UNITE HERE’s Culinary Workers Union Local 226 has called on Nevada gaming regulators to investigate and determine Deutsche Bank’s suitability to be a casino owner following a guilty plea to criminal wire fraud by a subsidiary of the bank, the bank’s admissions of misconduct and its agreements to pay $2.519 billion in penalties to U.S. and British authorities to settle charges of rigging global benchmark interest rates namely the London Interbank Offer Rate (Libor).
Deutsche Bank, through a subsidiary, participates in the ownership of and receives a distribution of gaming profits from 19 Nevada gaming licensees of Station Casinos, including Red Rock Resort & Casino, Green Valley Ranch, the two Fiesta casinos, and the Boulder, Palace, Texas, Sunset and Santa Fe Station properties.
“Nevada gaming regulators need to reassure the public that criminal elements are not profiting from our state’s largest industry,” said Culinary Union Research Director Maya Holmes. “We deserve to know if Deutsche Bank is using the money it makes from owning Station Casinos to pay fines for criminal behavior. Without an investigation and suitability review of the bank and its executives involved in the gaming business, we simply do not know.”
In a June 17, 2015 letter to the chairmen of the Nevada Gaming Control Board and Nevada Gaming Commission, the union called on the gaming regulators to immediately commence a review into not only the criminal plea and record penalties for an interest rate rigging case, but repeated improper conduct by Deutsche Bank, the failures of the bank’s internal controls, and its lackadaisical culture regarding compliance. The union believes the review should result in a suitability hearing of Deutsche Bank and its executives to decide whether they can continue to hold ownership stakes in Station Casinos.
In addition, the union has asked state gaming regulators to determine whether ownership by law-breakers like Deutsche Bank is consistent with Nevada’s long-standing policy of strict adherence to federal law and whether the bank’s multiple admitted acts are consistent with NRS 463.0129(1)(b), which states: “The continued growth and success of gaming is dependent upon public confidence and trust … that gaming is free from criminal and corruptive elements.”
“We are confident that Nevada regulators will hold Deutsche Bank accountable to the very high standard we have always imposed on casinos owners,” said Geoconda Arguello-Kline, Secretary-Treasurer of the Culinary Workers Union Local 226, which represents gaming 55,000 workers in Nevada. “The health and integrity of the gaming industry is of paramount importance to our members as well as workers at Station Casinos.”
In its letter to gaming regulators, the Culinary union pointed out that, since 2004, the bank also admitted to criminal wrongdoing in the promotion of tax shelters, settled a case involving misleading investors about auction-rate-securities, and paid a penalty because its investment bankers were improperly asserting influence over research analysts.1 In May, without admitting any wrongdoing, the Deutsche Bank agreed to pay a $55 million penalty to settle SEC charges the bank had filed incorrect reports that inflated the value of its derivatives portfolio during the economic crisis by an estimated $1.5 billion and downplayed the risk of huge losses.2 In June, media outlets reported Deutsche Bank was conducting an internal probe into possible money laundering by Russian clients and the bank’s co-CEOs announced their resignations. There are also reportedly current investigations into charges of currency manipulation and violations of U.S. sanctions against countries like Iran.
Culinary Workers Union Local 226 and Bartenders Union Local 165, Nevada affiliates of UNITE HERE, represent over 55,000 workers in Las Vegas and Reno, including at most of casino resorts on the Las Vegas Strip. UNITE HERE represents 270,000 workers in gaming, hotel, and food service industries in North America.
1 Cohan, William D. “S.E.C.’s Kara Stein Takes Aim at Deutsche Bank,” The New York Times, 5/18/15. Stein Kara M., “Dissenting Statement in the Matter of Deutsche Bank AG, Regarding WKSI, Public Statement”, 5/4/15.
2 Goldstein, Matthew. “Deutsche Bank to Pay $55m Million to Settle Derivatives Inquiry,” The New York Times 5/26/15.“Deutsche Bank Paying $55M Settlement on Incorrect Reports,” The Associated Press via The New York Times, 5/26/15.