Casino bagman got $30M

Japanese billionaire may lose license if bribery proved

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TOKYO/SAN FRANCISCO—Japanese billionaire Kazuo Okada’s Universal Entertainment funneled at least $30 million to an ex-consultant for the state gambling regulator, the Philippine Amusement and Gaming Corp. (Pagcor), who is now at the center of a bribery investigation, according to sources and company records.

The sum is six times the amount initially confirmed by Reuters and could, if found to be bribery, result in Okada being stripped of his firm’s casino license in the Philippines and also jeopardize his gaming license in Las Vegas.

A Hong Kong firm established by Okada’s Universal sent the money to the now ex-Pagcor consultant, Rodolfo Soriano, in a series of payments in the first half of 2010, according to a review of company records and interviews with more than a dozen current and former employees and people familiar with the investigation.

Soriano, who has close ties to key members of the administration of former President and now Pampanga Rep. Gloria Macapagal-Arroyo, received the payments as Universal was lobbying for tax and other government concessions to boost the profitability of a $2-billion casino it was developing in Pagcor’s Entertainment City project on Manila Bay.

Arroyo ties

He was an early partner in Okada’s Philippine project, and Universal documents describe him as the “personal secretary” to Efraim Genuino, the former head of Pagcor.

Soriano’s powerful connections included Arroyo’s husband, Jose Miguel, with whom he had traveled to Las Vegas in 2009.

Jose Miguel Arroyo, a lawyer by training, could not be reached for comment. His spokesperson, lawyer Ferdinand Topacio, said he was unaware of any business dealings between Jose Miguel Arroyo and Soriano. “We are denying reports linking Attorney Arroyo to that bribery case,” Topacio said.

Genuino’s lawyers did not respond to calls seeking comment.

Soriano is now under investigation by the Department of Justice, which has created an inquiry panel on the payments with a target to submit findings within the next month.

Universal, a Tokyo-based maker of gaming machines, the majority of which are owned by an Okada family trust, had no comment through its lawyer, Yuki Arai. Soriano could not be reached for comment.

US probe

In addition to the investigation in the Philippines, the Universal payments are being probed by US gaming regulators, with the Nevada Gaming Control Board likely to call the 70-year-old billionaire to give evidence at a closed-door investigative hearing, people familiar with the matter said.

Pagcor has said it has no knowledge of the Soriano payments but is cooperating with the justice department’s bribery investigation.

The Universal payments to Soriano in 2010 were described at a company meeting as a “completion bonus” for his help in clearing remaining hurdles for the casino, including an exemption from corporate tax and foreign ownership restrictions, people involved in the project said.

Philippine authorities have already threatened to strip Okada’s operating company of its casino license if investigators find evidence of bribery. Nevada regulators could also impose sanctions, including a suspension of Okada’s Las Vegas license.

Either outcome would represent a major setback for Okada, who has vowed to bounce back from a costly legal fight with American casino magnate Steve Wynn to turn Universal into Asia’s leading operator of high-end casino resorts.

In the United States, the FBI has also taken statements from those involved in the Soriano payments, according to people familiar with that inquiry. The bureau declined to comment on the state of its inquiry.

Lucrative concessions

The Nevada Gaming Control Board’s investigation has been under way since at least August and is gathering momentum.

“We are continuing our work,” board chair A.G. Burnett said, declining to comment on the agency’s next moves or the likely conclusion of its investigation.

“We’re about in the middle stage of our investigation.” he said.

Hearings could help the board’s three-member investigative panel decide whether to bring a formal complaint against Okada or his company, the people familiar with the investigation said.

Investigators were particularly concerned about fund transfers to Soriano-controlled Subic Leisure and Management, registered in the British Virgin Islands, because that jurisdiction allows firms to conceal the identity of directors and investors.

“He’s going to have some interesting explaining to do,” one of those with knowledge of the investigation said of Okada.

Money trail

Universal has maintained that at least some of the payments to Soriano were not approved. It has sued three of its own former executives in Tokyo District Court, claiming they made $15 million in payments to entities controlled by Soriano without authorization by Okada or the Universal board.

