1 1 STATE OF NEW JERSEY CASINO CONTROL COMMISSION 2 ---------------------------------------------- 3 Petition of Adamar of New Jersey, Inc., (Adamar) 4 for renewal of its casino license and other matters 5 6 (PRN 2140705, 2910706, 2910708) 7 Volume 4 - PM Session 8 --------------------------------------------- 9 Wednesday, November 28, 2007 10 Atlantic City Commission Offices 11 Tennessee and Boardwalk 12 Atlantic City, New Jersey 08401 13 2:18 p.m. to 5:56 p.m. 14 15 Certified Shorthand Reporter: Lynda DiGrazio-Smith 16 -------------------------------------------- 17 18 19 ATLANTIC CITY COURT REPORTING 20 CERTIFIED SHORTHAND REPORTERS 21 1125 Atlantic Avenue, Suite 416 22 Atlantic City, New Jersey 08401 23 (609)345-8448 24 www.ACcourtreporting.com 25 2 1 BEFORE: 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 DiGIACOMO, ASSISTANT GENERAL COUNSEL STEVEN M. INGIS, ASSISTANT GENERAL COUNSEL 10 11 APPEARANCES: 12 13 STERNS & WEINROTH, PC BY: PAUL M. O'GARA, ESQ. 14 CRAIG P. CORVELEYN, ESQ. FOR: TROPICANA ENTITIES 15 16 MICHAEL CARROLL BY: GUY S. MICHAEL, ESQ. 17 JOHN J. MERCUN, ESQ. 18 COOPER LEVENSON BY: LLOYD D. LEVENSON, ESQ. 19 LYNNE KAUFMAN, ESQ. 20 21 22 23 24 25 3 1 INDEX 2 WITNESS PAGE 3 LAUREN MASSARA 4 DIRECT BY MS. WAY 10 5 CROSS BY MR. MICHAEL 17 6 RECROSS BY MR. MICHAEL 20 7 FRED BURO 8 DIRECT BY MS. MAHER 22 9 CROSS BY MR. LEVENSON 80 10 RECROSS BY MR. LEVENSON 151 11 - - - 12 EXHIBITS 13 NUMBER ENTERED DESCRIPTION 14 A-81 X November 16, 2007 cover letter from 15 Lynne Kaufman (Cooper Levenson) to CCC 16 Document Control Unit enclosing copies 17 of a proposed Audit Committee Charter 18 for Ramada Holdings. Letter copied to 19 Director, DGE, Mary Jo Flaherty, Wendy 20 Way, Dorothy Turi, Donna More, Len 21 DiGiacomo, Tama Hughes, Guy Michael, 22 Lloyd Levenson 23 24 25 4 1 INDEX (CONT'D) 2 MARKED ENTERED DESCRIPTION 3 A-82 X October 29, 2007 fax from Tama 4 Hughes to Donna More containing 5 October 29,2007 letter from Tama 6 Hughes to CCC Chairperson Kassekert 7 forwarding to the Chair Jeff 8 Silver's Certification dated 9 October 24, 2007. Letters copied 10 to Len DiGiacomo, Wendy Way, Yvonne 11 Maher, Mitch Schwefel, Dianna 12 Fauntleroy 13 A-83 X October 26, 2007, letter from 14 Donna More to Len DiGiacomo and 15 Mary Jo Flaherty confirming that 16 2/19/2007 Legal Services Agreement 17 with Jeff Silver was terminated 18 A-84 X November 9, 2007 letter sent 19 via email from Lynne Kaufman 20 (Cooper Levenson)to Len DiGiacomo, 21 Mary Jo Flaherty and Wendy Way to 22 Len DiGiacomo regarding outstanding 23 Audit Committee Issues and 24 satisfaction of certain conditions. 25 Also enclosed Jeff Silver's 11/9/2007 Certification 5 1 INDEX (CONT'D) 2 NUMBER ENTERED DESCRIPTION 3 D-62 X Letter dated November 1, 2007 4 to Len DiGiacomo, Assistant General 5 Counsel to Wendy Way, Deputy 6 Attorney General. Re: Audit 7 Committee (PRN2910708) 8 D-63 X Letter dated November 13, 2007 9 to Len DiGiacomo, Assistant General 10 Counsel from Wendy Way, Deputy 11 Attorney General. Re: Audit 12 Committee (PRN2910708) 13 D-64 X Letter dated November 13, 2007 14 to Chair Linda M. Kassekert from 15 Mary Jo Flaherty, Deputy Attorney 16 General. Re: Audit Committee 17 (PRN2910708) 18 D-65 X Inter-Office memo dated June 19 24, 2007 to Kevin Preston from G.C. 20 Kohler. Re: Tropicana Atlantic 21 City - Security 22 23 24 25 6 1 CHAIR KASSEKERT: On the record 2 MR. MICHAEL: I think there is some 3 housekeeping matters that we can attend to -- 4 CHAIR KASSEKERT: Sure. 5 MR. MICHAEL: -- I think each of the 6 parties has additional exhibits that they want to 7 put before the commission for consideration. 8 MS. MAHER: If I may, Chair? 9 CHAIR KASSEKERT: Yes. 10 MS. MAHER: Yes, thank you. 11 We have one further exhibit on behalf 12 of the Division and that is marked D-65. It is an 13 inter-office memo dated June 24, 2007, to Kevin 14 Preston from G.C. Kohler. It was the security 15 staffing report that was discussed in Mr. Preston's 16 testimony. 17 CHAIR KASSEKERT: What was it, D? 18 MS. MAHER: D-65. 19 CHAIR KASSEKERT: D-65, any 20 objection? 21 MR. LEVENSON: No objection. 22 MR. MICHAEL: Yeah, the applicant has 23 four exhibits all involving correspondence related 24 to the Audit Committee it will be marked A-81, 82, 25 83 and 84. A-81 is a November 16, 2007 cover letter 7 1 attaching a variety of correspondence. A-82 is an 2 October 29, 2007, fax from Tama Hughes; 83 is an 3 October 26, 2007, letter from Donna More; and 84 is 4 a November 9, 2007 letter by e-mail from Lynne 5 Kaufman. They involve the Audit Committee and 6 copies have been distributed and I asked that they 7 be entered into evidence as well. 8 CHAIR KASSEKERT: Thank you. 9 Any objection. 10 MS. WAY: No objection. 11 Madam Chair, in the same vein, the 12 Division offers D-62 to D-64. The Division's letter 13 of responses to the Internal Audit Committee or the 14 Independent Audit Committee Petition. D-62 is my 15 letter dated November 1st. D-63 is my letter dated 16 November 1. D-63 is my letter dated November 13 and 17 D-64 is DAG. Flaherty's letter dated also November 18 13. 19 MS. FLAHERTY: Chair, I'm not sure if 20 there is a request with regard to my resource -- 21 CHAIR KASSEKERT: Yeah, I was going 22 to ask that next if there was any objection and then 23 any request for any sealing requests for any of 24 these items? 25 MR. LEVENSON: Yes. Number 65, the 8 1 portion of that that deals with location of cameras 2 on the floor plan and internal controls and alike. 3 MS. KAUFMAN: Also with respect to I 4 think the Division a -- I don't have the list, the 5 Mary Jo Flaherty letter -- 6 MS. WAY: That's D-64. 7 MS. KAUFMAN: D-64, we do have a 8 request with respect to Jeff Silver's compensation. 9 MS. WAY: No objection. 10 CHAIR KASSEKERT: No objection. 11 Can we make sure we get the sealing 12 request taken care of before it's distributed beyond 13 the commissioners. 14 Are there any other procedural 15 matters? 16 MS. FLAHERTY: Yes. I wanted to make 17 a few -- state for the record as of November 27, Mr. 18 Mitchell, Theodore R. Mitchell, has been made senior 19 vice president and chief financial officer and 20 treasurer of Tropicana Casino and Resort, and if the 21 Division has no objection to his serving in that 22 position, then we would ask that you review and rely 23 upon our previously filed qualifier report with 24 regard to this his qualifications. Thank you. 25 CHAIR KASSEKERT: Thank you. 9 1 MR. DIGIACOMO: Madam Chair and 2 Commissioners, if I may, I think one of the requests 3 pertained to D-64 on the sealing of Mr. Silver's 4 compensation. 5 CHAIR KASSEKERT: Yes. 6 MR. DIGIACOMO: One of the criteria 7 for determining independence goes to that issue, I 8 think at some point depending upon what other proofs 9 maybe in the case a further discussion of whether 10 that amount should be sealed or not -- 11 CHAIR KASSEKERT: Okay, but the 12 Division does not object to that? 13 MS. FLAHERTY: No objection. 14 MS. WAY: No objection, Chair. 15 CHAIR KASSEKERT: We will reserve 16 that. 17 Any other approval matters? 18 Mr. Levenson, do you have a witness 19 to call? 20 MR. LEVENSON: We rest. 21 CHAIR KASSEKERT: Thank you Ms. 22 Maher, Ms. Way. 23 MS. WAY: Thank you, Madam Chair. 24 The Division calls Lauren Massara. 25 MR. NANCE: Raise your right hand 10 LAUREN MASSARA - DIRECT 1 please. 2 THE WITNESS: (Witness complied.) 3 LAUREN MASSARA, having been duly 4 sworn, was examined and testified as 5 follows: 6 MR. NANCE: Please state your name 7 for the record. 8 THE WITNESS: Lauren Massara. 9 MR. NANCE: Please spell your last 10 name. 11 THE WITNESS: M-A-S-S-A-R-A. 12 MR. NANCE: Thank you. 13 CHAIR KASSEKERT: You may proceed, 14 Ms. Way. 15 DIRECT EXAMINATION BY MS. WAY: 16 Q. By whom are you presently employed? 17 A. State of New Jersey Division of 18 Gaming Enforcement. 19 Q. Are you assigned to any particular 20 bureau? 21 A. Regulatory Enforcement Bureau. 22 Q. In what capacity? 23 A. State investigator. 24 Q. What are your duties? 25 A. To insure that casinos compliance 11 LAUREN MASSARA - DIRECT 1 with rules and regulations of Casino Control 2 Commission, and particular emphasis on surrounds and 3 security and also rules of the games, gaming 4 equipment, alcoholic beverage control and underage 5 gambling and drinking. 6 Q. To what casino hotels are you 7 assigned? 8 A. Currently, Bally's Park Place, 9 Tropicana and Hilton. 10 Q. How long have you been employed as a 11 state investigator? 12 A. Approximately, 4 1/2 years. 13 Q. Approximately, how many 14 investigations are you involved in during the course 15 of a year? 16 A. About 120. 17 Q. Did there come a time when you were 18 assigned to investigate the formation of an 19 Independent Audit Committee for Tropicana Atlantic 20 City? 21 A. Yes. 22 Q. When? 23 A. June of 2007. 24 Q. Ultimately, did you prepare a report 25 on your investigation? 12 LAUREN MASSARA - DIRECT 1 A. Yes. 2 Q. I show you D-51. 3 A. (Witness perused document.) 4 Q. Look at D-51 please. Is that the 5 report you prepared? 6 A. Yes. 7 Q. Once you received your assignment to 8 investigate the formation of an Independent Audit 9 Committee for Tropicana Atlantic City, what did you 10 do? 11 A. I called Bill Edwards, who is the 12 director of surveillance of Tropicana on July 3. 13 Q. Is that July 3, 2007? 14 A. Yes. 15 Q. Did you interview Mr. Edwards? 16 A. Yes. 17 Q. What did you learn from your 18 interview? 19 A. He advised me that he reports to Mr. 20 Fred Buro on matters of day-to-day operations and 21 administrative matters, and he also reports to Fred 22 Buro on policies and procedures and authority. 23 Q. And that was on July 3. Correct? 24 A. Yes. 25 Q. Did you question him about reporting 13 LAUREN MASSARA - DIRECT 1 to an Independent Audit Committee? 2 A. Yes. 3 Q. And what did he say? 4 A. He advised me that he has no 5 knowledge of whom to report to as far as an Audit 6 Committee is concerned and he has had no reason to 7 report to anyone other than Mr. Buro. 8 Q. And whom did he previously report? 9 A. He reported to a Ned Armstrong, who 10 is the VP of Administration for Aztar Corporation. 11 Q. When did that change? 12 A. On January 3, 2007, when Columbia 13 Sussex took over Tropicana. 14 Q. All right. Did Mr. Edwards tell you 15 anything else? 16 A. He advised me if I had any more 17 questions to contact Tama Hughes. 18 Q. Did you contact Ms. Hughes? 19 A. Yes. 20 Q. Who is Ms. Hughes? 21 A. She is VP of corporate counsel. 22 Q. Okay. Did you interview Ms. Hughes? 23 A. Yes. 24 Q. When did you interview Ms. Hughes? 25 A. August 7, 2007. 14 LAUREN MASSARA - DIRECT 1 Q. What did you learn from your 2 interview? 3 A. She advised me that Mr. Edwards 4 should be reporting to Jeff Silver, who is a member 5 of the Independent Audit Committee for Tropicana 6 Casino and Resort. 7 Q. Did she advise you that Mr. Silver 8 was the sole member of that committee? 9 A. Not at that time, no. 10 Q. What did she call the committee, 11 Independent Audit Committee? 12 A. Tropicana Casino Resort Audit 13 Committee. 14 Q. Did you ask Ms. Hughes to provide any 15 documentation to you? 16 A. Yes. She faxed over to me the jobs 17 compendium which depicted the table of organization 18 for Tropicana. 19 Q. Would you look at Exhibit B to your 20 report please? 21 A. (Witness complied.) 22 Q. What is Exhibit B please? 23 A. It is the table of organization for 24 Tropicana. 25 Q. Is that what Ms. Hughes faxed to you? 15 LAUREN MASSARA - DIRECT 1 A. Yes. 2 Q. When did she fax it? 3 A. August 7, right after I talked to 4 her. 5 Q. What does it show in terms of 6 surveillance department reporting line? 7 A. It says that the surveillance 8 executive director is to report to Cologne Garacino 9 (ph) audit committee. 10 Q. And what is the -- what is the date 11 of the commission approval? 12 A. March 21, 2007. 13 Q. Okay. After you interviewed Ms. 14 Hughes, what did you do? 15 A. I called Jeff Silver. 16 Q. Did you interview Mr. Silver? 17 A. Yes. 18 Q. What did you learn from your 19 interview? 20 A. He confirmed that Donna More named 21 him a member of the Independent Audit Committee on 22 June 30, 2007. 23 Q. Did he confirm that he was the sole 24 member of that audit committee? 25 A. Yes. 16 LAUREN MASSARA - DIRECT 1 Q. Did he tell you anything else? 2 A. He said during our conversation that 3 Mr. Edwards had called him earlier that same day. 4 Q. What day was that please? 5 A. August 7, 2007. 6 Q. And what was the nature of that 7 conversation, did he tell you? 8 A. Mr. Edwards wanted to introduce 9 himself to Mr. Silver and give him his contact 10 information. 11 Q. After you interviewed Mr. Silver, 12 what did you do? 13 A. I called Tama back again the 14 following day, August 8. 15 Q. And did you glean any further 16 information? 17 A. She confirmed again that Mr. Edwards 18 was reporting to Mr. Ned Armstrong but that 19 reporting relationship ended when Columbia Sussex 20 took over on January 3. 21 Q. Did she tell you anything else? 22 A. I asked her, I said, is it fair to 23 conclude that Mr. Edwards did not have any direct 24 reporting line from January 3, 2007 through 25 August 6, 2007, and she said that wasn't entirely 17 LAUREN MASSARA - CROSS 1 accurate. 2 Q. Okay. What was not accurate about 3 that? 4 A. She said Mr. Edwards had the ability 5 to report to Donna More in the interim but she 6 didn't speculate as to whether or not he knew that. 7 MS. WAY: Thank you. 8 CHAIR KASSEKERT: Cross-examination, 9 Mr. Michael. 10 MR. MICHAEL: Yes, thank you. Good 11 afternoon. 12 THE WITNESS: Good afternoon. 13 CROSS-EXAMINATION BY MR. MICHAEL: 14 Q. You talked to Mr. Edwards you say on 15 what date? 16 A. July 3, 2007. 17 Q. And you wrote down everything he told 18 you? 19 A. Yes. 20 Q. Everything? 21 A. Everything. 22 Q. Did he talk to you about any 23 conversations he had with Donna More? 24 A. No. 25 Q. He never told you anything -- it 18 LAUREN MASSARA - CROSS 1 would be your testimony then that he never mentioned 2 to you that Donna More had spoken to him when she 3 had been on the property? 4 A. That's correct. 5 Q. And he never mentioned to you that he 6 was told and that he had an understanding with Ms. 7 More that he could contact her if there were any 8 problems with the property? 9 A. That's correct. 10 Q. That was not said to you? 11 A. Nope. 12 Q. Did you take notes of your interview? 13 A. Yes, I did. 14 Q. Do you have those notes? 15 A. No, I don't. 16 Q. Where are they? 17 A. They are shredded. 18 Q. You shred your notes? 19 A. (Witness nods head.) 20 Q. Did you tape the interview? 21 A. No. 22 Q. So your sole recollection of it is 23 what is here in this report? 24 A. Um-hmm, yes. 25 Q. Did Mr. Edwards in any way describe 19 LAUREN MASSARA - CROSS 1 to you what his arrangements had been with the prior 2 owners? 3 A. Yeah. Like I said before, he 4 reported to Ned Armstrong. 5 Q. And who is Ned Armstrong? 6 A. VP of Administration for Aztar. 7 Q. Was he -- was that the Audit 8 Committee? 9 A. I don't know, I didn't ask him. 10 Q. Did Mr. Edwards in any way mention to 11 you that he was uncomfortable with the reporting 12 arrangement that he had? 13 A. No. 14 Q. Did Mr. Edwards complain to you in 15 any way about any of the operations that were -- he 16 was undergoing at that point? 17 A. No. 18 Q. Did he tell you at any time that he 19 felt that he was not able to do his job performance 20 function properly? 21 A. No. 22 MR. MICHAEL: I don't have any other 23 questions. 24 CHAIR KASSEKERT: Thank you. Any 25 questions from the commissioners? 20 LAUREN MASSARA 1 COMMISSIONER EPPS: Was the purpose 2 of your investigation was to find out whether or not 3 he was comfortable with his reporting arrangement? 4 THE WITNESS: No. 5 COMMISSIONER EPPS: What was the 6 purpose of your investigation? 7 THE WITNESS: To find out if he was 8 complying with the regulation which requires him to 9 report to the Independent Audit Committee. 10 CHAIR KASSEKERT: Any other 11 questions? 12 COMMISSIONER EPPS: (Commissioner 13 Nods head.) 14 CHAIR KASSEKERT: Anything on 15 redirect? 16 MS. WAY: Nothing. Thank you, Madam 17 Chair. 18 CHAIR KASSEKERT: Anything of 19 recross? 20 MR. MICHAEL: Yes, one other 21 question. 22 RECROSS-EXAMINATION BY MR. MICHAEL: 23 Q. Did you ever give your report to Mr. 24 Edwards for him to review? 25 MS. WAY: Objection. That's out of 21 LAUREN MASSARA - RECROSS 1 line. That's not the procedure. 2 MR. MICHAEL: I'm just asking the 3 question. You can answer that if that's not the 4 procedure. 5 CHAIR KASSEKERT: You can answer. 6 THE WITNESS: My report that I 7 prepared that's here? 8 BY MR. MICHAEL: 9 Q. Right? 10 A. No. 11 Q. Did you show notes of your report to 12 confirm that your report was accurate with him? 13 A. No. 14 Q. So you have no way of knowing whether 15 or not Mr. Edwards would agree with what you wrote 16 here? 17 A. No. 18 MR. MICHAEL: No other questions. 19 CHAIR KASSEKERT: Anything? 20 MS. WAY: Nothing further. 21 CHAIR KASSEKERT: You may step down. 22 Thank you. 23 (Witness excused.) 24 CHAIR KASSEKERT: Ms. Maher, you may 25 call your next witness. 22 FRED BURO - DIRECT 1 MS. MAHER: The Division calls Fred 2 Buro. 3 CHAIR KASSEKERT: Mr. Nance will 4 swear you in. 5 MR. NANCE: Please raise your right 6 hand. 7 THE WITNESS: (Witness complied.) 8 FRED BURO, having been duly sworn, 9 was examined and testified as follows: 10 MR. NANCE: Please state your name 11 for the record. 12 THE WITNESS: Fred Buro. 13 MR. NANCE: Thank you. 14 CHAIR KASSEKERT: You may proceed. 15 MS. MAHER: Good afternoon, Mr. Buro? 16 THE WITNESS: Good afternoon. 17 CHAIR KASSEKERT: Could you make sure 18 you speak into the microphone and stay close so our 19 stenographer can hear, if the microphone doesn't 20 fall off the table. 21 MS. MAHER: I'll let you get 22 situated. 23 THE WITNESS: Okay. 24 DIRECT EXAMINATION BY MS. MAHER: 25 Q. Mr. Buro, from January 3, 2007 23 FRED BURO - DIRECT 1 through August, early August 2007, where were you 2 employed? 3 A. Tropicana Hotel Casino Atlantic City. 4 Q. What was your position there? 5 A. I was the president and chief 6 operating officer. 7 Q. I'm going to ask you to speak up a 8 little bit, I am having trouble hearing you so 9 probably others in the room are. 10 Again, what was your position there? 11 A. I was president and chief operating 12 officer. 13 Q. Can you give us a little bit about 14 your background and your career prior to coming to 15 Tropicana Atlantic City? 16 A. Sure. I started out in '89 for Trump 17 Hotel and Casino Resorts, um, through the marketing 18 vein, ultimately as president and chief operating 19 officer of Trump Plaza. 20 From there I went to Penn National 21 Gaming as the general manager of their largest 22 property at the time, which was Charlestown Races 23 and slots in West Virginia. And from there I went 24 to Columbia Sussex as the chief marketing officer. 25 And after about 2 1/2 years there, I went to -- I 24 FRED BURO - DIRECT 1 was of course in the same organization, moved to 2 Atlantic City as the president and chief operating 3 officer of that property. 4 Q. All right. And you began with your 5 casino career in 1999 with Trump. Correct? 6 A. 1989. 7 Q. Is that correct? 8 A. Yes. 9 Q. And your initial position with Trump 10 was what please? 11 A. I was director of marketing. 12 Q. And from 198 -- after you -- you were 13 director of marketing in 1989? 14 A. No. I actually started as a 15 consultant for Trump Hotels evaluating some of the 16 programs that were there at the time and was offered 17 a position full time for the organization -- 18 actually, I was a sole consultant and they were 19 exclusive to me and was offered a full time position 20 there probably 1994 or so as a director of 21 marketing. 22 Q. And what property was that at? 23 A. That was at Trump Plaza. 24 Q. How long were you in that position 25 with Trump Plaza? 25 FRED BURO - DIRECT 1 A. Probably for about a year and a half. 2 Q. And did you move up the chain at 3 Trump Plaza? 4 A. I did. From director of marketing to 5 executive director to vice president to senior vice 6 president of marketing, to executive director, 7 executive vice president of marketing and the 8 general manager to president chief operating 9 officer. 