offices 13 Joseph P. Lordi Public Meeting Room - First Floor 14 Tennessee Avenue and Boardwalk 15 Atlantic City, New Jersey 08401 16 10:06 a.m. to 1:04 p.m. 17 18 19 Certified Court Reporter: Darlene Sillitoe 20 - - - - - - - - - - - - - - - - - - - - - - - - - - - 21 ATLANTIC CITY COURT REPORTING, LLC 22 CERTIFIED SHORTHAND REPORTERS AND VIDEOGRAPHERS 23 1125 ATLANTIC AVENUE, SUITE 416 24 ATLANTIC CITY, NEW JERSEY 08401 25 (609) 345-8448 www.accourtreporting.com 2 1 B E F O R E : 2 CASINO CONTROL COMMISSION: LINDA M. KASSEKERT, CHAIR 3 MICHAEL A. FEDORKO, VICE CHAIR MICHAEL C. EPPS, COMMISSIONER 4 RALPH G. FRULIO, COMMISSIONER WILLIAM T. SOMMELING, COMMISSIONER 5 PRESENT FOR THE CASINO CONTROL COMMISSION: 6 DARYL W. NANCE, ADMINISTRATIVE ANALYST DANIEL J. HENEGHAN, PUBLIC INFORMATION OFFICER 7 OFFICE OF THE GENERAL COUNSEL: 8 DIANNA W. FAUNTLEROY, GENERAL COUNSEL/EXECUTIVE SECRETARY 9 LEONARD J. DIGIACOMO, ASSISTANT GENERAL COUNSEL STEVEN M. INGIS, ASSISTANT GENERAL COUNSEL 10 DIVISION OF GAMING ENFORCEMENT: 11 YVONNE G. MAHER, ACTING DIRECTOR MARYJO FLAHERTY, DEPUTY ATTORNEY GENERAL 12 13 14 A P P E A R A N C E S : 15 STERNS & WEINROTH, PC 16 BY: PAUL M. O'GARA, ESQ. FOR: TROPICANA ENTITIES 17 MICHAEL & CARROLL 18 BY: GUY S. MICHAEL, ESQ. AND: JOHN J. MERCUN, ESQ. 19 COOPER LEVENSON 20 BY: LLOYD D. LEVENSON, ESQ. AND: LYNNE KAUFMAN, ESQ. 21 22 23 24 25 3 1 I N D E X : 2 WITNESS: Direct Cross Redirect Recross 3 4 DONNA MORE 5 By Mr. Michael 12 6 By Ms. Maher 54 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 4 1 E X H I B I T S : 2 Commission No. Description EVD 3 C-1 Entities and Qualifiers Report, 11-16-07 X C-2 CHAB License Report, 11-20-97 X 4 C-3 EEBOP, 11-9-07 X 5 Division No. Description EVD 6 D-1 Division Report X D-2 DGE Report to Commission X 7 D-3 DGE Financial Report to Commission X D-4 DGE to Commission X 8 D-5 DGE Sworn Statement of Fred Buro, 9-25-07 X D-6 DGE Sworn Statement of William J. Yung, III, X 9 9-27-07 D-7 DGE Sworn Statement of Donna More, 10-1-07 X 10 D-8 DGE Sworn Statement of Tama Hughes, 10-2-07 X D-9 DGE Sworn Statement of Michael S. Lyons, X 11 10-5-07 D-10 DGE Sworn Statement of William J. Yung, III, X 12 9-27-07 D-11 Memorandum, 8-29-07, Richard Iannacone to X 13 Richard Carretta, Richard Handzo D-12 E-mail, 9-5-07, Ted Mitchel to George Clark X 14 D-13 DGE Memorandum, 10-5-07, Richard Iannacone X to Wendy Way 15 D-14 DGE Memorandum, 8-14-07, Richard Iannacone to Richard Carrettare 16 D-15 DGE Memorandum, 8-14-07, Michael Scotten to Richard Iannacone 17 D-16 DGE Memorandum, 8-14-07, Lauren Massara to Richard Iannacone 18 D-17 Fred Buro Interview Outline by Thomas Hollinger, 8-14-07 19 D-18 Casino Services Agreement, 1-3-07 X D-19 Service Agreement, 1-3-07 X 20 D-20 Letter, 4-17-07, Lynne Kaufman to X Dorothy Turi 21 D-21 Letter, 9-18-07, MaryJo Flaherty to Lynne X Kaufman 22 D-22 Letter, 5-2-07, William J. Yung, III, to X Len DiGiacomo and Dorothy Turi 23 D-23 Letter, 7-23-07, Larry King to Dorothy Turi X D-24 E-mail, 3-9-07, Dorothy Turi to Antoinette 24 Hill D-25 DGE Interview Report, 8-6-07, Joseph X 25 Stratman 5 1 2 Division No. Description EVD 3 D-26 Revised Agenda, 6-7-07, Indiana X Gaming Commission 4 D-27 LexisNexis Article, 9-13-07 X D-28 Evansville Courier and Press, 9-13-07 X 5 D-29 Evansville Courier and Press, 8-12-07 X D-30 Letter, 9-23-07, William J. Yung, III, to X 6 Lonna Willingham D-31 Chart of Violation Numbers/Chart of X 7 Violations D-32 Louisiana Gaming Control Board Notice of X 8 Recommendation of Administrative Action, 12-27-05 9 D-33 Louisiana Gaming Control Board Notice of X Recommendation of Administrative Action, 10 3-8-06 D-34 E-mail, 5-9-06, Kelly Duncan to Vivian Raby X 11 D-35 Louisiana Gaming Control Board Notice of X Decision and Order, 6-20-06 12 D-36 Louisiana Gaming Control Board Notice of X Decision and Order, 8-15-06 13 D-37 Louisiana Gaming Control Board Order, X 10-17-06 14 D-38 Letter, 1-26-06, Nevada Gaming Control Board X to William J. Yung, III, 15 D-39 Park Cattle Company's Amended Counterclaim, X 6-15-07 16 D-40 DGE Interview Report, 1-11-07, X Re: Marvin Cato 17 D-41 DGE Interview Report, 7-11-07, X Re: Charles Cato 18 D-42 Rainbow Capital Requirements Ownership X Information 19 D-43 Letter, 3-20-07, William J. Yung, III, to X Marvin Cato 20 D-44 Letter, 8-7-02, Thomas A. Ryder to Ken Ibsen X D-45 Letter, 10-9-02, Paul S. Pilecki to Thomas X 21 A. Ryder D-46 Letters, 11-1-02, Paul S. Pilecki to Thomas X 22 A. Ryder D-47 Consent to Assessment of Civil Money Penalty X 23 5-23-03, Re: Greenville Riverboat D-48 Letter, 5-27-03, Alma Angotti to Paul X 24 Pilecki D-49 Copy of Check 100475160, Huntington X 25 National Bank 6 1 CONTINUED: E X H I B I T S : 2 Division No. Description EVD 3 D-50 DGE Investigation Report, 9-10-07 X D-51 DGE Investigation Report, 8-16-07 X 4 D-52 Commission Opinion, 7-13-83, Re: Bally's X Manufacturing Corp. 5 D-53 Letter, Guy S. Michael to Mitchel Schwefel X D-54 Legal Representation Agreement, 2-19-07 X 6 D-55 Letter, 12-28-06, John J. Mercun to Len X DiGiacomo and Raymond J. Marquez 7 D-56 Letter and petition, 6-1-07, Lynne Kaufman X to Commission 8 D-57 Letter, 6-1-07, Dorothy Turi to Hon. Linda X M. Kassekert 9 D-58 Letter and Amended Petition, Lynne Kaufman X to Commission 10 D-59 Letter, 6-14-07, Dorothy G. Turi to Hon. X Linda M. Kassekert 11 D-60 E-mail, 7-10-07, to Commission X with attachments 12 D-61 DGE Qualifier Report, 10-30-07 X 13 Applicant's No. Description EVD 14 A-1 Equal Employment Business Opportunity Plan X A-2 E-mail, 2-15-07, Tama Hughes to Bruce Ladd, X 15 Re: Response to 2-14-07 Inquiry A-3 E-mail, 2-22-07, Tama Hughes to Bruce Ladd, X 16 Re: Followup on 2-14-07 E-mail A-4 E-mail of 2-22-07, Bruce Ladd to Tama Hughes,X 17 Re: Acknowledges Receipt of E-mail A-5 E-mail of 3-9-07, Bruce Ladd to Tama Hughes, X 18 Re: Provide List A-6 E-mail of 3-9-07, Tama Hughes to Bruce Ladd, X 19 Re: List of Expected Terminations A-7 Expected Terminations X 20 A-6 Letter e-mailed of 3-15-07, Dianna X Fauntleroy to Tama Hughes, Re: Proposed 21 Terminations, Casino Division A-7 E-mail of 3-15-07, S. Cooper to Tama Hughes, X 22 Re: Letter Proposing a Termination A7a E-mail of 3-29-07, Bruce Ladd to Tama Hughes,X 23 Re: FYI A-9 E-mail of 3-15-07, Tama Hughes to Fred Buro, X 24 Re: Revised that Tama Will Contact Ms. Fauntleroy 25 7 1 CONTINUED: E X H I B I T S : 2 Applicant's No. Description EVD 3 A-10 E-mail of 3-29-07, Bruce Ladd to Tama Hughes, X Re: "Please don't forget my stats" E-mail 4 A-11 E-mail of 3-30-07, Rose Williams to Tama X Hughes, Re: Numbers 5 A-12 E-mail Series of 3-30-07, Chris Costanzo to X Tama Hughes, Re: HR Metrics Grid 6 A-13 E-mail of 3-30-07, Chris Costanzo to Tama X Hughes, Re: HR Metrics Grid 7 A-14 E-mail of 3-30-07 from Tama Hughes to Bruce X Ladd, Re: Two-monthly Update Summary Report 8 A-15 E-mail of 4-2-07 from Tama Hughes to Scott X Griffin, Re: RIF Breakdown 9 A-16 E-mail of 4-2-07, Tama Hughes to Bruce Ladd, X Re: With Attached Memo Detailing Breakdown 10 In Staff Reduction A-17 E-mail of 4-3-07, Tama Hughes to Bruce Ladd, X 11 Re: Explanation for Discrepancy A-18 E-mail of 4-4-07, Tama Hughes to Bruce Ladd, X 12 Re: Self Report A-19 E-mail of 4-30-07, Tama Hughes to Bruce Ladd, X 13 Re: Limousine Services A-20 Letter of 5-3-07, Bruce Ladd to Mike Lyons, X 14 Re: Approval of Amended Security Submission A-21 E-mail of 5-4-07, Tama Hughes to Bruce Ladd, X 15 Re: RIF A-22 E-mail of 5-15-07, Tama Hughes to Carol X 16 Defoor, Re: Notice of Upcoming Terminations A-23 E-mail of 5-17-07 from Tama Hughes to Carol X 17 Defoor, Re: Notice of Upcoming Terminations A-24 E-mail of 5-17-07 from Tama Hughes to Carol X 18 Defoor, Re: Hotel Cage A-25 E-mail of 5-25-07 from Tama Hughes to X 19 Dorothy Turi Re: Qualifier Information A-26 Letter of 5-31-07, Tama Hughes to Chair X 20 Kassekert Re: Proposed Terminations, Slot Department 21 A-27 Letter of 5-25-07, Tama Hughes to Dorothy X Turi Antoinette Hill, Re: Qualifier Information 22 A-28 E-mail of 6-1-07, Carol Defoor to Tama X Hughes, Re: Two Month Update Summary Report, 23 HR Metrics Grid A-29 E-mail of 6-1-07, Tama Hughes to Carol X 24 Defoor, Re: Two Month Update Summary Report, HR Metrics Grid 25 8 1 CONTINUED: E X H I B I T S : 2 Applicant's No. Description EVD 3 A-30 E-mail of 6-1-07, Carol Defoor to Jim X Fehon/CCC, Re: Two Month Update Summary 4 Report, HR Metrics Grid A-31 E-mail of 6-1-07, Tama Hughes to Carol X 5 Defoor, Re: Breakdown of Terminations by Reason, Total 804 6 A-32 E-mail of 6-5-07, Tama Hughes to Carol X Defoor, Re: Termination Numbers Explanation 7 About HR Metrics Grid Numbers A-33 E-mail of 6-7-07, Tama Hughes to Dorothy X 8 Turi, Re: Qualifier letters A-34 E-mail of 6-12-07, Tama Hughes to Carol X 9 Defoor, Mitch Schwefel, Rich Handzo, Re: Staff Reductions 10 A-35 E-mail of 6-21-07, Carol Defoor to Tama X Hughes, Re: Rumors of Layoffs 11 A-36 E-mail of 6-27-07, Tama Hughes to Carol X Defoor, Mitch Schwefel, Dianna Fauntleroy, 12 Re: AC Press Letter A-37 E-mail of 7-3-07, Tama Hughes to Carol X 13 Defoor and George Homa, Re: Self Report, Task Force Personnel and Response 14 A-38 E-mail of 7-3-07, Tama Hughes to Carol X Defoor and George Homa, Re: Task Force Summary 15 A-39 E-mail of 7-6-07, Tama Hughes to Carol X Defoor, Mitch Schwefel, Richard Handzo, 16 Re: RIF advisement A-40 E-mail of 7-6-07, Tama Hughes to Carol X 17 Defoor, Mitch Schwefel, Richard Handzo, Re: RIF 18 A-41 E-mail of 7-18-07, Tama Hughes to Carol X Defoor, Mitch Schwefel, Richard Handzo, 19 Re: RIF Advisement A-42 E-mail of 7-18-07 Tama Hughes to Carol X 20 Defoor, Mitch Schwefel, Richard Handzo, Re: RIF 21 A-43 E-mail of seven 20 seven, Tama Hughes to X Carol Defoor, Andy Fiorentino, Mario 22 DeGuiseppe, Re: Slot Tech Impact Analysis A-44 E-mail of 7-20-07, Tama Hughes to Carol X 23 Defoor, Mitch Schwefel, Rich Handzo, Re: Revised RIF advisement 24 A-45 E-mail of 7-20-07, Tama Hughes to Carol X Defoor, Mitch Schwefel, Rich Handzo, 25 Re: Reductions 9 1 CONTINUED: E X H I B I T S : 2 Applicant's No. Description EVD 3 A-46 E-mail of 7-20-07, Tama Hughes to Carol X Defoor, Re: Slot Tech Impact Analysis 4 Undertaking and Assignment A-47 E-mail of 7-24-07, Tama Hughes to Fred Buro, X 5 Re: Rumors of Reduction A-48 E-mail of 8-6-07, Tama Hughes to Dianna X 6 Fauntleroy, Re: Tropicana Slot Tech Impact Study A-49 E-mail Series of 8-7-07, Re: Impact Study X 7 Submission A-50 E-mail of 8-7-07 Tropicana to submission, X 8 Re: August 7th Tropicana Atlantic City Proposed Department Layoffs and 2007 FTEs 9 A-52 E-mail of 8-10-07, Dianna Fauntleroy to Tama X Hughes, Re: Potential Department Layoffs 10 A-53 E-mail Series of 8-10-07, Dianna Fauntleroy, X Re: Potential Department Layoff, Clarification 11 A-55 E-mail Series of 8-14-07, Re: Qualifier X Notification 12 A-56 E-mail of 8-18-07, Tama Hughes to Dianna X Fauntleroy, Re: Proposed Staff Reductions 13 Security-Relief Rovers A-57 E-mail of 8-18-07, Dianna Fauntleroy to X 14 Tama Hughes Re: Reply proposed security Reductions 15 A-58 E-mail of 8-18-07, Tama Hughes to Dianna X Fauntleroy, Re: Reply to Item 34 16 A-59 E-mail of 8-18-07 Dianna Fauntleroy to X Tama Hughes, Re: Reply to Item 35 17 A-60 E-mail and letter of 8-18-07, Tama Hughes X to Dianna Fauntleroy, Re: Proposed 18 Tropicana Security Department Reductions A-61 E-mail Series of 8-23-07, Dianna Fauntleroy X 19 to Tama Hughes, Re: Tropicana Security Staffing Violation 20 A-62 E-mail 8-29-07, Tama Hughes to Dianna X Fauntleroy, Re: Request for meeting to 21 A-63 E-mail and Letter 9-5-07, Tama Hughes to X Dianna Fauntleroy, Re: Proposed Reductions 22 A-64 E-mail Series of 2-22-07, Tama Hughes to X Bruce Ladd, Re: Revised RIF List 23 A-65 E-mail 2-27-07, Tama Hughes to Bruce Ladd, X Re: Staffing Reduction Advisory 24 A-66 E-mail of 8-20-07, Tama Hughes to Carol X Defoor, Re: Tropicana Security Staffing 25 Violation 10 1 CONTINUED: E X H I B I T S : 2 Applicant's No. Description EVD 3 A-67 E-mail of 5-3-07, Len DiGiacomo to Lynne X Kaufman, Re: Morgan and Brugler 4 A-68 E-mail of 5-3-07, Len DiGiacomo to Lynne X Kaufman, Re: Brugler 5 A-69 E-mail 5-10-07, Lynne Kaufman to Dorothy X Turi, Re: Audit Committee 6 A-70 E-mail of 5-15-07, Guy Michael to Dorothy X Turi, Re: Tropicana Confirmations/Status 7 A-71 E-mail 6-14-07, Lynne Kaufman to Dorothy X Turi, Re: Audit Committee 8 A-72 E-mail of 6-14-07, Lynne Kaufman to Dorothy X Turi, Re: Audit Committee 9 A-73 E-mail of 6-14-07, Dorothy Turi to Lynne X Kaufman, Re: Audit Committee 10 A-74 E-mail of 6-14-07, Dorothy Turi to Lynne X Kaufman, Re: Audit Committee 11 A-75 E-mail of 6-18-07, Len DiGiacomo to Lynne X Kaufman, Re: Audit Committee 12 A-76 E-mail of 6-19-07, Dorothy Turi to Lynne X Kaufman, Re: Audit Committee 13 A-77 Chart, Second Level Casino Floor Plan X A-78 Photograph X 14 A-79 Photograph X A-80 Chart, Tropicana Termination/Turnover X 15 Summary 1-31-7 to 10-31-07 16 17 18 19 20 21 22 23 24 25 (Exhibits retained.) 11 1 (The Special Meeting is commenced at 2 10:06 a.m.) 3 MR. NANCE: Please stand for the Plege 4 of Allegiance. 5 (The flag salute was recited.) 6 CHAIR KASSEKERT: Good morning. 7 MR. NANCE: Good morning. 8 CHAIR KASSEKERT: We will continue today 9 with taking testimony in the Tropicana 10 licensing hearing. 11 I guess we're ready to proceed. Mr. 12 Michael, you can present your next witness. 13 MR. MICHAEL: Ready to proceed. Thank 14 you, Madame Chair. 15 CHAIR KASSEKERT: Thank you. 16 MR. MICHAEL: We call the next witness, 17 Donna More. 18 MS. MORE: Sorry about that. You know I 19 feel like I have to carry this everywhere. 20 CHAIR KASSEKERT: Mr. Nance will swear 21 you in. 22 23 DONNA MORE, having been first duly sworn 24 to tell the truth, testified as follows: 25 12 DONNA MORE - direct 1 MR. NANCE: Please state your name for 2 the record. 3 THE WITNESS: Donna More, M-o-r-e. 4 MR. NANCE: Thank you. 5 CHAIR KASSEKERT: You may proceed. 6 7 EXAMINATION BY MR. MICHAEL: 8 Q. Miss More, good morning. 9 A. Good morning. 10 Q. Miss More, by whom are you presently 11 employed? 12 A. Tropicana Casino and Resorts. 13 Q. And in what capacity? 14 A. Vice President, general counsel and 15 secretary. 16 Q. As young as you look, this isn't your 17 first job; correct? 18 A. No, it is not. 19 Q. And where were you employed previous to 20 this? Could you briefly describe your professional 21 history for the Commission. 22 A. Sure. I'll -- I'll maybe start 23 backwards first. 24 Q. Okay. 25 A. And work my way up. 13 DONNA MORE - direct 1 I grew up in Chicago. I went to Tufts 2 University for college. I received a master's degree 3 from Northwestern University, and I received my law 4 degree from Georgetown University. I think the only 5 school I went to that had a decent sports team. 6 But I graduated from law school, and I 7 went to work as a prosecutor. I was in the Cooke 8 County State's Attorney's Office, which is the -- 9 basically City of Chicago Prosecutor's Office. I left 10 there and went to work at the United States Attorney's 11 Office for the Northern District of Illinois. In both 12 of those places, the State's Attorney and the US 13 Attorney's office, I focused on criminal prosecutions 14 exclusively. 15 I was in the US Attorney's Office when I 16 was asked to be the first chief counsel for the 17 Illinois Gaming Board when Illinois passed riverboat 18 gambling, and I took that position. And, actually, 19 the first place that I went to when I was trying to 20 get my education in the gaming industry, was here to 21 New Jersey where the regulators here were quite -- 22 quite nice about showing me around and showing me what 23 I needed to know to -- to do my new job. 24 I was at the Illinois Gaming Board for 25 about four and a half years. We -- we started with 14 DONNA MORE - direct 1 nothing. You -- you all here and Nevada were pretty 2 much the only two jurisdictions that were up and 3 operating and mature at that point. My job at the 4 Gaming Board in Illinois was to assist with the 5 drafting of the rules and regulations that were going 6 to govern our industry. We have riverboats in 7 Illinois. Ten riverboats. 8 During my time there, we got -- we 9 licensed people. We got boats up and operating. We 10 had a lot of policy issues, as you are familiar with, 11 especially at the beginning of an agency. And also 12 created a disciplinary process there as well. And I 13 thought at one point that I would stay until Chicago 14 got approved, but I guess, fortunately for me, I 15 didn't wait around for that because they're still 16 discussing that in the legislature. 17 I left the Gaming Board and went to work 18 in a Chicago law firm, and my practice was kind of a 19 variety of things. I did gaming regulatory work. I 20 did some general litigation, and I did some 21 white-collar criminal defense based on my days as a 22 prosecutor. 23 I -- at one point I left there. I 24 opened my own firm, and I did that for about four 25 years. And then went back with a big firm in Chicago. 15 DONNA MORE - direct 1 And while I was at Greenberg Traurig, T-r-a-u-r-i-g, 2 one of my clients was Columbia Entertainment, now 3 Tropicana Casino and Resorts, which is how I came to 4 be familiar with the company and with Mr. Yung. 5 Q. Okay. It's fair to say, is it not, that 6 the gaming regulation has formed a large part of your 7 professional career? 8 A. That's correct. 9 Q. It means quite a bit to you? 10 A. That's correct. 11 Q. And did your relationship -- could you 12 describe for us a little bit what your relationship 13 with Columbia Sussex and Mr. Yung. 14 A. Well, as I said, they -- Mr. Yung and 15 Columbia Entertainment was my client, which enabled me 16 as an outside lawyer before I ever came in-house to 17 have a number of conversations with Mr. Yung and also 18 to get to meet other people in the company. He and I 19 had a couple of conversations specifically about the 20 gaming industry, about -- particularly when they 21 became the final bidder on the Aztar transaction, and 22 about what that really meant to the company and the 23 kinds of things that needed to be in place from a 24 regulatory standpoint. Because, in some sense, 25 digesting the Aztar acquisition, the then Columbia 16 DONNA MORE - direct 1 Entertainment was going from a rather small gaming 2 company to a rather large gaming company with two big 3 properties, one in Atlantic City and one on the Vegas 4 strip that would really catapult them to a different 5 level. 6 And so he and I had those conversations, 7 and he asked me to come in-house and be his general 8 counsel, and I accepted the position. 9 Q. In the course of those discussions, was 10 the issues of compliance discussed at all? 11 A. Yes, it was. Bill and I had one 12 conversation -- as I said, we had a number of 13 conversations, obviously. I represented the company. 14 But one conversation in particular where I said to 15 him, this is -- this is what I do. This is who I am, 16 and I'm not a "yes" person. And compliance is 17 important to me. I think the company needs to 18 graduate to this new level. And he said that's why 19 I'm hiring you. 20 Q. Could you describe briefly now your, 21 say -- your role, responsibilities in your position? 22 A. Well, I -- just as a little aside, I 23 felt -- I felt very comfortable with the company. I 24 felt very comfortable with Mr. Yung in accepting this 25 position. Comfortable enough where I moved my family 17 DONNA MORE - direct 1 from Chicago to Cincinnati, Northern Kentucky, which 2 some are questioning my wisdom on that. But we have-- 3 like any work relationship, we have developed a method 4 of dealing with each other, a rapport of dealing with 5 each other. Bill knows that I don't really sugarcoat 6 something. When I need to go in and talk to him, I 7 tell him good news. I tell him bad news. He doesn't 8 always like to hear the news that I have to tell him. 9 And there are, you know, levels of which, you know, 10 certain things that, obviously, I feel he needs to 11 know, I tell him. If there's some minor incident, I 12 try not to bombard him with absolutely everything. 13 But, it is -- it is a rapport that is 14 quite comfortable. We are -- when we're both in 15 town -- in and out of each other's offices a fair 16 amount during the course of the day. And as I say, it 17 is a true communication, and it's one that, from my 18 standpoint, I value because I feel like I have the 19 ability to tell him whatever I need to tell him. And 20 as I say, sometimes it's not necessarily what he may 21 want to hear, but certainly the one thing he knows 22 about me is that I will not compromise what has to be 23 done from a regulatory standpoint. And he has never 24 put me in a position where I have ever felt that I 25 have had to do that. 18 DONNA MORE - direct 1 Q. Does he actually have a nickname for you 2 in that regard? 3 A. Yeah. I -- when somebody came to the 4 company -- I forget who it was -- but actually, I 5 walked into the room, and he goes, oh, here's Dr. No. 6 And I sort of like to think of it as the K-n-o-w. I 7 think he thinks of it as N-o. But he -- you know, he 8 understands my role very well in the company. And he 9 understands that I'm sometimes the one that has to 10 deliver, you know, news to him that, as I said, isn't 11 always so great. But he appreciates my role. And he 12 respects my role. And it's a -- it's a nice working 13 relationship that we've developed over the past few 14 years. 15 Q. Would you explain how you go about 16 implementing your compliance plans and policies. 17 A. Well, when I came to the company, there 18 were -- you know, a to-do list. A lot of the to-do 19 list gets done by -- in the very beginning by 20 deadline. But we -- we had some discussions early on 21 about a compliance committee as well as an audit 22 committee. Initially I think those discussions 23 centered around whether or not we would have one 24 committee, an audit compliance committee, for lack of 25 a better name. 19 DONNA MORE - direct 1 I know there were some discussions that 2 our outside lawyers had in December before we took 3 over. I had some discussions about that in January 4 and February with the prior director at the DGE. And 5 our outside lawyers, I know, continued those 6 discussions. 