A review of company records and interviews with sources shows that a total of $40 million was sent by Universal to Soriano-controlled firms. The money was sent to Hong Kong firm Future Fortune, set up as an investment vehicle for the Philippine project. Of the total, $10 million was routed back immediately to Universal for internal accounting reasons, leaving Soriano with a net of $30 million.

It is not clear how that money was invested or disbursed.

The Arroyo government gave Universal a corporate tax exemption in March 2010, leaving the casino liable only for a 23.5-percent gaming tax. That exemption was key to the projected profitability of the casino, which was given a provisional license in 2008.

As a result of the tax concessions and low labor costs in the Philippines, Okada told investors and analysts last year that the Manila casino would be more profitable than gaming in Macau or Las Vegas, markets where Wynn has built his resorts.

The investigation of the payments to Soriano threatens to complicate Okada’s efforts to recover from a costly falling-out with US casino tycoon Wynn.

Battle of gaming tycoons

Okada was Wynn’s largest investor until the American accused him this year of improperly paying $110,000 in entertainment and other expenses for gaming regulators from the Philippines and Korea, where Okada is also looking to build a casino.

As a result of the disclosures, Wynn forced Okada to redeem his 20-percent stake in Wynn Resorts for $1.9 billion, a 30-percent discount in the market value.

Okada has sued to reverse the redemption, saying Wynn forced him out for questioning Wynn Resorts’ dealings in Macau.

The Nevada Gaming Control Board has been separately investigating Wynn Resorts on allegations made by Okada that Wynn’s company sought to influence Macau officials through a donation to the University of Macau, people familiar with the issue said.

But this probe was likely to be resolved without an investigative hearing, they said, signaling that Wynn Resorts was less likely to be subject to a major disciplinary action.

Pagcor’s main concern

In Manila, Pagcor chair Cristino Naguiat Jr. yesterday said the fate on the gaming license granted to Okada now rests with the Department of Justice (DOJ) panel investigating the bribery allegations.

“It’s [the] DOJ’s call. If [the] DOJ says that there is sufficient evidence, then the license should be canceled,” Naguiat said.

After allegations first emerged on the alleged bribery, he said Pagcor had written to Universal Entertainment for an explanation. It is still waiting for the Okada camp to respond, he said.

Naguiat said Pagcor’s main concern is to protect the country’s image as a “booming” investment destination as well as shield the gaming agency from legal liability.

“We can’t cancel a license without due process. We have to protect ourselves and the government because they might sue us if we just cancel the license without sufficient evidence,” he said in a phone interview.

Pagcor also wants to promote the country’s image as a destination that respects investors’ rights, he said.

“We have to protect the country from the negative perception of investors who might complain about unilateral contract cancellations,” Naguiat said. Daxim L. Lucas, Philippine Daily Inquirer

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  • UrHONOR

    LAHAT ng yan unti-unting ibubulatlat ng pamahalaan ng magiting na si PNoy na walang ibang hangad kundi ang kapakanan ng bayan.  NEVER has it happened in our country when the scalawags and scoundrels are being brought to justice by the long and sturdy arms of the law.

    U-nti-unti-in ang lahat ng yan…dadahan-dahanin na parang humuhuli ka ng tutube…..hindi ka nahahalata at nararamdaman ng tutube na may intensiyon kang huhulihin siya,,,,kaya kampante lang siya sa kinadadapuan niya. Tapos, bila na lang na TSAK! huli sa buntot ang 22B.  Ganyan ang mangyayari sa lahat ng mga MMM….kayam ngayon pa lang kayong mga TNL na linta ng bayan, galingan na ninyo ang pagtatago ninyo dahil nakatala ng lahat sa BIR and mga records ninyo na noon ay kayang-kaya ninyong balasahin, pero ngayon, wala…. no dice kayo kay Kim.