10 Q. And when did you leave Trump Plaza? 11 A. 2000, June of 2000. 12 Q. What position did you hold when you 13 left? 14 A. I was president of the property. 15 Q. And then you went to Penn National; 16 is that correct? 17 A. That's correct. 18 Q. And then from Penn National, did you 19 go to Columbia Sussex? 20 A. Yes. 21 Q. When did you begin your position with 22 Columbia Sussex? 23 A. I think it was March 2003. 24 Q. What was your position at Columbia 25 Sussex when you first began there? 26 FRED BURO - DIRECT 1 A. I was the chief marketing officer. 2 Q. And what were your duties as chief 3 marketing officer? 4 A. To begin the centralization process 5 at Columbia Sussex to take a lot of the marketing, 6 the day-to-day marketing analysis and direct mail 7 initiatives that took place at the property level 8 and move those to the corporate arena. 9 There was no corporate entity for 10 marketing at the time. There was a senior vice 11 president of gaming operations, Howard Reinhardt, 12 who worked out of Lake Tahoe but there was no 13 marketing initiative in corporate. I think it was 14 Bill Yung's wishes at the time to begin to bring a 15 lot of the functions of the corporate operation to 16 Fort Mitchell, Kentucky. 17 Q. And your function in that regard was 18 marketing. Correct? 19 A. That's correct. 20 Q. And so did you work with all of the 21 casinos in Mr. Yung's company at that time? 22 A. Yes. 23 Q. And you handled marketing for all of 24 them? 25 A. That's correct. 27 FRED BURO - DIRECT 1 Q. And who hired you? Who actually 2 recruited you and hired you to go to Columbia 3 Sussex? 4 A. Bill Yung. 5 Q. And he's the person that you 6 interviewed when you came in? 7 A. Yes. 8 Q. And he's the person that ultimately 9 made the decision to hire you? 10 A. Yes. 11 Q. How long were you with Columbia 12 Sussex before coming to Tropicana Casino? 13 A. I came here January of this past 14 year, so 2007; so about 2 1/2 years. 15 Q. How would you characterize your 16 relationship with Mr. Yung during the years you were 17 at Columbia Sussex? 18 A. Prolific, good. We did a lot of work 19 in a lot of the properties, put a lot of programs in 20 place that weren't there before, like marketing 21 plans themselves, templates for marketing plans to 22 identify for some of the people at the different 23 properties, some of the fundamentals that would help 24 build market shares specific jurisdictions, and Bill 25 seemed to enjoy to some degree in being involved in 28 FRED BURO - DIRECT 1 part of the those discussions. 2 Q. Now, when the discussion began 3 regarding the Aztar acquisition and the Tropicana 4 Atlantic City acquisition, did you have any role in 5 bringing that to Mr. Yung and positioning him to do 6 that? 7 A. No. 8 Q. When did you first learn about the 9 acquisition or the bidding process? 10 A. Bill told me about it during one of 11 our conversations that a broker had brought the deal 12 to him and that it seemed like it might be a long 13 shot, but they are going to take a look at it. It 14 was business broker who I think was on commission or 15 fee paid broker. 16 Q. All right. And what did he indicate 17 was his intention regarding his interest? 18 A. That he was interested in acquiring 19 the assets. At the time he was trying to grow the 20 company and pick up more of the casinos in his 21 portfolio versus hotel. 22 Q. Why was he talking to you about it, 23 do you know? 24 A. He knows my background and because of 25 my Atlantic City experience, and because of the work 29 FRED BURO - DIRECT 1 that we've done in marketing at all the properties 2 to date. There was a lot of work that we did and a 3 lot of programs that we put in place that were very 4 successful, and I think he had a high level of 5 confidence in me at the time. 6 Q. Was he looking at anything in 7 particular regarding operating the assets in the 8 Aztar acquisition when he spoke to you and was 9 considering the bid? 10 A. Looking at anything, could you be 11 more specific? 12 Q. Regarding the feasibility and the 13 profitability of the these options? 14 A. Sure. As everyone -- as most people 15 know, it was a bidding war ultimately between 16 Pinnacle organization and Columbia, and there was a 17 price, a strike price in the low to mid 30s at the 18 time when Columbia got involved. And to bid a 19 property up and bid an acquisition up, you have to 20 find value over what it -- expend large and to 21 justify price impact, and I think Bill took a look 22 at it and looked at some of the things associated 23 with the Aztar Corporation and saw opportunities to 24 bring more money to the bottom line and justify the 25 price he decided in his mind that he would pay for 30 FRED BURO - DIRECT 1 it. 2 Q. Do you know specifically what he was 3 looking at? 4 A. Sure. The first one was corporate 5 overhead with Aztar, I believe it was $68 million 6 and the other areas of course was payroll. 7 Q. And do you know -- did he discuss 8 with you or did you know that he was specifically 9 looking at a certain number of payroll savings with 10 regard to this acquisition? 11 A. Yes. It's public record and on the 12 road show, which I was part of to raise the funding 13 and the high yield debt to make the acquisition, and 14 then the comps calls as a matter of fact, that the 15 opportunities to grow the margin -- for spinoff, I 16 will speak specifically for a property like 17 Tropicana Atlantic City, which was the largest 18 property in the portfolio or the gross operating 19 profit of EBITDA was about $104 million. You could 20 estimate that, if you could take 30 to $40 million 21 out of payroll there, you can grow it out 160 or 170 22 or $180 million, plus on top of that you can throw 23 another $68 million in Aztar corporate overhead, 24 which I think during our road show presentation, we 25 stated that we would only need of that $68 million, 31 FRED BURO - DIRECT 1 $3 million or less to operate the asset, which I 2 believe it came in at a lot less than $3 million. 3 Q. When you were talking about payroll 4 savings with regard to the Tropicana Atlantic City, 5 was there a specific number identified by Mr. Yung 6 throughout the discussions prior to even obtaining 7 the asset that could be made or cut in payroll to 8 save money? 9 A. Yes. 10 Q. And how much was that identified? 11 A. I believe that was $40 million. 12 Q. Now, you talked a little bit about 13 the road show, what's the road show? 14 A. The road show is once you get -- once 15 you bid -- it's like buying a house, you put a bid 16 in a house, then you get a mortgage to pay for it. 17 The road show is very much the same thing for large 18 organizations. You make a bid to buy the property, 19 you win the bid, which Columbia did in the 50s, 20 maybe 54 I don't remember exactly, and then you have 21 to raise the money to pay for it. 22 The road show is where you go out to 23 Wall Street and some of the investment houses and 24 mutual funds and so forth that do high yield debt 25 and you state your case for buying the property. 32 FRED BURO - DIRECT 1 Why you have the expertise to run these properties, 2 what your financial assets are at the time, 3 demonstrate your ability to pay for them, and 4 demonstrate your ability to operate them 5 successfully. And we pay the money ultimately. 6 Q. Were you part of the road show? 7 A. I was. There were three people on 8 the road show, myself, Bill Young, and CFO at the 9 time was Rich Fitzpatrick had just joined the 10 company. 11 Q. And was there any discussion in the 12 presentation made on the road show regarding money 13 that could be shaved through payroll savings, 14 payroll cuts? 15 A. That was primarily -- that was one of 16 the prime topics of discussion on the road show as 17 the investors, as sharp as they are, keenly 18 understand this marketplace and understand this 19 industry, understand a lot of the players and 20 operators and try to understand how I could come in 21 and take a large chunk out of a payroll, and on the 22 road show that was commonly quite often brought up. 23 Q. And how was this brought up, the 24 whole contract, what did they say was going to 25 happen? 33 FRED BURO - DIRECT 1 A. It was brought up by the investors 2 and by anybody that participated and the question 3 was how do you guys tend to make the cuts. And, of 4 course, the answers were efficiency and corporate 5 organization and the fact that Aztar payroll was 6 robust, so adjust those different notes. 7 Q. Were there also similar discussions 8 with the regulators in New Jersey at the same time 9 that you're aware of? 10 A. No. 11 Q. Did those come later? 12 A. Later as in ultimately they did, but 13 I don't think during this process they did not. 14 Q. All right. You indicated that Mr. 15 Yung won the bid for the property; is that correct? 16 A. Yes. 17 Q. And at some point did he come to you 18 and ask you to step up and take a role specifically 19 at the Tropicana Atlantic City property? 20 A. Yes, he did. 21 Q. Tell us about that? 22 A. Okay. I was the Chief Marketing 23 Officer for the organization. I had experienced 2 24 1/2 interesting years there and somewhat rewarding 25 as a matter of fact because of the dynamics and the 34 FRED BURO - DIRECT 1 difference in each of the markets and each of the 2 properties and each of the cultures within each of 3 the properties in the jurisdictions and the 4 competitive aspects of those jurisdictions. 5 So Bill brought me in after the road 6 show -- actually just before the road show started 7 but after the bidding process was completed, and we 8 had won the bid. And he said we talked about it amongst 9 his higher up people in the company, and he mostly, 10 but everyone feels that I was the best choice to run 11 the asset and he would like me to do that. 12 To which I responded, I am pretty 13 happy as the chief marketing officer, I'd have to 14 really think about this seriously because it's a 15 very very different role going from -- although I 16 did manage the role as president before and I 17 enjoyed that as well, but a different role in the 18 chief marketing officer. It's pure competition on 19 many more levels and many jurisdictions and very 20 dynamic and it changes every day. 21 But -- so I told him I would think 22 about it and go home and talk to the family and see 23 what everybody thought, to which he responded and he 24 said, how about 90,000 more dollars, to which I said 25 okay. And I went home and I said guess what, we're 35 FRED BURO - DIRECT 1 going back to Jersey. I love New Jersey, I'm from 2 New Jersey and I did not want to come here. And 3 it's hard to contemplate that after just 2 1/2 years 4 and after so much work was in progress, that in 5 corporate to begin building a data warehouse, to 6 begin building a marketing repository where, simply 7 put, properties can upload and download information 8 about year to year marketing, marketing other 9 properties to educate themselves and train 10 themselves to help take these properties to the next 11 level. So it was not an easy decision for me, Bill 12 made it very simple. 13 Q. Okay. Now, in your mind at this 14 point, was there a difference between what Columbia 15 Sussex was acquiring through the Aztar acquisition, 16 and chiefly I'm talking about the Tropicana Atlantic 17 City, and the gaming establishments that were being 18 operated currently by the company? 19 THE WITNESS: Sure. I don't think 20 anyone would argue that this was a very very -- it 21 was a paradigm shift for the company. The company 22 had many small properties that did anywhere from $22 23 million per year to $45 million per year, the two 24 Mississippi properties to give you an example, 25 Greenville, Mississippi, Mississippi was a $70 36 FRED BURO - DIRECT 1 million dollar market property, approximately 25 2 million throughout the year in profit. The slot 3 revenue in Atlantic City is $36 million alone for 4 slots. So it's a very very big difference in the 5 type of property. 6 Although, Lake Tahoe gets a little 7 bit more sophisticated but still a very different 8 market than Atlantic City, Baton Rouge you can argue 9 is more Atlantic City type market or type property 10 -- that's all in two properties in that 11 jurisdiction. 12 But to simply put it, the portfolio 13 of Columbia Sussex at the time had nothing that did 14 $605 million per year in revenue. 15 Q. And besides that, what were some of 16 the other differences between Tropicana Atlantic 17 City and what Columbia Sussex already owned and 18 operated, just in terms of the logistics and how you 19 would handle it and things of that nature? 20 A. Logistics? 21 Q. How they are set up, how they 22 operate? 23 A. It's a big question because there's 24 almost no comparison when you think about it. 25 Although a slot machine is a slot machine, they're 37 FRED BURO - DIRECT 1 same in every property. The blackjack table is a 2 blackjack table, it's about hands per hour and pulls 3 per hour. There's a lot of jurisdictional issues 4 that come in to play in Atlantic City, minimus 5 requirements and so forth that would certainly come 6 into play in the same way in all the other 7 jurisdictions. 8 If you can perhaps ask me a different 9 way? 10 Q. Okay. Now, when did you first come 11 to the property, to the Tropicana Atlantic City to 12 start getting to know people and start to take a 13 look at things? 14 A. Probably September, if my memory 15 serves me. 16 Q. Of? 17 A. Of '06. 18 Q. What was your purpose in coming to 19 the property at that time? 20 A. Having gone through some of the other 21 acquisitions and having been on the other side of 22 the takeover and having been affected by change of 23 control when you lose your job, I know there is 24 immediately a huge trepidation on a part of the 25 employees and fear. And I guess my sole purpose was 38 FRED BURO - DIRECT 1 (a) to understand the property itself, update myself 2 on what's happened since I was gone, and also to 3 develop a level of comfort on the part of the staff 4 that was there that they can see this person behind 5 the name that they've heard and begin to get 6 comfortable with my style and the way I would 7 approach the business. 8 Q. Okay. And let me ask you this before 9 we go further. There was a split in 10 responsibilities in terms of the hotel and casino 11 side of the operation of the Tropicana Atlantic 12 City. Correct? 13 A. Yes. 14 Q. What was your area of responsibility? 15 A. My area of the responsibility was 16 casino. There's separate silos in the Columbia 17 Sussex business model, whereby one silo would be 18 hotel food and beverage and the day-to-day operation 19 of food and beverage operations up through corporate 20 structure into Bill Yung, the other is a casino side 21 of the business, and of course a construction side 22 of the business as well. 23 The casino side typically, I would 24 report up to at the time it would be Howard 25 Reinhardt but for the most part, I worked directly 39 FRED BURO - DIRECT 1 with Bill Yung because I was in Fort Mitchell, 2 Kentucky and Howard Reinhardt was in Lake Tahoe. 3 Q. All right. You were casino side of 4 operations in Tropicana Atlantic City? 5 A. Yes. 6 Q. Who was hotel side? 7 A. Mark Giannantonio. 8 Q. So when you came in, you were looking 9 at the gaming side of the operation. Correct? 10 A. Correct. 11 Q. You weren't dealing with the hotel or 12 the food and beverage side, would that also be 13 correct? 14 A. That's correct. 15 Q. Would that be a separate team of 16 people who was dealing with that? 17 A. Yes. 18 Q. Now in September of 2000 since you 19 were just kind of getting your feet wet, kind of 20 getting to know people; would that be credibility? 21 A. Yes. 22 Q. And at what point did you start 23 having -- at any point, did you start having 24 discussions about the layoffs and the cuts that were 25 going to be made in personnel. 40 FRED BURO - DIRECT 1 A. As we moved closer to October 2 November, December, right through there, it got more 3 detailed. It started out with the $40 million 4 number and it started to break down into -- I know 5 line share of these cuts were on the hotel from the 6 beverage side, but it got down to detail of that 7 about which departments and where there might be 8 opportunities to do staff to meet those numbers. 9 Q. Now the $40 million, that would be 10 for the entire operation; is that correct? 11 A. That's correct. 12 Q. Meaning as well as hotel? 13 A. Yes. 14 Q. And you indicated that the line share 15 of the cuts were on the hotel side? 16 A. That's correct. 17 Q. Did you have to deal with the issue 18 of cuts on the gaming side as well though? 19 A. Yes. 20 Q. And what role did you have in that, 21 when did that begin? Take us through that from when 22 it started. 23 A. Well, the inception and change of 24 control typically what happens is that -- and again 25 I've been on both sides of this, a new owner comes 41 FRED BURO - DIRECT 1 in and usually the entire executive team goes out 2 and a new executive team with a vision and the 3 culture and the ease of transition comes in. 4 Q. Okay. So would you indicate -- I 5 guess what you're saying to me that the first cuts 6 were the higher level of executives; is that 7 correct? 8 A. Yes. 9 Q. Do you remember, can you recall how 10 many people were cut in that round of cuts? 11 A. Yeah. It was maybe a half a dozen or 12 so. If you can think of executive row, it would be 13 President Popielarski, which was casino and 14 marketing, Michael Sacco, there were two attorneys, 15 the higher price attorney was not retained. I tried 16 to hold onto as many people that were there as I 17 could and I see -- I had to fight the battle and 18 earn a respect and loyalty than sometimes you just 19 replace somebody for the sake of replacing them. I 20 felt there was a competency level there that I could 21 use even at the higher levels, and I elected to do 22 so. 23 Q. But after that first initial cut at 24 the higher level exec, did you then begin 25 identifying your other areas on the gaming front? 42 FRED BURO - DIRECT 1 A. Yes. 2 Q. How did that process work please? 3 A. On the gaming side, Howard Reinhardt 4 was in the first wave very very involved in all the 5 initial cuts for all the acquisitions. Howard 6 Reinhardt was a dealer, was a craps dealer, came up 7 through the pit, and he was close with Bill on all 8 the numbers for all the years. 9 Howard had been with the company, I 10 believe, over 8 years and had an operations 11 relationship with Bill on the gaming side and 12 recommended the -- certainly the structure perhaps 13 the organization for the casino pit. 14 Bill and I had discussions about 15 marketing and agreed not to go after the marketing 16 department. We wanted to protect the revenue, 17 understand the market, understand the yield per 18 market segment, both outside the market and primary, 19 secondary, obviously the tertiary market, also 20 understand the yield for every market segment within 21 the casino itself as you split customers and your 22 vehicles and your value. 23 Q. At this point, did you start -- did 24 you make cuts on the gaming side, January, February? 25 A. Yes. 43 FRED BURO - DIRECT 1 Q. And how did you do that? How did you 2 decide? 3 A. That part was decided for me by 4 Howard Reinhardt and Bill Yung based on, it was 5 based on a lot of the years that they put in some of 6 the other organizations. Remember in my corporate 7 role, I was the marketing guy, so I wasn't the 8 operations guy. My relationship wasn't that way 9 with Bill, it was more about the revenues and 10 performance marketing and so forth, things that 11 brought customers back. 12 As far as the staffing levels and 13 casino operation, he went to Howard Reinhardt for 14 that. 15 Q. Were you involved in this? Were you 16 involved in the decision making at all? Let me ask 17 you that first. 