$375K fine eyed for late payment

The façade of the Imperial Pacific Resort in Garapan. (MARC VENUS)

The Commonwealth Casino Commission is looking to fine Imperial Pacific International (CNMI) LLC a total of $375,000 for their late payment of the annual casino license renewal fee.

CCC executive director Edward Deleon Guerrero told Saipan Tribune Saturday that his office will be imposing a fine of $25,000 for each day that IPI failed to pay the casino license renewal fee of $15 million.

With a total of 15 days’ delay, IPI will be ordered to pay a total of $375,000, according to Deleon Guerrero.

On the day of the deadline to pay, IPI paid only $5.5 million. The CCC gave IPI until Aug. 27, 2019, to settle the matter; IPI paid the remaining amount on Aug. 27.

“IPI was able to settle on Aug. 27, 2019. If you count starting from Aug.12, 2019 [IPI’s payment deadline], it amounts to a total of 15 days,” Deleon Guerrero said.

Although the agency is decided on imposing a fine, he noted that he still needs to bring the order to the full commission at their monthly meeting to formally accept the imposition.

“I need to bring it to the commission in the September monthly meeting. We need their blessings for the stipulating order,” he said. “The commission needs to review and approve the stipulation but… [the commissioners] have accepted the stipulation and they understand that this is a violation.”

According to Deleon Guerrero, CCC is given the authority to either issue a warning to IPI or fine them up to $50,000 per violation of the Casino License Agreement.

Deleon Guerrero noted that IPI had cited several reasons for the delay, most notably the $10 million that IPI already paid to the Department of Public Lands as an advanced deposit for a previous attempt to float a bond. That was not consummated, he added.

“Based on communications between IPI and CCC and IPI and DPL, they [IPI] were trying to get the $10 million back for the partial payment of the 2019 annual license fee. That’s why they paid the $5 million, thinking that DPL would return the $10 million,” he said. “…But that’s not CCC’s problem. CCC is saying [IPI] must pay on Aug. 12, 2019, and that’s it. We are not going to get involved on whether or not DPL will refund you or not.”

“If you fail to pay, CCC takes the position that you violate the Casino License Agreement,” he added.

Finance Secretary David Atalig confirmed with Saipan Tribune last Aug. 27 that IPI succeeded in settling its remaining balance, paying $10.5 million before they exhausted the 15 days the department and the CCC gave them. IPI paid only $5.5 million on Aug. 13, 2019, while their deadline to pay the annual obligation is every Aug. 12, 2019.

In total, IPI paid $16 million. CCC previously added that it must pay an additional $502,000 to reflect adjustments to the consumer price index, so IPI paid about $500,000 in excess.