  • http://www.blogspot.com/uniha Uniha

    Between Genuino and Naguiat, I am more worried for the latter. The former is dirty and we all know it. A huge amount of money as big as $30 million changing hands in early 2010 in the midst of power transfer from one administration to another is just too risky. With a new administration in place, the rules of the game may suddenly change calling all bets off. Therefore, it is more likely that a $2 billion dollar investor like Okada will get on the good graces of Naguiat than of Genuino. The entire amount may go either way, or be split into half, or disproportionately go to one side than the other. Whatever the outcome, the DOJ can always leverage on the gambling license of Okada to compel him to cooperate with the authorities. The Nevada Gaming Control Board, as stated in this report, is reluctant to investigate Mr. Wynn for his “unusual business practices” in Macau for obvious reasons. FBI will always prioritize protecting one of their own as we have seen in the Bel-Air Makati stabbing incident and the Daniel Smith rape case. I hope we will not end up being the collateral damage of two big feuding interests in the gaming industry. With Asia growing and Asian gamblers proliferating, the US has every reason to look east and carve a bigger share in the Asian gaming industry. All this means that Naguiat and those who will come after him will face even greater temptations than what we have seen thus far. The last temptation of Genuino has now come back to haunt him.

  • wawa2172

    Its simply tells us one thing, be it Genuino, his bagman Soriano and the present Pagcor head, Noy’s classmate Naguiat have dealings with Okada. Impartial investigation will not be possible and surely Naguiat hand in not as clean as we all know. As classmate of Noy who appointed him to the position, time will tell, that this man will pull down the pants on Noy down. What I am saying is the Pagcor head is hiding a lot of worms in the can too. I remember his defensive responses when he was interviewed by Ted Failon on Failon Ngayon. He is sure to have benefited from the “gift giving” activity of Okada. From Macau to the Philippines, Naguiat is like a pig that Okada have to feed with lots of cash for his businesses in the country. Special treatment from Okada? Naguiat knows the answer fully well. Do we expect an impartial investigation, I am doubting, I guess Naguiat fall would mean a black eyes for Noy. The DoJ de Lima will not touch such sensitive issue unless left with no other choice. Hintay pa siya nang utos sa palasyo,

  • Albert Einstien

    DI ba kayo NAGTATAKA….ALL projects of GMA knancel ng pnoy admin..pati mga daan,tulay at FLOOD projects ay at kung ano ano pa..PERO ang ITINIRA lang ni pnoy ang CASINO PROJECT ni GMA…at kahit PA-ULIT -ULIT na SUMSIKAT si NAGUIAT ay HNDI ito NAKAKASUHAN at TINATANGGAL….pero IBANG mga hepe TANGGAL agad sa MEDIA na lang nila nalalaman SIBAK na sila……ano ba ang TOTOONG PAPEL ni NAGUIAT ke pnoy? CANCEL ALL CASINO CONTRACTS..!!!

    WHO  among the MONEYED  KKKS  is eyeing for for the $billion lucrative
    & strategic landholdings & the LICENSE of OKADA ……that is the QUESTION?………….NAGUIAT & current PAGCOR officers are ALSO involved in the alleged INTERNATIONAL BRIBERY…in FACT by their ADMISSION that money & perks received from okada group an INDUSTRY PRACTICE ” is already INDIRECT BRIBERY..

    doj…just secure an autenticated copy of the freeh report to the gaming compliance committee..the alleged report contain the following;

    “nSeptember 23, 2010: In an e-mail to Ms. Lai, with a copy to Mr. Okada, Mr. Shoji requests that a credit of US 5,000 be extended to each person now staying at the Villa for shopping and gaming, up to a total of US 50,000. According to Mr. Shoji’s email, the funds are to be advanced by Wynn Macau and charged to the Universal City Ledger account.
     
    nSeptember 24, 2010 (13:45): MOP 80,00086 (approximately US 10,000) is advanced from the Wynn Macau main cage to a Wynn Macau VIP Services employee (no longer employed at Wynn Macau), who in turn hands the money to Masato Araki, special assistant to president of Aruze USA, based upon instructions in the above referenced e-mail to Ms. Lai. The handover of funds is witnessed by Wynn Encore manager Alex Kong. The funds are charged to the Universal City Ledger Account. MOP 15,000 of this sum is used to pay for a Chanel bag that Chairman Naguiat requested be purchased for his wife.
     
    nSeptember 24, 2010 (Approximately 14:00): Mrs. Naguiat, her three children, Mrs. Bangsil and her daughter arrive at Wynn Macau.
     