18 A. In the decision making, I think in 19 some cases yes, and in some cases no. I was told 20 this is where you, you know, this is where you will 21 get to, you have to get to these numbers. We don't 22 believe based on this revenue or this operation or 23 these hours or this scheduling that you need this 24 many people here. So I found my way to get there 25 and you find a way to make it work, which is what I 44 FRED BURO - DIRECT 1 did. 2 Q. Let me make sure I understand you. 3 You were told by Howard Reinhardt and Bill Yung you 4 have to make this many cuts, go and make this many 5 cuts? 6 A. As it relates to the casino floor, 7 yes. 8 Q. So if they told you to make the cuts, 9 you went and made the cuts? 10 A. Correct. 11 Q. Were these based on dollar figure 12 numbers or people numbers? 13 A. Both. Both. Howard has -- as I 14 said, Howard had a lot of years experience in the 15 industry. He came up as a dealer, worked as a 16 dealer for many many years, as a floorperson, as a 17 dual rated pit boss and put his time in there and 18 was very comfortable and Bill was very comfortable 19 with him as the corporate operator, and that was the 20 tone and the direction for the pit and I didn't 21 overwhelmingly argue it, quite frankly. 22 Q. Okay. Now, in this initial process 23 of beginning the cuts, did you have any discussion 24 regarding how this would affect the regulatory side 25 of things, how this might affect your compliance 45 FRED BURO - DIRECT 1 with regulations? 2 A. I knew in most case where it would 3 not impact the regulatory side. So if it's a 4 function of -- and what I did with Bill in the early 5 stages what seemed to work for awhile was, I didn't 6 have to make any cuts to dealers because you can do 7 that for scheduling in a lot of cases. You can cut 8 your hours back that way with just efficient 9 scheduling. 10 But ultimately at the end of the day, 11 there were opportunities to introduce some dealers 12 there, which they agreed with and we did. 13 Q. But initially, like I said, my 14 question is initially on, was there any discussion 15 between you and Mr. Yung or you and Mr. Reinhardt or 16 anyone else about, hey, we have to watch out what 17 we're doing with these layoffs as it impacts 18 regulatory compliance? 19 A. In some departments, yes. I had that 20 discussion especially in the security area. 21 Q. Okay. 22 A. And that was done down the road a 23 little bit but, yes. 24 Q. Okay. And correct me if I'm wrong, 25 you indicated to me at one point that the layoffs on 46 FRED BURO - DIRECT 1 the gaming side of things went fairly well at first, 2 would you agree with that? 3 A. Yes. 4 Q. How about the hotel side, what was 5 your, just your experience in watching what was 6 going on the hotel side of the operation? 7 A. It was, it was not good on the hotel 8 side. It went, it went perhaps too fast, too deep. 9 Q. Can you explain why you say that 10 please? 11 A. Sure. Coming up through the 12 marketing vein, my primary concern is not just 13 buying customers and offering more cash back because 14 you move -- often times you move -- the lower end of 15 the customer base moves for more dollars and the 16 coin, so forth. But my whole, my whole approach to 17 the business is performance marketing, it's the 18 experience that your mid and upper level customers 19 have when they are there, you can compete with the 20 energy on the property and the place that someone 21 desires to be. And I chose that route as. 22 So as I looked at the changes and 23 cuts on the hotel side, which affected service, 24 which is performance marketing, I had a very very 25 tough time with that. 47 FRED BURO - DIRECT 1 Q. What were you seeing that was giving 2 you a tough time? 3 A. Well, I saw, I saw -- this is pretty 4 common knowledge, there was an abrupt downturn in 5 cleanliness on the property and things that would 6 affect customers' perception of the property and 7 things that would affect customers' decision to come 8 to property A versus property B. 9 Q. Can you give us some examples? 10 A. Sure. We'll take public areas where 11 the public areas department went from maybe a 138 12 people that cleaned, reduced by more than 85 people. 13 And perhaps the first round was 20 some or 22 cuts 14 there, this isn't my area but based on the 15 recollection that I have, and that was in February. 16 And then in March there was another 59 or so taken 17 out, an immediate impact to the property where 18 garbage pails were overflowing on the casino floor. 19 There were -- all the horror stories that you read 20 about in the newspapers that seemed to be pretty 21 prevalent on the property were prevalent. 22 And I looked at it, and I had my 23 executives coming to me, voicing their concerns that 24 customers are upset with the cleanliness of the 25 property, among other things. And my response was 48 FRED BURO - DIRECT 1 we're separate silos. We have to report these 2 issues and work through these issues by going to the 3 general manager over at the hotel, which was Mark 4 Giannantonio at the time. 5 And we try to make the best efforts 6 to communicate every instance, which we did to Mark. 7 And his job was to communicate that to, up through 8 his chain of command and up to ultimately Bill Yung. 9 Q. So would it be fair to say that what 10 was happening on the hotel side was impacting the 11 gaming side, the casino side, that you dealt with? 12 A. Absolutely. 13 Q. And you had given me an example about 14 the buffet price. Can you talk about that for a 15 minute? 16 A. Sure. The problem, the problem with 17 the business model is that when you have an 18 organization, it may work in some jurisdictions but 19 when you have an organization that the hotel 20 department competes with the casino on separate 21 P&Ls, which is what it is or was at Columbia Sussex, 22 the hotel side isn't responsible for the gaming 23 revenue. 24 So as an example in the buffet, they 25 felt that they can grow the revenue in the buffet by 49 FRED BURO - DIRECT 1 raising the price a couple dollars, $3 let's say, 2 they would do that. In the case of Atlantic City, 3 we had customers coming to us one day on the gaming 4 side, to the host saying, you know I went to my cash 5 comp machine, I had to walk all the way to the 6 coffee shop and went to the buffet, it used to be 7 $15 now it's $18, I had to walk all the way back to 8 the cash comp machine and on one told us this was 9 happening. No one told the gaming side that they 10 were raising the price of the buffet because it was 11 a food and beverage operation. That's one example 12 of how it impacts the customers, how it impacts the 13 employees. 14 But how it impacts the hotel food and 15 beverage P&L in a very very transitional way, the 16 service encompasses to the guests, staff causing a 17 performance issue for the customer and a value 18 consequence to the customer, which may preclude them 19 from coming back. They may make a decision at that 20 time to go to another property. 21 Q. Okay. Did there come a point in 22 time, and you've testified that first layoffs on the 23 gaming side were going all right, going well. Did 24 there come a time where things started to 25 deteriorate in terms of the layoffs and your 50 FRED BURO - DIRECT 1 relationship with Mr. Yung? 2 A. Yes. 3 Q. When did that start happening? 4 A. First quarter was a great quarter. 5 There was a public conference call held as a result 6 of the first quarter where Bill Yung was on the 7 phone and he stated that I had come to the property 8 and we had a great accord and I put a very strong 9 management team in place and he was very pleased to 10 say that the direction on the gross side and net 11 side were very good. So I can tell you if that was 12 March and then the call was April 10, somewhere 13 between then and June 6, it all deteriorated that 14 point. I think there was -- and that's when a 15 reaction on the part of Bill and the growing level 16 of frustration on a lot of different levels. 17 First probably from impact of the 18 Philadelphia slots and New York slots coming on line 19 and the smoking ban on top of that, which had its 20 way with the revenue in Atlantic City overall, as we 21 very well know for the five years the market grew at 22 about 4 to 4.2 percent and this year, the market, it 23 went down additionally. 24 Additionally you have Caesar's Pier 25 which came on line this summer, where last summer it 51 FRED BURO - DIRECT 1 had a very insipid opening. And this summer it 2 kicked into gear with the addition of slots at 3 Caesar's, perhaps another 262 slots if my memory 4 serves me correctly. 5 And another dynamic is the 6 promotional war which was going on at the time. You 7 can look at promotional analysis and expenses in 8 Atlantic City and see who the big players are and 9 some of the big boys were sending a lot of 10 promotional dollars out into the marketplace at the 11 time. 12 So I think as the forecast for gross 13 revenue was not being met, I think the growing 14 frustration in part of Bill and between myself -- 15 and I'm trying to answer the question of how the 16 relationship deteriorated -- 17 Q. I understand. 18 A. -- was that we need more cuts to 19 compensate and we need them faster. So before where 20 we weren't necessarily looking at the casino side 21 for some of these cuts, we were probably looking for 22 deeper cuts in the casino at the time. And some of 23 the cuts, I couldn't find my way there and I 24 resisted a lot of the cuts in some cases because it 25 would be a further impact to some of the service and 52 FRED BURO - DIRECT 1 in some areas, we couldn't get there because it 2 would take time to adjust and get internal controls 3 changed as it would affect those positions. 4 Q. Would it be fair to say that Mr. Yung 5 was telling you make more cuts, make more cuts and 6 were you resisting? 7 A. To some extent, yes. 8 Q. And why? Why were you resisting? 9 Why did you not want to do that? 10 A. There were other things that were 11 impacting revenue. It wasn't just the things that I 12 mentioned. One of the biggest things that was 13 impacting revenue was the turn of the customers that 14 were going through on the property itself. It was 15 the party line on the property from people not on 16 the gaming side that is, hey, we are losing A level 17 customers, we need marketing to bring in more A 18 level customers. It's not just buying the business 19 in Atlantic City that just raises the cost of doing 20 business because everybody in town just raises there 21 offers to the customers and everybody keeps what 22 they have so everybody loses. It's about 23 performance. 24 So if you can't keep the customers 25 that you have, how could you make more of a 53 FRED BURO - DIRECT 1 deterioration and try to bring new ones in is the 2 problem. 3 Q. Okay. When Mr. Yung was giving you 4 these cuts to make, was he saying -- again was he 5 giving you bodies, dollar amounts, how were they 6 being communicated to you? 7 A. Many different ways. Usually in 8 numbers, Bill has a history with myself and Howard, 9 obviously this is where you've got to get to in 10 these departments, and this is where we got to. 11 Q. Is he giving you I want 10 bodies cut 12 or I want this is arbitrary $100,000 in salary cuts? 13 A. Quite frankly, it would be both 14 depending on the situation. If he looked at a 15 payroll and the payroll seemed to jump off the page, 16 he would say get the payroll down. You're paying 17 too much for persons, get this done by X amount of 18 dollars. In some cases he would say, you don't need 19 that many people to do that job, get that number 20 down. 21 Q. In a certain point during this 22 process then, obviously you were doing as you were 23 directed in many occasions in cutting. Correct? 24 A. Yes. 25 Q. At a certain point did the regulators 54 FRED BURO - DIRECT 1 became involved? 2 A. Yes, they did. 3 Q. The Commission and the Division? 4 A. Yes. 5 Q. How did they come in the process and 6 what was your role in that? 7 A. First it had to do with the 8 locksmiths in the department where we had six and we 9 wanted to go to two, and there were slot attendants, 10 if my memory serves me correctly, it was slot techs 11 and things that affected not only service but things 12 on the floor as it relates to construction was 13 jackpot no. 2 and so forth, that at the time the 14 Commission ultimately decided after the one of the 15 rounds of cuts and perhaps after some of the stuff 16 started hitting the papers and some of the 17 complaints started to flow in, what's going on over 18 there, and the Commission came in and said, you know 19 what, we need -- I don't think we should find out 20 about this Monday morning, I think there is 21 something going on that has us interested as well 22 because if it's service and if there's wait times 23 and if there's overflowing garbage pails and these 24 eight issues on the floor, what are the issues that 25 affect the integrity of the operation as well. So 55 FRED BURO - DIRECT 1 we want to know. And Tama Hughes was very plugged 2 in to the Division and Commission and made it clear 3 to me that it was their wishes that we disclose to 4 them what these future cuts would be. 5 Q. All right. So you were basically 6 directed to inform the regulators of the cuts prior 7 to them being made? 8 A. Yes. 9 Q. Let me back up a minute, I want to 10 cover about the locksmith thing a minute. You 11 indicated that one of the problem areas was cutting 12 the locksmiths down, I believe you said from 11 to 13 2? 14 A. I think there was six at the time 15 maybe we wanted to go to two. 16 Q. In your opinion, what would be the 17 impact of such a reduction, why is that a problem? 18 A. We like to have a locksmiths on 24/7 19 because people lock their money in their safes in 20 their rooms, you have locksmiths needed on the 21 casino floor. If you have to cover 21 shifts a 22 week, average person is covering -- you can do the 23 math and figure it out but on 21 shifts, you need 24 4.2 people to have someone on there to cover that 25 type of operation. 56 FRED BURO - DIRECT 1 Q. Okay. 2 A. So two would be -- I mean, you would 3 have to go outside services to get a union 4 locksmiths to come in and open a safe. 5 Q. Okay. Now when you began the process 6 of notifying the regulators, what was Mr. Yung's 7 response to this? 8 A. Again there was a growing level of 9 frustration on Bill's part because I think he began 10 to feel the impact on the revenue decline in the 11 industry and the impact specifically at the property 12 and it was in the middle of all of the issues and 13 problems on the hotel food and beverage side, and I 14 believe that he wasn't happy and didn't feel that I 15 needed to communicate with regulators about some of 16 these cuts, that that was not my role and not what 17 we had to do. 18 And, in fact, I did that. I believe 19 it was over the locksmiths or over the attendants. 20 In one of the conversations early on, perhaps in 21 May, and he was very irate on the phone, I remember 22 having a conversation that day with Donna More to 23 try to find out what he was so angry about. And I 24 just think that he probably felt a bit betrayed and 25 maybe he felt that I used the regulators not to make 57 FRED BURO - DIRECT 1 cuts that I don't want to make. 2 Q. And this is in a conversation that 3 you had on the telephone with Mr. Yung in May? 4 A. I believe it was May. 5 Q. What did you say to him that caused 6 an angry response in your mind? 7 A. Well, that was -- you may be 8 referring to a subsequent conversation about going 9 to the regulators but at that one he was very 10 disappointed. His comment to me on the first 11 incidence was -- I mean he was very upset with me at 12 the time and I certainly understand the fact that he 13 was upset. It became a New Jersey thing with him 14 and he said, quite frankly, this is the way you guys 15 do business in New Jersey. And I'm sure it was 16 directed at me because he felt betrayed. He thought 17 I was using the regulators to help me keep the level 18 of staff that I sought to be on the property. 19 Q. Well, was that what you were doing? 20 A. No. 21 Q. Why were you notifying then? 22 A. That's what we were supposed to do, 23 that's what the regulators wanted, that's what we 24 were supposed to comply with, and we did. 25 Q. Okay. Did things continue to 58 FRED BURO - DIRECT 1 deteriorate in terms of your relationship with Mr. 2 Yung and the dynamics you had with the regulators 3 and the cuts? 4 A. Yes. 5 Q. And this continued into June of 2007, 6 would that be correct? 7 A. Yes. 8 Q. Was there another round of cuts and 9 some notifications in June? 10 A. Yes. 11 Q. Okay. And let me back up a minute. 12 When you were directed by Mr. Yung to make cuts to 13 do layoffs, what was the time frame? How did that 14 come down, what was the time frame you were given? 15 A. Early on obviously we knew we had to 16 get to a number, so we looked at cuts which in an 17 organization would be long-term, over the next 18 30 days. But as we got closer to June, it was, it 19 was -- again there was a high level of frustration 20 on Bill's part and some anger and I think he said I 21 want these cuts on Wednesday morning done by Friday. 22 Q. He would give you a number on 23 Wednesday and say have these accomplished by Friday? 24 A. In some cases, yes. 25 Q. And this was occurring later, like in 59 FRED BURO - DIRECT 1 June of 2007? 2 A. Yes. 3 Q. When did this start -- 4 A. Yes. 5 Q. -- this kind of thing? 6 A. Yeah. 7 Q. And how did that affect your ability 8 to notify the regulators about the cuts? 9 A. Well, that's the second conversation 10 with the regulators where we had another round of 11 cuts to go through. And I talked to Tama, and Tama 12 talked to me, I said Bill called Wednesday, he 13 wanted them by Friday, and Tama had to get the 14 agreements done, the over-riders done and we had to 15 notify the regulators. 16 So I called Chairwoman Kassekert and 17 she was kind enough to see me that day. I went in 18 there with Tama Hughes and pleaded our case and why 19 we thought we could go down in slot attendants or 20 slot techs or whatever it was at the time, it may 21 have been attendants and by the way, could you give 22 us this decision by tomorrow. 23 Q. You asked the Chair that? 24 A. Yes, ma'am. And she was quite 25 accommodating with us, worked with us in every way 60 FRED BURO - DIRECT 1 she possibly could and understood and tried to. And 2 then again, I got out Tama and I worked out, what I 3 thought was a very good meeting and had another 4 conversation, subsequent conversation with Bill 5 about the cuts? 6 Q. Where did this conversation take 7 place and by what means? 8 A. Cell phone conversation out in the 9 car out in this parking lot right here. My phone 10 rang, it was Bill. He said where are you, I said I 11 just left the Commission. He was pretty upset over 12 the phone and just said what are you doing there? 13 And I told him. He said I thought I told you not to 14 go down there and do this. And I said I informed 15 the regulators and I said, Bill, we have to inform 16 the regulators, it's our duty, it's our 17 responsibility, it's my duty to protect this asset, 18 to protect you, protect your license, the property's 19 license. We are all on temporary licenses here and 20 we don't want to violate the direction or the spirit 21 of the direction, more importantly. And that's why 22 I did this. 23 And he was just angry beyond any part 24 I've ever seen him before. And Tama was sitting 25 with me and she's listening to this conversation on 61 FRED BURO - DIRECT 1 the phone, and I'm kind of repeating it back to 2 Bill, saying, Bill, we have to inform the 3 regulators. I had to do this. And it was not a 4 comfortable time for me. And I kind of felt that 5 that was the pivotal point in the relationship with 6 Columbia Sussex, Bill and that's probably one of the 7 last times that I spoke with him. 8 Q. What did he say to you? What did 9 Bill Yung say to you, specifically? 10 A. He said, I told you not to tell the 11 regulators, now you go back and make these cuts or I 12 will find someone else that will. 13 Q. Did you go back and make the cuts? 14 A. No. 15 Q. Now, you indicated that that was 16 pretty much the beginning of the end of your 17 relationship with Mr. Yung, would that be correct? 