7 Q. Okay. And we'll get into a little more 8 detail in a little bit about the audit committee 9 issues themselves. But, more generally, you have a 10 vice president of compliance, for example, and what 11 his duties would be and how you try to implement your 12 policies throughout the company. 13 A. We have a director of compliance. 14 Q. Okay. 15 A. And he reports to me. There are 16 compliance folks at each of the properties who have a 17 reporting responsibility up. Our compliance plan is 18 pretty similar to what a lot of other big casino 19 company compliance plans look like. We have reporting 20 for material financings, material litigation, vendor 21 suitability, due diligence investigations, key person 22 investigations and when -- when those things get 23 triggered. And we get notified of, you know, 24 regulatory actions in various jurisdictions. And so 25 it all kind of gets reported up, if you will. 20 DONNA MORE - direct 1 And we have a compliance committee and 2 on a quarterly basis reviews that information. And we 3 had a -- we've had three meetings so far, one for each 4 quarter. 5 Q. There had been some discussion earlier 6 in the hearings about corporate due diligence within 7 the company. Could you describe in a little more 8 detail what the due diligence policies are? 9 A. Well, we obviously -- if -- specifically 10 about due diligence on vendors? 11 Q. On vendors; correct. 12 A. The compliance plan itself has a dollar 13 amount, which I think is at $500,000 in terms of due 14 diligence. But in reality, that is a number at the 15 corporate level which, depending on what the 16 jurisdictional levels are, really fluctuates. So, for 17 instance, if we have a property in a jurisdiction, and 18 the dollar amount is a hundred thousand dollars, then 19 obviously, in that jurisdiction you're doing due 20 diligence investigation at a $100,000 level. It is 21 truly as if whatever the lowest dollar amount is in 22 the five jurisdictions we operate, that's, in essence, 23 the dollar amount that you use to sort of begin your 24 due diligence investigations. 25 We have some exemptions, obviously. If 21 DONNA MORE - direct 1 it's a publicly traded company or if it's a company 2 that is already licensed or registered in New Jersey 3 where you all have vendor registrations and so forth. 4 So there are some exceptions when we wouldn't do it. 5 And we have -- you know, we've gotten that into place. 6 We try to make sure that it's -- it's working. But 7 that's what we're doing. 8 Q. In the context of compliance as well, 9 you familiarized yourself with the Division of Gaming 10 Enforcement's reports, D-1 and D-2, about the company 11 and triggering this hearing today, have you not? 12 A. Correct. 13 Q. And as part of that report, there are 14 references to various complaints that have been filed 15 against the Tropicana here in Atlantic City; is that 16 correct? 17 A. Right. 18 Q. And have you had a chance to take a look 19 at the complaints upon which the Division relies or 20 were supplied in discovery and analyzed those with 21 staff to determine whether or not they apply to the 22 present management? 23 A. I did take a look. Obviously, I read 24 through the Division's report and just wanted to make 25 sure that I had an understanding of what was in the 22 DONNA MORE - direct 1 report and what was going on at the property. I 2 believe -- and I know you'll correct me if I'm wrong. 3 I believe the report says there were 11 complaints. I 4 believe five of them were for conduct in 2005 where 5 we, in essence, in -- when we bought the company, we 6 bought the liability so we paid those -- 7 Q. You mean 2006? 8 A. 2006. Sorry. 9 We paid those in 2007. 10 There was one additional one where the 11 conduct began in 2006 and then spilled over in '07, 12 and we paid that one. And then there was -- I believe 13 one complaint that was issued to a tenant but -- 14 Q. That was a warning letter? 15 A. That's a warning letter. Okay. So 16 there was, in essence, six complaints or -- yeah. Six 17 complaints that were under old Aztar management. 18 And the $90,000 of fines that were paid, again, were 19 for the conduct in '06 where we paid it in '07 once we 20 acquired the property 21 Q. And as you've began to say, with respect 22 to the warning letters also cited in the Division of 23 Gaming report they site 21 warning letters from 24 January 9th to October 16th; correct? 25 A. Correct. 23 DONNA MORE - direct 1 Q. And when you reviewed the warning 2 letters, were there only 18 of them that were provided 3 in discovery? 4 A. I think that's right. Yes. 5 Q. And of those, is it true that there were 6 only 11 -- oh, excuse me -- that there were 11 of 7 those that resulted from conduct when the ownership 8 was the prior ownership? 9 A. That's correct. 10 Q. And you had mentioned earlier one of 11 those warning letters was not sent to the company, 12 either. It was sent to a vendor, a tenant; correct? 13 A. Right. One was to a vendor, and then I 14 believe that there were eight other letters that the 15 Division sent to actually to patrons just informing 16 the patrons that the nature of their issue did not 17 rise to a regulatory violation. My understanding is 18 we -- we hadn't seen those before we had just received 19 them in discovery. 20 Q. Okay. Now, this is not meant to 21 minimize the importance of any complaints that were 22 filed against the company; is that right? You take 23 complaints pretty seriously, do you not? 24 A. Listen, you know, my goal is to have a 25 company that is compliant, that has no blemish on it 24 DONNA MORE - direct 1 from New Jersey or anyplace else. It obviously would, 2 you know, free up some time for me. But it is -- this 3 is important. What's important is, is actually the 4 substance of what the problem is so we can get it 5 corrected. 6 But, you know, I've spent my whole 7 career trying to make a regulatory system that works 8 and to try to be part, once I left the Gaming Board, 9 to try to be part of a regulatory system where 10 hopefully I contribute value in making this all work a 11 little better. So this is very important to me, and 12 it's very personal to me. 13 Q. When a complaint is filed against one of 14 your facilities, what is -- what is your role in that 15 and to what degree does Mr. Yung get involved in any 16 of that? 17 A. I will tell you that for -- a little bit 18 wider question. Generally speaking, if we get a 19 warning letter at a property, unless it's quite 20 unusual, I generally don't necessarily hear about it. 21 Warning letters are handled at the property level. 22 Maybe our director of compliance gets involved in it. 23 When any property gets a formal 24 disciplinary complaint or there is some sort of 25 investigation that may lead to a formal disciplinary 25 DONNA MORE - direct 1 complaint, I am notified by the property, obviously, 2 and I notify Mr. Yung of formal disciplinary 3 complaints. 4 In the case of New Jersey, we have an 5 in-house lawyer at the property, Tama Hughes, and she 6 gets on the phone with me and tells me what's going 7 on, gives me the facts and so forth. And, as an 8 aside, I would just like to say that for those of you 9 who have not worked with Tama directly -- and, again, 10 with -- with respect to the Division report, I just 11 need to clarify the record a bit. Tama is one of the 12 finest lawyers that I've worked with. And she does -- 13 she works tirelessly to keep this property compliant. 14 And, you know, we're dealing with human beings, so 15 sometimes people make a mistake. But there's 16 certainly nothing intentional in not following a rule 17 or reg. And I read through her sworn testimony, and I 18 consider myself personally and the property lucky to 19 have somebody of her caliber helping us get through 20 what we need to get through here and keeping us on the 21 straight and narrow in terms of being compliant. 22 Q. And you mentioned that if complaints 23 were filed against -- something rises to the level of 24 a actual formal regulatory complaint -- that matter is 25 brought to Mr. Yung's attention? 26 DONNA MORE - direct 1 A. Yes. 2 Q. And -- 3 A. It's brought to him upon the filing, and 4 I -- you know, depending on what happens, if we work 5 out a settlement agreement or whatever, obviously, 6 before we settle a disciplinary complaint, I will go 7 into his office, kind of remind him what the facts 8 are, and talk to him about the reasons why I think we 9 should or should not settle. 10 Q. There was some discussion earlier in the 11 hearing about some things that Mr. Yung does remember 12 and some things Mr. Yung doesn't remember. You have a 13 close working relationship with him on a daily basis. 14 Can you shed any light on that? 15 A. There -- you know, I can speak for 16 myself. In any given day, you know, I'm in there with 17 a lot of different things. I put documents in front 18 of him. I give him information. And obviously, at 19 the time I'm giving him something to sign, I tell him 20 what it is, make sure he doesn't have any disagreement 21 with it. There are -- you know, a lot of times just 22 in my little world of the legal division in the 23 company, there's a lot that gets thrown at me. And, 24 you know, on any given day, I can't necessary tell you 25 every count in every complaint that we have pending, 27 DONNA MORE - direct 1 obviously, but, you know, he's informed. He knows it. 2 And as -- he may not know the specifics, but he 3 certainly knows and asks the question of what are we 4 doing about it to cure the problem? And what kinds of 5 things is the property doing to make sure that it 6 doesn't happen again? He has told me on a number of 7 different occasions that, you know, you may not always 8 like being in a regulated industry, but we're going to 9 do the very best we can to be a model for that 10 industry. 11 Q. When you advised Mr. Yung about a line 12 in a place where the regulation said you cannot go any 13 further, what is his reaction to that? 14 A. There's -- if we're talking about 15 something you can or can't do, there's really not a 16 discussion, per se, because you can't do it. Or you 17 can do it. But it is -- he may not like to hear that 18 he can't do something, but it is not really open for 19 discussion. 20 The place where we get into discussion, 21 obviously, is where there are policy business judgment 22 issues. But in terms of you can or can't do 23 something, there's no discussion. And I have -- I've 24 never been asked not to do something that needed to 25 get done from a regulatory standpoint. And he knows I 28 DONNA MORE - direct 1 wouldn't do it. 2 Q. You mentioned earlier -- we started to 3 talk a little bit about the audit committee. 4 A. Uh-huh. 5 Q. Let's talk a little bit about the audit 6 committee. Are you familiar with the New Jersey 7 requirement of having an audit committee? 8 A. Yes. 9 Q. And when did you first begin discussions 10 about the formation of an audit committee in order to 11 comply with that rule? 12 A. I know that -- I know I came on with the 13 company November 1st. I think you all were one of my 14 first visits. And I think there were some discussions 15 in December about what this would look like. 16 Originally, New Jersey had a audit committee 17 requirement. Nevada, when we became public for 18 purposes of our debt, has a compliance committee 19 requirement. And, obviously, at some point, I think 20 by the end of '08 we needed to also be Sarbanes 21 compliant because of our public debt. So there were 22 some discussions about what we needed to do, could we 23 have a joint audit compliance committee? We had had 24 some discussions with Nevada about that. I had some 25 discussions with the prior director about that. And 29 DONNA MORE - direct 1 that was -- until we had to potentially split those 2 two functions at the end of '08, my understanding was 3 that we could potentially have a combined committee. 4 I also had some discussions about who 5 the outside member would be, and actually ran Mr. 6 Silver's name by Director Auriemma to get his thoughts 7 about that. And then there were continuing 8 discussions. That would have been in January or 9 February. I don't know. But then there were 10 continuing discussions. 11 Q. Let's talk about Mr. Silver first. How 12 did Mr. Silver come to your attention? 13 A. He actually came to our attention, I 14 believe, through Deloitte and Touche suggested his 15 name to our CFO. We had -- you know, we had all sort 16 of brainstormed to see if there were people that we 17 knew, had asked outside accounting firms. Deloitte 18 and Touche suggested Jeff's name. I had known Jeff 19 from my time in the industry pretty much since I 20 started in the industry. Jeff is a former Nevada 21 regulator and a lawyer and an accountant. And he sort 22 of has a triple degree, I guess. And so when I heard 23 that name, I thought that that actually was a -- you 24 know, a good person, and we pursued that. 25 Q. Okay. Did there come a time when you 30 DONNA MORE - direct 1 entered into a legal representation agreement with 2 Jeff to retain him to serve on the audit compliance 3 committee? 4 A. Yes. 5 Q. Let me show you. This is D-54 that is 6 now in evidence submitted by the Division. Was that 7 the agreement that was entered into, the original one? 8 A. Yes. 9 Q. And does that provide some language that 10 says that the client is Gordon & Silver? Do you know 11 who Gordon & Silver is? 12 A. Yes. That's Mr. Silver's law firm. 13 When I had talked to him about serving on our audit -- 14 on our joint audit compliance committee, he had said 15 that in order to get paid, we would actually pay his 16 firm and that the legal representation agreement was 17 kind of a form agreement that his firm had for 18 services. 19 Q. Okay. And is there language in that 20 agreement, also, that says that he may also engage 21 counsel in different matters? 22 A. Yes, there is. 23 Q. And did you have cognizance of that 24 language when you entered into the agreement in the 25 first place? 31 DONNA MORE - direct 1 A. No. I -- to be honest with you, I 2 looked at this as a vehicle to get Jeff and/or his 3 firm paid for providing us the service to be on our 4 independent audit compliance committee. I had never 5 used Jeff's firm in the past. I had no intention of 6 retaining Gordon & Silver for anything. They are a 7 bankruptcy firm so, thank goodness, we didn't need 8 them for anything. And, you know, shame on me. It 9 never occurred to me that that sentence would become 10 problematic in terms of evaluating Jeff's 11 independence. But it was never my intent to use his 12 firm for anything else other than for getting him paid 13 for sitting on our audit committee. 14 Q. It was always your intention to retain 15 Jeff Silver personally; is that correct? 16 A. Correct. 17 Q. And, in fact, you already have counsel 18 in Nevada, do you not? 19 A. Correct. We use Jones Vargas. 20 Q. And that agreement, is it fair to say, 21 is somewhat of a form that was sent to you, and the 22 language was not your intention. It was the intention 23 as you described it; is that correct? 24 A. That's -- it's a pretty standard 25 services agreement sent out by just about almost every 32 DONNA MORE - direct 1 firm. And, as I say, because it was -- it was never 2 in my mind to retain his firm for anything else. And 3 I should have read it more carefully, but it just 4 never occurred to me that I would retain him for any 5 other reason. So and so the sentence is in there. 6 Q. Now, the closing took place in -- the 7 transaction was completed January 3rd, I guess it was. 8 A. Correct. 9 Q. Is that -- 2007? And on January 3rd, 10 2007, did you have a audit committee? 11 A. No. 12 Q. What efforts were being made in order to 13 institute, implement, and constitute that audit 14 committee? 15 A. Well, as I mentioned, I was -- I was 16 trying to figure out if a joint committee was 17 possible. Our outside lawyers had had some 18 discussions. I had had some discussions, as I already 19 told you. And we had -- we had a meeting in March. 20 And right around the time of the meeting, our CFO 21 thought that it would be -- it would be beneficial to 22 actually split and do a separate audit and compliance 23 committee since, ultimately, we were going to go in 24 that direction. And that's when we started pursuing 25 that option and those discussions. 33 DONNA MORE - direct 1 And I know our outside lawyers -- I 2 honestly can't tell you who they spoke to at the 3 Division and/or the Commission, but I know that there 4 were discussions going on. We had sent over some 5 proposals, and I know there was a continual dialog of 6 what -- from an audit standpoint what the makeup of 7 the committee would look like. I know that the 8 regulations says that we needed to have one, and I 9 wanted to make sure, because it's silent as to what 10 exactly it needs to look like. So I wanted to make 11 sure it was something that was agreeable to you all so 12 we could put it in place. 13 Q. In your experience both as a regulator 14 and in the private practice of gaming law, had you had 15 occasions when areas that were unclear to you were 16 discussed with regulators to try to make sure that 17 compliance was obtained? 18 A. Sure. Areas that are unclear to me and 19 sometimes areas that are clear to me. But, obviously, 20 you know, I'm used to having very open discussions 21 with regulators while I was one and having discussions 22 with those who I regulated as well as other 23 regulators. And, you know, whether I was in private 24 practice or in-house, you know, a large part of my day 25 is spent in discussions to make sure that we get it 34 DONNA MORE - direct 1 right. 2 Q. Was the company having these discussions 3 with the agencies in order to delay or avoid having an 4 audit committee? 5 A. No. Our intent was -- obviously, we 6 were always going to have a compliance committee. We 7 were always going to have an audit committee. Whether 8 they are combined or separate was -- was not really 9 the -- was not really the issue, per se. It was just 10 what -- what did it need to look like, and how did we 11 get it in place? There was never any discussion by 12 anybody in the company that we just didn't want to do 13 it. It just didn't happen. 14 Q. And there were different compositions of 15 the committee that were proposed; is that right? 16 A. That's right. 17 Q. Do you remember what some of those were? 18 A. Well, once we had decided that we were 19 going to have a separate audit committee, I had -- I 20 was trying to figure out what different 21 constituencies, if you will, were required so, you 22 know, we could make some -- we could make some good 23 decisions. As far as Sarbanes, which was one of the 24 things that we had to be compliant with by the end of 25 '08, my understanding from talking to our outside 35 DONNA MORE - direct 1 corporate counsel was that because we had public debt 2 as opposed to public equity, the composition of our 3 committee could, in fact, have management on it. So, 4 I just sort of envisioned, you know, two people from 5 management plus our independent member. And I think 6 the first proposal we sent over was that because we 7 wanted to keep -- be mindful of the independence 8 concept, was that it would be a unanimous vote so 9 nobody could take an action unless the independent 10 person were voting along with it. 11 Q. And that proved to be unacceptable from 12 an independent standpoint to the agency; is that 13 correct? 14 A. My understanding was it was -- it was 15 viewed more like a veto power, that the person could 16 veto something but couldn't really propound something. 17 And so -- and that was -- you know, that was, when you 18 think about it in those terms, right. So we came back 19 and said, well, we'll just give them 51 percent of the 20 vote. And that way, if he thinks something has to get 21 done, he can vote it. And, you know, that would, you 22 know, be another alternative. So I think that one 23 actually -- 24 Q. And was there a petition that was filed 25 for -- that included a charter that had 51 percent 36 DONNA MORE - direct 1 vote by the independent member? 2 A. Yes. I believe that was submitted, and 3 my understanding was that the Division recommended 4 that that was acceptable. 5 Q. In fact, is the document in evidence now 6 D-57, which is the letter from the Division? I'll 7 show you that. And recommends approval of the audit 8 committee with the 51 percent vote by the independent 9 member? 10 A. It's here somewhere. (Reviewing.) 11 Oh, right. Yeah. That's correct. 12 Q. So during the course of these 13 discussions it was not your impression that a 14 committee that included some management would be 15 utterly unacceptable? 16 A. That's correct. 17 Q. But then there came a time shortly after 18 the 51 percent submission that that information was 19 transmitted to you; is that right? 20 A. Right. Outside counsel told me that -- 21 that that was still an uncomfortable -- an 22 uncomfortable structure. And that, you know, what 23 other companies have done is to have a single-member 24 audit committee for New Jersey, and I said fine. 25 Let's just have a -- it was not a question of if we 37 DONNA MORE - direct 1 were going to do this. It was just a question of what 2 it looked like. And if someone would have told me in 3 March, you know, don't try to come up with all these 4 new structures. We won't let management on a 5 committee because we don't think it lends -- even if 6 you have 51 percent of the vote to your independent 7 member, we don't think that structurally that's a good 8 idea. So when they told me that we needed to have 9 either a single member or a completely independent 10 committee with no management on it, I think we got 11 that done within a very short -- very short turnaround 12 time and, in fact, had the meeting by the end of June. 13 So it was -- it wasn't an attempt to delay. It was 14 just an attempt to figure out what was acceptable and 15 to get it done. 16 Q. And during the course of this time from 17 January until the audit committee was approved in 18 June, there was no audit committee; correct? 19 A. Correct. 20 Q. And so how were the reporting lines 21 structured in the absence of that requirement? 