US suit tags Pagcor execs

Pagcor Chairman Cristino Naguia and former Pagcor chairman Efraim Genuino. INQUIRER FILE PHOTO

The chairman of state-owned Philippine Amusement and Gaming Corp. (Pagcor) on Wednesday denied allegations made by an owner of US-based casino giant Wynn Resorts that he had received undue perks and favors from a Japanese businessman.

Cristino Naguiat Jr., also the Pagcor CEO, said his name was being dragged into a boardroom fray between two gaming magnates.

Naguiat said he did not receive a pricey Chanel bag meant for his wife from pachinko tycoon Kazuo Okada during a visit to Macau in September 2010.

He acknowledged that he found a Chanel bag delivered to his room after his return from one of his business meetings, but said that he returned it promptly to his hosts.

Naguiat explained that he had casually told his liaison—one of Okada’s staffers— that he wanted to surprise his wife with a Chanel bag and was astonished to find one delivered to his room later on.

“I was there to meet officials of Wynn Resorts and Mr. Okada was the vice chairman of Wynn,” Naguiat said in an interview with the Philippine Daily Inquirer. “Maybe the staffer was just trying to impress his guests. In any case, I had the bag returned immediately.”

The allegation about Naguiat receiving the bag in return for favors to Okada—an investor in Pagcor’s $4-billion Entertainment City project—was contained in a report prepared by a former Federal Bureau of Investigation director, Louis Freeh.

The investigation was commissioned by Wynn Resorts, whose owner has had a public falling out with Okada, his former partner.

“I’m the victim of a boardroom battle between giants,” Naguiat said, adding that he is being used by one side as ammunition against the other. “This is a fight between giants.”

US lawsuit

Okada was accused on Tuesday in a US lawsuit of paying off Philippine regulators and cheating his powerful Las Vegas partner, Wynn Resorts chief executive Steve Wynn.

In the lawsuit, Wynn Resorts said Okada, a director of Wynn, went behind the company’s back to develop business for his own Universal Entertainment group in the Philippines and broke US laws on foreign bribery.

Wynn said Okada spent more than $110,000 to curry favor with two Philippine officials in apparent violation of the US Foreign Corrupt Practices Act, jeopardizing Wynn’s own reputation in the process.

“Mr. Okada, his associates and companies appear to have engaged in a longstanding practice of making payments and gifts to his two chief gaming regulators at Philippine Amusement and Gaming Corp., who directly oversee and regulate Mr. Okada’s provisional licensing agreement to operate in that company,” the lawsuit said.

The suit, filed in a Las Vegas district court, said Okada had sought a gaming license in the Philippines and made the payments despite Wynn’s telling him not to do so. It named Naguiat, former Pagcor chairman Efraim Genuino and their families, as the recipients of the payoffs, which dated to 2008.

Okada told a Wynn investigator that he had paid for Genuino’s trip to the 2008 Beijing Olympics, Wynn said.

Wife, kids, nanny

The suit alleged that Naguiat, his wife, three children, nanny and company officials had a five-day trip to Wynn’s Macau resort in 2010 during which Okada met with the Pagcor chairman to discuss his Manila casino venture.

Okada’s Universal Entertainment broke ground for its Manila Bay Resorts casino on January 26, promising more than 2,000 guest rooms in three hotels, with the planned opening in the first half of 2014. Universal, through Aruze USA, was one of four winners of provisional gaming licenses awarded by the Philippine government in 2008.

The Japanese gambling tycoon allegedly ordered that Naguiat be given the most expensive accommodations at the resort—a $6,000-a-night villa normally reserved for high rollers—as well as use of the casino’s best butler.

More than $50,000 was spent on Naguiat’s visit, including about $20,000 in cash given to the Filipino delegation for shopping and gaming, the suit alleged.

Naguiat also requested and received a Chanel designer bag worth 15,000 Macau patacas ($1,878) for his wife, according to the suit.

Malicious

Naguiat—a friend of President Benigno Aquino III who was actively involved in the 2010 presidential campaign—decried the reports about him in the foreign media as “malicious.”

