Law does not require Saipan casino decision by June 19

Despite government statements about a June 19 deadline to decide whether or not to grant an exclusive Saipan casino license and to whom, a closer look at the latest casino law actually gives the options of a 90-day timeframe ending between late June and early July “or” when the investigations into the applicants “have been completed.” While this could push back decisions, so do lawsuits against the casino law.

Meanwhile, House floor leader Ralph Demapan (Cov-Saipan) prefiled yesterday a bill that “repeals” and “reenacts” Public Law 18-38 as amended by P.L. 18-43, in its entirety, to “ratify good faith actions taken by the Lottery Commission.”

Public Law 18-43, signed on April 1, states that the Lottery Commission must act to deny or approve applications “within 90 days after this Act is signed into law or when the requirements of Section 208 have been completed.”

That 90-day period ends between late June and early July, and not June 19.

Section 208, meanwhile, covers the investigations of the applicants; in this case, Best Sunshine International Ltd. and Marianas Stars Entertainment Inc.

Lottery Commission chair Sixto Igisomar and counsel Jim Stump confirmed that as of yesterday, both applicants are still in the running for a license to exclusively develop a minimum $2-billion integrated casino resort on Saipan.

The commission met yesterday to receive updates from their two consultants on the ongoing investigations into the two applicants.

They will meet again on June 19 for a continuation of those updates.

Igisomar said they are not likely to decide on June 19 whether a license will be granted or not.

For one, the two commission consultants issued requests for information to both Marianas Stars and Best Sunshine concerning their owners, managers, affiliations, among other things, as part of the investigations.

However, Igisomar said the commission would like to decide at the earliest date possible so that the CNMI can move forward.

Sen. Paul Manglona (Ind-Rota), in a nine-page letter to the Lottery Commission, pointed out that there is no legal requirement for them to “rush” the approval or disapproval of the casino license applications because “you can wait for the investigation to be completed, no matter how long it takes, and then the commission may deny or approve the applications.”

“Ultimately, doing the investigation once and doing it right will result in a quicker license issuance because it will avoid unnecessary litigation,” Manglona told the commission.

He said his letter is meant to not further delay the release of the 25 percent pension to retirees, but to help ensure the application process does not hit more snags.

“Conduct the investigation thoroughly because you and the Casino Commission share the responsibilities under the law, and the decision that you make will be momentous for the CNMI. Why not do this process once and do it right instead of having to constantly amend laws and decisions because we are in such a rush? Why put the future of our retirees and our credibility in the international business arena at risk?” Manglona told the four-member Lottery Commission.

Igisomar said he has seen Manglona’s letter but declined to comment on it except to say that the commission knows its priorities.

After citing eight areas of concern pointing to the Lottery Commission “acting beyond its powers and contrary to law,” Manglona asked the Lottery Commission to wait for the Casino Commission nominees to be investigated and confirmed by legislative delegations.

The law calls for consultation between the Casino Commission, which is a regulatory body, and the Lottery Commission, tasked to decide whether to grant a license and to whom, among other things.

Manglona also asked the Lottery Commission to “truly look” into the applicants’ suitability, including whether their group or part of their group, “were a part of the improper conduct that led up to the passing of P.L. 18-38 and other matters that have occurred since then.”

Some senators and House members were brought to Hong Kong, Macau, and Singapore last year and early this year by individuals looking into investing in the CNMI. To date, no CNMI government agency has confirmed whether the lawmakers’ conduct and trip have been investigated.

Meanwhile, during yesterday’s Lottery Commission meeting, the commissioners agreed to initiate amending the escrow agreement that calls for the June 19 release of the $30 million deposited each by Best Sunshine and Marianas Stars.

Because the Lottery Commission is not expected to decide on June 19 and because of the flexibility afforded to it by law, that escrow agreement needs to be changed.

There are three parties to the agreement: the Lottery Commission, Bank of Guam, and the casino license applicants.

Another bill to repeal casino laws

Meanwhile, while Demapan prefiled H.B. 18-195 yesterday, he didn’t introduce it during yesterday afternoon’s House session.
His 41-page bill repeals and reenacts P.L. 18-38, the original Saipan casino law, as amended by P.L. 18-43.

While the prior law established the framework for the casino industry, it included “some ambiguities and conflicts,” Demapan said.

He said P.L. 18-38 and later P.L. 18-43 granted the Lottery Commission the power to review applications and issue the exclusive casino license.

But he said the law did not clearly provide that the Lottery Commission could carry out the investigation on its own if the Commonwealth Casino Commission was not established by the time the applications were received.

Nor did the law clearly authorize the Lottery Commission to expend funds from the application fees to carry out the investigation.

Best Sunshine and Marianas Stars each paid a $1 million nonrefundable application fee. That’s the source of funding for the Lottery Commission’s hiring of two consultants to investigate and review the two applicants.

The $30 million deposited by the winning applicant, meanwhile, will be used to restore retirees’ deferred 25 percent pension and to pay the interest on some government employees’ retirement contributions that were withdrawn last year, among other things.

Demapan, in his bill, said the repeal and reenactment of the two laws is necessary to resolve challenges to the legislative process in the passing of the casino bills.

H.B. 18-195 says each house of the Legislature has the constitutional authority to establish their rules of procedure and does not concede that the Open Government Act applies to any legislature. But it said to avoid any delay in the implementation of the Act, the law needs to be repealed and reenacted in its entirety.

The Office of the Attorney General earlier said that the Open Government Act is not applicable to the Legislature, in responding to a lawsuit filed by private citizen Glen Hunter against government officials and entities for allegedly violating the OGA in passing the casino law.

Saipan voters twice rejected legalizing casino gaming on the island; the last one was in 2007. The Senate also killed in one way or another at least four Saipan casino bills from the House, but passed the latest one early this year without public hearings or committee report.