Did Pagcor chief break gov’t rules?

The Code of Conduct for public employees prohibits them from accepting gifts from individuals involved in government contracts

UNETHICAL? The chief of the Philippine Amusement and Gaming Corp (Pagcor) may have violated the Code of Conduct and Ethical Standards for Public Officials and Employees for accepting favors from a Japanese investor.

MANILA, Philippines – In accepting favors from a Japanese gaming investor, the chief of the Philippine Amusement and Gaming Corp (Pagcor) may have violated the Code of Conduct and Ethical Standards for Public Officials and Employees.

Cristino Naguiat Jr, Pagcor chief and a friend of President Benigno Aquino III, has admitted staying in the posh Wynn Resorts in Macau for 4 nights in September 2010, together with his wife, children and their nanny. This was courtesy of Universal Entertainment and its owner, Kazuo Okada, also the biggest shareholder of Wynn Resorts Ltd.

Okada is on Forbes magazine’s list of Asia’s richest.

Wynn Resorts has filed a suit against Okada in a Nevada court, accusing him of bribing Pagcor officials, including Naguiat, to finalize the setting up of a casino in Manila Bay.

Naguiat has defended his free stay in Macau, saying it is “industry practice” in the gambling community to be hosted by foreign investors.

These reported improper gifts to regulators outside the US were part of the lawsuit filed by Wynn against Okada.

The room where Naguiat and family were billeted is a 7,000-square-feet room called Villa 81, which then cost about US$6,000 per day and “reserved for high rollers,” ex-Federal Bureau of Investigation  director Louis Freeh wrote in his report, citing interviews with Wynn Macau management team. Freeh was hired by Wynn to investigate Okada.

Freeh wrote in his report to Wynn that Okada’s associates took out a $20,000 cash advance for the visit of Naguiat. The Filipino visitors numbered around 13. Naguiat denied receiving any cash from Okada.

The bitter corporate 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. 

2 other trips

While the agreement to build the casino in Manila Bay was made under the Arroyo government, Pagcor, under Naguiat who assumed the post in July 2010, still had the power to rescind it.

He made the questionable trip to Macau 2 months after he was named Pagcor boss.

The Freeh report showed that, 2 months after, he visited Wynn Las Vegas on November 15 to 20, 2010. He returned to Wynn Macau on June 6 to 10 in 2011. The report cited that that $5,380.86 and $3,909.80 were spent for these respective trips. 

Based on the Philippines’s Code of Conduct for public employees, accepting gifts and other favors from groups or people involved in projects subject to government regulation could serve as basis for “administrative disciplinary action, and without prejudice to criminal and civil liabilities provided.”

Specifically, Section 1 (f) of Rule X of the Code cites as one of the grounds for disciplinary action against a government employee the following:

“Soliciting or accepting, directly or indirectly, any gift, gratuity, favor, entertainment, loan or anything of monetary value which in the course of his official duties or in connection with any operation being regulated by, or any transaction which may be affected by the functions of, his office. The propriety or impropriety of the foregoing shall be determined by its value, kinship or relationship between giver and receiver and the motivation. A thing of monetary value is one which is evidently or manifestly excessive by its very nature.”

The Code defines gift as “a thing or a right disposed of gratuitously, or any act of liberality, in favor of another who accepts it, and shall include a simulated sale or an ostensibly onerous disposition thereof.”

But Malacañang has already cleared Naguiat of wrongdoing.

On Wednesday, February 22, Presidential Spokesperson Edwin Lacierda said in a news briefing that extending and accepting the hotel accommodations is unique to the gaming industry, and that there is nothing wrong with what Naguiat had done for as long as the Pagcor chair or any other Pagcor official did not personally gain or profit from it.

Lacierda said the government even saved money from it, since Pagcor did not have to pay for the hotel accommodations while attending an official function abroad.

“It would be more expensive for us to pay for all the expenses and since it’s already an industry practice and Mr. Bong Naguiat never profited from it personally, this is something that is peculiar to the gaming industry. We [who are] outside of the gaming industry would view this as some sort of unique but, again, this is something that’s common in the gaming industry,” he said.

Naguiat was a classmate of President Benigno Aquino III at the Ateneo de Manila University. He campaigned in 2010 for Aquino, who was elected largely on the basis of his anti-corruption campaign. – Rappler.com



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