22 A. Well, I think the two -- the two 23 positions at the Trop AC level, the head of 24 surveillance and the head of internal audit, 25 obviously, ideally it -- it would have been nice for 38 DONNA MORE - direct 1 them to have an audit committee. They obviously 2 report to the audit committee now or to our corporate 3 director of internal audit in the case of internal 4 audit who reports to the audit committee. Both Bill 5 King, who is the internal audit person at the 6 property, and Bill Edwards, who is the surveillance 7 person at the property, I think knew that -- knew me, 8 certainly, and knew that they could always call me if 9 they felt there was something that needed to get 10 reported outside of the property communication. I 11 think on a day-to-day basis, Bill King reported up to 12 Larry King -- not to confuse the issue -- at the 13 corporate level, our vice president of casino 14 accounting. And I believe Bill Edwards had some 15 day-to-day reporting with the then casino manager, 16 Fred Buro. 17 Q. And you understood that wasn't the 18 optimum situation? 19 A. Yes. 20 Q. But it was in place in the interim until 21 the appropriate audit committee was approved; is that 22 correct? 23 A. That's correct. 24 Q. All right. Let's go on to another issue 25 that's been the focus here, and that's the staffing 39 DONNA MORE - direct 1 question. 2 Were you involved at all in the 3 decisions about who to keep and who not to keep? 4 A. No. 5 Q. What role did you have, if any, in 6 reporting of that information to the regulators? 7 A. The role that I had and Tama Hughes on 8 the property had was to make sure that if there were 9 either specific requirements or just a request to 10 report certain information at whatever timetable we 11 were asked to report it, that it got done. 12 Q. Okay. And did you have conversation 13 with Tama and interchange to ensure that that was 14 happening? 15 A. Yes. 16 Q. Were you satisfied that it was? 17 A. Yes. 18 Q. In fact, were there volumes -- if it 19 could be called that. Certainly, you know, stacks of 20 e-mails and so on that went back and forth advising 21 the regulators from Tama's office about what the 22 latest layoff situation would be? 23 A. Yes, there were. 24 Q. Did there come a time, too, when you met 25 personally with some of the regulators concerning the 40 DONNA MORE - direct 1 layoff issue? 2 A. Yes, I did. 3 Q. Do you remember when that was? 4 A. I -- again, my role really is not 5 operational in nature except when operations and 6 regulation kind of collide, if you will. But what I 7 wanted to do was to make sure that the operational 8 people who were involved in those decisions got in 9 front of both the Division and the Commission to talk 10 about the kinds of things that they were concerned 11 with, that they were recognizing, and their thoughts 12 on future -- of what they were doing at the property. 13 So to some extent, while I facilitated and attended a 14 lot of those meetings, a lot of the substance of what 15 was necessarily being discussed was not specifically 16 in my bailiwick of responsibility. 17 Q. Was there a meeting in July or August in 18 which you gained some insight into what the agency 19 might want and went back and tried to comply? 20 A. I actually think there were two 21 meetings. I think there was one in July as well as 22 one in August. And you have to forgive me because I 23 know we met with the Division and the Commission, and 24 I'm not sure if we met with both of them both times -- 25 Q. Okay. 41 DONNA MORE - direct 1 A. -- and who actually was at the meetings. 2 But I think what happened after the July meeting was 3 that from sitting in on them, I sensed a concern. And 4 I think at that point we did meet with both. I want 5 to say we met with both the Division and Commission. 6 That there was a concern that we get them better 7 numbers. And when I say "better numbers" that 8 everybody's playing off the same page as to what these 9 numbers are, whether they be a layoff number, a 10 voluntary resignation, and/or a termination for cause. 11 And, also, I got the impression that it 12 would be helpful as -- as a regulator you don't want 13 to get blind-sided -- or at least I never wanted to 14 get blind-sided. And if you get a phone call from 15 someone, you want to make sure that you have the 16 information or at least the wherewithal to answer the 17 question. I'm not sure we had always done an 18 effective job of making sure that that happened. And 19 one of the things that I sensed was that it would be 20 helpful to come and say, look, here's where we are, on 21 a piece of paper, not taking into account what may or 22 may not have been reported inaccurately in the press. 23 But here's where we are. And, ultimately, here's the 24 end. Here's -- here's -- you know, the worst case. 25 And, you know, everything in between. And so after, I 42 DONNA MORE - direct 1 think the July meetings, that's when we went back and 2 kind of had some discussions at the company and then 3 came back for the early August meeting. 4 Q. And you supplied what you might call 5 that worst-case scenario information at that point? 6 A. That's correct. We met with both the 7 Division and the Commission. 8 Q. Then did you receive communication 9 subsequent to that that there should be cessation of 10 any layoffs, at least for security, until further 11 notice by the Commission, and did you comply with that 12 request? 13 A. Yes. 14 Q. In fact, was there ever any intention in 15 your communications with the regulators and the 16 agencies to try to obfuscate or in any way mislead 17 anyone with respect to any of these layoffs? 18 A. No. It -- you know, we -- we needed to 19 do a better job of getting our numbers gathered and 20 getting them in to you. But in terms of being, you 21 know -- at any given time when we submit something, 22 it's a snapshot, and that snapshot changes and 23 fluctuates. But, you know, bad news or good news, you 24 know, my role is sort of the same. I communicate it 25 to you. And sometimes we may have to agree to 43 DONNA MORE - direct 1 disagree. But my goal is not to hide the ball because 2 I don't think that's a very effective way to run the 3 company in a gaming industry. 4 Q. And each time information was provided, 5 was it the best information that was available at the 6 time? 7 A. Yes. 8 Q. And as you say, a snapshot of a fluid 9 situation; correct? 10 A. That's correct. 11 Q. Another subject matter; Mr. Buro. Were 12 you involved at all in the negotiation over Mr. Buro's 13 severance agreement? 14 A. Yes, I was. 15 Q. And what role did you play? 16 A. Both Tama Hughes, our property lawyer, 17 and I were involved. At one point, other than making 18 sure that we have agreement as to what the separation 19 agreement would be -- and to tell you the truth, I 20 don't know if it was -- I had some direct discussions 21 with Fred during this time. Tama had some direct 22 discussions with Fred. And I can't tell you if it was 23 my discussion or if it was in Tama's discussion, but I 24 do know at one point there -- there was a 25 communication where Fred had suggested that somehow 44 DONNA MORE - direct 1 his separation agreement and what was in there was 2 tied, if you will, to what he may or may not tell 3 regulators. And in no uncertain terms, in my 4 conversation with Tama -- and as I say, I don't really 5 remember if I had the conversation or if Tama did, but 6 I told him he had to tell the regulators the truth and 7 those were two very separate issues, and he wasn't 8 going to try to extort something in a separation 9 agreement based on what he perceived he was going to 10 tell the regulators or not. We had been very open 11 with the Division and the Commission. I felt very 12 comfortable with the information we communicated, and 13 there was nothing Fred was going to say, in my mind, 14 other than he just needed to tell the truth. And we 15 ultimately -- and as I said, you know, I told them 16 they were two separate things, and he needed to review 17 the separation agreement in that light and do whatever 18 he felt he needed to do. 19 Q. Okay. In fact, is there a -- one of the 20 standard form nondisparagement clauses in Mr. Buro's 21 agreement? 22 A. Yes. I -- I know there is. I don't 23 know where it is in the agreement, but I would expect 24 there to be one. 25 Q. What was your understanding of that in 45 DONNA MORE - direct 1 the context of the testimony that you had just given? 2 A. Well, my understanding is that that 3 doesn't negate your regulatory responsibilities. And 4 if you get called by, whether it's the Commission or 5 the Division, you need to go in, and you need to be 6 interviewed or have sworn testimony or whatever. But 7 that is really something standard put in a separation 8 agreement, more for public -- public -- the public 9 arena as opposed to your responsibilities to the 10 regulators. 11 Q. Okay. Let's talk a little bit about the 12 various other jurisdictions outside of New Jersey and 13 some of the matters that have arisen in those 14 jurisdictions as they have been reported by the 15 Division in their report. 16 You're very familiar with Illinois, are 17 you not? 18 A. Yes. 19 Q. And their report at -- this is D-2, at 20 pages 36 and 37 make reference to the Illinois Gaming 21 Commission investigation being delayed because 22 Columbia Sussex is not timely with providing 23 information and documents. 24 A. Right. 25 Q. What's your impression of that? 46 DONNA MORE - direct 1 A. Well, I'm going to take your word for it 2 that you're quoting me to the right page. 3 Q. Okay. 4 A. The Illinois Gaming Board and I, in my 5 discussions -- obviously, I was outside lawyer at that 6 point. And in my discussions with the administrator 7 and the chief legal counsel, I was never told that -- 8 that we were delayed in getting information. I was 9 told, quite simply, a couple of different times that 10 the Gaming Board was unable to finish their 11 investigation based on the timetable that was -- that 12 was outlined in our agreement with the Casino Queen 13 folks. 14 Q. And your understanding was that you had 15 provided all the information that was necessary for 16 them? 17 A. Yes. 18 Q. There's also a reference that the Casino 19 Queen required an additional $25 million for an 20 extension that was not paid. Do you know why that was 21 not paid? 22 A. Really -- and it's just a technicality 23 as it goes to the report. We didn't agree to it. I 24 don't want -- I didn't want anybody to think that we 25 somehow defaulted on a payment. It was just that we 47 DONNA MORE - direct 1 couldn't reach terms to extend out the agreement. 2 Q. With regard to Indiana, there are 3 recitations in the report of a series of 14 violations 4 that occurred in Indiana. Are you familiar with that 5 situation? 6 A. Yes. 7 Q. Okay. Could you describe your 8 impression of the Indiana regulatory problem? 9 A. Actually, in Indiana -- just to give you 10 a little background. We had -- since we've taken 11 over, we've had three complaints. The first complaint 12 was a holdover. 13 THE WITNESS: Somebody's calling me. 14 (There was a cell phone interruption.) 15 MR. MICHAEL: That's Indiana. 16 A. The first complaint was a holdover from 17 conduct relating to turn style counting in '06. And 18 it was something we settled very early on to -- you 19 know, again we inherited the liabilities. 20 The second -- the second complaint was 21 this 14-count complaint. It -- as I sit here today, I 22 can't tell you what all 14 counts are. But what I can 23 tell you is that a lot of them were sensitive key 24 issues and some accounting issues. And I know there 25 was some discussion earlier. I think it was Mr. 48 DONNA MORE - direct 1 Yung's testimony. Those departments that really 2 formed -- that had some of the violations were not 3 departments where we had cut staffing. They were 4 just, unfortunately, human error. And we retrained 5 and did some things like that to make sure of future 6 compliance. 7 And then there's a third complaint that 8 just happened, and I think got formally settled, 9 although we have agreed to settle for $15,000. Again, 10 which was really human error. Somebody let somebody 11 into the count room with a nontransparent bag. 12 Q. A lot of those -- the referenced 13 violations occurred during the prior ownership in 14 Indiana; is that correct? 15 A. Well, the first complaint was totally 16 under prior ownership. What we were -- what we were 17 told in talking with some of the agents and 18 regulators, was that there had been a history of not 19 doing some things very well at the property. We 20 wanted to make sure that we could correct those 21 things. 22 But, also, that there was -- there was a 23 philosophical attitude that if, you know, for 24 instance, if the regulator asked for the pen, and they 25 give them this part of the pen without this part of 49 DONNA MORE - direct 1 the pen. And one of the things I did early on was to 2 actually visit the property and do training to all the 3 employees with some employee meetings and said, look, 4 I don't know. I wasn't here. I don't know what the 5 philosophy was, I can't tell you. But I can tell you 6 what our philosophy is, and that is full cooperation. 7 And if somebody asks you for something, you not only 8 give it to them, you give them the stuff you think 9 they might want after they read through it and have 10 questions. So, you know, I -- again, we're -- I'm 11 pretty transparent. I want to communicate what there 12 is. And if we have a problem, I want to fix it. So 13 to the extent there was any misinterpretation, we 14 tried to correct that fairly early on. 15 Q. Initial discussion with regard to 16 Indiana in the Division's report about staffing 17 evaluations and staffing review, could you describe 18 for the Commission what is involved in the Indiana 19 staffing review? 20 A. Indiana is doing a staffing review. It 21 began in March. It is not completed. And I think 22 there was some mention -- and it may have been based 23 on a news article -- that the delay was caused to 24 their inability to interview some of the management at 25 the -- at Tropicana. And just to clear that up, we -- 50 DONNA MORE - direct 1 Kevin Preston and I met with the Commission, the 2 Commission staff. I think it was the third week in 3 August. And had asked if they were finished with 4 their staffing review yet, and they said no. I had 5 asked them -- there was some confusion as to the date 6 of their September meetings, whether it was the first 7 week in September or whether it was September 13th. 8 They said it was the 13th. And the reason that was 9 important to me was the 13th happened to be the first 10 day of the Jewish holiday, and I would not be able to 11 attend if we were on the agenda. And I was told that 12 we would not be on the agenda because the staffing 13 review wasn't done yet. It wasn't until the following 14 week right before Labor Day where we were asked for an 15 interview schedule, to come in and get interviewed. 16 So I think there was a news article that suggested 17 that the delay was not being interviewed, but we 18 corrected that with the Commission as well and sent in 19 a letter just kind of outlining the facts as we knew 20 them to be. 21 Q. And there have been some additional 22 layoffs in Indiana, have there not? 23 A. As I -- as I sit here, I think the total 24 number from January until now, I think is somewhere 25 about 49 or 50, total. 51 DONNA MORE - direct 1 Q. And as you engage in those layoffs, are 2 you contemporaneously engaged in discussion with the 3 Indiana Gaming Commission about it? 4 A. We do tell them when we are laying off. 5 There are no -- again, there's no specific rule or 6 regulation, but we do have outside counsel or I 7 communicate that. 8 Q. Have any of those layoffs been in 9 violation of any order or directive of any kind from 10 the agency? 11 A. Not to my knowledge. 12 Q. Let's talk about in terms of staffing. 13 You talk about Nevada. There's also reference that 14 there is a Nevada review of staffing going on. What 15 is your understanding of that? 16 A. We were asked -- I want to say the 17 beginning of October, maybe end of September, for some 18 information on staffing both in Nevada and outside at 19 some of our other properties. We provided that 20 information. And since then I'm not aware that 21 there's been any follow up. I guess -- I guess it 22 really just gets down to how you define. I think the 23 report uses "monitor." I don't know that -- we're 24 certainly asked for information, we provide 25 information. I don't know that we're being monitored. 52 DONNA MORE - direct 1 But it may just be a semantical argument. 2 Q. Okay. The Division's report also makes 3 some recommendations with respect to conditions that 4 they would like the company to follow and about 5 instituting and implementing a compliance system. 6 Have you reviewed those proposed conditions? 7 A. Yes. 8 Q. Do you have any objection to any of 9 those conditions whatsoever? 10 A. No. Many of them are in place as we 11 speak. 12 Q. Finally, Miss Yung, there was a 13 discussion about a manage services agreement? 14 Miss Yung? 15 A. I'd like that. 16 Q. I'll call you -- I apologize. I 17 shouldn't apologize. That's a promotion. 18 A. Yeah. Okay. Well -- 19 Q. Miss More, there's some discussion about 20 a management service agreement. 21 A. Yes. 22 Q. Two management services agreements, 23 actually. 24 A. Yes. 25 Q. And could you describe what the present 53 DONNA MORE - direct 1 status of those management service agreements are? 2 A. In New Jersey, they are not effective. 3 They won't be effective unless and until we go through 4 an approval process. And there is no money accruing 5 under either management service agreements. Just for 6 the benefit -- there's two agreements. One for all of 7 our other properties, one is with Tropicana corporate 8 for sort of casino management services. The other is 9 with Columbia Sussex for what I would call 10 administrative hotel services. 11 In the five jurisdictions, some 12 jurisdictions required approval of those agreements. 13 Some did not, and we could implement those with no 14 approval. And, as I say, in New Jersey, unless and 15 until they are approved, they're not effective. 16 Q. All right. And Mr. Yung's submitted a 17 letter, did he not, signed -- signed a letter that 18 memorialized this ineffective status of these 19 agreements? 20 A. That's correct. I know that -- I know 21 in Bill's testimony he talked about the concepts of 22 what's contained in those agreements without -- one of 23 the good things, I guess, about being the CEO is he 24 doesn't necessarily have to go line by line with some 25 of this stuff. He -- he understands that in New 54 DONNA MORE - cross 1 Jersey that they are not effective. I obviously put 2 the letter in front of him, explained what it was 3 before I had him sign -- sign off on it. But, yes. 4 He is well aware of the specifics as it relates to 5 those agreements in New Jersey. 6 Q. And, in fact, there are no 7 compensation-- there's no compensation being paid 8 between the companies for any management services 9 being provided and no management services are being 10 provided by Columbia Sussex; is that correct? 11 A. That's correct. 12 (Conferring.) 13 Q. Ms. More, thank you very much. I have 14 no other questions. 15 CHAIR KASSEKERT: Thank you. 16 Division? Cross-examination. 17 MS. MAHER: Thank you. 18 19 CROSS-EXAMINATION BY MS. MAHER: 20 Q. Good morning. 21 A. Hi. 22 Q. Just a few questions. 23 When did you come in-house with 24 Tropicana, please, again? 25 A. November 1st of '06. 55 DONNA MORE - cross 1 Q. How long had you been representing them 2 as outside counsel prior to that, please? 3 A. Just about a year. I think -- I think 4 in December of '05 is when I may have started 5 representing them. 6 Q. And basically what are your primary 7 duties? 8 A. I -- I'm going to talk into my 9 microphone. 10 Q. That's okay. 11 A. I'm responsible overall for -- for the 12 legal department of the company. What that means is 13 kind of two-fold. Obviously, in a regulated company 14 like this, the gaming regulatory part of it is a big 15 role. I'm responsible, therefore, for -- the director 16 of our gaming compliance reports to me. I'm also 17 responsible for litigation oversight and risk 18 management as it relates to that. We -- I think 19 you've heard we have a small in-house legal 20 department. So a lot of it is managing outside 21 lawyers. 22 I have a much different view as an 23 in-house lawyer now than I did when I was an outside 24 lawyer, so, you know, if I knew then what I knew now. 25 And just general kind of policy matters 56 DONNA MORE - cross 1 in the company. If -- I've met, I think, all of the 2 GMs at our properties. And so if there's a day-to-day 3 question or whatever, you know, people pick up the 4 phone and call me. So it's -- on some level it's a 5 jack-of-all-trades. But as I say, litigation, 6 regulatory compliance, that kind of thing are my 7 primary -- 8 Q. So compliance is a big part of your 9 duties; is that correct? 10 A. Correct. 11 Q. And I'm somewhat confused. You 12 indicated in your sworn statement that yourself and 13 Tama Hughes were the only lawyers within the company 14 and that you were hiring another one for the Kentucky 15 property; is that correct? 16 A. Correct. 17 Q. Mr. Yung testified that there were 18 in-house lawyers at each individual property. Which 19 is correct, please? 20 A. It may have been compliance folks that 21 he was referring to. And I -- none of the compliance 22 folks at our property -- sometimes they tend to be 23 lawyers, but none of our compliance people at the 24 property in the pure compliance role are lawyers. We 25 had -- we have a lawyer in-house at the Trop in Las 57 DONNA MORE - cross 1 Vegas, which I just haven't had the opportunity to 2 focus and get somebody new at that property. But 3 right now it's Tama and I. And, hopefully, this week 4 my new lawyer in Kentucky. 5 Q. And how many properties are we talking 6 about? 7 A. Fourteen. 8 Q. So we're talking about basically two 9 lawyers to handle 14 properties; am I correct? 10 A. To this point. Yes. 11 Q. And only one in-house counsel at the 12 property. That would be Miss Hughes at the Tropicana 13 Atlantic City? 14 A. Correct. 15 Q. And you're hoping that someone will 16 start at corporate within the next week or so; is that 17 correct? 