‘We need a better deal’

Editor’s Note: The following is the text of a statement that the author submitted during yesterday’s meeting of the CNMI Lottery Commission. The statement was addressed to commission chair Mark Rabauliman and commission members.

Today you are considering whether to approve a sixth amendment to the exclusive casino license agreement between Imperial Pacific International and the Commonwealth of the Northern Mariana Islands. Before you approve any amendment favorable to the developer, I appeal to you to negotiate a better deal for the people of the Marianas. At a minimum, I plead that you provide the citizens of the Commonwealth a genuine opportunity to understand the content of the proposed amendments and set forth their opinions.

IPI is currently seeking approval to operate other hotels, namely the Mariana Resort in Marpi, at less than a “five-star” standard, and to begin operations at facilities in phases. IPI is also seeking another extension. They are currently required to complete construction of the initial gaming facility by Aug. 31, 2018. For the sixth time, IPI will not be able to meet its deadline. As before, there are many reasons for the delay. As before, there is no practical way for IPI to meet their obligations in a safe and timely manner. They need this extension, again.

The Lottery Commission, and the people of the Marianas whom you represent, have been more than patient and accommodating. To my knowledge, no request for an extension or other amendment beneficial to IPI in the license agreement has ever been denied. Liquidated damages have never been demanded for breach of contract. The casino license has never been suspended or revoked.

This total deference to IPI comes despite the multiple, serious problems associated with this development, including at least one confirmed worker fatality and dozens of documented workplace injuries; the illegal employment of tourists as workers; millions of dollars in unpaid wage claims by multiple contractors (with another instance surfacing this past week); allegations of wage discrimination; the recent layoffs of hundreds of U.S. workers; failures to timely pay taxes and contributions to the community chest fund; failures to timely pay vendors and contractors; violations of environmental protection standards; and allegations of money laundering and public corruption.

Given this history, and growing public concern about the viability and integrity of this development, it is only reasonable that the Lottery Commission consider imposing conditions in the casino license agreement to strengthen protections for workers, the environment, and the interests of the people of the Marianas.

Such conditions would also be consistent with the recommendations of the Development Plan Advisory Committee, which in the Aug. 11, 2018, report to the governor, called for the Commonwealth and IPI to negotiate terms that would lead to a higher probability of project success. One of DPAC’s suggestions included “[i]mproved management controls to ensure continual emphasis in safety, local hiring, compliance with federal regulations, according fair opportunities for local businesses and protection of the environment as envisaged by CLA [casino license agreement] to avoid termination and disruption risks.”

I am willing to support an extension, but not without conditions that are beneficial to the people of the Marianas. As a starting point, I urge you, the members of the Lottery Commission, to consider requiring:

– U.S. Treasury-listed payment and performance bonds to protect the Commonwealth’s interest in ensuring the completion of the project;

– Engagement of an independent monitoring program, at IPI’s expense, to ensure the compliance of IPI, its contractors and subcontractors, with all federal and Commonwealth labor, workplace safety, environmental, and human rights standards, subject to penalties;

– Stronger protections for U.S. workers, including protections against wage discrimination and compensation or new job opportunities for those U.S. workers who were recently replaced by foreign workers;

– Disclosure and online publication of IPI’s plan to meet U.S. resident employment objectives set forth in the casino license agreement, and periodic progress reports;

– More accountability for the community chest fund, including independent review and decision-making on grant applications, periodic audits of the fund, and online publication of payments into the fund, grant announcements, grant awards, and audit reports;

– Disclosure and online publication of reports related to IPI’s compliance with environmental permitting and other regulatory standards, including notices of violation, plans of corrective action, and progress in implementation;

– Disclosure and online publication of all reports of the Development Plan Advisory Committee and all of IPI’s reports to DPAC and the Commonwealth Casino Commission, including reports on financial status and payment of tax obligations.

IPI is the single biggest developer in the Commonwealth, and the exclusive holder of Saipan’s casino license. The people of the Marianas have a stake in ensuring the completion of this project and the viability of this development. We also have a stake in ensuring that workers and the environment are protected, vendors and contractors are paid, laws are followed, and the terms of the license agreement are favorable to the Commonwealth, and fulfilled. We did not sign up for a profitable casino at “any cost.”

For this partnership between IPI and the people of the Marianas to succeed, greater transparency is essential. Trust is impossible otherwise. People need more information to evaluate the progress of this project and also the wisdom of their government representatives in the decisions that are made on their behalf. IPI should not be allowed to operate in the dark.

Which brings me to this final point: it is widely believed that the approval of this sixth amendment is already a done deal, and that today’s meeting is largely a formality. Even the draft amendment, like every amendment before it, presumes “the community’s understanding and support.” But what steps have been taken to gauge what the public really wants? This latest amendment mentions a public meeting on Aug. 2 to discuss the details of the proposal—a meeting that was actually cancelled and postponed until today, according to the government officials I spoke to, largely because the amendment request package was not ready. Those documents were not widely available to the public before today—and here we are, two days before the Aug. 31 deadline, rushing to make a decision.

IPI needs this amendment. But the people of the Marianas need a better deal—especially in light of the history of this project, and all the broken promises. You, the members of this Lottery Commission, are entrusted to look out for the interests of our people and to impose common-sense conditions that benefit the Commonwealth. Please, do so.