    . MOP 80,000 was worth approximately US 9,816 at that time.

    Chairman Naguiat’s party] are very important to Universal, and that Mr. Okada wants Mr. Couglan to insure that they are well cared for during their stay.
    nSeptember 24, 2010 (17:00): Mr. Okada meets Chairman Naguiat (and approximately thirteen (13)) others in his party) for dinner at Okada Restaurant.91 Mr. Okada hosts the dinner and the bill for $1,673.07 is charged to his room.
     
    nSeptember 25, 2010 (05:45): Wynn Macau employees meet Mr. Okada outside his room and escort him to a limousine, which transports him to the Macau Ferry Terminal for 07:00 scheduled ferry departure to Hong Kong International Airport.
     
    nSeptember 25, 2010: Beatrice Yeung describes in her log book “Movements – Incognito (Mr. Naguiat, Cristino L) / Mr. Bangsil, Rogelio / Mr. Opinion, Jeffrey (Mr. Okada’s guests, Villa 81).”
     
    nSeptember 25, 2010: Mr. Araki requests a second advance of MOP 80,000 for guests in Villa 81. Ms. Yeung accompanies Mr. Araki to the Main Cage and obtains the advance for him. [This makes a total of MOP 160,000 advanced for the use of Chairman Naguiat and his party and charged to the Universal City Ledger Account per Mr. Okada’s orders, as relayed in Mr. Shoji’s e-mail.]
     
    nSeptember 26, 2010 (11:10): Mr. Araki departs the Wynn Macau Encore main entrance. He hands Ms. Yeung MOP 4100, returning what he says is the remainder of the two cash advances for Chairman Naguiat’s party 
    nSeptember 26, 2010 (13:15): Chairman Naguiat’s party departs via Wynn Macau limousine to pick up Mrs. Naguiat from shopping and proceeds to the airport.. 
    [See Appendix]; Wynn Macau “Miscellaneous Disbursement” record #013066, dated September 25, 2010. 95 E-mail from B. Yeung to I. Coughlan, September 27, 2010 [See Appendix]; Wynn Macau Manager – Encore Logbook, September 26, 2010 [See Appendix]; handwritten and signed note dated “9/26/10” with notation “MOP 4.100”. [See Appendix]. The returned funds were equal to approximately US 503.07 returned out of a total of approximately US 19,632 provided.
     
    On or about December 10, 2010: After e-mails and phone messages following Mr. Shoji’s September 20, 2010 e-mail, Mr. Coughlan has a phone conversation with Mr. Shoji, in which he advises Mr. Shoji that, after internal Wynn Macau discussions, the final decision was that Wynn Macau would not provide the requested free upgrade for the Villa occupied during the September 2010 visit.
    The foregoing recitation of facts surrounding the September 2010 visit of Chairman Naguiat and his party to Wynn Macau demonstrates several significant elements of that visit:
    nMr. Okada considered these guests to be very important to his company.
     
    An effort was made from the outset to conceal Chairman Naguiat’s identity and official status, to the point of not even wanting to advise Wynn Macau management and staff.
     
    nWith Mr. Okada’s knowledge, Chairman Naguiat and his family were provided with approximately US 20,000 cash to use for gaming and also shopping
     
    nMr. Okada’s representative sought to have Wynn Resorts fund a portion of the expenses incurred by Chairman Naguiat and his party, i.e., the free upgrade to a Villa.

    There is evidence that Mr. Okada personally directed the payments and gifts provided to Chairman Naguiat and his family during their luxury stay at Wynn Macau’s most expensive accommodation in September 2010. On October 5, 2010, Mr. Araki sent an email to Wynn Macau in order to arrange for a “second group of PAGCOR” checking into Wynn Macau on October 8, 2010.