18 A. Correct. I think she won't have New 19 Jersey responsibilities, but I know that we've 20 notified everybody, and my understanding is that she 21 can start and doesn't need waivers or approvals but -- 22 right. 23 Q. So Mr. Yung would have been incorrect 24 when he testified that there were in-house lawyers at 25 each of the properties? 58 DONNA MORE - cross 1 A. I think he was just mistaken. 2 Q. So the answer would be yes, he would be 3 incorrect? 4 A. Correct. 5 Q. Do you have any responsibilities 6 regarding the hotels that are noncasino related as 7 well? Do you deal with all that? 8 A. I help out on that side. Again, if 9 there's an issue or a problem. The hotels are -- the 10 pure hotel side, because it's not specifically in a 11 gaming regulated industry, have less issues. 12 Q. All right. Do you deal with that at 13 all? Or is your main focus on the gaming? 14 A. I would say probably 90 percent of my 15 focus is on gaming. 16 Q. And is there another lawyer that handles 17 those things. 18 A. On the hotel side? 19 Q. Correct. 20 A. There is -- we employ a lot of outside 21 firms. The outside lawyers will be happy. There is a 22 firm in Cincinnati that does a lot of the work 23 relating to the hotels. 24 Q. As I understood your testimony, did you 25 understand that Mr. Yung was bringing you in -- 59 DONNA MORE - cross 1 bringing you into the company in-house in kind of 2 direct response to the Aztar acquisition? Or no? 3 A. Well, I think in some sense in direct 4 response to Aztar. And even for -- to be quite 5 honest, even for the Casino Queen transaction. You 6 know, if you were going to grow as a gaming company, 7 the discussions I had with him is you had to take a 8 look at your org chart and make some changes to it. 9 Q. So -- 10 A. So I think in the sense that Colum -- 11 then Columbia Entertainment was in a growth mode as 12 related to gaming, yes. I believe that was why he 13 brought me in. 14 Q. And what discussions did you have 15 regarding going from a small gaming company to a large 16 gaming company? How did you plan for it? Because, 17 correct me if I'm wrong, it seemed like a big leap. 18 A. Yeah. It -- you know, you plan for it 19 in that you try to get the right people in place. You 20 try to make sure that, you know, you're doing what you 21 need to do in the -- you know, in the first few months 22 while I was in-house, in November a lot of my time was 23 spent just visiting with regulators, getting the 24 regulatory approvals that we were -- had already begun 25 well before I came on board. And then making sure 60 DONNA MORE - cross 1 that, you know, you're doing the right thing. 2 Q. What -- what people did you put in place 3 specifically to transition yourself? 4 A. Well, good news/bad news. I probably 5 did a lot of it myself. But I also had lawyers on the 6 ground, outside lawyers as well as Tama, Ed Mulholand 7 was our in-house lawyer at the Trop in Las Vegas. 8 And, you know, I relied a lot on counsel in each of 9 the jurisdictions to either file what had to get 10 filed. Do what needed to get done and just kind of 11 oversee that for my role. I think my own -- I don't 12 want to say mistake, but I think that I thought that I 13 could be a lot more involved with each of the 14 regulators in each of the jurisdictions just because 15 of my background. And I think I quickly found out 16 that I had to rely a lot more heavily on outside 17 lawyers just for time reasons. 18 Q. So when you're talking about putting the 19 right people in place, you're not talking about adding 20 to the corporate structure of the company. You're 21 talking about relying on outside counsel? 22 A. Part of that is true. Part of that is, 23 I had -- we had a fellow at corporate that did a lot 24 of Title 31 stuff who really we made the position of 25 director of compliance and really expanded his role. 61 DONNA MORE - cross 1 Brian Doyle. 2 And, also, one of the things that it 3 appeared to me that was important was really, I'll 4 call it, a community relations function. Because I 5 think as you grow as a gaming company, you have to 6 look at your role as a corporate citizen. And so 7 there was a woman in the company who had expressed a 8 desire to kind of do that. And, actually, I dealt 9 with her a lot because she happened to be from the 10 East St. Louis area, and we made a position director 11 of community relations, so she could kind of take on 12 kind of some of that responsibility. I had talked for 13 a long time about needing to interview for a lawyer, 14 and finally did that at the end of the summer. The 15 person that I thought was really all-around best 16 person for that. Was taking some time off to get 17 married and have her honeymoon. And I decided that I 18 would rather have her someone I didn't think was so 19 good. So, amazingly, I let her go get married and 20 have her honeymoon and bore the brunt of the extra 21 time for that. Because it was forefront in my mind. 22 It was just a question of getting it done and until 23 then, you do, knowyou -- 24 Q. Well, let me ask you this. The 25 Tropicana Atlantic City was a fairly big part of the 62 DONNA MORE - cross 1 acquisition; is that correct? 2 A. That's correct. 3 Q. And is it correct that a number of 4 people were immediately terminated from that property 5 upon the acquisition based on reports that Mr. Yung 6 wanted people with salaries over $150,000 eliminated? 7 A. Well, that's, you know, that's a part 8 operational people in terms of my own need, Tama was 9 at the property and was in-house person -- lawyer at 10 the property. And I felt very comfortable that she 11 was able to not only do what needed to get done from a 12 property role but also to advise me because I'm 13 familiar with New Jersey rules and regs but, 14 obviously, not like -- 15 Q. Okay. 16 A. -- they who deal with it. 17 Q. Certainly. But were a number of people 18 at the property let go because of the structure. 19 Talking about coming in and putting the right people 20 in place. Am I correct or not that that occurred? 21 A. Again -- and I don't mean not to answer 22 your question. I don't know that I'm the best person. 23 I've heard testimony there were certain people let go 24 either because they were management. And 25 traditionally when you take over a property, you tend 63 DONNA MORE - cross 1 to bring in your own management or because of their -- 2 because of their salaries. But from my standpoint, as 3 I say, I did not have a problem because I had Tama at 4 the property. 5 Q. Was there another in-house counsel at 6 the property other than Tama at the time you took 7 over? 8 A. There was. Nick Moles. 9 Q. And he was terminated; is that correct? 10 A. That's correct. 11 Q. Who would be the best person to ask 12 about this, then? Because Mr. Yung didn't seem to 13 have a good handle on it, either. 14 A. Well, I think in Mark's testimony he 15 provided a lot of responses to who was at the 16 property, the numbers of people remaining at certain 17 salary levels. 18 Q. I want to talk about your compliance 19 committee that you discussed, and you indicated the 20 individual, Brian Doyle, is the director of 21 compliance; is that correct? 22 A. That's correct. 23 Q. Did the company have a compliance 24 director prior to your coming on board? 25 A. Certain of the properties had compliance 64 DONNA MORE - cross 1 committees and had compliance people. They did not 2 have a corporate compliance committee prior to me 3 coming on board. 4 Q. So the answer is, no -- 5 A. No. Right. 6 Q. -- that you did not. 7 And what did the various corporation -- 8 various properties had their own compliance? 9 A. Certain of the properties had compliance 10 committees. I want to say -- it may have been -- 11 again, in the broad scheme of things, and until we 12 become -- I guess we're now public for debt purposes-- 13 there was no requirement by any jurisdiction that 14 there be a corporate compliance committee, but I 15 believe that certain of the properties -- and I want 16 to say maybe in Louisiana -- had some ad hoc 17 compliance committees at the property level. 18 Q. And what happened to those once you had 19 corporate compliance? 20 A. Well, we -- they still have -- like 21 River Palm still has meetings. Each of the properties 22 still have their own. I don't know if it's formal in 23 terms of they have a meeting every month. But they 24 have folks that review Title 31. They have their 25 compliance officers at each of the properties that now 65 DONNA MORE - cross 1 report up, and we review it quarterly for all of the 2 properties. 3 Q. So these compliance committees are still 4 in place? 5 A. I don't know that -- not all of the 6 properties have them, but they all have Title 31 7 review committees and so forth. So I wouldn't -- they 8 are not -- they're not compliance committees as I 9 traditionally look at it, and as I look at it from 10 what we have at the corporate level. 11 Q. And do they interact with corporate? 12 A. Yes. 13 Q. Does the Tropicana Atlantic City have 14 any sort of -- 15 A. They have -- 16 Q. -- compliance committee? 17 A. Yes. They do. And that one does -- is 18 in place and reports up to corporate. 19 Q. And who's involved in that? 20 A. Again, I know -- I know that Tama is. I 21 know that Bill King, the internal audit person is, the 22 GM is. And I think there's a few other people that 23 get involved, but off the top of my head right now, I 24 can't remember it. 25 Q. What's Brian Doyle's background in terms 66 DONNA MORE - cross 1 of being qualified to be director of compliance? 2 A. Brian was -- before he came to us, he 3 was at Grand Vic in Indiana. He also spent some time 4 working at a variety of riverboats in Iowa. And from 5 my experience with him, he has -- he really has a good 6 understanding of a lot of the issues that happened at 7 the property and takes the time to review what's going 8 on at the properties. He's very strong on Title 31 9 and has good knowledge of the rules and regs in a lot 10 of jurisdictions. And, at least my impression is, has 11 a good rapport with the regulators in the 12 jurisdictions where we're at. 13 Q. Well, he has an accounting degree, an 14 accounting background; is that correct? 15 A. Yes. 16 Q. And he was working in the audit section 17 of Tropicana or Columbia Sussex prior to being named 18 Director of Compliance; is that correct? 19 A. He was doing Title 31. Yes. 20 Q. Well, there -- would you agree with me 21 that there's more to compliance than Title 31? 22 A. Absolutely. Absolutely. Yes. 23 Q. What was his background in some of the 24 other regulated areas and other regulations for the 25 various jurisdictions? 67 DONNA MORE - cross 1 A. In terms of had he been in all the 2 jurisdictions where we were? No. But I thought in 3 talking with him when I first got to the company that 4 he had a good base of understanding to kind of use 5 that to jump off to expand his role. He had been -- I 6 forget his exact position at Grand Vic -- but, as I 7 say, he had had a broader compliance experience. I 8 don't think he had ever had a position equal to what 9 he now has with our company. 10 Q. Do you have written compliance 11 procedures at the corporate level? 12 A. We have the written compliance plan, 13 which I think you all have a copy of. And we also 14 have just recently formalized some ethics and 15 conflict-of-interest policies which we've just 16 published and passed out. And I'm doing a big 17 training for all our general managers in about two 18 weeks. 19 Q. Would it be correct that you're 20 compliance plan generally at the corporate level 21 doesn't vary by jurisdiction? As a matter of fact, 22 that's what you told us in your sworn statement; is 23 that correct? 24 A. It doesn't -- it doesn't vary in the 25 sense of -- it has certain reporting in there. It 68 DONNA MORE - cross 1 does vary to the extent of if a jurisdiction has a 2 particular requirement, for instance, on due diligence 3 where if one jurisdiction is at a hundred thousand and 4 another is at 250,000, obviously we vary what the 5 properties have to do. 6 Q. You just basically have one big 7 corporate compliance plan; is that correct? 8 A. Right. That's similar to pretty much 9 how a lot of the big companies operate. 10 Q. And how many jurisdictions do you deal 11 in? 12 A. In five. 13 Q. How long has Brian Doyle been Director 14 of Compliance, please? 15 A. He's been since November 1st. 16 Q. Of this year? 17 A. No. Of -- I forget what year -- when I 18 came on. '06. 19 Q. '06. 20 A. Yeah. Sorry. 21 Q. Did you bring him on, or did you make 22 that decision? 23 A. Yes. 24 Q. Did he become involved in the audit 25 committee issue while here in New Jersey? 69 DONNA MORE - cross 1 A. No. I don't think he was involved, to 2 the best of my knowledge, at all. 3 Q. Was he -- not at all? 4 A. On the audit committee issue? 5 Q. Yeah. Would you agree with me that's a 6 compliance issue? 7 A. Yes. 8 Q. And your Director of Compliance wasn't 9 aware of the issue or interfacing with anyone on that 10 issue? 11 A. I was dealing with that issue. I mean, 12 he was aware of it. But did he have any direct 13 dealings with either the outside lawyers or the 14 regulators? No. 15 Q. Has he ever been to the Tropicana 16 Atlantic City? 17 A. Yes. 18 Q. On how many occasions? 19 A. I don't know. I'm guessing he's been 20 here two or three or four times. He's -- he has his 21 compliance training scheduled for early in '08. You 22 asked for -- okay. Early '08 where he will probably 23 spend probably the better part of a week here. 24 Q. Okay. You talked a little bit about the 25 complaints that have been filed by the Division 70 DONNA MORE - cross 1 against the Tropicana Atlantic City. 2 A. Right. 3 Q. And a number of them you noted were 4 filed prior to your current ownership? 5 A. Correct. 6 Q. But you are also aware there were 7 complaints filed and pending against you regarding the 8 current ownership; is that correct? 9 A. That's correct. 10 Q. Correct regarding security staffing; is 11 that correct? 12 A. Correct. 13 Q. Complaints regarding notifications 14 regarding name changes and certain people placed in 15 certain positions; is that correct? 16 A. Correct. 17 Q. And as well as the audit committee. 18 A. Right. 19 Q. What steps have you taken to deal with 20 some of the security issues, if any? 21 A. Well, the three pending complaints, 22 obviously the -- you know, I've talked about them with 23 the property just in general. Probably need to ask 24 Mark in terms of -- Mark Diannantonio -- in terms of 25 more specific steps that have been taken. And I also 71 DONNA MORE - cross 1 think that there are some discussion, as I recall, 2 that some of what happened in the security complaint, 3 for better or worse, had been happening. I think it 4 was somebody being pulled off a fixed position. And 5 some of that had happened for quite some time as well. 6 And it seems to me we have to do a little bit of 7 training on that because while it may have been 8 happening for quite some time, that doesn't make it 9 the right thing to do. So I'm sure that we will 10 institute some training once we've resolved the actual 11 substance of the complaint which -- 12 Q. But you haven't started any training at 13 this point? 14 A. Not to my knowledge. But I -- I could 15 be wrong on that. 16 Q. What about the complaints regarding the 17 failure to comply with filing requisites? That would 18 seem to be something that would be under your control 19 and in your area. Am I wrong? 20 A. Well, it's certainly something that I'm 21 aware of and -- 22 Q. Well, whose responsibility, I guess, 23 would it have been to make sure that those filings 24 were properly undertaken? 25 A. Well, you know, ultimately, it's my 72 DONNA MORE - cross 1 responsibility. And, you know, there are -- there are 2 unique things about every jurisdiction you do business 3 in. We clearly need to do a better job with making 4 sure that if it's a corporate hiring, or it's somebody 5 coming in from the Sussex side to do some work that we 6 have the proper approvals. There's no question about 7 it. But, you know, it was never our intent not to get 8 them. If -- on some of it, we made a mistake. On 9 some of it, I think there's going to be some 10 discussion with the Division, obviously, about the 11 substance of a couple of those -- a couple of those 12 issues. But I understand that, except for the audit 13 issue, substantively we'll have those discussions 14 separately. 15 Q. You indicated that you take complaints 16 very seriously? 17 A. Yes. 18 Q. Any time a complaint is filed in any 19 jurisdiction, you're involved? 20 A. I'm aware. I'm certainly made aware of 21 it, and I talk to the property about it and make 22 sure-- again, you know, the complaint itself is 23 serious. But -- and I said this, I think, to Miss Way 24 when I talked to her -- what's really more serious is 25 let's figure out what we can do to make sure the 73 DONNA MORE - cross 1 underlying conduct gets corrected. You hate to get a 2 complaint. You hate to report complaints. But you 3 want to make sure that you put steps in place so they 4 don't happen again. I mean, we're human. You make a 5 mistake. But you try to do the best you can to make 6 sure it doesn't happen again. 7 Q. And you discuss these with Mr. Yung, as 8 well? 9 A. Yes. 10 Q. The complaints? 11 A. Yes. 12 Q. Because Mr. Yung, when he testified, 13 didn't seem to have the knowledge about the -- whether 14 various complaints in the jurisdictions did that -- 15 A. When you asked him those questions, 16 that's right. I think -- for better or worse, if I 17 was in front of him and said, do you remember when I 18 came into the office and I said thus and such? It 19 would jog his memory. On some of the things 20 complaints, like the one in Indiana, he has to do the 21 sign-off because of the dollar amount involved in the 22 settlement agreement. So, you know, that discussion, 23 to be honest, I think was probably -- it may have just 24 gotten resolved with Indiana in terms of the 25 settlement agreement being accepted and so forth. But 74 DONNA MORE - cross 1 I think that was probably 8 to 10 to 12 weeks ago when 2 maybe we were initially notified of it. And so, you 3 know, it's a big part of my day. And when I go in and 4 talk to him, he's aware of it. But on any given day 5 with everything else, he may not know the 14 counts 6 that are in the complaint. 7 Q. But he certainly should be aware that 8 there have been complaints filed and that they are 9 filed regarding the time that he took ownership of the 10 property; would that be correct? Would you agree? 11 A. Well, I agree. I think that he is aware 12 of them. You know, I think that when you sit up here, 13 and you're testifying. And, you know, I'm a former 14 prosecutor. You're a prosecutor. You know, even your 15 best witnesses to and including police officers, it's 16 very stressful being up here, and you don't 17 necessarily remember everything you would when you're 18 having a conversation sitting -- even in, you know, 19 your office. So, you know, he forgot. But he's not-- 20 it's not because he's not aware of them. 21 Q. When did you indicate that the Indiana 22 complaints were settled, please? 23 A. I think that they were -- well, the 24 current one on the bringing the bag into the 25 nontransparent -- 75 DONNA MORE - cross 1 Q. No. Not that one. I'm sorry. The 14 2 violations. 3 A. Oh. I think that one -- actually, that 4 one probably was further back. I want to say either 5 at their June meeting or their September meeting. 6 Q. So it was settled sometime ago, in June 7 of 2007? 8 A. Correct. 9 Q. Does that sound correct to you? 10 A. That sounds right. 11 Q. And the current complaint you discussed, 12 when was that, about? 13 A. I think -- again, I'm trying to -- I 14 can, obviously, get you the exact date, but -- 15 Q. No. Not necessarily. Just the time 16 frame. 17 A. I'm thinking if it would have gone -- 18 the Indiana Commission meets quarterly. So their 19 quarterly meeting -- I'm just trying -- doing this 20 back. November. I'm thinking maybe six, eight weeks 21 ago, something like that. 22 Q. Okay. And did it -- 23 A. Yeah. 24 Q. Was it a similar kind of incident to the 25 14 incidents that occurred -- 76 DONNA MORE - cross 1 A. It was one incident. 2 Q. Same type of thing? 3 A. It was that somebody let someone into 4 the count room with a nontransparent bag. 5 Q. What kind of things did you do to make 6 sure that the violations that were occurring in 7 Indiana, the 14 counts, didn't occur anymore? 8 A. The GM at the property on this current 9 one and the last one talked to the employees involved 10 and did some remedial training on some of it. As I 11 say, there were -- the 14 -- there were four or five 12 sensitive key issues in terms of people taking home a 13 sensitive key by accident or not signing it back in 14 when they should have. There were a couple of -- I 15 think one was still a turn style issue which was back 16 from '06 conduct. And a couple of them were just 17 accounting, reporting, and -- I think signatures on 18 reports or whatever. But everybody was spoken to. 19 They did some follow-up training. And we're just, 20 again, reminded -- I don't know if there was any what 21 I would call personnel action. I can't tell you that. 22 Q. When you came to the Atlantic City 23 property or when you acquired the Atlantic City 24 property, Mr. Buro was brought in from corporate to be 25 President and CEO of there; is that correct? 77 DONNA MORE - cross 1 A. Correct. 2 Q. Who made that decision? 3 A. I believe it would have been Mr. Yung 4 with input from Howard Reinhardt, but I wasn't 5 involved in -- 6 Q. But -- you weren't involved in that? 7 A. No. 8 Q. Were you involved in Mr. Buro's 9 termination at all? 10 A. No. Other than to deal with the 11 separation agreement. 12 Q. Okay. You talked a little bit about Mr. 13 Buro's termination in terms of the structure of how 14 the Tropicana Atlantic City -- 15 A. Uh-huh. 16 Q. -- operated; is that correct? 17 A. Correct. 18 Q. And you believe it was not functional or 19 good to have two -- to have those responsibilities 20 split between Mr. Buro and Mr. Diannantonio. Would 21 that be correct? 