18 A. Yes. 19 Q. And you really never spoke to him 20 subsequently? 21 A. He came in and asked for more cuts on 22 a separate visit, perhaps the week after. 23 Q. And did he talk to you or did he 24 communicate those cuts to you in some other way? 25 A. He communicated those cuts in another 62 FRED BURO - DIRECT 1 way. 2 Q. What way was that please? 3 A. Um. 4 Q. Did he give you a piece of paper? 5 A. He did. That would be the analysis I 6 think everybody is referring to. 7 Q. Okay. I'm handing you, and for 8 everyone's reference, this is found in D-6, it's 9 Exhibit B, D-6 would be one of Mr. Yung's sworn 10 interviews and this would be Exhibit D-6? 11 MR. LEVENSON: Is that the same 12 document that is what attached to Mr. Buro's -- 13 BY MS. MAHER: 14 Q. Mr. Buro, I'm going to hand you this 15 exhibit. Can you identify that and tell us what 16 that is? 17 A. Yes. This is a handwritten note by 18 Bill Yung to myself, and it looks like perhaps Mark 19 Giannantonio as well because it says hotel on the 20 top and casino on the bottom, where Bill has told me 21 to make these cuts in my area of which includes 22 $600,000 in table games, marketing and player 23 development. 24 Q. Take us through the cuts -- and do 25 you understand this document? Do you understand 63 FRED BURO - DIRECT 1 what the numbers mean that he gave you? 2 A. The $600,000 in player development 3 means roughly six jobs if they are averaging about 4 $100,000 a job. 5 Q. The first number $600,000, what do 6 you equate that number with? 7 A. Slot table games, marketing, player 8 development area. 9 Q. Now, there's other numbers there; is 10 that correct? 11 A. Slot management. 12 Q. What number is that? 13 A. $80,000 in slot management, $80,000 14 in collections and credit, three floorpersons 15 $150,000. $100,000 in two poker floorpersons; 16 $30,000, one poker seating person, another $300,000 17 in thus marketing, retail marketing, operations 18 special events, advertising PR, so forth. 19 Q. So these cuts that you were told to 20 make were dollar driven; is that correct? 21 A. That's correct. 22 Q. He came, Mr. Yung -- 23 A. On the left-hand side of the page are 24 dollar driven but on the right-hand side, Bill is 25 specifically telling me take $600,000 out of player 64 FRED BURO - DIRECT 1 development. 2 Q. Okay. So he's telling you the dollar 3 amount he wanted taken out -- 4 A. Yes. 5 Q. -- and what department he wanted it 6 taken out of? 7 A. That's correct. 8 Q. Now, did he discuss this document 9 with you when he brought it to you? 10 A. No -- well, he said -- yes, maybe it 11 was a Monday, he said I want these done by Friday. 12 Q. And what month, what time frame was 13 this given to you? 14 A. In the vicinity of June 15. 15 Q. And did you make these cuts? 16 A. I made the player development cuts. 17 I made some of the cuts on this sheet. 18 Q. Would it be your testimony then that 19 the player development cuts that you made were 20 directed to be made by Mr. Yung? 21 A. Absolutely. 22 Q. Now, there's been some discussion 23 that you hired your friends in player development, 24 is that an accurate statement? 25 A. It's an unfortunate untruth. It's 65 FRED BURO - DIRECT 1 very unfortunate that someone would say that. 2 Q. And, again, the cuts made of player 3 development were specifically at the request of Mr. 4 Yung? 5 A. That's correct. 6 Q. Now, I want to move on to the summer 7 a little bit. At a certain point, are you aware 8 that someone was brought in from the top, one of the 9 Tahoe properties to do a security assessment? 10 A. Yes, I am. 11 Q. Who was that please? 12 A. Glenn Kohler. 13 Q. Did you have anything to do, first of 14 all, with the fact that he was brought in? Did you 15 request for him to be brought in? Did you have any 16 input put into that? 17 A. I was probably the reason along with 18 Mike Lyons when we went through the request in cuts 19 in security, we couldn't get to the number in the 20 amount of the time that Bill wanted us to get to the 21 number. And Mike ran security and has a long 22 history of managing security at big properties and 23 ran security for Trump Marina, and I relied heavily 24 on Mike, a very competent executive in that area. 25 Mike had taken a department down from 66 FRED BURO - DIRECT 1 maybe 185 guards down to 162 guards. And I think 2 the requested cut from that 162 number was another 3 31 or 33, and Mike just couldn't find his way there. 4 And at the time, I think Howard 5 Reinhardt was back in the picture again because I 6 don't think I was in the good graces of the boss at 7 the time, and Howard said you got to get there but 8 we're bringing in Glenn Kohler, who is a security 9 officer for the corporation and he's going to 10 evaluate your security department, which Glenn did 11 do. 12 He came down, and I dealt myself out 13 because I was biased and because I was not the 14 expert in the area, Mike Lyons was and is. And I 15 asked Mike if he would tour security with Glenn and 16 let Glenn conduct his audit and let them go directly 17 to Tama and let them explain their findings to Tama 18 so she can both keep them up because she did still 19 have a good working relationship with Donna More and 20 then come to me and let me know what they found. 21 Q. Now, Mr. Kohler actually came to the 22 property; is that correct? 23 A. That's correct. He spent a couple 24 days there. 25 Q. It's my understanding from your 67 FRED BURO - DIRECT 1 testimony, you really weren't involved in taking him 2 around, it was Mike Lyons? 3 A. Correct. 4 Q. And Mike was the director of 5 security? 6 A. Correct. 7 Q. And at some point when he finished on 8 the property and finished touring, was there a 9 discussion had with Mr. Kohler, as well as yourself 10 and Mike Lyons and Ms. Hughes regarding his 11 assessment, do you recall that? 12 A. There was a discussion. I was not 13 present at the discussion with Tama Hughes, that 14 discussion -- they went to Tama first, Glenn Kohler 15 and Mike went and sat with Tama and Glenn explained 16 to Tama that he felt we were understaffed in 17 security, and that it would be his recommendation to 18 add back security especially on the perimeter of the 19 building where he felt there was a potential for 20 undesirables to walk into various parts of the 21 hotel, parking garage and so forth? 22 Q. Did he ever communicate that to you 23 as well? 24 A. After they finished the meeting with 25 Tama, they came in and sat with me, told me what 68 FRED BURO - DIRECT 1 they told Tama, and then they told it to me. And 2 Glenn said thanks for the visit. I'll head back to 3 Tahoe, I'll write my report and I'll submit it to 4 Bill. 5 Q. Was Mr. -- at this point, was Kevin 6 Preston in the picture, had he been hired? 7 A. He was not. 8 Q. So he wasn't there for any of these 9 meetings, would that be correct to say? 10 A. That's correct. 11 Q. So it was your understanding, correct 12 me if I'm wrong, when Mr. Kohler left, that he was 13 recommending no cuts certainly? 14 A. Not critically. 15 Q. Not that the staffing levels stay the 16 same but you actually increase? 17 A. Correct. 18 Q. Did that -- what happened? Did that 19 ever happen? 20 A. So we fast forward, Howard Reinhardt 21 leaves the company, he quits and takes a job in 22 Rhode Island and Kevin Preston is brought on board. 23 As Kevin said, he was trying to get 24 his arms around this and figure out which end is up 25 and had a tall task when he first came on board. 69 FRED BURO - DIRECT 1 And one of the first things he was tasked with was 2 the security area. He did sit with myself and Mike 3 Lyons, he said why did you have guys added, these 4 six bike patrol guys on here, why did you add these 5 -- that was direction we got from corporate. 6 And you have to remember, I had no 7 direct ties at that point with Bill anymore so -- 8 and looking at these corporate guys, like give me 9 some direction here, we'll try to get it done, which 10 we did. And Kevin said that's not what the report 11 says. He said, the report -- if I remember the 12 report correctly, it says you're overstaffed in 13 security. 14 Mike Lyons and I looked at each other 15 and we looked at Kevin, and we said that's not what 16 Glenn told us when he was here. In the conference 17 call Kevin was referring to where he went over the 18 inconsistencies, it's true, that happened. Kevin 19 was surprised that we hired and that we felt Glenn 20 said -- we believe what we heard, and we were 21 surprised he had written a different report after he 22 went up to corporate. 23 So Kevin got Glenn Kohler on the 24 phone, Glenn waffled a little on the phone. And 25 Mike will tell you the same thing, when he was done 70 FRED BURO - DIRECT 1 with his conversation, I don't know which property 2 they compared us to in Atlantic City or how they 3 came to their conclusions but Glenn had shifted his 4 position and decided, after he told us we needed to 5 -- we were severely understaffed based on his life 6 experience, that he had an epiphany and said I think 7 you're overstaffed. 8 Q. So somehow the recommendation changed 9 between Mr. Kohler speaking to you on the property 10 and reaching Mr. Yung or whoever it reached at the 11 top? 12 A. Yes. 13 Q. What time frame was that? If you can 14 give me a time frame between the time you spoke to 15 him and the time that you learned this? 16 A. 4 to 6 weeks. 17 Q. And in response to request for more 18 cuts from security, were more cuts made? 19 A. Not by us. I think we probably held 20 fast at the 161 number. And I know they were going 21 to go down 30 or the 70. 22 Q. Now, there came a point in time when 23 you were terminated as COO of the property; is that 24 correct? 25 A. Yes. 71 FRED BURO - DIRECT 1 Q. When did that occur? 2 A. August 6. 3 Q. And how were you informed? 4 A. Bill Yung came in and sat down. 5 Q. What did he say to you? 6 A. He said we looked at our business 7 model, we think -- we don't think -- we looked at 8 our business model, we're going to go with one 9 manager at this property instead of two and we're 10 going with the hotel manager instead of the casino, 11 which means you're out. 12 Q. How soon after did you leave? 13 A. I left that moment. It wasn't a 14 surprise to me. I was kind of wondering what took 15 so long after that June day. And he asked me if I 16 had any questions. And I said no, and I got up and 17 I left. 18 Q. Now, since leaving -- obviously let 19 me ask you this, you have received a severance 20 package; is that correct? 21 A. Yeah. During, pardon me for leaving 22 it out, what he said to me when he terminated me, he 23 said we're going to give you three months severance 24 and it's effective immediately. You can go today. 25 Q. Now, you had some subsequent 72 FRED BURO - DIRECT 1 discussion with Donna More regarding your severance 2 package; is that correct? 3 A. That's correct. 4 Q. Can you tell us what you discussed 5 regarding your severance pay? 6 A. Sure. I told her that the 7 compensation offer or the severance offered was 8 unjust and unfair and that my reputation and my 9 experience in Atlantic City is what was used by Bill 10 and by Columbia to take to the road show and to take 11 to the regulators, to sell the deal to Wall Street 12 and to actually get here today is my background. 13 Because up to that point, the 14 organization had just a lot of little riverboats and 15 they were starting to grow into the hundred million 16 to $150 million properties but nothing like 17 600,000,000, nothing that would take up the greater 18 percentage of the portfolio like Atlantic City, and 19 I think that it was unjust and unfair that I got 20 terminated for a reason that was -- I read several 21 different reasons in the newspapers, I'm not sure 22 which one is real. But I know what the event was 23 and what changed -- materialistically changed my 24 relationship, so I mentioned to Donna, I said, look, 25 this is not fair. This is based on -- that I feel 73 FRED BURO - DIRECT 1 this is based on that day in June and Bill was very 2 upset and very angered and I am persona non-grata 3 here with Bill and I have done so since that day but 4 I did this deal for Bill and I worked as hard as I 5 could to inspire, lead and motivate every employee 6 and every executive on that property until the day I 7 left. And I can say, quite frankly, even after I 8 left. 9 I said to her, I think I was 10 wrongfully terminated. I think I was asked to do 11 something that I just couldn't do. And I was 12 wrongfully terminated. Now, I don't want to go down 13 that road with you but I do want to be fairly 14 compensated. I want a severance package that makes 15 sense and I said three months doesn't help, how 16 about six or nine months. 17 To which Donna More responded, I'll 18 talk to Bill. She called me back in a couple days 19 and said okay. 20 Q. You were talking to them regarding 21 your severance package and saying -- weighing your 22 options versus a wrongful termination suit in terms 23 of your negotiation with your severance package? 24 A. Yeah. Quite frankly, I wasn't 25 interested in anything but getting on with my life. 74 FRED BURO - DIRECT 1 I wanted to be compensated to get me through a 2 couple of months that it would take me to find 3 another job. 4 Q. Did you ever in that discussion hold 5 over their heads the prospect of talking to the 6 regulators? 7 A. No. 8 Q. And you spoke to us; is that correct? 9 A. That's correct, at your request. 10 Q. Okay. So this discussion did not 11 have anything to do with holding -- talking to the 12 regulators over their head -- 13 A. Absolutely not. 14 Q. Just negotiating your severance 15 package and weighing your legal options? 16 A. That's correct. 17 Q. I want to talk about the Audit 18 Committee issues, if I may. Are you familiar who 19 the director of internal audit is? 20 A. Yes. 21 Q. Who is that? 22 A. Mr. Hill out in Las Vegas -- Silver, 23 I'm sorry. 24 Q. No, I'm talking about -- I'm sorry, 25 I'm talking about Director Bill King? 75 FRED BURO - DIRECT 1 A. Yes. 2 Q. How did Bill King come to the 3 Tropicana? 4 A. It was during the transition that 5 Judy Lopez, the then internal auditor, resigned to 6 me. I'm not sure if she called corporate or not but 7 she certainly resigned to myself. All of this 8 happened during the transition when Donna More was 9 on her way in, Rich Fitzpatrick was setting up 10 compliance and understood a little of the audit 11 function but really had no gaming experience so 12 really didn't necessarily understand it thoroughly 13 or something more beneficial to this particular 14 issue. 15 So when Judy Lopez resigned to me, I 16 called someone that I knew from the Sands, because 17 the Sands had just closed at the time, an internal 18 auditor down there. As a matter of fact, I think 19 it's where Bill was, oh, yeah, he was down there at 20 the Sands, and I knew they closed and I knew he 21 might be available. So he was involved in chip 22 destruction at the time. 23 He came in, we sat down, we hit it 24 off. I said Bill, I think you're perfect for this 25 plus you've been here before. I like you, they like 76 FRED BURO - DIRECT 1 you, you know, decent judge of character, I think 2 you will make a good member of the team. I said 3 what kind of money are you looking for? He said I'm 4 looking for this kind of money. I said I think 5 that's doable. 6 So I called Rich Fitzpatrick, I said 7 Judy Lopez resigned and I found a guy, identified a 8 guy, and he wants this much money, what do you 9 think? He said, yeah, I think that's fair. You 10 better get him on board. I said okay. Bill, I 11 think -- 12 Q. I'm sorry, Rich Fitzpatrick told you 13 to hire Bill King and get him on board? 14 A. Well, he said get him on board, he 15 didn't say hire him but he said I think we better 16 get him on board. When I called Bill King I said, 17 Bill, the good news is we can bring you on board and 18 Bill King said, well, the bad news is, Fred, you 19 can't hire me. It's a really a function of the 20 Audit Committee. I said that's right. I said call 21 these people at corporate, call Rich Fitzpatrick, 22 find out who you got to talk and get yourself hired. 23 And it's approved to them, so make that phone call. 24 Q. And were you aware whether or not 25 there was an Independent Audit Committee function in 77 FRED BURO - DIRECT 1 the place at Tropicana Atlantic City? 2 A. You mean -- 3 Q. From January 2007 through June 2007? 4 A. I'm not aware. Rich Fitzpatrick and 5 Donna More, it's probably something that falls more 6 in their area. It's an important part of it and it 7 had a thing, that function that they would handle 8 that. 9 Q. Who actually hired Bill King, do you 10 know? 11 A. I think it was Rich Fitzpatrick or 12 another gentleman that works for Rich -- worked for 13 Rich at the time, last name is also King. It might 14 have been head of the Audit Committee or compliance, 15 I'm not sure. 16 Q. Did you know if he was hired? 17 A. Yes, he was. 18 Q. What time frame was he brought on 19 board? 20 A. I can't say. It escapes me at this 21 moment. 22 Q. And Bill Edwards, do you know who 23 Bill Edwards? 24 A. Yes, he runs surveillance. 25 Q. Did he report to you? 78 FRED BURO - DIRECT 1 A. Technically, no. I heard the 2 testimony, and I dealt with this issue directly with 3 him. 4 Q. What do you mean? 5 A. He kind of wondered where he belonged 6 and where he lived and he would stop in every once 7 in awhile and say can I give you a by the way, this 8 is what we're working on, he said we're working on 9 this with regard to some of the things he could tell 10 me, just to keep me in the loop about his 11 department. 12 I knew I couldn't give him any 13 direction nor did I give him any direction. He told 14 me about some of the cheap skims that are going on 15 and told me some of the things that historically 16 happened with surveillance house department 17 functions. 18 He took me down to the department one 19 day so he could introduce me to people in his -- 20 this is Fred Buro, who runs the property. This is 21 the face behind the name. And I took a quick tour 22 there and that was probably the extent of it. 23 Q. Do you know who he was reporting to? 24 A. Technically, he's supposed to be 25 reporting to the Audit Committee. I know that he 79 FRED BURO - DIRECT 1 said he reported to me because I am the only point 2 of contact that he had. 3 When this situation came up, I did 4 ask him, I said how long have you been doing this 5 job? He said quite a long time. I said have you 6 had any incidents here? He said no, I haven't had 7 any incidents. I said I'm really not the one that 8 you could report to, are you aware of that? He 9 said, yeah, but you're the only person that I know 10 at this point. 11 So I directed him to immediately work 12 with Bill King and resolve the issue and find out 13 what the functionality of the corporate structure is 14 regarding the Audit Committee. 15 Q. Okay. 16 MS. MAHER: Thank you, Mr. Buro. I 17 have nothing currently. 18 CHAIR KASSEKERT: Cross-examination. 19 MR. LEVENSON: Can we take a 20 10 minute break? 21 CHAIR KASSEKERT: Certainly. 22 (There was a brief recess taken at 23 3:30 p.m.) 24 CHAIR KASSEKERT: Back on the record. 25 We need to get the witness back though. 80 FRED BURO - CROSS 1 Thank you, Mr. Buro. I will remind 2 you you're still and under oath. Mr. Levenson, are 3 you prepared to begin your cross? 4 MR. LEVENSON: Yes, ma'am. Yes. 5 CROSS-EXAMINATION BY MR. LEVENSON: 6 Q. Good afternoon, Fred? 7 A. Good afternoon. 8 Q. Never though we'd be in this 9 position? 10 A. I'm sorry. 11 Q. We never thought we'd be in this 12 position? 13 A. No, considering I hired you. 14 VICE CHAIR FEDORKO: A lawyer. 15 THE WITNESS: I said considering I 16 hired you. You were a friend, too. 17 MR. LEVENSON: It's all about 18 business now, Fred, okay? 19 BY MR. LEVENSON: 20 Q. Your previous history in Atlantic 21 City, you were employed here, I think you said by 22 Trump Plaza as the president and chief operating 23 officer or general manager, either one or two of 24 those three. Correct? 