‘A dangerous precedent’

Sen. Paul Manglona (Ind-Rota) is guarded about Imperial Pacific International (CNMI), LLC’s proposal to amend its casino license agreement with the CNMI for the ninth time, describing it as “a dangerous precedent without legislative standing.”

In a letter to Attorney General Edward Manibusan, Manglona warned against the amendment “as it would reduce a “future contractual debt of a private party” to the CNMI, and would “materially harm” the financial affairs of the Commonwealth.

Among other changes, IPI wants to cut the $15-million annual license fee by half and to source money for the community benefit fund from the casino’s net profit, instead of a flat $20 million every year.

Manglona wants Manibusan to clarify whether IPI’s requests can even be legally considered, or accepted by the CNMI Lottery Commission without legislative changes.

“As far as my office is aware, the CNMI Casino License Agreement did not provide provisions or any authority to allow reductions in licensing fees. We are also not aware of any statute that allows any attorney, representative, or employee of any branch of the CNMI to allow the reduction of licensing fees in any circumstance,” Manglona’s letter states. “Also, my office would like to know if any consideration of such changes invokes fiduciary duties on the members of the Lottery Commission and the Attorney General as the amounts of monies owed to the CNMI would be reduced without legislative standing at the sole discretion of the commission members.”

At the moment, the annual casino license fee funds senatorial district projects, as well as the Saipan Higher Education Financial Assistance. A bill is also currently pending at the Senate that, if passed, would allocate the entire $15-million license fee to CNMI retirees.

The Lottery Commission

Manglona also expressed concerns on the draft amendment being made, submitted to the Lottery Commission, and forwarded, for review, to the Office of the Attorney General, even though the Lottery Commission has yet to meet officially.

“We do not have any public record that the Lottery Commission has met, nor have public hearings been made related to the request from IPI. Yet, the Lottery Commission made a decision to forward the document for review when it has not met. This procedural requirement would become important if the proceedings for the amendment approvals are faulty,” he said.

Aside from changes to the license fee and the community benefit fund, IPI also wants the deadlines to complete the construction of the Imperial Palace Resort in Garapan and its other projects extended.

According to the senator, authority was never conferred to the Lottery Commission to extend the development schedules for phases I and II of the Saipan Integrated Resorts, and that the license agreement delegated such responsibility to the Development Plan Advisory Committee.

“Any amendments to the development schedule without DPAC’s endorsement would be outright illegal,” he added.

DPAC removal is against public interest

The DPAC, under the Office of the Governor, was created under the casino license agreement to make a determination on the construction status and timeline for the safe construction and completion of the initial gaming facility and Phase 1 of the integrated resort.

However, Manglona said that his office’s investigation of the Casino License Agreement Amendment No. 6 illustrated that the Office of the Attorney General had concurred with the Office of the Governor, the Lottery Commission, and IPI to remove the DPAC from any review of the initial gaming facility.

“It appears that the report of the contractor may have illustrated compliance defects and their removal is completely against public interests,” Manglonma said.

The senator asked the Office of the Attorney General to review the amendments and restore the review process that was originally required of the DPAC review for the Saipan Integrated Resorts, as well as to review the prior work by DPAC, which “establishes the critical factors that the CNMI must consider, but all remain ignored, by the CNMI Lottery Commission.”

Further, Manglona stated that his office has been trying to establish DPAC’s status, but is hampered due to its reluctance to provide details of its engagement.

“DPAC has executed a contract which prevents them from communicating or disclosing their CNMI contracted works due to a non-disclosure section that the Office of the Attorney General has approved. …It is clear that this non-disclosure requirement is contrary to transparency expectations for public good,” he said.

The senator has asked the Office of the Attorney General to remove the non-disclosure and all communication restrictions imposed on DPAC.