22 A. Right. When -- you know, as I -- as I 23 grew up in this industry, there was one head of a 24 property. And from my standpoint whether -- and I 25 don't care which hat I was wearing, whether it wasa 78 DONNA MORE - cross 1 regulator's hat, an outside lawyer's hat, or an inside 2 lawyer's hat, I look at it as one property. It 3 doesn't matter to me if it's a hotel problem or a 4 casino problem or whatever. It's a problem. And, so 5 I guess my own philosophy is that sometimes it's 6 easier to have one head of a property. 7 Q. Did you communicate that to Mr. Yung 8 when he brought in Mr. Buro and set it up in this 9 fashion? Why was it done this way if that was -- 10 A. Well, my philosophy -- my philosophy 11 does not always, you know, win the day. But I think 12 when I first came on, it was not something I had 13 talked to Bill about. At some point, when -- and we 14 did it with one of our property -- the MontBlue 15 property out in Nevada. There was a discussion about 16 putting one person in charge, and I had said at the 17 time that I actually thought that was good, and we 18 should try to do it with more of our properties 19 because sometimes that provides for more effective 20 running of a property. So I think he knows that 21 that's my philosophy, but -- 22 Q. He disregarded it? 23 A. No. He didn't disregard it. I don't 24 think -- you know, Fred went in in January 3rd, and I 25 don't think Bill and I had those discussions until 79 DONNA MORE - cross 1 well after I was on board at the company. So he 2 didn't -- he didn't do it because in disregard of me. 3 I think that was a decision reached well before he 4 ever knew what my philosophy was. 5 Q. Well, weren't you engaged in discussions 6 back in November of 2006 when you came on about what 7 your philosophy was, how you were going to handle this 8 new acquisition, the differences that it was going to 9 be between a small gaming company and a large gaming 10 company? When did you begin these discussions? 11 A. Well, I began them then. But my primary 12 focus, again, because my background is legal, 13 compliance, operational to the extent that what I do 14 every day relates very closely with the operational 15 people, but I'm not making the operational decisions. 16 My focus was on what we had to do as a company in 17 growth mode to make sure that we were doing the right 18 things legally from a regulatory compliance 19 standpoint. 20 I -- you know, there are things that -- 21 and I think I said before on direct, there are things 22 that you can do, and there are things that you can't 23 do and there's no real discussion about that. There 24 are other things that are potentially business 25 judgments. And as I sit here, you know, I like to 80 DONNA MORE - cross 1 think that I sometimes have good business judgment 2 but, you know, I'm not the one that started a company 3 from scratch and created a multi-billion dollar 4 entity. So, on some level, I think that Bill takes 5 into account what I have to say. And I think a lot of 6 times, he'll agree with me. But on January 1st did I 7 say what are you doing putting two people in this 8 property? That probably wasn't the first thing I 9 communicated. 10 Q. Okay. And you didn't have a discussion 11 about the -- 12 A. Not about the actual structure from an 13 operational standpoint of the property. 14 Q. In Illinois, you were involved in the 15 termination -- when you -- you were involved in 16 Illinois in the termination of the Casino Queen 17 Riverboat? 18 A. Correct. 19 Q. Had that purchase been in place prior to 20 you coming on board as in-house counsel; correct? 21 A. Correct. I was representing the company 22 and related to that purchase. 23 Q. Okay. And it's your testimony there was 24 no difficulty with Columbia Sussex providing 25 information to the Illinois Gaming Commission in 81 DONNA MORE - cross 1 regards to this? 2 A. I had discussions with the administrator 3 and the chief counsel. And I said, have we been 4 untimely getting you information? And they said no. 5 It -- we just didn't get our investigation done. We 6 had -- we had gotten a lot of information to them 7 very quickly in November of '06. I think I'm in '06 8 now. In November of '06 the investigator who had 9 pretty much contact with me two and three times a day 10 as the outside lawyer, I didn't hear from anymore. 11 And there were no requests for information for about 12 six or eight weeks. And then, you know, we started to 13 get requests from a new investigator that were, in my 14 opinion, duplicative. And I think had heard that the 15 investigator assigned to our case was put on some sort 16 of administrative leave. So I was never told we were 17 not untimely in providing information to the Board. 18 Q. Well, are you aware that the Illinois 19 Gaming Board's position is that you were untimely, 20 that Columbia Sussex doesn't have knowledgeable people 21 in place that could answer questions, wasn't able to 22 provide information in a timely fashion, and that's 23 why they weren't able to go for the investigation? 24 A. Well, I would be surprised if that came 25 from the administrator. 82 DONNA MORE - cross 1 Q. Are you aware that that would be the 2 Illinois Gaming Board's position? 3 A. If you -- 4 MR. MICHAEL: I object. I don't know 5 it's been ever been established that that is 6 the Illinois Gaming Board's position. 7 MS. MAHER: It's established through the 8 investigative reports that the Commission 9 has -- or that the Division has filed as 10 evidence that have been stipulated to. 11 MR. MICHAEL: She can ask do you think 12 that's the Illinois Gaming Board's position? 13 The question is asked, are you aware that it is 14 the Illinois Gaming Board's position? 15 CHAIR KASSEKERT: I will allow it. I 16 think that it has been established. It's in 17 the Division's report. 18 A. I was not informed that. I was -- as I 19 say, I believe they switched out investigators. And 20 from the public -- they switched out investigators 21 because one administratively -- I'm not privy to their 22 personnel issues, but obviously they had a problem 23 where our investigator was no longer assigned to us. 24 And we had to supply a lot of duplicative information 25 with, you know, the agent saying, sorry, we know 83 DONNA MORE - cross 1 you've already gotten this to us in the past. And as 2 I say, a six-week delay where we were asked for no 3 information, pretty much between Thanksgiving and the 4 end of the year. 5 In my discussions with the 6 administrator -- all I can tell you is what I was 7 told. If they told you something different. I 8 can't-- I can't agree to it because I wasn't told 9 that. We filed everything timely. We would get back 10 to them. As I say, I was on the phone with the 11 initial fellow assigned to our case three and four 12 times a day, answering his questions, as were a lot of 13 other folks in the company. So I can only tell you 14 what I know. 15 Q. And what you know begins when? 16 A. What I know begins when -- actually, 17 even before we filed the formal application, which I 18 want to say was maybe May or June of '06. We actually 19 had some informal meetings with the staff right after 20 the first of the year of '06. 21 Q. And when was it that you were on the 22 phone with the administrator every day and really 23 having to provide information? Would that be in 24 November? 25 A. I wasn't on the phone with the 84 DONNA MORE - cross 1 administrator when it came to providing information. 2 It would have been with the investigators from the 3 time we filed until sometime in November. At the end 4 in -- early part of '07, when we were having 5 discussions with the Casino Queen folks about the 6 possibility of extending out the term of the 7 agreement, that's when I was told specifically by the 8 administrator and the chief counsel, and I think our 9 outside lawyer may have been on the phone, too, at 10 that point that there was, you know, there was nothing 11 we could have done. It was -- they were not finished 12 with their investigation. And that was what I was 13 told. And I can only repeat to you what I was told. 14 Q. And when were you told that? 15 A. It would have been late -- probably 16 sometime in February. I don't remember what the end 17 date was in the agreement, whether -- I want to say it 18 was -- was the end of February. Whenever it was, it 19 was right around that time when we realized we weren't 20 going to extend out the agreement. 21 Q. So you were involved in this 22 investigation the whole time? 23 A. Correct. 24 Q. Would that be fair to say? 25 A. Yes. 85 DONNA MORE - cross 1 Q. Did you become more involved when you 2 came on board as in-house counsel? 3 A. No. I actually became less involved. 4 Q. Who became involved in it then? 5 A. I had -- there was -- oh, a woman who 6 kind of took my place at my old law firm who acted as 7 our outside lawyer. 8 Q. I want to talk a little bit -- oh, I'm-- 9 When did Kevin Preston come into the 10 company? Do you know? 11 A. I want to say mid June. 12 Q. And did you have -- were you involved in 13 any of the discussions in bringing him in and putting 14 him in place? 15 A. I spoke with Kevin, obviously, when he 16 came in for his interview. And I was impressed with 17 him. And I'm, you know, happy that we have him at the 18 company. But, obviously, the final decision would 19 have been made by Mr. Yung. 20 Q. And what is his title? 21 A. Senior Vice President of Casino 22 Operations. 23 Q. And was that a new position that was 24 created for him, or did he take someone's place when 25 he came in? How did that come about? 86 DONNA MORE - cross 1 A. No. He took Howard Reinhardt's place. 2 Q. And what happened to Howard Reinhardt? 3 A. Howard went with a small hotel company 4 in Rhode Island that had contemplated getting into 5 gaming but never did. 6 Q. And how long had he been with the 7 company prior to leaving? 8 A. I don't know. I want to say ten years, 9 something like that. I don't know exactly how long -- 10 Q. When did you -- let's discuss the audit 11 committee a little bit. When you become aware that 12 the audit committee issue was there, that you needed 13 an audit committee and that you had to get one in 14 place and go forward with that? 15 A. Obviously, I was aware that we needed to 16 do it from the get-go. 17 Q. And the "get-go" being when, please? 18 A. From when -- well, when the transaction 19 would have closed. 20 Q. And how were you aware of it? 21 A. Well, from a couple of standpoints. One 22 is our outside lawyers knew about it. Two is I knew 23 that, ultimately, we were going to have 24 responsibilities under Sarbanes. And, three, one of 25 the first things that I personally wanted to do was to 87 DONNA MORE - cross 1 create a compliance audit type committee at a 2 corporate level because I thought we needed to have 3 that. 4 Q. So prior to the acquisition you were 5 aware? 6 A. Yes. 7 Q. And how did you start the process of 8 putting together the audit committee? Where did you 9 start? 10 A. Well, as I said, originally, I had 11 contemplated that maybe we would do a joint committee. 12 Audit and compliance. I talked to both Nevada and to 13 your predecessor about whether that is something that 14 would work because, obviously, you want to make sure 15 that in the jurisdictions where you need it that it's 16 something that's going to get approved. And I also 17 talked to, as I think I mentioned, our outside 18 lawyers, corporate lawyers that help us on our SEC, 19 kind of Sarbanes issues to understand what the 20 distinctions were for a company that had public debt 21 as opposed to public equity. 22 So kind of balancing all those things is 23 how we first started in our approach. I think that, 24 as I said, in March, we decided to actually split the 25 function and go with a separate compliance and audit 88 DONNA MORE - cross 1 committee. 2 Q. Okay. 3 A. And then it was -- it was just ongoing 4 discussions to make sure that what we came up with was 5 a structure that was acceptable to New Jersey because 6 you -- 7 Q. Ongoing discussions went on for quite a 8 while. Would that be fair to say? 9 A. That would be fair to say. 10 Q. You didn't have an audit committee for 11 six months. Would that be fair to say? 12 A. From January to June we did not have an 13 audit committee. 14 Q. No audit committee in place at all, as a 15 matter of fact; is that correct? 16 A. Correct. I've said that. 17 Q. When did you bring outside counsel in in 18 New Jersey to work on this issue? 19 A. Started working on it in December. 20 Q. And who was brought in? 21 A. Of '06. 22 Q. And who was brought in? 23 A. Our outside lawyers were Guy Michael and 24 Lloyd Levenson and Lynne Kaufman. 25 Q. Was there anyone in particular that was 89 DONNA MORE - cross 1 working on this audit committee issue from the outside 2 counsel? 3 A. I think Guy worked on it. And then 4 really I think in March, for better or worse, Lynne -- 5 Lynne got full control. 6 Q. Okay. So for a couple of months, a 7 number of people, a number of outside counsel were 8 working on it? 9 A. Correct. 10 Q. And then in March one person then became 11 the lead on it and continued working on it; correct? 12 A. That's true. 13 Q. What took so long to focus on it and get 14 someone involved that was going to take the lead of 15 involved? 16 A. I don't think it was lack of focus. I 17 was involved in it as well. And, you know -- you 18 know, my -- my directive -- and, again, I've had these 19 discussions with -- with you and your staff and the 20 Commission and its staff. We knew we needed to have a 21 committee in place. We wish it would have been in 22 place sooner. But the goal here was to make sure that 23 what we had in place was something that was 24 acceptable. And if anybody would have come to me 25 early on and said, listen, we don't care that you can 90 DONNA MORE - cross 1 be compliant with Sarbanes and have management on, we 2 don't -- as a policy in New Jersey, we don't have 3 management on the committee, and it would have 4 circumvented a lot of time. But didn't happen. 5 Q. That we were the -- the regulators were 6 supposed to come forward and tell you you needed to 7 get an audit committee? 8 A. No. No. No. No. That as to the 9 structure, we suggested having -- because the rule 10 says have a audit committee, and when the rules are 11 silent as to exactly what it has to look like, which 12 I'm -- most rules are silent on that. It begets a 13 discussion that starts with the regulators, and the 14 discussion is to further the ball, if you will. To 15 make sure that what we structure is something that is 16 acceptable to you all. Because pri -- primarily, as I 17 said, New Jersey has the audit committee requirement. 18 And so when we suggested that management be some part 19 of this committee, what I said is -- 20 Q. Well, okay. 21 A. Let me finish. 22 What I said is that had anyone come to 23 me and said, you know, I understand, Donna, that it's 24 not specified in the rule, but as a policy, because 25 oftentimes, I'm not aware of a policy, we prefer that 91 DONNA MORE - cross 1 management does not sit on this committee because we 2 don't think that it lends to independence, that would 3 have been fine. I would have circumvented a lot of 4 the proposals that we did give you. That's all I'm 5 saying. 6 Q. And would it by fair to say that the 7 Tropicana wanted management to sit on the audit 8 committee? 9 A. Only if it was -- ideally, sure. 10 Because management knows what's going on in the 11 company. But, again -- you know -- 12 Q. Yeah. 13 A. Not want it or not want it. It's just a 14 question of, is it something we can or can't do? And 15 if it is something that makes -- that makes the 16 independence factor seem less, I'm happy. As I say, 17 once I was told to not have management on the 18 committee, it didn't take long for us to get a 19 sole-member independent audit committee in place. 20 Q. And I want to talk about that in a 21 minute. But, yes or no, fair to say Tropicana 22 initially wanted management on the audit committee; 23 correct? 24 A. Initially we proposed it because we did 25 not know from your standpoint that that was a problem. 92 DONNA MORE - cross 1 And, again, even in the proposal that we submitted 2 with management on it, at 51 percent of the vote going 3 to an independent member, that proposal was 4 recommended in a Division letter. 5 Q. Dated June; correct? 6 A. Correct. 7 Q. It didn't -- it took you until June to 8 submit a petition; is that correct? 9 A. Well -- 10 Q. And forward that to us; is that correct? 11 A. We had submitted one prior to that. 12 Well, I think it was submitted in a petition. I'm not 13 sure that was the one with the unanimous vote. And I 14 don't know if it was a petition or if it was 15 discussions with you. Again, I wasn't involved 16 specifically, so I don't know if it was Division staff 17 and/or Commission staff. I don't mean to suggest it 18 was just one or the other. But there were ongoing 19 discussions well before June, which ended up in the 20 June petition being submitted on June 1st. And I 21 think your letter was dated June 1st recommending 22 approval. 23 Q. Correct. But you can't tell me that you 24 submitted any petition prior to June 1st; is that 25 correct? 93 DONNA MORE - cross 1 A. I think it was discussions about, and 2 there may be some correspondence about the unanimous 3 vote concept and that it came back saying that, no. 4 That, you know, try again. 5 Q. So, yes. The answer would be, yes. You 6 cannot indicate to me that you submitted any petition 7 prior to June 1st? 8 A. I don't think it was submitted as a 9 petition. I think it was submitted as a suggestion. 10 And if it would have been approved, I think then they 11 would have gone ahead and submitted the petition. 12 Q. You indicated in your sworn statement, 13 and I'm going to quote you, "I have a lot of 14 frustration because we went back and forth. And when 15 I say 'we,' I am primarily talking about us and our 16 lawyers as opposed to the Division or Commission." 17 What did you mean by that? 18 A. Well, as I said, it's -- you know, the 19 good news is is -- if in these discussions about what 20 the audit committee needed to look like, it's not -- 21 it's not a tough concept to get an audit committee in 22 place. I just needed to understand what was agreeable 23 and what was not agreeable. If it was not going to be 24 agreeable to have management on, I just needed to 25 understand that and be told that. And I guess that's 94 DONNA MORE - cross 1 where my frustration came in. Because it seems to me 2 that from March till June there were probably 3 discussions that we could have circumvented to get 4 something in place more quickly. 5 Q. When did you find out that you were -- 6 you could put a one-person audit committee together 7 and that that would suffice? 8 A. I want to say sometime in -- well, it 9 would have been after June 1st. Because I think it 10 came back that still having 51 percent of the vote 11 vested in your independent member was not -- was not 12 the best structure. So it would have been sometime 13 between June 1st and June 29th or 30th when we had our 14 meeting. 15 Q. Because in your sworn statement you 16 indicated that you started the discussion in March 17 about having a sole-member audit committee. 18 A. Well, if I -- as I say, it would have 19 been -- it would have been -- if I said it there, I 20 was probably wrong. I got a lot of dates floating 21 around. But, obviously, it was the next thing that 22 was brought to my attention after the 51 percent. 23 Q. So the March time frame would not be 24 correct as you indicated in your sworn statement. The 25 June time frame is correct? 95 DONNA MORE - cross 1 A. That would -- that would be accurate. 2 As I say, I didn't -- I didn't have everything in 3 front of me, and sometimes I'm a little off on my 4 dates. 5 Q. When did Mr. Silver come to your 6 attention? 7 A. He came to our attention, as I said, 8 from Deloitte and Touche. It would have been, I don't 9 know what the date of that February agreement is, but 10 probably sometime end of January or early February. 11 And I actually ran his name by Director Auriemma just 12 to get his thoughts on what he thought about Mr. 13 Silver. 14 Q. Did you know Mr. Silver from prior work 15 in the gaming industry? 16 A. Yes. As I said, I had known -- I had 17 known him probably from even when I was a regulator, 18 although I had no real interaction with him. But I 19 knew him from -- there are a couple of gaming 20 associations where I was familiar with him and knew 21 his reputation. 22 Q. So you were considering him for an 23 independent audit committee member? 24 A. Yes. 25 Q. Was there any discussion in your mind 96 DONNA MORE - cross 1 that regarding the independent audit committee and 2 putting it together, before you even considered just 3 one, that you would take two or three people and 4 comprise an independent -- two or three independent 5 people, not management. Take three, kind of Mr. 6 Silvers, and put them together. Was that ever 7 discussed? 8 A. I think we thought about it. I think 9 it's something we still talk about because until 10 really -- until I talk to our corporate lawyers, I 11 thought that by the end of '08 that that's what would 12 have been required under Sarbanes. 13 Q. So was that -- 14 A. But it was talked about. You know, from 15 our standpoint, we wanted to get something in place. 16 We wanted to get people reviewed and investigated. 17 And if we could -- similar to my understanding, other 18 companies, if we could get somebody in place as a 19 sole-member audit committee and get them approved 20 that, obviously, you know, down the line we could 21 investigate, expanding not only a New Jersey audit 22 committee but also at a corporate level. 23 Q. But back when you realized that there 24 was a need and you were -- 25 A. Uh-huh. 97 DONNA MORE - cross 1 Q. -- tossing back and forth, and you 2 didn't realize until June, you said, that you needed-- 3 that you could just do a sole independent audit 4 committee member why didn't you just go back and say, 5 look, let's not goof around with putting -- let's just 6 take three people to be independent audit committee 7 members like Mr. Silver and get it going? 