25 A. Right. 81 FRED BURO - CROSS 1 Q. Which was that? 2 A. All of the above. 3 Q. All the above, okay. How long were 4 you in that chief operating officer position? 5 A. Probably just over a year. 6 Q. And how is it that you left that 7 position? 8 A. There was a change of control. 9 Q. Mr. Trump doesn't own the property 10 anymore, what do you mean? 11 A. Change of control at the highest 12 level below Mr. Trump. The gentleman that hired me, 13 Nick Ribis, was the CEO at the time and that team 14 was going out and a new team was coming in. 15 Q. But Mr. Ribis and Mr. Trump still 16 remained at that point as part of Trump Plaza; is 17 that correct? 18 A. Yes. I left in June, I believe 19 Nick's contract was over in August. It was common 20 knowledge at the time that Mark Brown was the pick 21 and was going to be the next CEO and I knew I wasn't 22 on that team. And my discussions with Donald were 23 very very good, I said rather me sit through this 24 for another two months, it might be good if we part 25 ways now. 82 FRED BURO - CROSS 1 Q. So you were let go by Trump, were you 2 not? 3 A. I'm sorry? 4 Q. You knew you were going to be let go 5 by Trump -- 6 A. Yes. 7 Q. -- so you resigned before you were 8 let go? 9 A. Yes. 10 Q. And that was -- are you sure it was 11 as much as a year? 12 A. No. 13 Q. It could have been six months? 14 A. I'm 51 now, so it seemed like a long 15 time, maybe it was less than that. 16 Q. Does the six months sound more 17 accurate than a year? 18 A. No. 19 Q. Now, you talked about the road show 20 that you went on and raising the money, how much 21 money was raised? 22 A. About $3 billion. 23 Q. And that was raised from the market 24 on Wall Street. Correct? 25 A. Wall Street -- 83 FRED BURO - CROSS 1 Q. Bankers? 2 A. -- per se, really around the country 3 as far as California. 4 Q. I didn't mean Wall Street per se, 5 that street, but I meant the investment banking 6 world? 7 A. Yes. 8 Q. When you left Trump Plaza, you then 9 proceeded to have other jobs outside of Atlantic 10 City. Correct? 11 A. Yes. 12 Q. Wasn't it your desire after you left 13 Atlantic City and went to these other jobs, like 14 West Virginia and even Kentucky, to come back to 15 Atlantic City? 16 A. I think my family is all here and I 17 love New Jersey, but the prospect of getting 18 experience in different jurisdictions was also 19 pretty interesting to me at the time. 20 Q. But your desire was to come back to 21 be closer to your family and work in Atlantic City, 22 isn't that correct? 23 A. My desire was never to leave, quite 24 frankly. I liked New Jersey at the time. 25 Q. So meaning your desire never to 84 FRED BURO - CROSS 1 leave, I assume, continued into a desire at some 2 point to return; is that correct? 3 A. No. 4 Q. When you were out in Kentucky, where 5 did your family live? 6 A. My wife lived with me in Kentucky. 7 We are empty-nesters, both my daughters live up in 8 Boston. 9 Q. When you -- withdraw that. 10 Other than your -- whether I'm right 11 or you're right, let's use your time period one year 12 as head of Trump Plaza. Other than that, did you 13 have any other top position in Atlantic City? Did 14 you run any other property -- 15 A. No. 16 Q. -- in Atlantic City? 17 And that was in what year? 18 A. 2000. 19 Q. And the road show was when, 2006? 20 A. Yes. 21 Q. So did I hear your testimony clearly 22 that when you went on this road show with Mr. Yung, 23 that your one year basically as a person in charge 24 of a property in Atlantic City was the reason why 25 the investment banking community felt comfortable in 85 FRED BURO - CROSS 1 lending $3 billion to this company? 2 A. That is incorrect. The reason why is 3 because I started in Atlantic City in 1989 at the 4 very lowest level and had 11 or 12 years experience 5 in Atlantic City with the Atlantic City market. 6 It's the intimate understanding of that market Wall 7 Street was interested and not the twelve months or 8 six months that I spent in the top position. 9 Q. You mean these people or companies 10 that were loaning the money were novices to the 11 world of Atlantic City gaming and in order to have 12 them agree to loan money, they would rely on the 13 fact that you were an individual who's on that road 14 show and you worked in Atlantic City? 15 A. I don't think they are novices. 16 Q. Do you think any of those companies 17 on Wall Street and otherwise may have relied upon 18 the fact that Bill Yung owned 80 plus hotels and was 19 a very successful entrepreneur in his own right? 20 A. Yes. 21 Q. So do you still think that it was 22 Fred Buro who convinced these investment banking 23 types to loan the $3 billion to the company and feel 24 comfortable because Fred Buro was on that road show? 25 A. Fred Buro never said that. Fred Buro 86 FRED BURO - CROSS 1 said he was part of three people that went on the 2 road show and his contribution to that road show and 3 the reason he was asked to attend that road show, 4 because I didn't have to be asked to go there, I was 5 asked by Bill Yung and the people, the investment 6 bankers themselves, it was Credit Suisse, they 7 thought, not me, the novices as you said, were the 8 ones that thought I should be on the road show 9 because of my experience in Atlantic City beyond the 10 one year, six months whatever it was, but for the 11 11 or 12 years I spent in this town, competing in this 12 town. 13 Q. Didn't you say on your examination 14 from the director that the decision to loan the 15 money by these investment bankers was due to your 16 experience in Atlantic City? Didn't I hear you 17 correct? 18 A. In part. In part it wasn't -- I 19 didn't write a $500,000,000 check to buy this asset, 20 Bill Yung did. And I think when -- if you take a 21 look at it from 35,000 feet, when you look at a 22 company that has Marriott Courtyards and Crown 23 Plazas and riverboats in Mississippi that do $25 24 million a year, it was Credit Suisse and Bill Yung 25 who decided that there is a value to putting Fred 87 FRED BURO - CROSS 1 Buro on the team, so let's add him to the team. 2 They asked me to join that team. I did not ask to 3 go on that team. I did not decide that I was a 4 contributing factor, that was decided by two other 5 people. 6 Q. And you had no desire at that time to 7 come back to Atlantic City in the event that money 8 was raised and the transaction would go through? 9 A. I was very happy as chief operating 10 officer, Lloyd, the thought never crossed my mind. 11 I never thought I would be considered for it and I 12 didn't ask for it. 13 Bill Yung is pretty specific in the 14 rules he makes at that level and I was happy with my 15 job. I had only been a chief operating marketing 16 officer for 2 1/2 years and I was in the middle of, 17 you know, quite a big project at corporate at the 18 time, as I said earlier, quite content. 19 I bought a really nice home on 20 six acres in Kentucky and a quality of life out 21 there. And my kids are in Boston. It was the same 22 flight basically to go from Kentucky to Boston as it 23 is to go from Kentucky to New Jersey. 24 So, no, is the answer. 25 Q. Mr. Yung told you that he believed -- 88 FRED BURO - CROSS 1 before I do that, let me just -- this is a copy of 2 your sworn interview. Just in case we need it, you 3 have it right here. 4 Did Mr. Yung tell you early in the 5 process that he believed the Tropicana was 6 overstaffed compared to his competitors in the 7 Atlantic City marketplace? 8 A. Yes. 9 Q. And did you believe that also? 10 A. Yes. 11 Q. I withdraw that, okay. 12 A. Yes. 13 Q. Yes, okay. And Mr. Yung believed 14 that staff reductions were needed to bring the 15 property into alignment with the other properties in 16 Atlantic City. Correct? 17 A. Yes. 18 Q. And you believed that also. Correct? 19 A. Yes. 20 Q. And you discussed with Mr. Yung how 21 staff reductions could affect compliance with the 22 Commission regulations, did you not? 23 A. Not at that time. It was really at a 24 high level -- a gross level, not a detail level. 25 Q. I didn't ask you what gross or 89 FRED BURO - CROSS 1 detail. Did you discuss with Mr. Yung how staff 2 reductions could affect compliance with Commission 3 regulations? 4 A. At some point, yes. 5 Q. And you explained to Mr. Yung that 6 according to the regulations, there are minimum 7 staffing requirements which require the property to 8 be staffed in a certain way; isn't that correct? 9 A. At a point in time, yes. 10 Q. And you believed that Mr. Yung 11 understood that; is that correct? 12 A. At a time, yes. 13 Q. And Mr. Yung never instructed you to 14 make any cuts which would violate the regulations on 15 staffing requirements. Correct? 16 A. Correct. 17 Q. And a casino has to operate in a way 18 that not only complies with CCC regulations but also 19 must abide by its internal controls; is that 20 correct? 21 A. Yes. 22 Q. And you believe that Mr. Yung 23 understood internal control requirements, is that 24 correct? 25 Do you want to look at your sworn 90 FRED BURO - CROSS 1 interview or do you want to answer it? 2 A. No, I'll answer it. It should be the 3 same answer. 4 Q. It should be. Do you want me to ask 5 the question again? 6 A. Please. 7 Q. And you believe Mr. Yung understood 8 internal control requirements? 9 A. Not detailed, maybe from a high level 10 but yes. 11 Q. Mr. Yung, as you testified, suggested 12 that staff be reduced at the Tropicana. Correct? 13 A. Yes. 14 Q. And you told the regulators prior to 15 the cuts being made that you were going to make the 16 cuts, as apparently they asked; is that correct? 17 A. Yes. 18 Q. And the regulators felt that some of 19 these cuts should not be made at that particular 20 time; is that correct? 21 A. Yes. 22 Q. And I believe you testified that Mr. 23 Yung was not happy that you told the regulators of 24 the proposed staff reductions before they were made; 25 is that correct? 91 FRED BURO - CROSS 1 A. Yes. 2 Q. And, again, those proposed cuts were 3 not in violation of regulations. Correct? 4 A. Yes. 5 Q. And Mr. Yung believed as the owner of 6 the company, he should be able to decide the proper 7 staffing as long as he followed the law and the 8 regulations; is that correct? 9 A. Yes. 10 Q. And Mr. Yung thought that you went 11 over and above the regulatory requirements by 12 telling the regulators of proposed reductions before 13 you made them; is that fair? Is that yes? 14 A. It's close. 15 Q. Just close? 16 A. Yes. 17 Q. Do you want me to say it again? 18 A. Yeah, please. 19 Q. Say it again? 20 A. Please. 21 Q. And Mr. Yung thought you went over 22 and above the regulatory requirements by telling the 23 regulators of proposed reductions before you made 24 them? 25 A. I think that's what he thought, I 92 FRED BURO - CROSS 1 don't know exactly what he thought. He just told 2 him not to do it. 3 Q. Do you remember telling the Division 4 in your sworn interview that's what you thought or 5 do you want to read it? 6 A. No. I don't remember saying over and 7 above. I remember saying, and I remember that he 8 didn't feel I needed to do it. 9 Q. I'm sorry, say that again. I didn't 10 hear what you just said. 11 A. He didn't feel I needed to do that. 12 Q. Is it true that you believed at that 13 time that Mr. Yung may not have been aware that the 14 Commission had asked to be notified in advance of 15 cuts? And what I mean at that time is the time that 16 he had phone conversation with you, the initial 17 phone conversation that you told us about where he 18 complained about going to the regulators, isn't it 19 fair to say that Mr. Yung may not have been aware? 20 A. I don't think that's fair to say, no. 21 Q. Okay. Would you open your sworn 22 interview please? 23 A. Sure. 24 Q. Look at page 40. 25 A. (Witness complied.) 93 FRED BURO - CROSS 1 Q. Start with line 12, you say I called 2 Bill to give him that information. He was not happy 3 I followed that procedure. And I informed the 4 Commission and Division, and you say, perhaps at 5 that time didn't understand that I had to. 6 A. Okay. 7 Q. All right. So it's accurate that you 8 believed that it was certainly possible that Mr. 9 Yung didn't understand at that time that there was a 10 request by the regulators to be informed in advance 11 of the cuts at a time that he was yelling at you or 12 upset with you; am I correct? 13 A. I said perhaps at the time. 14 Q. That's what I asked you? 15 A. Yep. 16 Q. And even in the second call, the one 17 where you say that somehow Tama was able to hear -- 18 withdraw that. 19 Was that on a speaker phone, that 20 conversation? 21 A. No. 22 Q. The conversation, the second 23 conversation with Mr. Yung out in the parking lot, 24 was that on a speaker phone? 25 A. No, it was not. 94 FRED BURO - CROSS 1 Q. So you had the phone up to your ear 2 and you were talking to Mr. Yung? 3 A. Yes. 4 Q. And even in that second call 5 regarding that second call, you're not sure that Mr. 6 Yung understood the fact that you had been requested 7 to give advance notice of cuts -- 8 A. No -- 9 Q. -- to the reg -- 10 A. -- he clearly. 11 Q. You have to let me finish the 12 question. She has to get the question and your 13 answer. 14 A. Okay. 15 Q. We'll do that again. Even with 16 regard to the second call, you're not sure that Mr. 17 Yung understood the fact that you were requested to 18 give notice of proposed cuts to the regulators and 19 obtain their approval; is that incorrect? 20 A. Is that incorrect? There's a couple 21 double negatives there, I apologize. Can you say it 22 again? 23 Q. Okay, we'll take break it down. 24 A. Thanks. 25 Q. Try to leave out any of the negatives 95 FRED BURO - CROSS 1 here but isn't it true in the second call, the one 2 that was in the parking lot -- 3 A. Right. 4 Q. -- you had indicated in your sworn 5 interview, that there was still the possibility that 6 he didn't understand that you were asked by the 7 regulators to give them advance warning with regard 8 to proposed cuts? 9 A. I think he didn't understand why I 10 had to do that. I think that he understood that 11 that was required by the Commission. He was well 12 aware that I was told by the Commission that we had 13 to inform -- he was well aware of that, but he 14 perhaps couldn't understand why I had to do that, 15 and therefore asked me not to do it. 16 Q. Well, we know from the previous 17 questioning that I asked you that at the time of the 18 first phone call, you certainly could not testify 19 that he was aware of the fact that the regulators 20 were requesting to be advised in advance, correct, 21 we went over that already? 22 A. Yes. 23 Q. Now look at page 47 -- 24 A. (Witness complied.) 25 Q. -- line 24, but he, and that refers 96 FRED BURO - CROSS 1 to Mr. Yung. Correct? 2 A. Yes. 3 Q. It says, but he clearly, he just 4 wouldn't -- either he didn't understand or wouldn't 5 accept the fact that we had to communicate with the 6 Division and the Commission? 7 A. Yes. 8 Q. Isn't that what it says? 9 A. Or wouldn't accept, yes. 10 Q. Or didn't understand? 11 A. Yes. 12 Q. And, Mr. Buro, at all times the 13 property complied in full with all the requests of 14 the regulators to be informed in advance of the cuts 15 after you were asked to do so; isn't that correct? 16 A. Yes. 17 Q. And Mr. Yung and the rest of 18 corporate, so to speak, were surprised at the level 19 of involvement that the regulators in New Jersey 20 wanted to have in business matters during the 21 temporary license period; is that fair? 22 A. Yes. 23 Q. But your feeling was, and still is, 24 that Mr. Yung was just surprised at the level of 25 involvement as opposed to Mr. Yung taking a position 97 FRED BURO - CROSS 1 to disregard the will of the regulators; is that 2 correct? 3 A. No. 4 Q. Would you turn to page 72? 5 A. (Witness complied.) 6 Q. Let's start from the bottom of the 7 page, see it, where it says, I think Columbia was 8 surprised that the amount of involvement that 9 regulators wanted to have during the temporary 10 license period, the licensing period, the 11 transaction? 12 A. Right. 13 Q. Okay. And I think -- and on many 14 different levels, I think there was a surprise there 15 as to the level that the regulators wanted to be 16 involved. 17 A. Um-hmm. 18 Q. So I think it's safe to say there was 19 not an understanding there in the beginning. And 20 then the question was asked by Ms. Way, would you 21 say it was one of disregard? 22 And what was your answer? 23 A. It was just surprise. 24 Q. No. What was your answer? 25 A. No. 98 FRED BURO - CROSS 1 Q. It was just surprise was the next 2 question? And what did you answer to that? 3 A. Yes. 4 Q. So when I ask you the question, so 5 it's your feeling that Mr. Yung was just surprised 6 at the level of involvement as opposed to Mr. Yung 7 taking a position to disregard the will of the 8 regulators, am I correct, isn't that what you told 9 us in your sworn interview -- not us but you told 10 the Division? 11 A. Right, there's a level, I think they 12 were surprised but I think there was one other term 13 that I used with surprise but, yeah. 14 Q. And that's because you don't believe 15 that Bill Yung or anyone else at corporate would 16 intentionally disregard the law; is that correct? 17 A. That's correct. 18 Q. And you have no doubt that Columbia 19 Sussex's position in complying with regulatory 20 requirements has, under every circumstance complied; 21 is that correct? 22 A. Yes. 23 Q. And you and Mr. Yung and all the 24 people at corporate always complied with the rules 25 and regulations, did they not? 99 FRED BURO - CROSS 1 A. Yes. 2 Q. And there was never a point in time 3 at which the number of employees who were let go 4 affected Tropicana's ability to comply with 5 Commission's regulations; is that correct? 6 A. Yes. 7 Q. Now, there is something, I don't 8 remember which day it was. We've been here a long 9 time. I know you weren't here but trust me on this. 10 There was some question posed by someone on that 11 side of the room with regard to the potentially and 12 attitude on behalf of corporate, that if you had to 13 go ahead and violate a regulation, pay a fine, 14 that's sort of the cost of doing business, and we'll 15 worry about it later. That's paraphrasing some of 16 the testimony or some of the questions anyway here. 17 You know that that wasn't Mr. Yung's 18 or corporate's position, isn't that correct? 19 A. Do I know that unequivocally, no. 20 But I think that was their position. 21 Q. Well, in fact, you believed that Mr. 22 Yung and the entire organization always wanted to be 23 in compliant and not pay fines for failing to follow 24 a reg -- 25 A. Yes. 100 FRED BURO - CROSS 1 Q. -- is that fair? 2 A. Yes. 3 Q. And by the way, when Kevin Preston 4 became employed and you reported to him, you told 5 Kevin Preston that you would continue to inform 6 regulators in advance of any staff reductions. 7 Correct? 8 A. Maybe so. 9 Q. All right, well -- 10 A. Maybe so. 11 Q. -- you don't remember? 12 A. I don't. 13 Q. Look at 105? 14 A. (Witness complied.) 15 Q. You got it? 16 A. (Witness nods head.) 17 Q. The bottom of the page, line 22? 18 A. (Witness complied.) 19 Q. That's the wrong one, hold on a 20 second. I'm sorry, 106 is the page I'm looking for. 21 And basically the answer you gave at 22 line 3, the relevant part of this question starts, I 23 explained to Kevin -- do you see where it says I 24 explained to Kevin on line 5? 25 A. Um-hmm. 101 FRED BURO - CROSS 1 Q. -- that whatever cuts we were going 2 to make, I would continue to inform the regulators; 3 is that correct? 4 A. Yes. 5 Q. And what did Mr. Preston say to that? 6 A. He was in agreement. 7 Q. And he was the senior vice president 8 of casino and marketing -- casino operations and 9 marketing for the company. Correct? 10 A. Yes. 11 Q. There's another thing that has sort 12 of been swirling around this hearing which has to do 13 with the number of head count or the number of 14 bodies versus full time equivalents or FTE -- 15 A. Right. 16 Q. -- as they are called. You know what 17 I'm talking about, FTEs? 18 A. I think so. 19 Q. Isn't it fair to say that you 20 believe, you Fred Buro, believe that from a 21 performance perspective FTE is the best number to go 22 by rather than head count? 