    .what is DOJ/NBI doing  kumuha na ng AUTHENTICATEd copy ng report……..BOUNG MUNDO na ang NAKASAKSI nyan DAHIL nk-POST yan sa internet..(
    EX-99.2 3 d304177dex992.htm REPORT BY FREEH, SPORKIN & SULLIVAN, LLP TO THE GAMING COMPLIANCE COMMITTEE  )
     …..hindi na pwedeng PAGTAKPAN yan….ALAM ng BOUNG mundo yan… NO SACRED cows madam doj…you should follow the direction of comelec brilliantes at mmda chairman tolentino… ” NO SACRED COWS “..alamin sino sino ang mga PACOR OFFICERs at mga PAMLYA nila na INVOLVED dito sa alleged bibery…….( byahe ng sept 23 & oct 8 2010 )……HUWAD na DAAN..pag lagi na lang me PROTEKSYON ang mga KKK….dapat ang BATAS pantay para sa lahat…papano na pag di ka KKK?  DOJ NBI kilos na…wag na magBULAG-BULAGAN at magnoynoying…IMBISTIGAHAN nyo na rin INTEL, DISCRETIONARY FUNDS…..& other nontaxable receipts…kun saan dinala at kanino napunta….at TINGNAN nyo rin kung me katotohanan.. yung VIDEO REPORT ni taberna….ginagamit na daw for PERSONAL & PRIVATE USE 2 years ang mga sasakyan at empleado ng pagcor…bakit yung NBI chief, bilbid chief, pdea chiefs at pag-asa chief…NEWS pa lang ang ALEGASYON TANGGAL na …ito si NAGIAT paulit-ulit ang KASIKATAN…e matibay pasa madulas na PADER……PAPANO titino ang taong gobyerno at MANINIWALA ang taong bayan kung protektado ang mga kkk ng bawat admnistration?

  • pugadlawin

    $30M is a lot of bribe money… so much more to be made in RP casinos?

    Friends of Naguit’s wife now has a good story for her channel bag? Wag sumunod kay Jinkee.. si Pacman ay bilyonaryo.
    At bilyonaryo dahil sa boxing, hindi sa nakaw..

    Marcos started the trend.. “stealing from government is as natural as breathing”.
    Imelda Marcos is our ICON..
    Still unremorseful after all these years.. and who is to blame? ..
    Well, we did not put them in jail and have them return their ill gotten wealth…
    They are still elected and revered in government. Hahaha.. keep the Pinoys poor
    and uneducated.. and those in power will continue to loot the coffers…
    endless cycle..
    what’s stopping P-NOY from retrieving the paintings?

  • http://profile.yahoo.com/55XNXOYBNF6BG3EWOM5V4YMWXM Pedro

      I  AM  REALLY  AGAINST  THESE  CASINOS.  MATAGAL  KO NG  SINASABI , THESE  CASINOS  ARE SOURCES  OF  MASSIVE  CORRUPTION  AND  PROSTITUTION !  THE PAGCOR  OFFICIALS  OF THE  ADMINISTRATION  OF  THE  CORRUPTION QUEEN  ARE VERY CORRUPT.  NOW, THESE  CASINOS  WILL ALSO  CORRUPT  THE PRESENT  PAGCOR OFFICIALS  OF  PRESIDENT  NOYNOY.  FROM  THE TUWID  NA DAAN,  IT WILL TRAVEL  THE  BALUKTOT  NA DAAN. MAAWA  KAYO  SA  MGA  KABABAYAN  NATING MGA FILIPINA  NA MAGIGING  PROSTITUTES  NG  MGA  DAYUHANG  MILYONARYO  SA  CASINO.  NO TO CASINOS !!

    • http://pulse.yahoo.com/_RXMIUVEJ3IC6NIAXMA4IBYEPHI Oliver

      Marami din nman kasing mga Pilipinang mangmang na gusto easy money agad kya nagiging Prostitute. Choice na nila yn. Kung gusto ng easy money dahil TAMAD sila eh di bukaka na lang nila mga hita nila pra madali ang pera

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