Naguiat said that the probe report which mentioned his name as part of the Chanel bag issue was quoted liberally by foreign journalists, while excluding the footnote at the bottom of the page—in fine print—which mentioned that he did, in fact, return the bag.

He said he received reports that at least one of Wynn’s publicists had called up journalists whom they felt did not press on the Chanel bag issue enough.

Free accommodations

Naguiat did admit, however, that he enjoyed free accommodations at a Wynn Resorts suite in Macau during that visit which was provided by his hosts.

He disputed the $6,000-a-night price tag ascribed to the hotel room, saying the particular suite he stayed in had no published rates as it was used only to accommodate the resort’s VIP guests.

“You can’t book that room as a walk-in guest even if you wanted to,” he said. “So I don’t know how they got that figure.”

The Pagcor chairman said it was standard operation procedure in the hospitality industry to provide free accommodations to guests invited to engage in official business with their hosts.

“Here in the Philippines, when we invite guests, we shoulder their accommodations, we assign a car to bring them around and we assign a 24-hour security detail to them if they are VIPs,” he said.

His wife and children paid for their own expenses during that trip, Naguiat said.

He added that he never received the $20,000 expenses supposedly credited to his visit by his hosts, adding that this may have been credited to his room or his liaison, possibly used to acquire the Chanel bag.

‘Fight it out’

Naguiat said he had briefed Palace officials about the issue and that he had been advised to “fight it out” if he believed that he did not do anything wrong.

Malacañang expressed confidence that Naguiat would be able to clear his name.

“(T)he point really here is, did he benefit personally?” presidential spokesperson Edwin Lacierda told reporters as he reiterated the Palace stand that it did not see anything wrong with Naguiat’s acceptance of hotel accommodations from Wynn Resorts as it was industry practice and saved costs for the government.

Lacierda confirmed that Naguiat had arranged a meeting between President Aquino and Steve Wynn but it did not push through. The aborted meeting had to do with a possible business investment, according to Lacierda.

“There’s nothing wrong with that. There are many business people who want to inform the President that they are bullish about the Philippines,” Lacierda said. “This is not a special case.”

Lacierda said Pagcor was envisioning to build a Pagcor City that was not purely for gambling but also one that would provide entertainment to families.

Pagcor vice president Francis Hernando said the Wynn suit would not adversely affect Okada’s plans for Manila. “It’s full steam ahead as far as its execution is concerned,” he said.

A member of the House committee on games and amusement found nothing irregular in the accommodations and perks given by Okada to Pagcor officials.

“Pagcor is just collateral damage in the corporate dispute between Okada and his partners at Wynn Resorts. I think the two should settle their dispute before Pagcor should entertain their proposal,” Eastern Samar Representative Ben Evardone said in a text message.

Latest step

The suit was the latest step in the acrimonious fight between Steve Wynn and his longtime partner Okada. On Sunday, Wynn’s board voted to force out Okada, who controls a 20-percent stake in the company, which owns casinos in Las Vegas and Macau.

The board also moved to redeem Okada’s 24 million shares at a 30-percent discount and payable in 10 years, held through Aruze USA Inc., a Universal subsidiary.

In a statement on Sunday, Universal branded the board’s action outrageous, saying the investigation had been rushed. “Universal Entertainment will take all legal actions necessary to protect its investment and prevent a forced redemption of its shares,” it said.

$135-M donation

The row between Wynn and Okada burst into the public spotlight in January, when the Hong Kong-based businessman sued Wynn, intending to gain access to records surrounding a $135-million donation the company made to the University of Macau.

Okada, Wynn Resorts’ largest shareholder, sued Wynn Resorts in January for denying him information about the donation, which he called “inappropriate.”

The US Securities and Exchange Commission is looking informally into the issue.   With reports from AFP, Reuters, Christine O. Avendaño and Gil C. Cabacungan

Originally posted at 08:57 am | Wednesday, February 22,  2012