23 A. From a performance perspective. 24 Q. Look at 114, I'm just repeating what 25 you said? 102 FRED BURO - CROSS 1 A. I understand. I'm just trying to 2 remember, I don't remember every page of this 3 document, I assure you. 4 Q. Okay. 5 A. Yeah, I think an FTE count is a 6 40-hour equivalent -- I didn't have length of what 7 it takes to do a job. 8 Q. And Mr. Yung never told you in as far 9 as cuts being made of any particular people to be 10 cut, like John Smith or Jane Jones or anything like 11 that? 12 A. In some cases, yes. 13 Q. Those were the top people, I presume. 14 Certainly not a poker dealer or a slot attendant? 15 A. Certainly not at the hourly level, 16 correct. 17 Q. Certainly what? 18 A. The hourly level, correct, as opposed 19 to higher salary sometimes but not the hourly -- 20 Q. How about the player development 21 people, did he go through each and ever player 22 development person and say to you get rid of this 23 person, get rid of that person, and get rid of this 24 person or did he say we needed to save some money in 25 the player development area? 103 FRED BURO - CROSS 1 A. At that point, I wasn't -- at that 2 point, I was dealing with Kevin Preston not Bill 3 Yung. Bill Yung handed me a sheet of paper that day 4 and said do it by Friday. And I was working with 5 Kevin on it. 6 Q. My question was, did Bill Yung come 7 to you and tell you to layoff John, Mary and Joe? 8 A. Indirectly, yes, through Kevin. When 9 I submitted the list of what I thought would be good 10 cuts, Kevin came back at one point and said he's 11 more interested in higher level salary that aren't 12 on the list, can you get a couple of higher 13 compensated executives on there, which is -- 14 Q. Did you do an analysis and present it 15 to Mr. Preston and through Mr. Preston to Mr. Yung 16 which would show even though that these people were 17 higher priced people, that they were responsible for 18 millions and millions and millions of dollars in 19 revenue? 20 A. I already had that conversation with 21 Bill Yung. He was aware of that, and we agreed not 22 to go after the marketing department specifically 23 for that reason. Bill was very aware of that. So 24 did I do an analysis, I didn't need to do an 25 analysis at that time, it was already established. 104 FRED BURO - CROSS 1 Q. But you decided which player 2 development people to let go, isn't that correct? 3 A. No, there was an executive in charge 4 of player development who did at that time. 5 Q. But that person worked directly for 6 you, he didn't -- who is that person. 7 A. Jason Lyons. 8 Q. Jason Lyons didn't communicate, I 9 presume, to Mr. Yung with regard to the individual 10 people in player development. You interacted with 11 Jason Lyons. Correct? 12 A. Yes. 13 Q. So between you and Jason Lyons, a 14 decision was made to cut certain player development 15 people? 16 A. Yes. 17 Q. And all I'm saying is that, did you 18 present the analysis to Mr. Preston or Mr. Yung that 19 by letting go these certain player development 20 people, that it was absolutely crazy because they 21 were the ones that were responsible for such a huge 22 amount of revenue? 23 A. Didn't need to. Had the conversation 24 with Bill Yung, had the conversation with Mark 25 Giannantonio, we all knew that by reducing the 105 FRED BURO - CROSS 1 player development staff, we would lose revenue. 2 You didn't needed to an analysis to understand that. 3 Q. I'm not talking about reducing player 4 development staff per se, I'm talking about the 5 particular human beings that were being let go. 6 A. I guess the point is that whoever you 7 let go in player development, it didn't matter. 8 You're going to lose 50 percent of their base. 9 Q. Your not telling me, Mr. Buro, that 10 in player development there are superstars, stars, 11 medium stars, lower stars and people that are just 12 making phone calls and not really getting anywhere, 13 that's in every property; isn't it? 14 A. There's a difference there, sure. 15 Q. And what I'm asking you or suggesting 16 to you is, the people that were laid off at player 17 development, people were, quote, the "superstars" as 18 far as slot player development people, people that 19 were bringing in the most -- whose customers were 20 bringing in the most revenue -- 21 A. No. 22 Q. -- is that fair? 23 A. No, it's not fair. If you 24 understand -- I'll explain it to you if you wish. 25 Q. Go ahead. 106 FRED BURO - CROSS 1 A. If you understand the player 2 development department, especially at a property in 3 Tropicana, where it's been in business for so long 4 and so many of the player development staff have 5 been there for so many years, every time an 6 executive leaves that department not because they 7 are fired but because they get a better offer from 8 another property, they take a list with them. They 9 move some of the their base with them and then a lot 10 of their customers remain behind and are coded to 11 another executive. 12 So what you would characterize as a 13 superstar because on an analysis, and I've seen a 14 report on every player development executive, the 15 term is being coded up where you don't really do 16 much to drive that play as an executive even though 17 you're a superstar but because you've been there for 18 a long time, it appears on the analysis that you do. 19 So the analysis is not by any stretch 20 accurate in that particular department unless you're 21 hands-on management as Jason Lyons was. 22 Q. Are you telling us, Mr. Buro, that 23 when you look at Atlantic City, Las Vegas or 24 whatever, you see these player development people 25 making a half a million dollars or more, that the 107 FRED BURO - CROSS 1 reason they are being paid that is because the 2 players will follow them to the place that they go 3 to; isn't that why somebody gets paid a lot of money 4 if they are moving to another property? 5 A. Yeah. Yeah. 6 Q. Let me ask you this question. Isn't 7 it true that without going to Mr. Yung, you were 8 able to make marketing banding and positioning 9 decisions? 10 A. Yes. 11 Q. Let's talk about the Tropicana in or 12 and the time when Mr. Yung was taking over the 13 property. Before they bought the property, would 14 you be fair to say that when The Quarter opened, the 15 Tropicana enjoyed a lot of success, but then the 16 garage collapse came and that hurt, it's one of the 17 things that hurt, I'll break this down. 18 A. The Quarter got off to the bad start 19 because the garage happened just about after it 20 opened. 21 Q. Also before it was purchased by Mr. 22 Yung, the property flattened out from an operational 23 and competitive perspective; is that fair? 24 A. Yes. 25 Q. So now you have it, assume 2006, that 108 FRED BURO - CROSS 1 before because Mr. Yung took over in the beginning 2 of 2007, before you bought the property or his 3 company bought the property, the property meaning 4 Tropicana flattened out from an operational and 5 competitive perspective. Correct? 6 A. Yes. 7 Q. And let's talk about the property. 8 It's your opinion that while The Quarter is 9 extremely attractive, the casino paled in 10 comparison; is that fair? 11 A. Yes. 12 Q. And didn't you once describe it, The 13 Quarter to the casino, meaning the difference as if 14 you were at the Venetian in Las Vegas and that was 15 The Quarter but when you went over to the casino, 16 you were like gambling in Downtown Binyons? 17 A. Yes. 18 Q. That had nothing to do with Mr. 19 Yung's actions; is that correct? 20 A. Yes. 21 Q. That existed before he got involved 22 in the property? 23 A. Yes. 24 Q. And you believed, that at the time 25 before the takeover of the property, that the casino 109 FRED BURO - CROSS 1 was a low energy flat casino; is that correct? 2 A. Yes. 3 Q. Now, you talked about the fact that 4 at some point in time you believed that the property 5 suffered from a cleanliness point of view. Correct? 6 A. Yes. 7 Q. From -- okay. Now, I know you 8 weren't here during Mark Giannantonio's testimony 9 but just to give you a little bit of flavor, he 10 discussed the fact that during a period of time, he 11 said there was a cleanliness problem, but he 12 attributed it to some degree to the fact that there 13 was some problem with the unions and slowdowns and 14 some malicious activity going on at the casino 15 hotel. Were you aware of that? 16 A. Of what, Mark Giannantonio said 17 during his testimony? 18 Q. No, I'm trying -- I know you wouldn't 19 be aware of what he said because you weren't here. 20 But were you aware of the fact -- let me break it 21 down. 22 Were you aware of the fact that there 23 was graffiti in the back part of the casino hotel 24 which was extremely negative to Mr. Yung and to 25 Columbia Sussex or was it cleaned off every time 110 FRED BURO - CROSS 1 before you saw it? 2 A. No, I didn't see it. 3 Q. No one ever told you about it? 4 A. Not graffiti that was against Mr. 5 Yung, not graffiti. Like, as in spray paint on the 6 walls? 7 Q. Um-hmm. 8 A. No. 9 Q. Were you aware that there -- this is 10 according to Mr. Giannantonio's testimony, that 11 there was a work slowdown in the cleaning people as 12 far as the fact of whether they were designated 13 during a certain period of time to clean? 14 A. I know that he said that, I don't 15 necessarily agree with it. 16 Q. Are you aware that discovered during 17 a period of time in 2007 before you left, that there 18 were events such as sand being poured down all the 19 urinals in the men's bathrooms, common men's 20 bathrooms? 21 A. No. 22 Q. Were you aware that there was toilet 23 paper roles with toilet paper on it stuffed down 24 toilets? 25 A. I was aware that there was clogged 111 FRED BURO - CROSS 1 toilets and overflowing toilets, didn't know what 2 the cause was. 3 Q. You have no reason to disbelieve what 4 Mr. Giannantonio says, that the toilets were stuffed 5 up and they were clogged because when they went to 6 clean them, they found toilet paper roles in it? 7 MS. MAHER: I'm going to object to 8 that. How would this witness be able to speculate 9 on the credibility of Mr. Giannantonio's statement? 10 THE WITNESS: First of all -- 11 MS. MAHER: Wait -- 12 CHAIR KASSEKERT: I'm going to 13 overrule it because I'd like to hear the question 14 rephrased differently. 15 MS. MAHER: Thank you. 16 MR. LEVENSON: I knew you were going 17 to say that. I have to remember how I phrased it 18 and how I said it. 19 CHAIR KASSEKERT: Do you want me to 20 ask it? 21 MR. LEVENSON: Go ahead. 22 CHAIR KASSEKERT: Well, I think your 23 question is really was he aware of it, not whether 24 or not Mr. Giannantonio's credibility or was he 25 telling the truth about it but was he aware of it? 112 FRED BURO - CROSS 1 MR. LEVENSON: I was trying to ask 2 him was he -- did he have any idea why if Mr. 3 Giannantonio testified to that, which he did, why he 4 would testify to that if it weren't accurate? 5 MS. MAHER: And, again, that's the 6 objection. That's asking to pass on the credibility 7 of another witness. 8 MR. LEVENSON: No. No. No. It's 9 asking him to pass on the question of whether Mr. 10 Giannantonio has an interest or a motive not to tell 11 the truth here, that's all. 12 MS. MAHER: Same thing. Same thing. 13 MR. LEVENSON: How is that -- I don't 14 understand that. 15 CHAIR KASSEKERT: I think what you 16 are asking him to do is pass on the credibility -- I 17 think -- I'm not sure how you would reword it in 18 order to get around this situation but I agree with 19 the counsel that you're asking him to pass on the 20 credibility of a witness's testimony. 21 BY MR. LEVENSON: 22 Q. You knew as president of the property 23 that there was a work slowdown and the toilets were 24 stopped up; is that fair enough? 25 A. No. 113 FRED BURO - CROSS 1 Q. You didn't know that? 2 A. I didn't know. I didn't know of a 3 work slowdown. You have to understand -- 4 Q. Did you ever review -- 5 A. It goes back to separate silos, 6 there's a hotel silo that reports -- 7 Q. Fair enough. 8 A. -- and there's a casino silo. 9 Q. And the cleaners are on the hotel 10 silo even if they are cleaning the casino? 11 A. Correct. 12 Q. Okay, fair enough. And just so we 13 have it clear, at no time did Donna More ever give 14 you any direction to not communicate to regulators; 15 is that correct? 16 A. That's correct. 17 Q. I think you said she did not nor do 18 you think she ever would; is that correct? 19 A. Correct. 20 Q. And you don't know whether the hotel 21 people were telling Mr. Yung whether the property 22 was clean or wasn't clean; is that correct? 23 A. I don't know whether -- they told me 24 that they were, so I believed that they were. 25 Q. Well, let's look at page 49. 114 FRED BURO - CROSS 1 A. (Witness complied.) 2 Q. Let me get to it myself. And 3 starting at the bottom of page 49, you said, It 4 wasn't clean. And you're saying, I'm not sure what 5 the hotel people were telling him about how clean it 6 was or wasn't. 7 And the question was, You weren't 8 privy to any of that? 9 And you said, No, I wasn't. 10 So why are you telling us that the 11 hotel people told him that it was not clean? 12 A. Because my responsibility regarding 13 anything from mice to roaches to toilet paper on the 14 -- missing toilet -- was to go to Mark Giannantonio 15 with that information, which is what I did. 16 Q. That, that wasn't the question, with 17 all due respect. The question was relating to Mr. 18 Yung. I had asked you whether Mr. Yung was told by 19 the hotel people about the cleanliness or lack of 20 cleanliness of the property. 21 And you told me, yes, until I told 22 you to look at your interview. 23 And then you were reading your 24 interview -- 25 A. Right. 115 FRED BURO - CROSS 1 Q. -- and you're saying I'm not sure, 2 the hotel people were telling about how clean it was 3 or wasn't because you weren't privy to any of that? 4 A. Well, I'm not privy to it but Bill 5 does run 85 hotels, he's a good hotel operator. And 6 if he knew they were dirty, sometimes you think, 7 why. So when they're telling me, they're telling 8 him, you look at the fact that the place was filthy, 9 and there are big issues with cleanliness 10 everywhere. 11 Q. And he runs 85 hotels, are you aware 12 of all the awards he's received from Marriotts about 13 the cleanliness of his hotels? 14 A. He's an excellent hotel operator. 15 Q. Doesn't that give you some clue that 16 maybe some force was at work here in Atlantic City 17 other than an intention to leave a property unclean, 18 that maybe there was some other force at work, like 19 people maybe not doing the jobs because of the 20 layoffs? 21 A. I think, I would have -- here's why I 22 don't think so, because as an operator and a service 23 focused operator understanding the first time 24 someone walks into a dirty bathroom or sees a mouse 25 on a casino floor, that that's a problem. And I 116 FRED BURO - CROSS 1 think that -- 2 Q. Mr. Buro, I've had a mouse in my 3 house, I will admit to that. 4 COMMISSIONER EPPS: He didn't finish 5 his answer. 6 MR. LEVENSON: I'm sorry, excuse me. 7 CHAIR KASSEKERT: You have a cat, 8 Lloyd. I know that cat is taking care of those 9 mice. 10 MR. LEVENSON: Two cats. 11 THE WITNESS: Other forces at work, I 12 think I would approach it different from a service 13 perspective understanding that if this is happening, 14 then you quickly rectify the problem. It shouldn't 15 perpetuate itself over a period of weeks and weeks 16 and months to the point to where you form a 17 perception of the property. 18 BY MR. LEVENSON: 19 Q. Are you done? 20 A. Yeah. 21 Q. Are you aware that there are no 22 complaints basically about the cleanliness of 23 Tropicana today with the same amount of cleaning 24 people that existed at the time that it was unclean? 25 A. I'm not aware of that. 117 FRED BURO - CROSS 1 MS. MAHER: I'm going to object to 2 that, that's assuming facts not in evidence. 3 MR. LEVENSON: What do you mean facts 4 not in evidence? I'm asking the question -- 5 MS. MAHER: Just, just what I said. 6 CHAIR KASSEKERT: I'm going to 7 sustain that. 8 MS. MAHER: Thank you. 9 BY MR. LEVENSON: 10 Q. Have you been back to the property 11 since August 8? 12 A. I have not. 13 Q. Now, in the first quarter of '07, I 14 believe that your position was the Trop kept the 15 market share or expanded a little or barely held its 16 own; is that correct? 17 A. Close to it and still north of 18 8 percent, I believe at the time, 8.1 percent, it 19 fell off a little bit. 20 Q. I'm sort of using your words here 21 so -- 22 A. Okay. 23 Q. -- is it fair to say that the kept 24 market share expanded a little but -- or held its 25 own -- 118 FRED BURO - CROSS 1 A. Okay. 2 Q. -- is that fair? 3 A. Okay. 4 Q. You can look it up. 5 A. No. 6 Q. And there were certain forces that 7 were happening, I think you mentioned it earlier, 8 smoking or the smoking ban? 9 A. Yes. 10 Q. And that hurt the entire Atlantic 11 City market not only Tropicana. Correct? 12 A. Yes. 13 Q. And the competition from 14 Pennsylvania, and to some degree New York? 15 A. Yes. 16 Q. That hurt everybody not just 17 Tropicana? 18 A. Yes. 19 Q. And that some of the casinos would 20 engage in what has been called promotional wars, is 21 that the correct terminology, promotional wars or 22 promotional somethings? 23 A. Yes. 24 Q. And, basically, that's paying for 25 customers to come in, increasing what you pay and it 119 FRED BURO - CROSS 1 becomes sort of a battle between casinos. I give 2 you $50 in quarters and the next casino says, well, 3 I'll give you 70 in quarters and all that kind of 4 stuff? 5 A. Yes. 6 Q. And that becomes a big expense side 7 for casinos? 8 A. Yes. 9 Q. And I guess your position would be if 10 nobody did it, it would be the best thing, in that 11 no one would have that expense side higher or lower 12 than any other competitor. Correct? 13 A. Yes. 14 Q. And so there was a decision made at 15 Tropicana or at corporate or both, or whatever, to 16 not engage in those promotional wars; is that 17 correct? 18 A. Yes. 19 Q. And as it turned out, not engaging in 20 those promotional wars and spending all the money to 21 try and get the customer, because the other casinos 22 were spending that money, hurt the revenue at 23 Tropicana; is that correct? 24 A. I don't know that. 25 Q. Well, why did the other casinos spend 120 FRED BURO - CROSS 1 it, don't they spend it to get revenue? 2 A. Not all the time, no. In the case of 3 Harrah's, for instance, they'll sometimes spend it 4 to gain market share and advertise over time. It's 5 not necessarily profitable revenue for them either. 6 Q. Okay. So -- 7 A. So it's gross revenue but not net 8 revenue. 9 Q. Okay. But to a novice, it's to drive 10 people to the property? 11 A. Yes. 12 Q. Right, because the fact is, if you 13 drive them to the property, the idea is they are 14 going to spend money and hopefully you'll make up 15 the difference by what they lose in the casino or 16 spend in the restaurant versus what you're giving 17 them to come in; isn't that the whole concept? 18 A. That's the basic concept. 19 Q. Okay, thank you. 20 By whom are you employed now? 21 A. I'm not employed now. 22 Q. And does your severance agreement -- 23 was it six months or nine months, you said it 24 earlier? 25 A. Six. 121 FRED BURO - CROSS 1 Q. Six. Did your severance agreement 2 have a clause in there that prevented you from being 3 employed by another casino during that six-month 4 period? 5 A. No. 6 Q. You weren't at the property last 7 week, by any chance? You weren't in Tropicana last 8 week? 9 A. Last week? 10 Q. We have surveillance -- no, I'm just 11 kidding. 12 A. You know what, I did walk someone in 13 the Providence Nightclub, I walked in through the 14 street. I didn't go to the casino side, I did walk 15 someone into the Providence Club and walked out. I 16 don't think I was there 20 minutes. 17 Q. You were at the Tropicana, so when 18 you told us earlier you hadn't been back -- 19 A. Yeah, I forgot. I dropped somebody 20 off there basically and got them into a line. I 21 tried to get in and out as quickly as I could. 