BridgeCapital investor in gambling-related suits

The Commonwealth Development Authority’s newest tax break grantee, Shawn A. Scott of BridgeCapital lending company, has reportedly been involved in gambling-related lawsuits in the U.S. mainland, particularly in Washington D.C.

A Washington Post article published on July 22, 2004, labeled Scott as a “gambling promoter” who was behind the much-criticized proposal to set up gambling operations—slot machines—in the D.C. area. This resulted in D.C. residents filing a lawsuit opposing it.

The plaintiffs, which included the nonprofit watchdog group DCWatch—said the proposal “amounts to special-interest legislation because it would grant a monopoly 10-year license, or contract, to a single company composed of unnamed and unrevealed investors.”

It said that the backers included Pedro Alfonso and Rob Newell, “an Idaho man who lives in the U.S. Virgin Islands.”

“Newell has ties to gambling promoter Shawn A. Scott, who came up with the idea of bringing slots to the District,” it continued.

The Post said that Scott has invested “in more than a dozen gambling ventures over the past decade but has been denied or failed to obtain gambling licenses in five states where regulators found evidence of financial mismanagement and hidden partnerships.”

The Post report clarified, though, that Scott is no longer involved with the D.C. initiative, “though he and Newell remain business associates.”

When reached yesterday, CDA board chair Glenn Quitugua expressed no worries over this issue, saying the board is “satisfied” with the information presented by BridgeCapital.

“We were satisfied with our inquiries. They came up with a very substantial documentation. …They were very forthcoming,” said Quitugua.

Quitugua said CDA conducted its own research regarding the company and its proponents prior to its granting of a qualifying certificate in late January.

CDA said it recommended the granting of 100 percent rebate and tax abatement for BridgeCapital over 25 years.

Quitugua said that CDA knew about the D.C. litigation “and other pending litigations from New York that are very, very accessible.”

“Let’s put it this way. Their company in itself was able to come up with the necessary information that made the board comfortable to proceed with these tax requests,” he said.

“We do our own research. We are satisfied with it,” he added.

He said BridgeCapital aims to invest an initial $12 million in the CNMI. It is expected to grow by over $50 million over 25 years during which it would get 100 percent rebate and tax abatement.

The company wants to offer international lending, investments and consulting services in the Commonwealth.

The company deals with high-yield, short-term, real estate secured loans in excess of $1 million for eligible customers or those who cannot borrow from traditional lending sources due to time constraints, risks or complex arrangements.

Founded in 1995 by business partners John Baldwin and Shawn Scott, the company pledges to increase up to $2 million its lending for eligible CNMI borrowers.

Based on its data, Baldwin founded his own company, BridgeCapital, Inc., in 1995 and arranged loans in excess of $1 billion over the next several years.

He and co-owner Shawn Scott founded Bridge Capital (USVI), LLC in 2003 and established their offices in the U.S. Virgin Islands.