8 A. Well, it's sometime -- it's a little 9 easier said than done when you're trying to figure out 10 who you know in the industry or get recommendations 11 from people in the industry. As I say, with Mr. 12 Silver, he came us through Deloitte and Touche, even 13 though, you know, I had known of him and of his 14 reputation in the industry for some time. It's just, 15 you know -- it doesn't come to the forefront of your 16 mind. If it's permission, and we could do a 17 one-person audit committee, I guess whether it's one 18 or three, they're still independent, and they still 19 have the abilities to make independent decisions. 20 Q. So you didn't reach out and try to make 21 any other contacts like Mr. Silver? 22 A. Correct. 23 Q. When you said we had discussions about 24 joint audit compliance committee who are you talking 25 about? Who is "we"? 98 DONNA MORE - cross 1 A. I probably had them with our CFO, with 2 our outside lawyers in the jurisdictions where, as I 3 say, I knew there were some specifics we had to comply 4 with. And at some point I probably would have talked 5 with Mr. Yung. 6 Q. Which CFO was it? 7 A. Rich Fitzpatrick. 8 Q. When -- am I correct in saying that when 9 you were -- came on board as in-house counsel for 10 Tropicana that Mr. Silver contacted you and asked 11 about doing legal work for the Tropicana? 12 A. You know, I know that that's Jeff's 13 recollection. To tell you the truth, when I came on 14 board, I had so many outside lawyers calling me trying 15 to get legal work that I don't really remember Jeff's 16 call in light of all the other calls I got. So, yeah. 17 Lloyd is smiling over there. 18 So it -- I had never -- I had never -- I 19 knew Jeff, obviously. I knew him from the industry. 20 I knew him from organizations. I had never -- let's 21 see, to the best of my knowledge, I don't think I ever 22 worked with Jeff on any particular matter. And, as I 23 said, it's a bankruptcy, firm. I had no real 24 intention of hiring that firm. We had a number of 25 outside lawyers already on board in Nevada. 99 DONNA MORE - cross 1 Q. I understood it to be a general practice 2 firm. That's incorrect? 3 A. I don't know. I thought his firm was a 4 bankruptcy firm. 5 Q. So you are aware that he has maintained 6 that he contacted you regarding legal work? 7 A. Yeah. 8 Q. You just don't recall it? 9 A. I just don't remember. 10 Q. And you indicated that the legal 11 representation agreement form regarding his services 12 for the audit committee, the paragraph or the sentence 13 that talks about engaging counsel in different 14 matters, that's just -- was an oversight on your part. 15 A. Correct. 16 Q. Why would that be in that sort of an 17 agreement if they are a bankruptcy firm? 18 A. Well, I mean, they -- my view of them -- 19 and maybe that's Jeff's partner, Gordon, and I forget 20 Mr. Gordon's first name -- but all the panels that 21 I've ever seen them on at gaming conferences have to 22 deal with bankruptcy. So, to tell you the truth, I 23 don't really know how big their firm is. They 24 probable have some people that do other things, but 25 that's just not my experience with them nor my 100 DONNA MORE - cross 1 familiarity with what they do. 2 All firms have a legal representation 3 agreement. And, you know, it's pretty standard 4 language that's in them. And for better, worse it 5 didn't occur to me that that sentence would have an 6 effect potentially on Jeff's independence. If I knew 7 it would, trust me, I would have crossed it out of the 8 agreement. 9 Q. Did you provide a copy of that February 10 agreement to regulators when we were -- because you 11 had indicated that you were engaging in ongoing 12 discussions with regulators regarding the audit 13 committees makeup, Mr. Silver? 14 A. Uh-huh. 15 Q. You had talked to my predecessor -- 16 A. Uh-huh. 17 Q. -- Director Auriemma about them. 18 A. Correct. 19 Q. You signed an agreement with him in 20 February? 21 A. Right. 22 Q. Did you provide that to the regulators? 23 A. I know that it was provided at some 24 point. I did not provide it. And, just as I say, it 25 was a vehicle to get him paid. I think everybody knew 101 DONNA MORE - cross 1 what we were paying him. That was no secret. But the 2 representation agreement, to me, was just a -- maybe 3 because I'm jaded because I came from a firm where we 4 sent that out routinely, but it was just a vehicle to 5 get him paid. 6 Q. Okay. 7 A. And I think everybody was aware of the 8 amount we were paying him. 9 Q. Well, it's just -- it's just interesting 10 to me because, I'll tell you, we actually found that 11 agreement dated in February -- 12 A. Uh-huh. 13 Q. -- in the field investigation regarding 14 Mr. Silver. It was not provided by Tropicana or 15 Columbia Sussex. Are you aware of that? 16 A. Okay. Our mistake. 17 Q. I just find it curious during all those 18 ongoing discussions and Mr. Silver being discussed, 19 and things being thrown back and forth, that no one 20 provided the regulators with a copy of an agreement 21 that which apparently was very important? 22 A. As I say, I looked at the agreement as a 23 vehicle to get him paid. I didn't view it as 24 important in terms of impugning his independence. 25 But, obviously, I'll make sure in the future that 102 DONNA MORE - cross 1 we're more careful about getting you those documents. 2 Q. And I would note that we actually found 3 it in August. We did not have a copy of that 4 agreement until August of 2007. 5 When you say that proposals were sent 6 over regarding the audit committee, do you have any -- 7 written proposals, or are you just talking about 8 discussions about proposals? 9 A. To the best of my knowledge, I know that 10 there were discussions. I think there was some e-mail 11 correspondence with our outside lawyer, Miss Kaufman, 12 and folks at the Division or the Commission. I 13 apologize because I don't know specifically who was 14 involved in those, but -- and I don't know if they 15 were -- they were written or oral. 16 Q. You couldn't disagree with me, then, if 17 I said the first written proposal we ever got was 18 dated June 1st, 2007? 19 A. I have no reason to disagree with you on 20 that. 21 Q. During June -- I'm sorry. From January 22 of 2007 to June of 2007, I want to back up about 23 something you testified to on direct. 24 A. Who was -- give me those dates again? 25 Q. I'm sorry. I'm getting confused. 103 DONNA MORE - cross 1 January of 2007 to June of 2007. 2 A. Okay. 3 Q. Who was Bill Edwards, the Director of 4 Surveillance, reporting to regarding matters of 5 policy, purpose, responsibility, authority, things of 6 that nature? 7 A. I think on -- on some matters, and I 8 guess they are more administrative, Bill would have 9 been reporting to Fred. 10 Q. That would be Fred Buro? 11 A. Yes. That's correct. 12 And I think that Bill had -- and I had 13 talked to him, and I don't -- I don't remember when 14 that conversation was at all. But I think he knew 15 that if there was an issue at the property that 16 couldn't be communicated to somebody at the 17 property -- and, obviously, that's why the reporting 18 changes is as it is -- that he can certainly call me. 19 He was very familiar with me. And, you know, it would 20 have been better -- we're all in agreement here that 21 it would have been better if we had the audit 22 committee in place. I'm not arguing the point with 23 you. I'm just saying that -- 24 Q. No. I appreciate that. 25 A. -- just saying that's my understanding 104 DONNA MORE - cross 1 of misreporting. 2 Q. So basically, it was to you. 3 A. I think -- I think he reported on 4 property to Mr. Buro. And I know he probably had some 5 discussions, if need be, with our property lawyer, 6 Tama Hughes. But if there was an issue which, you 7 know, may happen every so often where he needed that 8 outside reporting, I think that he was aware that he 9 could call me. 10 Q. Did he ever call you? 11 A. He called me -- he called me once just 12 to chitchat but never to discuss a substantive issue 13 at the property that he had a concern about. 14 Q. And how is it that -- how was it 15 communicated to him that he should call you on -- 16 regarding these matters? 17 A. I don't know. I had met him on a number 18 of different occasions from just being out at the 19 property. And, you know, I'm -- I'm not a hundred 20 percent sure. But, as I say, he called me in to 21 chitchat, and I think that my impression is that when 22 I came with the company, everybody at the property 23 level knew if there were issues that they, you know, 24 wanted to pick up the phone and talk to me about that 25 they'd have an ear. 105 DONNA MORE - cross 1 Q. But that was not formally communicated 2 to him in any way? 3 A. I don't -- I don't believe so, but. 4 Q. And who was the director of internal 5 audit? 6 A. Bill King. 7 Q. And who was he reporting to? 8 A. Bill King was reporting to Larry -- 9 Larry King, not to confuse the issue. Between the 10 dates and the names. Larry was our Vice President of 11 Casino Accounting at the corporate level. And then I 12 believe in May we had our corporate Director of 13 Internal Audit come on board, and he reported to Karen 14 Brugler. 15 Q. Okay. But, again, regarding matters of 16 policy, purpose, responsibility, things of that 17 nature, things that would normally go to the 18 independent audit committee who was -- 19 A. It was Mr. Larry King. 20 Q. And that's -- that was the reporting 21 line until the audit committee was in place? 22 A. And until Karen Brugler came on board. 23 (Conferring.) 24 Q. Who did Larry King report to, please? 25 A. Larry King reported to Rich Fitzpatrick, 106 DONNA MORE - cross 1 our CFO. 2 Q. You indicated that you were not involved 3 in a lot of staffing and the layoff decisions and 4 things of that nature; is that correct? 5 A. Correct. 6 Q. But you did become involve in the 7 discussions with the regulators -- 8 A. Yes. 9 Q. -- at a certain point? 10 A. That's right. 11 Q. And what made you become involved with 12 the discussions with the regulators involving the 13 staff if you weren't hands-on involved with it? 14 A. Well, as I said, when it comes to 15 operational issues which involve staffing, obviously, 16 my role intersects when it potentially becomes a 17 regulatory issue. And one of the things that I want 18 to make sure of is that we're in good standing with 19 the regulators. And if I feel that there is an 20 operational issue that either needs further 21 explanation or needs to get discussed with the 22 regulators, I will certainly go to the folks like, you 23 know, Kevin and Mark and say, let's have some meetings 24 to make sure we're all on the same page here. And 25 that's how I got involved in knowing that there were 107 DONNA MORE - cross 1 concerns from a regulatory standpoint and trying to 2 get the folks in the room together to see if we 3 couldn't address them. 4 Q. Were you aware of Mr. Yung's philosophy 5 regarding layoffs and staffing when you came on board 6 with him? 7 A. I know that -- I don't know that he 8 particularly has a philosophy on layoffs. I know that 9 he likes to run very efficient properties. And I know 10 that with Aztar that there were discussions that there 11 were payroll, if you will, that was somewhat in excess 12 of what he felt was needed at the properties. 13 Q. Okay. 14 A. So I was aware of that. 15 Q. I mean, and you were aware of his 16 philosophy in general, and you were aware of some of 17 these things that were going to happen; is that 18 correct? 19 A. Well, when you say "some of the things 20 that were going to happen," I was aware that there 21 were because going on to be some, you know, reductions 22 at the property. Obviously, you know, one of the 23 things that I wanted to ensure was that we had good 24 communication, no matter what the jurisdiction was, 25 with the regulators. 108 DONNA MORE - cross 1 Q. Well, when did -- again, from your 2 understanding, and I realize that you've indicated 3 you're not -- highly involved in the staffing and the 4 layoff issue. When did you become aware that layoffs 5 were going to start? 6 A. Well, I don't know that -- I don't know 7 that I'm told at any given particular time. I think 8 that when I became aware was more from our -- in New 9 Jersey -- was from our responsibilities to report 10 certain things, whether it be after we had done a 11 reduction or before we contemplated doing one. I 12 don't know if before that time I was actively involved 13 in -- you hear things. But I don't know that I was 14 actively involved in, you know, somebody calling me 15 saying FYI. You know, obviously, at a property level 16 there are, you know, documents that have to get done, 17 which I know Miss Hughes did from that standpoint. 18 But I got more involved and focused on it when we need 19 to ensure reporting. 20 Q. And that was when? 21 A. I'm -- I don't -- you know, I'm guessing 22 it was maybe March or April, but I'm not a hundred 23 percent sure. At some point I think there were 24 discussions where we were asked to -- and maybe we're 25 always asked to -- I'm not a hundred percent sure that 109 DONNA MORE - cross 1 every time -- I know that the Division or Commission 2 gets a bimonthly list of what our workforce is. So I 3 know there's at least that snapshot reporting on a 4 ongoing basis. At some point, I believe in addition 5 to that, we were asked to provide a list of those -- 6 of those folks that were laid off. And I want to say 7 maybe we started doing that in, I want to say March or 8 April, but I don't really know that for sure. And 9 then at some point I believe we were asked to just 10 give prior notice so everybody would have a heads-up. 11 Q. Okay. 12 A. And I don't know when that was. 13 Q. Would it be fair to say that you didn't 14 become involved until the Commission and the Division, 15 the regulators, started having concerns? 16 A. Yeah. I think that's fair. 17 Q. So when a lot of the -- would you agree 18 with me that there are a fair number of layoffs made 19 January, February, right when Mr. Yung came into the 20 picture? 21 A. Based on -- based on the chart that got 22 introduced last week, yeah. 23 Q. Okay. And at that point you weren't 24 interfacing with the regulators. You didn't go to the 25 regulators and say, look, we're going to do a lot of 110 DONNA MORE - cross 1 layoffs. This is our philosophy. This is going to be 2 happening. Didn't do that initially. Would that be 3 correct? 4 A. I did not do that initially. I don't 5 know if from a property standpoint there's some 6 communication with our agent at the property in terms 7 of staffing issues, but I don't know. 8 Q. When you met with the regulators in 9 August of 2007, you provided an August 7th, 2007, 10 memorandum regarding 320 layoffs; is that correct? 11 A. There was a memorandum provided. I 12 think that that was a -- what I would call a 13 worst-case scenario. Sort of the purpose of the 14 meeting was to say here's -- here's where we're at. 15 Here's where, you know, in the worst-case scenario, we 16 think we would have to be at. But we want to go back 17 and department by department look at where we are and 18 what we're potentially going to do. And I think that 19 the way the discussion ended up from that meeting -- 20 at least my recollection -- with the Commission was 21 that security was something we wanted to take a look 22 at fairly quickly. And that some of these other 23 departments were things that we would take a look at 24 post Labor Day. 25 Q. All right. So and in response to my 111 DONNA MORE - cross 1 question, and I -- the answer would be yes that you 2 came to the Commission with that August 7th, 2007, 3 memorandum, outlining potentially 320 layoffs; is that 4 correct? 5 A. That's correct. 6 Q. And 70 of those layoffs were in the 7 security area. Would that be correct? 8 A. I'll take your word for it because I 9 don't remember. 10 Q. All right. I can show you the document. 11 MR. MICHAEL: Yeah. 12 Q. This was an exhibit which was marked as 13 Exhibit D at the time of your sworn interview. 14 A. Thanks. 15 Q. Does that look familiar? 16 THE WITNESS: Now I need to take off my 17 glasses. 18 COMMISSIONER EPPS: A-50. 19 CHAIR KASSEKERT: A-50? Thank you. 20 THE WITNESS: Yeah. 21 Q. And take a look at that if if refreshes 22 your memory then. Is 320 the number of layoffs 23 involved? 24 A. Yes. And security. 70, yes. 25 Q. What the impetus for putting together 112 DONNA MORE - cross 1 this document? By so many layoffs after numerous 2 layoffs had already occurred at the property? 3 A. Well, I don't think it was -- as I 4 mentioned, my -- my sense of what -- of what I was 5 getting from just my informal discussions with 6 regulators in July when we had a meeting out here, and 7 just some probably back and forth, was when is the-- 8 you know, what's the finality look like? What's -- 9 where are we, and where do you think potentially you-- 10 you're going to be? And so part of what I did-- and 11 you know hindsight has 20/20 vision. You can always 12 think about, you know, have we -- you know, had we 13 come and said, here's what we're going to do. Here's 14 how we're going to do it. You know, communications 15 probably could have been better. And I'm not arguing. 16 I'm not arguing that point. But the purpose of 17 this -- this memo was to say, look, we -- we want to 18 give you some finality without saying that this is 19 what we're ultimately going to do. And I thought, I 20 guess, from my own standpoint of looking at it, that 21 it might be helpful to say, here's where we think we 22 are from a numbers standpoint. Because I think there 23 was some misreporting of numbers in the newspapers. 24 And mainly because I think it was just getting 25 confused. You know, what was considered a layoff 113 DONNA MORE - cross 1 versus a voluntary resignation versus a termination 2 for cause. 3 Q. Okay. 4 A. And that was really the purpose of 5 providing the document was -- 6 Q. Okay. 7 A. -- in some sense to try to communicate a 8 worse-case scenario and to try to alleviate some 9 frustration. 10 Q. Well, my question is this, though. I'm 11 not asking you why you necessarily provided the 12 document? What was driving 320 more potential 13 layoffs? You already laid off a number of people. 14 A. Well, in terms of, again -- this was, 15 you know, the operational view of each of these 16 departments. Some of them -- and, again, saying and 17 reiterated by our correspondence that they would go 18 back and take a good hard look about what had to be 19 done. And I want to say the ultimate number, and 20 maybe not including security, was I think in September 21 we came back at about 40, I think. But those are in 22 terms of what's driving this? You have to ask the 23 operational folks. This was not substantively 24 something that I have intimate knowledge with. 25 Q. Did you prepare that? 114 DONNA MORE - cross 1 A. No. 2 Q. Who prepared that? 3 A. I -- I think it was probably a joint 4 effort is my guess. But I don't know specifically 5 who-- who all was involved in the preparation. I do 6 know that Kevin Preston asked me to just take a read 7 through, and I corrected some grammar. But that was 8 my involvement. 9 Q. Do you know what kind of assessments, 10 what kind of assessment or analysis was done to 11 produce those numbers? 12 A. I don't. 13 Q. Who would know that? 14 A. Probably Mr. Preston. 15 Q. Okay. And you had indicated that after 16 this -- what was, I guess, your view of the response 17 you got from the regulators when you presented this 18 document? 19 A. Well, you know, obviously, whether 20 you're talking about one layoff or a number of 21 layoffs, it's not -- you know, I've been in the 22 industry a long time. I understand that part of the 23 reason this industry exists is in certain areas to 24 provide a stimulus for economic growth. And 25 employment is issue that is -- is of the utmost 115 DONNA MORE - cross 1 importance to regulators and to the industry. And 2 it's -- you know, as I said, I -- it's not pleasant 3 communicating some of this news. But, on the other 4 hand, I don't want to not communicate it. And so, you 5 know, was anybody happy both about this document? I'm 6 sure not. 7 Q. So the response that you got was not 8 good. Would I be correct in putting it that way? 9 A. Well, I think they -- I think there was 10 a concern, yeah. I mean, I don't think anybody's, you 11 know, happy about, you know, people having to lose 12 their jobs. Obviously, there's a lot of things that 13 go into this discussion. And I know some of them have 14 been talked about in the past in terms of competitive 15 issues and smoking ban issues and just the property 16 issue in the beginning as to what the numbers looked 17 like in terms of staffing. But, you know, this is -- 18 this is, you know, not a scenario that you enjoy. And 19 as Mark said, and I think Mr. Yung said it as well, 20 you know, if we increase market share, we get to, you 21 know, hire back people. And that's -- that's what our 22 goal is. 23 Q. And when you talked about the number -- 24 actually, after you met with regulators and produced 25 this document, you ultimately came back with the 116 DONNA MORE - cross 1 number that was significantly reduced from that 320? 2 A. That's -- that's correct. 3 Q. What was -- 4 A. I don't know -- I think it was 40, Miss 5 Maher, but I can't tell you. 6 Q. This is what was referenced as Exhibit E 7 in your sworn statement. 8 A. Okay. 9 Q. Can you tell us what that is? 10 MR. MICHAEL: Has that been moved into 11 evidence as an evidence exhibit? 12 MS. FLAHERTY: Yeah. 13 MR. MICHAEL: What is it? 14 MS. MAHER: On your exhibits, I'm not 15 sure what number. 16 THE WITNESS: This is -- it's a letter 17 to Dianna Fauntleroy at the Commission from 18 Tama and then copy to a variety of people. 19 Q. And the date of it? 20 MR. MERCUN: Yeah. That's attached to? 21 THE WITNESS: It's August 17th, and it's 22 a follow-up to -- 23 MR. MERCUN: A-54. A-54. 24 MR. NANCE: A-54? 25 THE WITNESS: It's a follow-up to the 117 DONNA MORE - cross 1 meetings that were held relating to the staff. 2 It's kind of a follow-up to the document you 3 just showed me. 4 MR. MERCUN: That's not it. 5 Q. So the August 7th document was prepared 6 for the meeting indicating a layoff number of 320. Or 7 potential layoff; is that correct? 8 A. Yeah. 9 Q. You met with the regulators; correct? 