Where did all the money go?

Rep. Tina Sablan (Ind-Saipan) said yesterday that Commonwealth Casino Commission executive director Charlie Atalig’s complaint against Imperial Pacific International (CNMI) LLC for allegedly failing to contribute $40 million in Community Benefit Fund money in 2018 and 2019 only affirms what they have known for some time now—that IPI has indeed violated the Casino License Agreement.

Sablan said Atalig’s complaint also affirms that the Commonwealth is unable to account for more than $30 million in Community Benefit Fund money that IPI should have distributed for public purposes.

“The CCC executive director has found that the violations are egregious enough to justify a suspension of the license and the imposition of major monetary penalties,” said the lawmaker when asked for comments about Atalig’s complaint that he filed before CCC.

Atalig, through assistant attorney general Mike L. Ernest, asked CCC to declare that IPI committed the violations and failed to self-report to CCC all the facts that gave rise to the violations.

In his complaint, Atalig asked CCC to declare that each violation is a major offense and order IPI to pay a fine of $50,000 per violation, for a total of $100,000.

Atalig also asked the CCC to suspend IPI’s license to have gaming operations on Saipan until such time as all required Community Benefit Fund payments are fully paid.

According to Ernest in the complaint, IPI is required by the Casino License Agreement to endow the Community Benefit Fund $20 million on or before June 1, 2018, and another $20 million on or before Oct. 1, 2019, yet failed to do so, and that IPI did not self-report the violations and has not accepted responsibility for the conduct underlying the offenses.

Sablan and some other lawmakers have long been pressing both the Torres-Palacios administration and the CCC to shed light on IPI’s compliance with their Community Benefit Fund obligations in the casino license agreement.

Sablan said it is clear to them from records released by the Office of the Governor pursuant to an Open Government Act request made by minority lawmakers that Gov. Ralph DLG Torres has done little to enforce that part of the casino license agreement. Sablan said they still do not know what has become of the $10 million that IPI initially deposited in a Community Benefit Fund bank account.

She pointed out that at last week’s joint hearing with the House of Representatives and Senate gaming committees, CCC chair Edward Deleon Guerrero disclosed that the commission has a list of beneficiaries who received $4.7 million from the Community Benefit Fund, but IPI would not authorize the commission to release those records.

“We do not know why,” said Sablan, adding that the remaining $5.3 million has apparently been spent on other obligations not in compliance with the purpose of the Community Benefit Fund, as provided in the license agreement.

She said IPI has also failed to respond to the Office of the Public Auditor’s request for records so it could audit the Community Benefit Fund.

The lawmaker said the minority bloc has urged the House Gaming Committee to subpoena these records directly from IPI as soon as possible.

“The question remains: Where did all that money go?” Sablan said.

IPI, through counsel Michael W. Dotts, said the company finds itself unable to fund the Community Benefit Fund at this time and is hoping that the Lottery Commission will agree to amend its license to push back the time to pay into the fund.

Dotts said IPI has paid over $300 million in taxes since starting its business, has helped create jobs for many residents, and has helped the growth of the tourism industry in the CNMI.

“Now IPI needs the help of the CNMI,” he said, adding that the Lottery Commission agreeing to amend the license to push back the payments into the Community Benefit Fund should resolve Atalig’s complaint.