One of James Packer’s key lieutenants, Michael Johnston, has blamed others at Crown Resorts for problems unearthed during an inquiry into the casino business.
Johnston, who is one of Packer’s nominees on the Crown board, acted appropriately and should be spared any adverse findings, his lawyer, Noel Hutley, QC, told inquiry head Patricia Bergin on Thursday.
The inquiry, held by the New South Wales Independent Liquor and Gaming Authority, is examining whether Crown and its associates are fit to hold the licence to a casino at Barangaroo in Sydney that is due to open next month.
It was called last year following allegations aired by Nine Entertainment’s 60 Minutes and in the media group’s newspapers that included criminal involvement and money laundering in junkets at Crown’s existing casinos in Melbourne and Perth.
Hutley said it was not his client’s job to pass reports of a crackdown on the promotion of gambling by Chinese authorities with the rest of the board.
Instead, this should have been done by Crown’s chief executive, Rowen Craigie, Hutley said.
He said Johnston had no reason to suspect that reports he was receiving about the situation in China weren’t also being passed on to the correct executives within Crown and being dealt with.
“Good corporate management doesn’t necessitate that one treats the structures as not operating appropriately,” Hutley said.
“I accept that all that failed, I accept that.
“But the question here is the judgment of Mr Johnston.”
He denied a VIP gaming working group of which Johnston was a member was an alternative governance structure within Crown that operated outside of the usual chain of command.
Counsel assisting the inquiry have alleged the existence of the group helped compromise reporting lines within Crown, contributing to the arrest of 19 Crown workers in China in 2016 for illegally promoting gambling.
Hutley said the working group was merely an advisory body and had nothing to do with Crown’s failings in regards to the arrests.
Another member of the group, Australian resorts boss Barry Felstead, has admitted failing to report problems to Craigie, but Hutley said this had nothing to do with Felstead’s membership of the group.
He said Packer asked Craigie to “drill down” into the VIP business and see what was going wrong.
“It appears he failed to do so,” Hutley said.
Hutley also represents Packer, who counsel assisting the inquiry have also recommended be barred from being associated with the casino, in part due to a threat the billionaire made to a businessman in 2015.
In evidence to the inquiry Packer admitted the threat was “shameful” and “disgraceful”, but Hutley said it was made when his client was affected by “a profound psychiatric illness”.
Hutley said the episode should not be enough to bar Packer from involvement with Crown.
“There is no evidence to suggest that any such conduct would be repeated,” he said.
Crown’s lawyers are expected to respond to counsel assisting the inquiry’s recommendation that it be found not fit to hold a casino license next week.