10 COMMISSIONER EPPS: Hold on. 11 CHAIR KASSEKERT: Excuse me. I don't 12 see an A-54. 13 COMMISSIONER EPPS: We don't have an 14 A-54. 15 MR. MICHAEL: There is an A-54, but I 16 guess -- what is the -- 17 MS. MAHER: It's attached to Ms. More's 18 sworn statement, Exhibit E. 19 COMMISSIONER EPPS: I have it. 20 MS. FLAHERTY: D-57. 21 MR. MICHAEL: Part of -- 22 MR. DiGIACOMO: D-60, I believe. 23 MR. NANCE: D-60. 24 MS. MAHER: I'm sorry. Exhibit F. It's 25 D-7, Exhibit F. 118 DONNA MORE - cross 1 MR. DiGIACOMO: Chair, Commissioners, I 2 think the same document can be found at A-60. 3 The first page of A-60 appears to be a cover 4 letter or a cover e-mail, rather, and the 5 document itself follows. 6 CHAIR KASSEKERT: Okay. 7 MR. DiGIACOMO: If that helps at all. 8 THE WITNESS: You want to see this? 9 MR. MICHAEL: Let me see. 10 Yeah. Mr. DiGiacomo is right as usual. 11 MS. MAHER: There's a bit of confusion 12 here. I have it attached in -- to Ms. More's 13 sworn interview, D-7, as Exhibit E. 14 MR. DiGIACOMO: And it does exist in 15 that location as well. 16 CHAIR KASSEKERT: Form as well. Okay. 17 COMMISSIONER EPPS: Is it the August 18 17th letter or -- 19 MS. MAHER: Correct. 20 COMMISSIONER EPPS: -- September 5th 21 letter? 22 MS. MAHER: The August 17th letter. 23 COMMISSIONER EPPS: Okay. That's the 24 exhibit. 25 MS. MAHER: All right. I think we're 119 DONNA MORE - cross 1 all on the same page now. I'm hopeful. 2 THE WITNESS: I'm good. 3 MS. MAHER: Okay. Well, you have it 4 there. 5 (Laughter.) 6 Q. Would it be fair to say that that letter 7 was a follow-up to the August 7th letter or memorandum 8 outlining the proposed 320 layoffs; is that correct? 9 A. Yes. 10 Q. And that was -- that was produced and 11 sent after you had the meeting with the regulators; is 12 that correct? 13 A. That's correct. 14 Q. And would it be fair to characterize, 15 based on your prior testimony, that at the meeting the 16 regulators had a fairly strong reaction against 320 17 potential layoffs; is that correct? 18 A. That's correct. 19 Q. Why such a drastic reduction from 320 to 20 33? 21 A. Well, again, the 320 was a worst-case 22 scenario. What was said in our meetings, at least 23 based on my recollection, was that we were going back 24 and looking at each of these departments, and we 25 anticipated that this would not -- that the 320 would 120 DONNA MORE - cross 1 not be the working number, that it would be something 2 less. But, again, it was in an effort to give an end, 3 for better or for worse. And not necessarily what we 4 anticipated happening. 5 So I think at the point that operational 6 folks had discussions with the regulators, they -- it 7 was with the caveat that they were going to go back 8 and look at each of these specific departments. And, 9 you know, I think in addition to looking at it, 10 obviously, one of the things that you look at is -- is 11 the concern of regulators and, you know, in my mind, 12 that's a good thing. 13 Q. All right. Well, I guess what I'm 14 getting at is this: What kind of analysis, what extra 15 analysis did you do in ten days that took from you 320 16 to 33? It wasn't done prior to producing that 17 document to the regulators and discussing it with 18 them. 19 A. Well, as you know, personally, I did not 20 and I was not involved in the analysis, so I'm not 21 sure I'm the right person to answer that question. 22 But having said that, I think that the initial 23 document was done differently than the purpose of the 24 August 17th letter. 25 Q. Well, would it be fair to say that the 121 DONNA MORE - cross 1 change, the drastic change occurred because the 2 regulators said, pretty much, no. You can't do that. 3 A. Well, you know, we -- in our meetings 4 with the regulators, it was always brought to our 5 attention that there were certain minimum staffing 6 requirements which we're well aware of, and there were 7 certain things that, in essence, were -- were business 8 judgment calls. And, in fact, I can remember with 9 Deputy Director Schwefel saying, listen, we can't 10 necessarily mandate certain of your staffing levels, 11 and -- but rest assured that, ultimately, if there's 12 an issue somehow with the compliance problem as a 13 result of your staffing levels, that's where, you 14 know, the rubber hits the road, as it were. So I 15 think that we were well aware of the concerns. We 16 were cognizant of the concerns. And I think as far as 17 the regulated entity goes, I think we internalized a 18 lot of the concerns that we heard. And, in part, I 19 think that's a good thing if there's concern expressed 20 and the folks who regulate go back and rethink some of 21 it. 22 Q. If you hadn't -- if the regulators 23 hadn't expressed any concern about that 320 number, 24 would that have been implemented? 25 A. I don't believe so. And the reason I 122 DONNA MORE - cross 1 say that -- and, again, I -- it's from my own scope of 2 familiarity, but the 320 number was not necessarily a 3 for-sure number. It was a worst-case scenario number, 4 so I don't know that the intent was possibly that that 5 would ever get implemented. It was just provided as a 6 worst-case scenario to work from there. 7 Q. You've also had staffing reviews and -- 8 by regulators in other jurisdictions; is that correct? 9 We're not alone in New Jersey? 10 A. In Indiana. 11 Q. What about in Nevada? 12 A. As I mentioned, they -- Nevada agents 13 have asked for some information on staffing, but my 14 understanding is that it is not an ongoing review. I 15 mean, as a practical matter, look, you know, as a 16 regulator, you can review every aspect of our business 17 as frequently as you want to review it. But my 18 understanding is we were just asked for some 19 information. I think the term used was "monitor." 20 It's a semantics argument. We provided the 21 information. Is there still some sort of staffing 22 investigation? To my knowledge, no. 23 Q. Did you -- when was -- when was Fred 24 Buro coming in? 25 A. I want to say it was in July at some 123 DONNA MORE - cross 1 point. 2 Q. Did you try to contact him prior to him 3 coming into the Division to give a -- to discuss with 4 investigators or give a sworn interview? Do you 5 recall trying to call him? 6 A. No. I only called Fred in response to 7 calls that he had made to me relating to a separation 8 agreement. 9 Q. So you didn't try to call him or contact 10 him prior to him discussing -- 11 A. No. 12 Q. -- anything with the regulators? 13 A. No. 14 Q. One final area I want to touch on, and 15 that's the management service agreements. You 16 indicated that it's -- it's clear that those were in 17 effect of January 3rd, 2007; is that correct? 18 A. In effect except for New Jersey. 19 Q. Correct. But they had been signed; is 20 that correct? 21 A. Correct. 22 Q. And do you -- had these management 23 service agreements that operate in all the other 24 jurisdictions? 25 A. Correct. 124 DONNA MORE - cross 1 Q. So everyone but New Jersey has the 2 management service agreements in place; correct? 3 A. Correct. Some -- some jurisdictions, as 4 I mentioned, had no formal rules requiring an 5 approval. I think a couple others permitted the 6 agreements, but they just had to go through the 7 approval process, which we did. So they -- they may 8 not have been effective right on January 3rd, but they 9 were effective at whatever date they were approved by 10 the regulatory body. 11 Q. And what's the point of the management 12 service agreements? What are they for? 13 A. The management services agreement on the 14 Sussex side, the hotel side was really to provide an 15 expertise that Columbia Sussex had developed over 16 30-plus years of being in the hotel business. And in 17 terms of having systems in place that could provide 18 for centralized operations and knowledge that had been 19 gained on the Sussex side and on the hotel side. And 20 on the casino side, the casino services agreement, you 21 know, kind of the same thing. A reimbursement for 22 managerial services that were being provided to all of 23 the casinos. 24 Q. This is consolidation, basically; 25 correct? 125 DONNA MORE - cross 1 A. Consolidation? Maybe on the Sussex side 2 and some expertise potentially on the casino side. 3 Q. Well, things like, would you agree with 4 me, payroll, accounting, marketing, advertising, 5 casino layout, things of that nature -- 6 A. Right. 7 Q. -- are all affected; correct? 8 A. Right. 9 Q. And what happens when these management 10 service agreements are effectuated? What happens in 11 the particular jurisdictions when they enter into the 12 management service agreements? What changes? 13 A. Well, you know, some -- obviously, you 14 have -- you have an economies of scale, so to speak. 15 And when, you know, when companies merge because of 16 some of the duplication of services that were being 17 provided at one level and are now consolidated, you do 18 get -- do you get some layoffs. And I think that was 19 anticipated. It was one of the reasons, frankly, why 20 Aztar was the takeover targeted in general, was 21 because there were a lot of companies that felt they 22 could more efficiently run and, in part, consolidate 23 services. But in New Jersey we had -- 24 Q. So -- 25 A. -- some discussions. And, again, you'll 126 DONNA MORE - cross 1 have to forgive me because I'm not a hundred percent 2 sure if I was involved or some of our outside lawyers 3 were involved, but obviously, we were aware of the 4 concern on the consolidation at some level of 5 services. And that's why, obviously, we didn't -- 6 didn't really proceed in moving the service agreements 7 ahead. 8 Q. Well, at one point you did try to 9 proceed and move them ahead; correct? 10 A. We did. And then there were discussions 11 had. And I think the end result of that discussion 12 was, you know, let us know if this is something that 13 has never been done in the jurisdiction and can't be 14 done, obviously. You know, you don't want to continue 15 on. 16 Q. And these services that are talking 17 about being consolidated, they're consolidated at the 18 home office in Kentucky; is that correct? 19 A. That would be correct. 20 Q. You initially indicated or initially did 21 put forth the service agreements for approval. Did 22 you file a petition? 23 A. Again, I think we either filed a 24 petition, or there were discussions had with outside 25 lawyers about the services agreement. 127 DONNA MORE - cross 1 Q. And what -- 2 A. But -- 3 Q. Again, what caused the -- what caused 4 you to retract and decide not to put them forward? 5 A. Well, if you -- you know, listen, if you 6 can't do it in a jurisdiction, you just don't do it. 7 Q. Well, it could be done, if you had their 8 necessary regulatory approvals; is that correct? 9 A. Well, right. But my understanding -- 10 and those jurisdictions where it could be done, and we 11 got the regulatory approvals, but if there were issues 12 with certain aspects of consolidation as far as Trop 13 Atlantic City, we just weren't going to go ahead and 14 do it. 15 Q. Well, and as a matter of fact, we got 16 letters from outside counsel as well as from Mr. Yung 17 indicating that the agreements would not be 18 implemented in New Jersey until the proper regulatory 19 approval was received; correct? 20 A. That's my understanding. 21 Q. What happened then? Apparently, there 22 were fees accrued by the Tropicana Atlantic City 23 under -- by Columbia Sussex under the management 24 agreement in July of 2007. Are you aware of that? 25 A. My understanding is in talking with our 128 DONNA MORE - cross 1 accounting folks that there were no fees accrued, that 2 I think if there was a misunderstanding initially, it 3 may have been one month fees were accrued, but they 4 were reversed because there -- everybody at my level 5 at least -- the understanding was no fees would be 6 accrued and wouldn't be accrued and no back payments 7 would be made ever. And no future payments would be 8 made unless and until these services agreements were 9 approved in New Jersey. 10 Q. Okay. But fees were accrued in error? 11 A. If they were accrued, I believe it was 12 one month, and they were reversed. 13 Q. Okay. And how -- do you know how that 14 mistake occurred? 15 A. No. 16 Q. What happened? What made that happen? 17 How the mistake was made? How the fees were accrued? 18 A. Do not. 19 Q. Do you know if the management service 20 agreements were to be in effect in New Jersey at the 21 Tropicana Atlantic City, if you did seek the approval 22 and get the approval, how many jobs would be affected? 23 How much would be sent out of the State of New Jersey 24 to your home offices in Kentucky? 25 A. I don't know. 129 DONNA MORE - cross 1 Q. Okay. At this point what is your 2 position? What are you going to do with these 3 management service agreements? 4 A. Well, they're in effect in other 5 jurisdictions. And -- excuse me -- as far as New 6 Jersey -- you know, if it is something that's not 7 permissible to do here, we just won't do it. 8 Q. Are you going to submit the management 9 service agreements again under a petition? Are you 10 going to ask for the regulatory approval? There's 11 been some back and forth. I guess the Division is 12 asking at this point, what's your intention? 13 A. Well, I guess our intention is to have 14 some ongoing discussions with you all about it and 15 with the Commission about it, but only to clarify -- 16 only to clarify whether this is something that 17 potentially can be done or can't be done. And if it 18 didn't be done, just drop it. 19 (Conferring.) 20 MS. MAHER: Thank you. No further 21 questions. 22 CHAIR KASSEKERT: Thank you. 23 I want to get back to a line of 24 questioning that Ms. Mayor was asking you with 25 respect to the decisions coming back to the 130 DONNA MORE 1 Commission with respect to the layoffs. 2 Now, I understand it's your testimony 3 that you did not make operational decisions. 4 That was left to other people. Can you tell me 5 who those people were? 6 THE WITNESS: Depending on the time 7 frame, it would have been Mr. Buro and Mr. 8 Diannantonio from the property level. And then 9 at the corporate level, the discussions 10 probably would have involved Mr. Reinhardt 11 and/or Mr. Preston and Mr. Yung. 12 CHAIR KASSEKERT: Okay. And do you know 13 what the process was in place? For example, 14 did Mr. Reinhardt or more Preston say to Mr. 15 Buro or Mr. Diannantonio, we'd like to say to 16 see a certain reduction, and you get back to us 17 with your recommendations? Was that 18 essentially how it would work? 19 THE WITNESS: To be honest, I'd be just 20 guessing -- 21 CHAIR KASSEKERT: Guessing. Uh-huh. 22 THE WITNESS: -- as to how those 23 discussions occurred. And, you know, the 24 people with more expertise on that particular 25 subject area would have to let you know. 131 DONNA MORE 1 CHAIR KASSEKERT: Okay. So I should ask 2 these questions probably of Mr. Preston when he 3 comes to testify? 4 THE WITNESS: Correct. 5 CHAIR KASSEKERT: Can you tell me why 6 Mr. Moles was let go? 7 THE WITNESS: I think that my 8 understanding is that, in general, because we 9 do run a lean operation that it was thought 10 that we didn't need two lawyers at a property, 11 and so that's why the decision was made. 12 CHAIR KASSEKERT: So was the decision to 13 keep the attorney who was least expensive? 14 Because he was -- he was the counsel. 15 THE WITNESS: He was the counsel. When 16 I came in -- again, some of it is just 17 conjecture, so I don't want to -- 18 CHAIR KASSEKERT: Right. 19 THE WITNESS: -- engage in that with 20 you. When I came in-house in November -- I 21 don't know. We hadn't, obviously, taken over 22 the property, but my understanding was that in 23 the discussions that Miss Hughes was going to 24 stay and Mr. Moles was going to leave. And I 25 don't know that I actively participated in the 132 DONNA MORE 1 discussion otherwise. 2 CHAIR KASSEKERT: Okay. I know that Mr. 3 Michael took you through a number of 4 jurisdictions with respect to complaints or 5 warning letters issued. I note that he did not 6 discuss Louisiana at all. Can you tell me 7 about -- about the complaints filed in 8 Louisiana? 9 THE WITNESS: In Louisiana they have a 10 little bit different system. They have kind of 11 levels of violations. And I believe that a 12 Category 2 is more like a warning violation. A 13 Category 1 is more akin to what I would think 14 of as a complaint that has potentially a fine 15 element to it. 16 Since I've been on board -- and, 17 obviously, I can get you the information. I 18 think that just before I came out here last 19 week, we had only a Category 2 -- only some 20 Category 2 violations. We just got notice of a 21 Category 1 violation that deals with some 22 vendor issues down there. And, to be honest, I 23 haven't really addressed it because I've been 24 focused on New Jersey for the last few days. 25 CHAIR KASSEKERT: Okay. Can you tell me 133 DONNA MORE 1 what the -- what the type of matter was that 2 the -- on the October 17th, 2006, Louisiana 3 Gaming Control Board approved, I believe a 4 $12,500 settlement. Can you tell me what that 5 related to? 6 THE WITNESS: In November of '06? Or 7 October of '06? 8 CHAIR KASSEKERT: In -- yeah. That 9 might have predated you. 10 THE WITNESS: It predated me. I know we 11 had -- I know we had a settlement on some 12 billboard advertising, and I don't know if that 13 would have been it or not. There was something 14 re -- and I'm not sure -- it would have been 15 had to be on the Belle of Baton Rouge, I think. 16 Because Amelia Belle was getting refurbished 17 from Katrina. But I believe, if it's the 18 advertising issue, that there was something 19 about the way that the gamblers hotline was 20 done. 21 CHAIR KASSEKERT: Okay. 22 THE WITNESS: But I'm not a hundred 23 percent sure it that was -- 24 CHAIR KASSEKERT: Was it a self-excluded 25 person? 134 DONNA MORE 1 THE WITNESS: It could be. I can go 2 back and look for you. 3 CHAIR KASSEKERT: Okay. I also see that 4 the administrative warnings, you would classify 5 those as a Category 2 warning? 6 THE WITNESS: Exactly. That there's no 7 fine -- my understanding is there's no fine 8 attached to those. That those are warnings. 9 We do submit -- we do submit a letter in 10 response to each of those that we receive 11 telling what corrective action we are doing to 12 prevent it from happening again. But it's the 13 Category 1 that is potentially have the fine. 14 CHAIR KASSEKERT: Okay. It looks like 15 that some of these were failure to remove a 16 system access for employees that had been 17 terminated. Jackpot request errors. Missing 18 signatures. So these are all things that you 19 now going forward plan to address through 20 compliance with respect to training and with 21 the director of compliance coming on. And how 22 will you do this at each of the individual 23 properties? With their own directors of 24 compliance? 25 THE WITNESS: That's correct. And some 135 DONNA MORE 1 of those issues we've already started to 2 address down in Louisiana, particularly working 3 with HR in terms of making sure that if 4 somebody is no longer they property that their 5 security clearance is taken away so that they 6 can't get into the computer system. 7 We have begun -- and, as I say, really 8 since June have done kind of a traveling road 9 show, if you will, where we at corporate have 10 visited a number of our properties. And I 11 think I mentioned we're coming to Trop AC in 12 January, early part of January to really do 13 compliance training with the in-house folks 14 that are there. For a variety of reasons. 15 One -- and Mr. Yung comes on some of those with 16 us as well. I think it's very important for 17 all of your employees to realize, number one, 18 that it's important at the corporate level. 19 Because I think, you know, it flows downward. 20 And if they see it's important at the top, 21 then they take it seriously. And it's a very 22 hard -- it's a very hard sell to tell your 23 employees that they need to self-report. It's 24 like everything you learned in kindergarten 25 about not tattling on the kid who hit you. I'm 136 DONNA MORE 1 focused on that because I've a three-year old, 2 and I know I saw a picture from your son or 3 daughter, too, so -- but it's a very -- you 4 know, you need to get your employees -- and we 5 have very good employees at all of our 6 properties. To get them to understand why 7 that's important. You can't just say, well, 8 because it is. They really need to understand 9 what the whole compliance system looks like and 10 why it's important. Whether, again, for me it 11 doesn't matter if you're a hotel employee or 12 you're a casino employee. And so that's -- 13 that's really what we're trying to do at 14 corporate level, at a property level, with the 15 GMs and the compliance folks as well. And, you 16 know, we're not perfect, but we're hoping to 17 get there. 18 CHAIR KASSEKERT: Okay. And with 19 respect to Missouri, I guess, I can't really -- 20 that predated your coming on board? 21 THE WITNESS: That's correct. 22 CHAIR KASSEKERT: Okay. Who was the 23 counsel at the time? 24 THE WITNESS: I believe in Missouri we 25 had used and do use outside counsel for the 137 DONNA MORE 1 litigation there. 2 CHAIR KASSEKERT: All right. I think 3 that's all I have. 4 Commission Epps? 5 COMMISSIONER EPPS: I have a few 6 questions. 7 Your testimony earlier was that you have 8 two lawyers for 14 properties as of right now 9 until something else happens. Is that 10 accurate? 11 THE WITNESS: Correct. Until this week. 12 COMMISSIONER EPPS: But you really had 13 one lawyer for 13 properties and one lawyer in 14 Atlantic City. 15 THE WITNESS: Correct. 16 COMMISSIONER EPPS: And those other 13 17 are in four different jurisdictions? 18 THE WITNESS: Correct. 19 COMMISSIONER EPPS: Now, was that part 20 of the corporate structure of a lean operation? 21 Is that the reason? The rationale? 