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MANILA, Philippines [UPDATED] – More details about the “industry courtesy” practices between the chief of the Philippine Amusement and Gaming Corp. (Pagcor) and a foreign investor have been made public through a case filed at a Nevada state court.
The basis of the suit was the 47-page report by former Federal Bureau of Investigations (FBI) director Louis Freeh who investigated the Philippine investments of Japanese billionaire Kazuo Okada that Pagcor had approved.
Pagcor chairman Cristino Naguiat Jr’s reported stay at a US$6,000-a-day suite in a premium Macau hotel has been cited as part of a series of illicit payments and gifts made by Okada to Filipino regulators.
Naguiat is a good friend and classmate of President Benigno Aquino III at the Ateneo de Manila University. He campaigned for Aquino in the 2010 election.
Las Vegas-based casino-resort operator Wynn Resorts cited these claims in its February 19 suit where it accused Okada, its single biggest shareholder, of violating the US Foreign Corrupt Practices Act. The law bars corrupt payments to government officials to obtain or retain business overseas.
Ex-FBI director Freeh reported to Wynn that Okada made 3 dozen improper payments and gifts over 3 years worth over $110,000 to regulators outside the US.
It added that one payment, amounting to $4,642, benefited former First Gentleman Jose Miguel “Mike” Arroyo, and that Okada’s firm, Universal Entertainment, paid for the Beijing trip of then Pagcor chairman Genuino during the 2008 Olympics. No additional details were given.
Wife, kids, nanny
These reported improper gifts to regulators outside the US include a 4-night stay of PAGCOR’s Naguiat, his family members and colleagues in the most expensive room at the Wynn Resorts Macau.
It is a 7,000-square-feet room called Villa 81, which then costs about $6,000 per day and “reserved for high rollers,” ex-FBI director Freeh wrote in his report, citing interviews with Wynn Macau management team.
Naguiat, along with Pagcor gaming department’s Rogelio Bangsil and a certain Jeffrey Opinion, arrived in Macau on September 22, 2010 at 2pm via PAL flight 352 from Manila. They were fetched by a Rolls Royce and a team led by Okada’s special assistant.
Previous arrangements were reportedly made with the hotel that “all charges should be posted to Universal’s City Ledger” and that “Mr. Okada would like them to experience the best accommodations and services at Wynn Macau.”
The previous instruction was for the hotel staff to register only Bangsil and that the others “should not be registered.” When Bangsil provided his name and employer upon registration, the hotel officers checked Pagcor’s website where they identified Naguiat through his picture there. The Pagcor chief and his party are then logged as “Incognito.”
Freeh wrote in his report to Wynn that Okada’s associates took out a $20,000 cash advance for the visit of Naguiat who was reportedly with his wife, 3 children, nanny and other Pagcor officials.
Okada’s associates then bought “a Chanel bag that Chairman Naguiat requested be purchased for his wife.”
Naguiat denied to Bloomberg that he received a $20,000 cash for shopping and gaming during that Macau visit.
Okada also reportedly hosted a $1,673 dinner for Naguiat and his companions that was charged to Okada’s room. The Filipino visitors numbered around 13. They flew back to Manila on September 26.
“Naguiat’s luxury stays at Wynn Resorts facilities were fully known to Mr. Okada, who actively involved himself in some of the arrangements,” the Freeh report said.
It was the evidence on Naguiat’s stay in the Wynn Resorts Macau that reportedly gave Wynn Resorts board “a factual basis to review Mr. Okada’s continued suitability to be a major shareholder and director.”
On Sunday, February 19, the Wynn Resorts board made a surprise announcement that it is forcibly redeeming the shares of Okada who has bankrolled the firm and its expansion.
It based its decision on the Freeh report findings, which the board received the day before.
This is the latest in the ongoing dispute between 2 former bestfriends and now bitter enemies – Okada and Steve Wynn.
Okada’s Universal Entertainment had denied these allegations in its statement to the Tokyo exchange on Monday, February 20, when its stocks started plummeting.
Universal Entertainment said they will make a legal action to counter Wynn’s suit, as well as contest the ouster of Okada from the Wynn board and the buyout of the group’s shares.
Okada, Universal and a company controlled by Universal, Aruze USA Inc., control about 20% of Wynn Resorts.
The bitter war started when Okada, through Universal Entertainment, invested in the Bagong Nayong Pilipino – Entertainment City project of Pagcor at a reclaimed area in Manila Bay in 2008.
Okada had reportedly said the new Manila venture will be the biggest in Asia and will rival those elsewhere in Asia.
Wynn didn’t take this well as this would compete with the Las Vegas firm’s existing venture in nearby Macau.
In a statement on Monday, February 20, Naguiat said Okada personally visited them in their Manila office to apologize for being dragged into the mess.
For his part, Naguiat stressed that there was “nothing inappropriate” about the free accommodations since these were part of a “standard industry courtesy” practices.
He said these are reciprocated when similar visits are made by foreigners here.
In a press briefing on Tuesday, February 20, Palace spokesperson Edwin Lacierda said Naguiat had met with President Aquino about the issue and that the President was satisfied with the regulator’s explanations.
Lacierda said the “practice” allows Pagcor to save on costs as it is cheaper to spend on accommodations of the foreigners when they are visiting the Philippines.
The Philippine officials also stressed that Universal Entertaiment’s provisional authority was granted in 2008, during the administration of former President Gloria Macapagal-Arroyo.
Naguiat assumed the Pagcor post in July 2010, after President Aquino won the national election that year. (For perspective read “Murky past catches up with new Pagcor.”)
This Macau visit was a few months after – in September 2010 – around the time the newly appointed Pagcor officials were reviewing the contracts granted by their predecessors who were appointees of Mrs Arroyo.
President Aquino won on a campaign promise that corruption will stop during his term and transparency will be pursued at all costs. – Rappler.com