22 Q. Just to re-engage you on this one 23 area, that those player development people that were 24 let go, were they -- withdraw that. 25 The player development people that 122 FRED BURO - CROSS 1 were let go were three of the top producers in 2 player development; isn't that correct? 3 A. I don't, I don't know or think so. I 4 don't know right offhand. As I said to you earlier, 5 sometimes what's indicated on how many customers 6 they have in their base is not representative of how 7 many of those customers they actually speak to. But 8 when those customers come in and put their card in 9 the machine, they get credit for that customer. 10 So in the case of one executive has 11 over 4,000 customers in their base, I can assure you 12 they don't talk to 4,000 customers in a week or 13 month or sometimes even in a year. It's a very 14 small percentage. 15 Q. That's sort of the best, the best you 16 have as part of the process. I mean, when you went 17 there as chief operating officer, you didn't change 18 the methodology of how customers were coded to the 19 player development people; did you? I mean -- 20 A. No. 21 Q. -- it stayed the way it was and is? 22 A. That's why we wouldn't use that 23 coding as representative of who the real superstars 24 were. 25 Q. Okay. You gave -- companies give 123 FRED BURO - CROSS 1 bonuses, do they not? Not all companies, I won't go 2 into that but a lot of gaming companies give out 3 bonuses at the end of the year, is that correct, 4 like any other company? 5 A. Yes. 6 Q. And they give it out based on how 7 well -- I mean, they give it out based on normally 8 merit, normally; wouldn't you think so? 9 A. I don't know what -- all different 10 ways, merit, performance, all different ways. 11 Q. Well, to me merit and performance, 12 they mean the same thing but -- 13 A. To me, they are completely opposite. 14 One is because that you're a good guy and one is 15 performance that is statistically proven. 16 Q. Okay. We can disagree about that but 17 I use in my firm, merit means if you're merited by 18 your work production and all the rest -- 19 A. Okay. 20 Q. Okay. Did you analyze in some way, 21 shape or form or did you rely upon Jason Lyons to 22 give you an analysis of what the prediction was, at 23 least of what revenue was being produced by the 24 three player development executives that were let 25 go? 124 FRED BURO - CROSS 1 A. Not revenue specifically. As I said, 2 there are players that were coded to them and the 3 revenue those players drove was not indicative to 4 the job they did on a day-by-day basis. It was just 5 those players were coded. You have to sit on top of 6 those players and see them on the phones and hear 7 them and watch them work to understand they're 8 productive player development executives. It's a 9 relationship-based position. 10 To have 4,000 people in your database 11 doesn't mean you're a superstar or a successful 12 executive, so you cannot use that gross revenue 13 number. 14 Q. I'm assuming you use some number to 15 quantify how good a player development person is, 16 you have to use something? 17 A. Yeah, we never got there. I mean, I 18 had four months, Lloyd, and it's certainly one of 19 the frontiers that we wanted to get to, was put a 20 new performance and incentive program in place for 21 player development but first you had to understand 22 who was really doing the job down there and who was 23 not. 24 Q. Okay. So the decision was made, 25 whether it was by Jason Lyons or by you or a 125 FRED BURO 1 combination of you and Jason Lyons, to let go of the 2 certain player development people without it fooling 3 houses. Correct? 4 A. No. 5 Q. And just to, I guess, sum things up. 6 At no time did Mr. Yung or anyone else connected 7 with the home office, so to speak, ever, ever 8 suggest to you to violate any law or regulation 9 either of the Casino Control Act or the regulations; 10 is that correct? 11 A. That's correct. 12 MR. LEVENSON: I have no further 13 questions. 14 CHAIR KASSEKERT: I think we're going 15 to take a brief recess. 16 COMMISSIONER EPPS: I have a question 17 concerning one that Mr. Levenson just asked. 18 Player development, do these player 19 development people have what is sometimes called a 20 book of business? 21 THE WITNESS: Yes, they do. 22 COMMISSIONER EPPS: And do you above 23 them generally know what's in their book of 24 business, you know the players and their book? 25 THE WITNESS: You can look at the 126 FRED BURO 1 players in their book, of course. So do I know them 2 as do I know who those -- one executive has 4,000, 3 do I know those players individually, I don't. 4 COMMISSIONER EPPS: Well, I guess on 5 the casino side at the top level, do you kind of 6 know who has the players that you like in their book 7 and the players that you want to maybe hold on to, 8 do you have an idea where those people are? 9 THE WITNESS: Yes. 10 COMMISSIONER EPPS: So if someone 11 leaves, you might have some trepidation that some of 12 their better players in their book might go. 13 THE WITNESS: Yes. 14 COMMISSIONER EPPS: So to that 15 extent, you do have that knowledge of who you might 16 want to keep based on their books? 17 THE WITNESS: Yes. Yes. 18 COMMISSIONER EPPS: When you were 19 testifying about the road show and you had spoke 20 about Tropicana's acquisition -- or Columbia 21 acquiring the Tropicana and that being a paradigm 22 shift because Columbia's portfolio prior to Atlantic 23 City was quite different; is that a fair -- 24 THE WITNESS: Yes. 25 COMMISSIONER EPPS: -- 127 FRED BURO 1 characterization of your statement? 2 THE WITNESS: Yes. 3 COMMISSIONER EPPS: During the road 4 show, were you guys questioned about this jump in 5 your portfolio? 6 THE WITNESS: Yes. 7 COMMISSIONER EPPS: And what was the 8 Wall Street -- what were those questions and what 9 were their concerns, if you will? 10 THE WITNESS: Basically the 11 understanding of the market, do you really 12 understand the Atlantic City market, and I think 13 that was their biggest concern there. 14 COMMISSIONER EPPS: Okay. And how 15 did you guys address those concerns? 16 THE WITNESS: I went into my 17 background in the Atlantic City market and asked 18 questions about different market segments, segments 19 like domestication, international Asian, bus 20 marketing, long distance outer market, charter 21 market, line run buses because these guys knew quite 22 a bit about the industry and know the questions to 23 be asked and wanted to be sure that we understand 24 each of the drivers within each of those markets and 25 all the segments and the competitive nature of those 128 FRED BURO 1 segments and those markets. 2 COMMISSIONER EPPS: So is it fair to 3 say that having a bunch of money and owning a bunch 4 of hotels wasn't enough to carry the light on the 5 road show? 6 THE WITNESS: Just hotels and money, 7 yeah, I think that's true to say. 8 CHAIR KASSEKERT: Anything else? 9 COMMISSIONER EPPS: (Commissioner 10 nods head. 11 CHAIR KASSEKERT: Mr Fedorko? 12 VICE CHAIR FEDORKO: Mr. Buro, you 13 mentioned in your testimony that the gaming venue, 14 there are many jurisdictional issues that have to be 15 considered? 16 THE WITNESS: Yes. 17 VICE CHAIR FEDORKO: Who does that at 18 Trop? 19 THE WITNESS: Jurisdictional issues 20 that are considered? 21 VICE CHAIR FEDORKO: Yeah. 22 THE WITNESS: Who considers those 23 issues? 24 VICE CHAIR FEDORKO: Yeah. 25 THE WITNESS: Who does it at 129 FRED BURO 1 Tropicana Atlantic City? 2 VICE CHAIR FEDORKO: Yeah. 3 THE WITNESS: Myself would develop 4 and understanding of the jurisdiction in Atlantic 5 City. 6 VICE CHAIR FEDORKO: I'm very 7 confused over this Glenn Kohler situation. Tell me 8 if I'm correct, Glenn Kohler was brought into 9 Atlantic city to evaluate the security situation? 10 THE WITNESS: Yes, he was. 11 VICE CHAIR FEDORKO: In fact, he 12 wrote a report -- went back to Nevada, wrote a 13 report saying that people should be hired? 14 THE WITNESS: No, I think there was a 15 little confusion early on with the testimony. I'm 16 pretty clear on it and Glenn Kohler came in, met 17 with -- introduced himself to me, I had known him 18 from being in the company and being out in Lake 19 Tahoe, a nice man. I don't think he has a law 20 enforcement background, by the way, but nice enough 21 man and hard worker. 22 And he was brought in, I believe, by 23 Howard Reinhardt and Bill Yung to take a look at the 24 staffing in Atlantic City in the security 25 department. When -- I dealt myself out of that 130 FRED BURO 1 meeting and out of that audit because I was again 2 not the expert in security, Mike Lyons had many 3 years in security, he's very well versed in staffing 4 and understands it. And I left him to Mike Lyons. 5 And I didn't want to jade it, I 6 wanted the performance and the safety issues more 7 than covered. So upon the completion of his audit 8 of security and Atlantic City -- Mike took him to 9 the Borgata, he took him to many of the hotels in 10 the Atlantic City. It wasn't just a tour of 11 Tropicana, showed him security operations in a 12 couple different casinos, spent a lot of time with 13 him to help him understand how security worked in 14 Atlantic City at several properties not just one 15 property and then how it worked at Tropicana and why 16 at a place like Showboat, there's a mandatory 17 staffing minimal security guards on the internal 18 controls of about 12 per shift and perhaps at 19 Tropicana, it might be more in the vicinity of 21 or 20 22. 21 And in addition to the internal 22 control positions, when Glenn looked at the 23 perimeter of the building, The Quarter, and some of 24 the other issues as it related -- as they were 25 related to securing the property, it was his 131 FRED BURO 1 conclusion that the property was understaffed in 2 security. And that's what -- and I asked him at the 3 conclusion of his audit of security and his tour 4 with Mike that they go to Tama, in which they did, 5 as I said earlier. 6 He indicated that to Tama Hughes as 7 well with Mike Lyons, and then they came to my 8 office and told me what he told Tama, that he 9 thought they were understaffed in security, that we 10 should add more -- at least get the perimeter of the 11 property secured and protected, which Mike 12 immediately went on to hire bike patrol to show a 13 presence out in the parking lots and other public 14 areas, and basically told me that, the same thing. 15 And then he said he would go up and 16 explain his findings to Bill Yung and write a 17 report. And, again, Kevin Preston was not on board 18 and certainly not present for that, that was Howard 19 Reinhardt and Bill Yung initiative. 20 So when the report came back 21 different -- the report came back saying, and I 22 think this was the confusion, the report actually 23 said that we do not require additional staffing and 24 perhaps we could make more cuts. And that's when 25 Mike Lyons and myself were very surprised that the 132 FRED BURO 1 report came back different than what was told to us 2 by Glenn Kohler at the conclusion of his audit at 3 Tropicana Atlantic City while he was still there. 4 So on the day he left, he completed, 5 he sat us down and said this is what I found, this 6 is what I'm going to write. Mike and I took action, 7 again the process of bringing on bike patrol and 8 some of the security officers and were quite 9 surprised, as was Kevin Preston, when he sat down 10 and he questioned us why are you guys adding this 11 staff when Glenn Kohler's report said to cut staff? 12 And I said, quite frankly, I haven't 13 seen a report, Mike, have you seen a report? 14 He said, no, who's got the report? 15 Kevin Preston's confusion, he was as 16 surprised as I was. And the report went directly to 17 Bill Yung up in corporate. And, apparently, there 18 was some discussion between Bill and Glenn and I 19 guess Glenn had changed his position on what he 20 thought the staffing required in Atlantic City after 21 that meeting or discussion with Bill because it was 22 certainly different from what he told us when he was 23 on property. 24 VICE CHAIR FEDORKO: Did you talk to 25 Kohler about that? 133 FRED BURO 1 THE WITNESS: Only on that conference 2 call was, as Kevin explained, with Glenn Kohler, 3 myself and Mike Lyons in the room. There might have 4 been one other person in the room, it escapes me for 5 a minute. 6 And Glenn Kohler did say he wrote the 7 report and he didn't really get into any of the 8 other specifics of why he told us what he told us. 9 We did raise the issue with him, he waffled at that 10 point, I could understand why. And Kevin, rather 11 than and rightly so, once Kevin realized that there 12 was a rift here and there was some confusion in a, 13 in a good way, really ended the call and said he 14 would conduct further analysis, which is what I 15 think he did and was appropriate at the time. 16 Sorry. 17 VICE CHAIR FEDORKO: Do you think he 18 was told to change the report or do you think he was 19 told to write what was in the report? 20 THE WITNESS: I have no knowledge of 21 that. I have no knowledge whatsoever. 22 All I know is that he may have done 23 further analysis when he went back, I have no idea 24 what happened -- I only know what he told me. 25 VICE CHAIR FEDORKO: And no one asked 134 FRED BURO 1 him why you changed your finding? 2 THE WITNESS: From that point 3 forward -- I hate to dump it back on Kevin. From 4 that point forward, Kevin was involved in the 5 process, realizes there was a disparity between what 6 we were saying Glenn told us and what Glenn wrote in 7 his report. And at that point, Kevin took over and 8 decided who would get involve and handle it. 9 VICE CHAIR FEDORKO: I think we're 10 going to have to clear this up because I find it 11 incredible that somebody would come out here, look 12 at the situation, tell you something, and then go 13 back and do something totally different, don't you? 14 THE WITNESS: We were surprised by 15 that, yes. 16 VICE CHAIR FEDORKO: Shocked is the 17 word I would use, okay. 18 THE WITNESS: Yes. 19 VICE CHAIR FEDORKO: All right. I'm 20 going to ask that we clear this up at some point. 21 We need to go further with this, I have a lot of 22 questions about this. 23 CHAIR KASSEKERT: Mr Frulio? 24 COMMISSIONER FRULIO: Yes. Mr. Buro, 25 I need to understand. And is it fair to say that 135 FRED BURO 1 prior to the Philly/New York thing and the smoking 2 ban thing, wasn't the decision to make layoffs, to 3 bring the cost down made during the road show to 4 help sell the investors bill of goods on Columbia 5 Sussex? 6 THE WITNESS: I don't think bill of 7 goods is appropriate. 8 COMMISSIONER FRULIO: No? 9 THE WITNESS: I think that the 10 proposed cuts were really to demonstrate where the 11 opportunity was to add another $40 million to the 12 operating profit. I believe that Bill believed that 13 that was very possible and we believed that most of 14 it was possible. 15 COMMISSIONER FRULIO: Okay, fair 16 enough. And I hate to belabor the point but do you 17 think Mr. Yung would have been has successful during 18 this road show if Fred Buro wasn't there? 19 THE WITNESS: That's a very 20 self-serving question. As I said, and I appreciate 21 you teaming up, I was a small part of that. As 22 Lloyd said, Bill Yung is a successful entrepreneur 23 who wrote the $500 million check to buy it, and I 24 was just part of that. And I was there, and believe 25 it or not, humbly so just to represent my experience 136 FRED BURO 1 and Atlantic City and answer the questions. 2 I have no desires to manipulate the 3 situation to bring myself back to New Jersey or any 4 other agenda at that point. 5 COMMISSIONER FRULIO: Do you believe 6 that a company like Columbia Sussex who operated a 7 number of smaller casino venues would succeed in 8 Atlantic City, a much bigger one? 9 THE WITNESS: I believed it in my 10 whole heart and soul, they would be very successful 11 there. 12 COMMISSIONER FRULIO: You did? 13 THE WITNESS: I did. I just think 14 that Bill really wanted it, he really believed in me 15 at the time and I knew I, I knew I could bring it 16 across the finish line. 17 As I said, there was a lot of 18 frustration that Bill brought and a lot of 19 disenchantment that was created as a result of some 20 of the incidents there and it just deteriorated. So 21 at the time, I did believe that. 22 COMMISSIONER FRULIO: Okay. 23 Subsequent to the Philly/New York and smoking ban 24 issues that came on board, all the casinos Atlantic 25 City witnessed a single digit downturn but the Trop 137 FRED BURO 1 had a double digit or a much more severe downturn 2 compared to the year before, can you explain that? 3 THE WITNESS: There's a lot of 4 downturn associated with the Tropicana at the time 5 because of the cleanliness issues and what -- it 6 just takes on a life of its own, and it's very 7 difficult. Customers talk to customers and I'm very 8 sensitive to that. 9 And when you run out of toilet paper 10 in a bathroom, it's not even clogging, it's just 11 running out because they're not getting filled fast 12 enough, there's thousands and thousands -- we have 13 57 bathrooms, one bathroom in particular I think 14 it's our section ladies room has, I don't know it 15 has 32 stalls and 16 sinks, and I don't know how 16 many garbage pails are on the property but I can 17 tell you with 52 bathrooms or 28 elevators, 24 18 escalators, I think the staffing levels and to go -- 19 to make such an abrupt change in staffing levels, 20 not necessarily -- you can potentially get there but 21 to do it so quickly has a severe and profound impact 22 on the performance of the property. I don't know if 23 I answered your question, sorry. 24 COMMISSIONER FRULIO: So it's word of 25 mouth? 138 FRED BURO 1 THE WITNESS: Yes, it's word of mouth 2 by the customers. And I can tell you by the few 3 that I knew and that I talked to, they sit at the 4 blackjack table, especially the high rate customers, 5 and they talk to each other. At that point, some of 6 it's hearsay, some of it's true. 7 All I'm concerned with on the casino 8 side is that these things are happening, you guys 9 deal with it on the hotel side, food and beverage, I 10 just operate the casino. 11 But regardless of what the reason is, 12 you got to clean it up now, today. You can't say 13 it's sabotage or we're moving too fast. Whatever it 14 is, forget looking backwards, you have to address 15 the issue now and fix it at this moment, not one day 16 should go by, not one more time should you have a 17 dirty bathroom or overflowing garbage pail, not days 18 and days, weeks and weeks and here we are. That was 19 then and this is November, that it's clean now. 20 I think that ultimately there is a 21 path that you could have taken over a period of time 22 that would have made the transition go much smoother 23 and saved a lot more customers. 24 COMMISSIONER FRULIO: Thank you very 25 much. 139 FRED BURO 1 CHAIR KASSEKERT: Mr. Sommeling? 2 COMMISSIONER SOMMELING: Thank you, 3 Chair. 4 When you and Tama Hughes were going 5 to go and talk to Donna More, we talked about an 6 incident that occurred with Mr. Yung where he was 7 somewhat upset. 8 In your sworn statement you said 9 that, Well, yes, but there's one, there's one 10 incident that happened prior as it related to cuts 11 whereafter I had been instructed by the regulatory 12 bodies to inform them of further staff reductions, 13 that I did and got -- that I did and I got a call 14 from Bill Yung. He was quite upset in his -- from 15 his perspective that the regulatory bodies were 16 interfering with the way he wanted to structure and 17 operate his business. 18 Now my question is, when you said he 19 was upset, why do you think he was upset, 20 specifically with respect to the -- 21 THE WITNESS: First of all, I want to 22 correct the record that I think it wasn't Donna, I 23 think you mentioned Donna More first, it wasn't 24 Donna More, it was perhaps Chairwoman Kassekert. 25 COMMISSIONER SOMMELING: No. No. It 140 FRED BURO 1 says you and Tama had these concerns and you were 2 going to take them to Donna More with regard to 3 regulatory compliance and regulatory scrutiny, it's 4 on page 39. 