22 THE WITNESS: Truth be told, most of it 23 was -- I knew I needed to focus on doing some 24 hiring. I had talked about it with Mr. Yung. 25 Actually, probably Memorial Day. Just before 138 DONNA MORE 1 Memorial Day I remember having a conversation, 2 and for better or worse, Commissioner Epps, I 3 interviewed at some point over the summer and 4 into the fall and after Labor Day, but I was -- 5 I was doing a lot of different things. And 6 sometimes what you need to do is take the time 7 to say, okay, whoa. I have to get another 8 lawyer on board. And, I utilized a lot of -- 9 of my outside gaming lawyers to get a lot of 10 things done but finally bit the bullet and 11 said, you know, I am not -- I cannot do it all 12 myself. I have to take the time and interview, 13 and that's what I ultimately did. 14 COMMISSIONER EPPS: And prior to your 15 joining Columbia, Columbia did not have 16 in-house general counsel? 17 THE WITNESS: That's correct. 18 COMMISSIONER EPPS: Okay. When you 19 guys-- after you joined the company, and you 20 were considering entering the Atlantic City or 21 the New Jersey market, you realized that an 22 audit committee -- at some point you realized 23 an audit committee was an absolute requirement. 24 THE WITNESS: That's correct. 25 COMMISSIONER EPPS: And on January 1st 139 DONNA MORE 1 or January 3rd or 4th or whatever, whenever the 2 matter closed -- 3 THE WITNESS: January 3rd. Yeah. 4 COMMISSIONER EPPS: You guys took over 5 the company without a audit committee? 6 THE WITNESS: That's correct. 7 COMMISSIONER EPPS: So from day one you 8 were out of compliance. 9 THE WITNESS: That's correct. 10 COMMISSIONER EPPS: And this didn't get 11 resolved unitl, even if I take your testimony, 12 March you began with a plan -- you think you 13 began with a plan that could have -- you 14 thought might be manageable, but ultimately it 15 got done in June. 16 THE WITNESS: Correct. There were 17 discussions before March. But in terms of what 18 it would look like and whether it would be 19 joint or single and who would serve as our 20 independent member that I personally had. But, 21 yes, in terms of the resolution of the issue, 22 it didn't get resolved until June. But while I 23 understood that we were not in compliance, I 24 guess part of my understanding was we were 25 having ongoing discussions. And the deadline 140 DONNA MORE 1 that I had heard that was communicated to me is 2 you guys have to have a meeting before the end 3 of the second quarter, which we did. 4 But, you know, being in discussions, I 5 understand, is not the same as being in 6 compliance. But I thought that it was moving 7 the ball forward to get an audit committee that 8 would satisfy what your requirements were. 9 COMMISSIONER EPPS: So your testimony is 10 you were told by someone from the regulatory 11 side that you're not really in violation if you 12 have a meeting by June? 13 THE WITNESS: No. No. No. I was 14 told-- there were two that I recall. There 15 were two specific deadlines that I was aware of 16 from our outside lawyers. One was to get a 17 charter, an audit committee charter in by 18 whatever the date was, and the other was that 19 we needed to have the meeting before the end of 20 June. And, again, I'm not saying that I was 21 ever told that we were in compliance. It was 22 just that we were having these discussions 23 about what this committee would look like in an 24 effort to make sure we got it right. 25 COMMISSIONER EPPS: But from an in-house 141 DONNA MORE 1 perspective, January 3rd wasn't a deadline for 2 audit committee? 3 THE WITNESS: Well, January 3rd -- it 4 says we have to have an audit committee. The 5 rule says we have to have an audit committee. 6 I had-- you know, had some discussions. And I 7 guess -- and I can't base it on any particular 8 conversation, but I guess my own belief was 9 because we were trying to discuss what it would 10 look like that there was some leeway in when we 11 had to have the committee in place. 12 COMMISSIONER EPPS: Okay. And with 13 respect to your compliance committees or your 14 compliance program, there was no corporate 15 compliance program at Columbia before you came 16 in-house? 17 THE WITNESS: That's correct. 18 COMMISSIONER EPPS: Even though Columbia 19 was functioning in other gaming jurisdictions 20 prior to your coming on? 21 THE WITNESS: There was no requirement 22 in the other jurisdictions where they were 23 functioning to have a corporate compliance 24 committee. As I said, there were folks that 25 did certain reviews. But it wasn't formalized 142 DONNA MORE 1 with a compliance plan as I -- as I look at it. 2 COMMISSIONER EPPS: So at a corporate 3 level there was no -- 4 THE WITNESS: Overarching plan. 5 COMMISSIONER EPPS: Overarching plan of 6 compliance even though you were in gaming 7 jurisdictions at the time. 8 THE WITNESS: There was no -- again, 9 this is part of the concept of going from a 10 small casino company to a big casino company in 11 a short period of time. The jurisdictions that 12 they -- that they had been operating, really 13 prior to when I came on board, didn't have that 14 as a requirement. And, as I say, while there 15 were people doing compliance things at the 16 property levels, there was not an overriding 17 plan at the corporate level. And there was no 18 requirement to have one. And even at this 19 moment in time, the requirement of a compliance 20 plan from a Nevada standpoint comes into place 21 when we have-- when we become public for 22 purposes of our debt, and we submit our plan 23 for approval. But the reporting of that in 24 other jurisdictions, I think we may send 25 minutes but, there's no specific reporting. 143 DONNA MORE 1 COMMISSIONER EPPS: Okay. With respect 2 to that -- again on the audit committee, I 3 think you testified that Mr. Edwards may have 4 reported to Mr. Buro if there were issues, who 5 may have reported up to you. And then Mr. King 6 reported to Mr. King. But on January 3rd, how 7 did -- I'm still not clear -- 8 THE WITNESS: Uh-huh. 9 COMMISSIONER EPPS: -- how did they know 10 that that's what they were supposed to do if 11 there was no communication? I mean, a new 12 company is in, and there's this new line of 13 reporting. But if there's no indication, 14 doesn't someone at some point say, hey, I'm 15 surveillance in New Jersey. I've got to report 16 to an audit committee. Where do I go? 17 THE WITNESS: Well, I think that there-- 18 I just wasn't involved in the communication. I 19 think that there was communication, and I -- 20 again, it -- from the surveillance standpoint, 21 I think I may have actually spoken to Mr. Buro 22 about it, who I believe would have talked to 23 Mr. -- Mr. Edwards, the surveillance fellow, 24 that he reported, administratively I guess, to 25 Fred. But -- and I think there were also 144 DONNA MORE 1 discussions, as I say. Because at some point I 2 think that both the understanding of Bill King 3 and Bill Edwards was they could always pick up 4 a phone and call me. But, you know, 5 Commissioner Epps, was it the perfect 6 reporting? Obviously, it wasn't. 7 COMMISSIONER EPPS: And going to that, 8 if the purpose of an independent audit 9 committee is to let them go outside of the 10 chain, doesn't it become a problem if they are 11 ultimately reporting to corporate? 12 THE WITNESS: Well, I think that, 13 obviously, you know, our goal in the 14 discussions was to have an independent audit 15 committee in place. My role at corporate as 16 the general counsel, to some extent in my -- my 17 dictates under sort of the cannons of ethics as 18 a lawyer, I think, you know, if they need to 19 report something to me, in some sense my job is 20 to take that information and make sure it gets 21 handled appropriately in my professional 22 capacity no matter what. But I'm in agreement 23 with you that, you know, we need to get -- we 24 needed to have an audit committee and 25 independent audit committee in place. And, you 145 DONNA MORE 1 know, the discussions, as you've heard, took 2 longer than I think -- I anticipated, 3 certainly. And it would have provided better 4 reporting, which is why there's the rule. 5 COMMISSIONER EPPS: And if -- if looking 6 forward you were looking at end of '08 when you 7 had to comply with Sarbanes and have two 8 committees -- 9 THE WITNESS: Uh-huh. 10 COMMISSIONER EPPS: -- why not just go 11 with two committees at the beginning, which 12 would have satisfied Sarbanes, satisfied New 13 Jersey -- potentially if one committee -- 14 THE WITNESS: Right. 15 COMMISSIONER EPPS: -- was set up and in 16 the way that it was manageable, why not start 17 with two and in '08 when you got there you were 18 already set? Was that a -- 19 THE WITNESS: I think that's where we 20 ended up in March, quite frankly. Although, 21 again, from what I understand, what Sarbanes 22 required of us and what New Jersey required 23 would have been a little different. But, you 24 know, I -- and it's no excuse. It's easier to 25 look at this issue in a vacuum than for me it 146 DONNA MORE 1 was at the time going through this. I -- I, 2 admittedly, had a lot going on. And so when I 3 focused on it, I was looking at what can we do 4 to potentially comply with Sarbanes? Can we do 5 to comply with New Jersey? What can we do to 6 comply with any of the other jurisdictions that 7 have, you know, rules on this? And I think 8 where we did come out, and to separate the 9 committees and then move forward on it from 10 that day, but that decision doesn't really 11 occur until March. 12 COMMISSIONER EPPS: But earlier on when 13 you were looking to consolidate them, was that 14 mart of the overarching which seems to be the 15 policy of the company, to consolidate functions 16 at all costs, was that another one of the 17 things where you consolidated this committee 18 and didn't have to manage two. Was that part 19 of that? 20 THE WITNESS: For me, it wasn't really 21 part of that at all. For me, it was how many 22 meetings -- how many meetings do I need to 23 have? And you want to have as many meetings as 24 you need to be compliant. But, honestly, on 25 any given day, I would actually rather do stuff 147 DONNA MORE 1 than sit in a meeting because I get more done 2 that way. So, for me, my own just time 3 standpoint, how do I best utilize my time? And 4 if I can consolidate the needs of a committee 5 that, in essence, has the same function that 6 was preferable. But if I can't, I can't. 7 COMMISSIONER EPPS: Now, is that all 8 that went into, is your time concerns or 9 corporate philosophy to consolidate the effort 10 at all? 11 THE WITNESS: I never -- to be honest, 12 when I talked about it with Mr. Yung, he 13 didn't-- he didn't give me direction one way or 14 the other. This was all my -- my trying to 15 grapple with what I wanted this thing to look 16 like. 17 COMMISSIONER EPPS: Okay. Now, you 18 testified a little bit earlier about Mr. Yung 19 not being aware of some of the things because 20 at a high level you get it on a much broader 21 picture, and you don't necessarily drill down 22 on every single thing that you get in front of 23 you. But then later it seemed -- your 24 testimony suggested that this management 25 service agreement is the corporate philosophy 148 DONNA MORE 1 of how you operate, at least outside of New 2 Jersey. That's the -- seems to be the Columbia 3 Sussex structure. That's what you do. So I 4 don't understand how you say that Mr. Yung 5 wouldn't understand that, and that seems to be 6 a top-down philosophy. 7 THE WITNESS: I think that in Mr. Yung's 8 testimony he referred to some of the substance 9 of what's in the management services agreement 10 when we talks about things like centralization. 11 I don't think he is familiar with the actual 12 content of the management services agreement, 13 although if he was asked in the context of 14 centralization, he could probably give you a 15 lengthy answer on it. So I think that's where 16 the disconnect may have been, Commissioner, was 17 the actual what's contained from a legal 18 standpoint in the management services agreement 19 versus the concept and philosophy of trying to 20 centralize some of the systems. 21 COMMISSIONER EPPS: Respectfully, I 22 didn't get that. I mean, because the answer 23 was I don't really know, and that didn't say, 24 well, I know -- I don't know subtle nuances, 25 but I know general knowledge of it. I didn't 149 DONNA MORE 1 get that. And it's not for us to debate 2 because you weren't the witness. But I just 3 wanted to see where you were coming from 4 because you testified that he did. 5 THE WITNESS: Originally -- and, again, 6 it's, you know -- it's hard as you're going 7 through this process, the management services 8 agreement was probably something that we talked 9 about way back in January. And so, again, it's 10 just, you know, in terms of what was going on 11 on a day-to-day basis with which jurisdictions 12 approved it and which hadn't and whatever, 13 obviously, when I need to go in and put a 14 letter in front of him to say here's what's 15 going on with the management services agreement 16 in New Jersey, it hasn't been approved, it's 17 not effective, we're not accruing for it -- 18 except for maybe one month when there was an 19 mistake, and we reversed the accrual -- so take 20 a look at this letter and review it. And if 21 it's okay with you, sign off on it. You know, 22 on that kind of thing, yes. It jogs -- it jogs 23 his attention, so you're back focused on what 24 this letter is. But there's a lot of things 25 crossing his desk, not just my stuff. And so 150 DONNA MORE 1 part of my job is to, you know, tell him what's 2 in front of him, and in terms of a legal 3 document, and what's substantively in there. 4 But, again, not necessarily for us, but I think 5 on the global concept of centralization, he did 6 talk about it, and it just may not be in 7 coordination with the services agreement 8 itself. 9 COMMISSIONER EPPS: Okay. Because 10 again, I guess my difficulty is based on your 11 testimony, it seems to be the operating 12 philosophy of the company. At least on the 13 gaming side. 14 THE WITNESS: On the gaming side. As I 15 say, in -- and off the top of my head, I'm 16 trying to think. I want to say in one or two 17 jurisdictions that needed no approval from a 18 regulatory standpoint to put it into effect, 19 and I think in two others it did need approval 20 which we received, so operationally while Mr. 21 Yung would know that in certain places there 22 was the ability to centralize, I don't know 23 that it became an issue that he focused on 24 except for that it wasn't -- it wasn't 25 happening in New Jersey. 151 DONNA MORE 1 COMMISSIONER EPPS: Right. But I 2 mean -- I guess my point is other than in New 3 Jersey, it's what you do. Whether it was 4 difficult to get it through or -- 5 THE WITNESS: Right. 6 COMMISSIONER EPPS: -- had to get 7 approval or not. 8 THE WITNESS: Right. 9 COMMISSIONER EPPS: It's what you do 10 everywhere else. So that's the way you run 11 your company as a corporate philosophy, 12 corporate structure outside of New Jersey. 13 THE WITNESS: Right. I guess where -- 14 and maybe it's -- I guess what I'm saying is, 15 is I think he -- from a corporate philosophy 16 standpoint, that's right. The vehicle to 17 effectuate the corporate philosophy, which is 18 the management services agreement, is maybe 19 where he's -- he's not as familiar with the 20 agreement as he is with the result of the 21 agreement. 22 COMMISSIONER EPPS: Okay. So he didn't 23 recognize the name of the document, maybe? 24 THE WITNESS: Correct. 25 COMMISSIONER EPPS: Okay. Nothing else. 152 DONNA MORE 1 CHAIR KASSEKERT: Commissioner Fedorko? 2 VICE CHAIR FEDORKO: I just have one 3 question. 4 During your testimony you mentioned the 5 phrase "model" for the industry. Do you think 6 you're there yet? 7 THE WITNESS: I don't think we're there, 8 but I'm working on it. I'm working on it. 9 We-- listen, I am -- I am very pleased to be 10 affiliated with the company. As I said, one of 11 the discussions that I had early on before I 12 ever came to the company was, you know, I've 13 spent a good part of my legal career in this 14 industry, and I have a great commitment to this 15 industry, and a great respect for this 16 industry. I've spent four and a half years of 17 my life trying to craft the rules and regs that 18 now govern Illinois. And from a personal 19 standpoint, I never want to be put in a 20 position of having to compromise what I know 21 has to get done. And, you know, Mr. Yung 22 understood that. And he has -- he has always 23 supported me a hundred percent in that. And 24 I'm the one responsible at the company for 25 making sure that that's done. And, so, are we 153 DONNA MORE 1 a model yet? You know, we have some glitches 2 in the system, but we have -- we have good 3 employees at all our properties. We have good 4 folks at corporate. And, you know, my -- my 5 hope is that the next time we're in front of 6 you, we have -- we have an exemplary record 7 that we can be proud of and you can be proud 8 of. 9 VICE CHAIR FEDORKO: Thank you. 10 CHAIR KASSEKERT: Commissioner Frulio? 11 COMMISSIONER FRULIO: Yes. Miss More, 12 it was surprising to me that your role, as you 13 stated to Mr. Michael, as far as the layoffs 14 was concerned was minimal. At least until 15 August the 7th. Was it surprising to you that 16 you should have had more input prior to that? 17 THE WITNESS: Not really. In the sense 18 of, you know, I've learned -- I've learned some 19 things about the operations of the business, 20 obviously, as I've gone along. I'm not sure I 21 really have the capabilities of knowing how 22 many people need to be on the floor at any one 23 time or how many people you needed in the cage. 24 It's not -- I get involved in it when there is 25 a problem. As an outside lawyer, obviously, if 154 DONNA MORE 1 one of my clients got a complaint on something, 2 I focused on it. But I don't consider that to 3 be my primary area of expertise at all. And so 4 while I get involved, when the two sort of 5 collide, if you will, I did not feel that I was 6 being left out of the discussion, that I should 7 have been included. 8 COMMISSIONER FRULIO: I'm glad you said 9 what you said just now because I want to look 10 at Exhibit A-50, the decision on the security 11 guard layoff. When I see a sentence here 12 "After checking with Harrah's Showboat 13 security, which is approximately the same 14 size." Well, it might be the same size, but I 15 mean, geography might be different inside the 16 casino where you might need more security 17 guards leading into the Quarter. I'm talking 18 about stationary positions, roving positions. 19 Positions needed for filling credits leading to 20 and from the cage. Do you feel that way, 21 anybody say that should be -- should be 22 something else to look at besides the size of a 23 casino compared to another casino? 24 THE WITNESS: Well, I know -- as I say, 25 that's why when I say -- you know, was I 155 DONNA MORE 1 involved in those discussions? Because really 2 from how many stationary people you have to how 3 many roving people and really on a practical 4 level what you need? I'm willing to admit I'm 5 good at a lot of things, but that's not one of 6 them. It's not my expertise. So the 7 operational people really need to drill down 8 and figure that out. Whether we are comparable 9 to Harrah's and Showboat in terms of how we 10 utilize security? I can't answer that. 11 COMMISSIONER FRULIO: Okay. Thank you. 12 CHAIR KASSEKERT: Commissioner 13 Sommeling? 14 COMMISSIONER SOMMELING: Yes. Just one 15 question, Chair. 16 In listening to all the testimony about 17 what was known and unknown with respect to the 18 regulations, especially New Jersey -- 19 THE WITNESS: Uh-huh. 20 COMMISSIONER SOMMELING: -- now your 21 company has to be compliant in all venues. 22 And, of course, we know that as well and we 23 require that as well. But what kind of plan is 24 really put together if you could give it to us 25 in a paragraph about what this company is going 156 DONNA MORE 1 to do to familiarize itself with all the 2 aspects of what is required in New Jersey so 3 that you're in compliance and so that you have 4 the audit committee functioning properly so 5 that you have the right staffing levels and so 6 that you know what positions you have to pay 7 attention to within your working staff within 8 the casino? Is there a committee that's 9 working on that right now? Or is that you by 10 yourself? Or is it in consultation with people 11 in management at Tropicana, including Mr. Yung, 12 the owner of the company? I mean, is this all 13 ongoing right now as we speak? 14 THE WITNESS: It is ongoing in terms of, 15 you know, we talk about employee training, you 16 know. We also, you know, have as management to 17 familiarize ourselves with what is going on. 18 We feel very fortunate that our management at 19 the property level here is very good. I think 20 you've all met Mr. Diannantonio. You or your 21 staff may be familiar with Miss Hughes, our 22 in-house property lawyer, who's excellent. 23 And, you know, part of that is we have made 24 some -- we have made some slips. And as we 25 become more knowledgeable, I -- you know, I 157 DONNA MORE 1 spent a good deal of my time focused on New 2 Jersey and your rules and regs. Again, to make 3 sure that some of the -- some of the missteps 4 we've had at the start are just that. And on a 5 going-forward basis that we become not only 6 more compliant but really become a model that, 7 you know, when you all say, well, you know, we 8 wish you do it the way the Tropicana does it, 9 and that's my goal. 10 COMMISSIONER SOMMELING: Thank you. 11 CHAIR KASSEKERT: Anything else? 12 Anything on redirect? 13 MR. MICHAEL: Nothing. 14 CHAIR KASSEKERT: Anything on recross? 15 MS. MAHER: No, thank you. 16 CHAIR KASSEKERT: Okay. Why don't we 17 recess for lunch. Be back here at 2:00? 18 Everybody agree with that? 19 Okay. We'll recess until 2:00. 20 (The luncheon recess was taken at 1:04 21 p.m.) 22 23 24 25 158 1 2 C E R T I F I C A T E 3 4 5 I, DARLENE SILLITOE, a Certified Court 6 Reporter and Notary Public of the State of New 7 Jersey, certify that the foregoing is a true 8 and accurate transcript of the proceedings. 9 10 11 I further certify that I am neither 12 attorney, of counsel for, nor related to or 13 employed by any of the parties to the action; 14 further that I am not a relative or employee of 15 any attorney or counsel employed in this case; 16 nor am I financially interested in the action. 17 18 19 DARLENE SILLITOE CCR 20 License No XI01023 21 22 Dated: November 26, 2007 23 My Commission Expires on July 10, 2009 24 ID No 2062871 25