5 THE WITNESS: Okay. If my memory 6 serves me well, It may be at that time asking Donna 7 to do some bidding for us up in corporate with Bill 8 to further explain the demands that we're under at 9 the property level to inform the Commission and 10 Division of any staffing changes. 11 COMMISSIONER SOMMELING: All right. 12 And further on in your deposition -- in your sworn 13 statement rather, you called Mr. Yung and you wanted 14 to give him the information about the cuts and about 15 the regulatory requirements. And you called Bill to 16 give him that information and he was not happy that 17 I followed that procedure and that I informed the 18 Commission or the Division and perhaps at the time, 19 I didn't understand I had to. I perhaps felt 20 slightly betrayed by myself. In some way, I may 21 have wanted to make those cuts. They had talked to 22 the Division and the Commission, which of course was 23 not the case but he was rather upset with me at the 24 time. 25 Why do you think he was upset, going 141 FRED BURO 1 back to my original question about Mr. Yung and 2 compliance with the regulatory process? 3 THE WITNESS: I think on a couple 4 levels. One is, as Lloyd explained it in his 5 questioning of me, that at no time did Bill violate 6 any of the written regs, any of the laws nor would 7 he. 8 There was a requirement, a request by 9 the Division -- or by the Commission for us to 10 submit a list of cuts prior to because they were 11 concerned about certain things on the property. So 12 on the actual written law side, he was, he was, I 13 guess, okay but very frustrated and angered that 14 this request was made and that it wasn't one of the 15 original written rules and didn't necessarily 16 understand that or even perhaps agree with it, I 17 don't know but I just know the result. 18 COMMISSIONER SOMMELING: Finally, 19 after you got out of your meeting with Chair 20 Kassekert, you got a call from Mr. Yung? 21 THE WITNESS: Yes. 22 COMMISSIONER SOMMELING: And you had 23 already informed him previously that you were 24 required to cooperate with the regulators, that's 25 the Commission and Division, with regard to 142 FRED BURO 1 reporting? 2 THE WITNESS: Yes. 3 COMMISSIONER SOMMELING: And he was 4 very upset with you that day? 5 THE WITNESS: Yes. 6 COMMISSIONER SOMMELING: And he said 7 that I informed Bill that we would not be able to 8 make those cuts at this time because there was 9 concern by the Commission that we would be 10 jeopardizing the further integrity of the operating 11 of the casino floor. He was clearly upset. As a 12 matter of fact. He was irate. 13 THE WITNESS: Yes. 14 COMMISSIONER SOMMELING: He said, I 15 remember it clearly, and I remember it clearly was 16 that, I thought I told you not to tell the 17 regulators about those cuts. He said, now you go 18 back and you make these cuts or I'll find somebody 19 else who will. What do you think he meant by that. 20 THE WITNESS: He used the F word -- 21 COMMISSIONER SOMMELING: Oh. 22 THE WITNESS: -- which is fire, that 23 takes all the rationale sometimes out of it and 24 says, well, still you've got to comply to the extent 25 that you can without compromising the requested -- 143 FRED BURO 1 yourself, and the best way you can. 2 COMMISSIONER SOMMELING: Last 3 question. Do you think at any time Mr. Yung -- or 4 do you know of any time that Mr. Yung was clearly 5 advised of the difference in the regulatory process 6 in New Jersey with respect to the casinos conforming 7 to what's required in the reporting to both the 8 Commission and the Division? 9 I think I asked this question to some 10 of the other witnesses. 11 THE WITNESS: Yeah, we continually 12 did our best to explain it and to develop in those 13 areas. Donna probably more so than myself because 14 she was with him and she did a really good job of 15 communicating with him and explaining the regulatory 16 environment down here. She was our conduit to Bill 17 and she was the background and wherewith all to do 18 that and she did a very good job of that. 19 COMMISSIONER SOMMELING: As a protege 20 of the New Jersey casino industry, you've had lot of 21 experience in that regard as well? 22 THE WITNESS: Somewhat. 23 COMMISSIONER SOMMELING: No more 24 questions. 25 CHAIR KASSEKERT: Mr. Buro, I guess I 144 FRED BURO 1 have two questions. The first with respect to the 2 player development issue and the six employees that 3 were terminated. 4 THE WITNESS: Yes. 5 CHAIR KASSEKERT: Were any of them 6 hired back during your tenure? 7 THE WITNESS: During mine? 8 CHAIR KASSEKERT: Yeah. 9 THE WITNESS: No, ma'am. 10 CHAIR KASSEKERT: Were any additional 11 player development people hired during your tenure? 12 THE WITNESS: After those six were 13 cut, no. 14 CHAIR KASSEKERT: Okay. So no one 15 that could have been characterized as a friend of 16 yours was hired back? 17 THE WITNESS: No. 18 CHAIR KASSEKERT: With respect, you 19 testified here that you don't believe that Mr. Yung 20 would violate the regulations and the internal 21 controls and that you didn't see anyone in the 22 organization that would do that, isn't it true that 23 as a result of some of these cuts, there were 24 violations of the regulations and violations of the 25 internal controls? 145 FRED BURO 1 THE WITNESS: Not that I'm aware of. 2 CHAIR KASSEKERT: Weren't some of the 3 citations when the Division and the Commission met 4 with you with respect to that, didn't we express 5 concerns about those kinds of violations? 6 THE WITNESS: Yes. 7 CHAIR KASSEKERT: Thank you. 8 Commissioner Epps, any more questions? 9 COMMISSIONER EPPS: Just one more 10 question. 11 You said earlier in your testimony 12 that you agreed that Tropicana was overstaffed? 13 THE WITNESS: Yes. 14 COMMISSIONER EPPS: But then you said 15 that the staff reduction caused some of the 16 problems? 17 THE WITNESS: Yes. 18 COMMISSIONER EPPS: Help me 19 understand the two sides of that. 20 THE WITNESS: Okay. It's almost like 21 organizational development. You're talking about a 22 culture of a property that's, even under the current 23 president, operated with that president running 24 hotel food and beverage. Such an abrupt change in 25 culture, in operating philosophy affects an hourly 146 FRED BURO 1 worker, someone who doesn't understand. This hourly 2 worker makes $1,500 a month gross and perhaps net 3 1,200 bucks and probably has two jobs and the timing 4 in which you make that staff adjustment to a 5 department, and again these public areas as an 6 example where you go and cut the department by more 7 than 50 percent in three or four weeks time, that 8 front line worker can't understand. They themselves 9 don't believe they can do it as a department. So I 10 think over time if you begin to work with all the 11 bodies involved, whether it's the union involved or 12 whether it's the department heads, whoever, at the 13 time it was Jean Beloff (ph) and you develop a plan 14 to make this transition to a lower staffing level. 15 You can get to lower staffing numbers 16 and there is certainly opportunities there. And 17 apparently if what Lloyd is saying is true, and I 18 believe what he says is, then you ultimately do get 19 there and there's two ways to get there. So they 20 could have gotten there another way. 21 Now, I don't know if it's as clean as 22 he says it is but, again, it's the timing and the 23 culture and everything that has to take place which 24 really obviously didn't happen in three or 25 four weeks. 147 FRED BURO 1 COMMISSIONER EPPS: So then that goes 2 back to your testimony where you said it was maybe 3 too deep and too fast, is that -- 4 THE WITNESS: Yes. 5 COMMISSIONER EPPS: -- fair? Okay. 6 Now, however, on the road show, part 7 of the presentation was that you would recognize X 8 amount of savings as a result of payroll reduction? 9 THE WITNESS: Yes, sir. 10 COMMISSIONER EPPS: So in order to 11 recognize the savings over the course of a year, you 12 had to start getting rid of them because the longer 13 you had them gone, the more savings you could 14 realize; isn't that fair to say? 15 THE WITNESS: Yes. 16 COMMISSIONER EPPS: And you were part 17 of the road show team? 18 THE WITNESS: Yes. 19 COMMISSIONER EPPS: So there was a 20 certain point where you know that a good chunk of 21 people are going to go early so that you get a whole 22 year to realize that savings? 23 THE WITNESS: That's fair to say. 24 COMMISSIONER EPPS: Okay. So were 25 you conflicted when you knew that there were going 148 FRED BURO 1 to be a lot of early cuts but then you come in and 2 you find out that maybe that wasn't a good idea or 3 how did you change your -- 4 THE WITNESS: No. It's, it's -- I 5 just think that, I just think that it would happen 6 -- you know, there's a difference between getting at 7 that run rate in the first quarter and getting at 8 that run rate in the second quarter or the third 9 quarter. Perhaps they were lofty projections on our 10 part and I think when you come in and you see the 11 reality of the marketplace and the performance of 12 the property, you just lick your wounds and say, you 13 know what, maybe I can't do this much today because 14 this will be the impact of it. 15 I think we believed it on the road 16 show and some parts you try to implement on the 17 property part and you see that they don't work and 18 quickly you should rectify. 19 COMMISSIONER EPPS: And did there 20 come a time you stopped and you called up and said, 21 you know what, this cut them fast and make it lean 22 quick, that's not going to work. Did you 23 communicate that up? 24 THE WITNESS: Not in those exact 25 words but that was the spirit of the message. 149 FRED BURO 1 COMMISSIONER EPPS: How did you 2 communicate it? 3 THE WITNESS: On hotel food and 4 beverage side, I went right to Mark Giannantonio and 5 it became -- and I hate to use levity because it 6 wasn't funny but we used to walk in his office and 7 Mark would attest to this, with roles of toilet 8 paper under our arm and say we have to keep toilet 9 paper in the bathrooms. 10 And he assured me that he was working 11 on it. He was communicating it up the flagpole to 12 his direct reports which may have been Jim Brocco 13 (ph) or it may have been Stan Clayton and sometimes 14 probably direct to Bill Yung and that was it for me. 15 COMMISSIONER EPPS: Now, how did you 16 go up -- did you go up your silo with the same 17 message? 18 THE WITNESS: My silo wasn't the 19 same. My side, at that point, I was Bill would make 20 a mense of me and I, in some areas -- and again. We 21 agreed not to go after marketing and player 22 development even on the road show and even between 23 Bill and myself. 24 Bill and I agreed also not to get 25 involved at that point in the promotional wars 150 FRED BURO 1 because it normally generates a more than fair 2 percentage of unprofitable revenue. So those things 3 were discussed at that level. 4 But on my side, the cuts were de 5 minimus. They were in the very very beginning, 6 there weren't that many. 7 COMMISSIONER EPPS: Let me ask you 8 another question. Would it have been possible for 9 you to go up your silo and say to whoever was above 10 you, look, these hotel cuts are hurting casino side 11 and we're all going to get hurt, can't you talk to 12 somebody up there? Did you try that? 13 THE WITNESS: Yeah, I had that 14 conversation with Howard Reinhardt and Kevin, when 15 he came in. I know he worked very hard to get his 16 hands around the operation very very quickly, and it 17 was just, you know, at the time those cuts started 18 happening and my side is when we went deeper, it 19 wasn't the first quarter for me. So mine was second 20 quarter and there was too much -- in my world, there 21 is probably too much chaos at that point. 22 CHAIR KASSEKERT: Any other 23 questions, anything on redirect? 24 MS. MAHER: No thank you. 25 MR. LEVENSON: I have a couple of 151 FRED BURO - RECROSS 1 questions, I'm sorry to keep everybody waiting. 2 RECROSS EXAMINATION BY MR. LEVENSON: 3 Q. Just following up on something 4 Commissioner Sommeling was reading from the 5 transcript. I just need to make it clear again and 6 I asked you this question before but I think based 7 on the fact that part of the transcript was 8 discussed about the first call and the second 9 call -- 10 A. Yes. 11 Q. -- from Mr. Yung. 12 You testified, and correct me if I'm 13 wrong, that regarding the second call that you took 14 from the parking lot outside, that you're a not sure 15 even at that time that Mr. Yung understood the fact 16 that you were requested to give advance notice of 17 the cuts? 18 A. It would appear to be so, based on 19 the call. 20 Q. Right. I know you left right around 21 August what, 8th, 7th? 22 A. 6th. 23 Q. 6th. Were you aware that there was a 24 meeting though scheduled with the Casino Control 25 Commission and Division of Gaming Enforcement to 152 FRED BURO - RECROSS 1 take place on August 8? 2 A. I was not. 3 Q. Were you aware that various parties 4 at the -- involved with the casino and corporate 5 were getting matters together in order to have a 6 meeting with the Casino Control Commission, the 7 Division of Gaming Enforcement at the regulator's 8 request with regard to the potential for further 9 layoffs? 10 A. No, I was not. 11 Q. So you're not aware that before any 12 more layoffs were done in August that Mr. Yung, Ms. 13 More and Mr. Preston went in to meet with the Casino 14 Control Commission and the Division of Gaming 15 Enforcement prior to making any cuts and basically, 16 you know, asking for some advice and counsel with 17 regard to the potential for additional cuts? 18 A. Right, correct. 19 Q. When you compare year-to-year, and I 20 think it was Commissioner Frulio asked the 21 year-to-year 2000 double digit decline. Isn't it 22 true that, in addition to Pennsylvania, New York and 23 the smoking ban and the promotional wars and that 24 kind of stuff, that the statistics as far as 25 Tropicana is concerned comparing '07 to '06 can be 153 FRED BURO - RECROSS 1 misleading because of the fact that in '06 there 2 were certain labor that was capitalized under prior 3 management but yet expensed under Columbia Sussex? 4 A. Yes. Yes. 5 Q. And that would sku some of those 6 numbers, would it not, to make it look like -- I'm 7 not saying to make, not saying that anybody 8 intentionally -- 9 A. No. 10 Q. -- to have the result that Tropicana 11 is doing worse than it really is; is that correct? 12 A. Yes. 13 Q. Would it be fair to say, Mr. Buro, 14 that before the road show all the financing as far 15 as Credit Suisse was concerned was committed by them 16 but the road show had to do with the syndication and 17 to get bank financing? 18 A. Yes. 19 MR. LEVENSON: Nothing further. 20 CHAIR KASSEKERT: Anything else? We 21 are going to recess five minutes, ten minutes. 22 (There was a brief recess taken at 23 5:15 p.m.) 24 CHAIR KASSEKERT: Back on the record, 25 I'd like to recall Mr. Buro. 154 FRED BURO 1 MS. MAHER: He's just outside, Chair. 2 CHAIR KASSEKERT: Mr. Buro, I'd like 3 to remind you you're still under oath. I have one 4 issue of question in terms of clarification. 5 You spoke at length about the 6 property, about the cleanliness condition of the 7 property. And I'd like to ask you to put this in 8 terms of a time frame for me, and how long and when 9 was the property unclean? Did it continue all the 10 way to the end of your tenure? Was there a time 11 when it got cleaner? Can you clarify that for me? 12 THE WITNESS: Yes. Directly as a 13 result of the cuts, I believe they were in March, 14 there was a big impact to the cleanliness of the 15 property. And I think that that was realized by 16 everybody at every level of the organization. It 17 was obviously visible and I think it peaked out 18 perhaps just shortly thereafter, maybe after a few 19 weeks and got progressively better but was not, in 20 my opinion, up to the standard what I left the 21 property at on that August 8 day on a consistent 22 basis. 23 So it wasn't consistently at the 24 level but I think it was getting better all the 25 time. 155 FRED BURO 1 CHAIR KASSEKERT: Can you maybe 2 articulate to me it was getting better at what sort 3 of level, were you still finding -- and what sort of 4 uncleanliness issues that there were? 5 THE WITNESS: Sure. During the first 6 couple of days, maybe a week or so when I was on the 7 casino floor and there were overflowing garbage 8 pails with paper towels and the dirtiest of 9 bathrooms, that was probably more part of the bigger 10 problems that I think the allegations of my around 11 the poker room are true and that Jean Beloff (ph) 12 who ran the department at the time, saw them and 13 mentioned it to me and brought it up the food chain 14 to the hotel side to Mark. 15 I personally went down at a point, it 16 was a Sunday, I was living on property. And I 17 personally went down into the dealer lounges and 18 locker rooms and honestly none of the toilets were 19 stuffed but the garbage pails hadn't been emptied 20 down there. There were literally trash all over the 21 floor, every place, garbage pails hadn't been 22 emptied in a long time. I did make the call that 23 day to Stan Clayton and to Mark Giannantonio. 24 CHAIR KASSEKERT: When was that, do 25 you remember the date? 156 FRED BURO 1 THE WITNESS: I don't have the date. 2 They did quickly, they came in that day and they 3 took pictures with their cameras to make sure it was 4 true and they could do whatever they could -- had 5 need to do to get it rectify quickly. 6 I was on the property a lot on the 7 service side and it's easy to criticize anything in 8 life and in the world so your opinion of what's 9 dirty, people view at different levels of what's 10 dirty. 11 In my opinion, being a performance 12 based marketing person who understands more than 13 just the rebate side of the business, it's got to be 14 immaculate. Not clean, it's got to be immaculate 15 all the time. When my wife or any woman or any 16 person, more female than male, I think, walks into a 17 bathroom, you got to be willing to sit on that seat 18 and you got to be enthusiastic about it because you 19 really got to go. 20 CHAIR KASSEKERT: Okay. I think 21 that's another TMI. 22 Is there any other questions, Mr. 23 Levenson? 24 MR. LEVENSON: I'm not touching that. 25 CHAIR KASSEKERT: Thank you, Mr. 157 FRED BURO 1 Buro, you can step down. 2 THE WITNESS: Am I through now? 3 CHAIR KASSEKERT: Yes. I think we're 4 going to adjourn. Do we need to lay out any of the 5 -- we're going to continue this hearing on tomorrow 6 and Thursday night's hearing and we anticipate 7 taking more testimony tomorrow. Correct? Anything 8 else I need to announce, Ms. Fauntleroy? 9 MS. FAUNTLEROY: Tomorrow ten 10 o'clock. 11 CHAIR KASSEKERT: Having said that, I 12 will entertain a motion to adjourn. 13 COMMISSIONER SOMMELING: Motion to 14 adjourn. 15 COMMISSIONER FRULIO: Second. 16 CHAIR KASSEKERT: I think we have a 17 motion. Motion has been made and seconded. All 18 those in favor? 19 (Ayes.) 20 CHAIR KASSEKERT: Motion carries. 21 Thank you. We are adjourned till tomorrow. 22 23 (The special meeting adjourned at 24 5:56 p.m.) 25 158 1 C E R T I F I C A T I O N 2 I, Lynda DiGrazio-Smith, a NJ Certified 3 Court Reporter (License No. 2212) and Notary Public 4 of the State of New Jersey, do hereby certify that 5 the foregoing proceedings, evidence, and objections 6 are contained fully and accurately in the 7 stenographic notes taken by me upon the foregoing 8 matter, on November 28, 2007, and that this is a 9 true and correct transcript of same. 10 I further certify that I am neither an 11 attorney nor counsel of any of the parties in the 12 above proceedings, nor a relative or employee of any 13 attorney or counsel employed by the parties hereto, 14 nor financially interested in the outcome of the 15 within proceedings. 16 17 18 ____________________________ 19 LYNDA DIGRAZIO-SMITH, Certified 20 Court Reporter of the State 21 of New Jersey License No. XIO2212 22 Notary No. 2174751 23 24 My notary commission expires August 7, 2011. 25