$2-B casino deal in peril
The license issued to Universal Entertainment Corp. of Japanese billionaire Kazuo Okada to operate a casino in Manila will be canceled if it is found to have been obtained through bribery, Malacañang said Monday.
However, Malacañang and gaming regulator Philippine Gaming Corp. (Pagcor) said due process must be observed in probing the alleged bribery.
US regulators are investigating a $5-million payment two years ago by affiliates of Universal to Rodolfo Soriano, then a Pagcor consultant, in exchange for concessions at a $2-billion casino on Manila Bay.
Soriano allegedly served as bagman of then Pagcor chairman Efraim Genuino.
President Aquino’s spokesperson, Edwin Lacierda, said Pagcor officials had referred the allegation of bribery involving Universal and Soriano to the Department of Justice (DOJ) for investigation.
“If there’s proof that the license was obtained through bribery, then there may be reason to consider canceling the contract,” Lacierda said in a briefing.
Universal won a provisional license to operate a casino in the Philippines when it paid about $300 million for land as part of the project on Manila Bay. It began building the casino in January, promoting it as a VIP destination resort for China’s new rich.
Universal acquired reclaimed land in 2008 and announced plans to build Asia’s largest aquarium, a Ferris wheel and a 2,050-room hotel and casino.
Reuters reported on Friday that the $5 million was part of the $40-million fund transfers by Universal’s Aruze USA in the first half of 2010 while Universal was seeking tax and ownership-related concessions in the final months of the Arroyo administration.
Reuters based its report on bank records, corporate filings, court documents and records prepared by Universal’s staff.
Lacierda said the executive branch would not “countenance” any finding of bribery in the grant of a license to Universal.
“If there are allegations and proof that the award was granted through some form of bribery, then certainly we will not countenance that,” he said.
Like Lacierda, Pagcor said the license granted to Universal for the operation of a casino hotel complex in Entertainment City could be canceled should it be found that Okada had bribed former officials of the state gaming agency.
“While a license for the operation of a casino facility in Entertainment City has already been issued in favor of [Okada-owned] Tiger Resorts Leisure and Entertainment Inc., the state-owned gaming agency can still cancel the license if it is proven that they have indeed resorted to bribery in order to secure the said license,” Pagcor said in a statement.
Coordinate with FBI
Pagcor said it would ask the DOJ and the National Bureau of Investigation to get help from the US Federal Bureau of Investigation (FBI), which had first uncovered the alleged cases of bribery, in verifying the alleged payment to Soriano.
Lacierda, however, said that the allegations of bribery should go through the regular process of investigation by the justice department.
Soriano, Genuino and 16 other former Pagcor officials are facing plunder charges for alleged malversation of public funds and goods amounting to more than P100 million.
Pagcor chairman Cristino Naguiat Jr. confirmed to the Philippine Daily Inquirer that Soriano had indeed been briefly employed by the agency as a consultant a few years ago.
“Rodolfo Soriano Jr. was hired as a consultant by the office of the CEO for the contract period of Aug. 30, 2006 to Feb. 28, 2007,” he said. “His contract was preterminated on Nov. 28, 2006.”
It was unclear why Soriano had dealings with Pagcor, including receiving the alleged bribe in May 2010, after his official engagement with the agency ended.
Soriano and Genuino could not be reached for comment.
In its statement, Pagcor said it was unaware of the “serious” bribery allegations involving Okada’s group and Soriano until the Reuters report came out.
“Pagcor is willing to cooperate with both local and international authorities on this,” it said.
The gaming regulator and operator added that the report bolstered its plunder case against Genuino, whom it sued last year for allegedly misappropriating P186 million in agency funds for a foundation he controlled from 2003 to 2010.
“Pagcor assures the public that its management’s decision on the issues at hand will be based on what is sanctioned by law and the conditions prescribed in the provisional license given to the group of Mr. Okada for their casino project in Entertainment City,” it said.
In a phone interview, Pagcor legal counsel Jay Santiago said the bribery charges would help further establish the “deep ties” between Genuino and Soriano.
In their reply to charges of malversation of public funds filed by the current Pagcor management, Genuino and Soriano said they were mere acquaintances.
Santiago said the current Pagcor management was equally surprised by the new bribery allegation in the running legal battle between erstwhile partners Okada and Las Vegas casino magnate Steve Wynn.
Wynn Resorts suit
Naguiat and Genuino were identified earlier this year in a lawsuit filed by Wynn Resorts in a district court in Las Vegas as the two Pagcor executives for whom Okada had spent $110,000 to curry favor with them.
Wynn Resorts chief executive Steve Wynn accused Okada of violating the US Foreign Corrupt Practices Act through alleged payoffs made to the two gaming officials.
Okada, a director at Wynn Resorts, was alleged to have gone behind the back of the company to develop a business for his own Universal Entertainment Group in the Philippines.
The lawsuit said that Naguiat, his wife, three children and nanny received free accommodations at a luxury suite in Wynn Macau, that they were assigned the casino’s best butler and that he requested and received a $1,878 Chanel designer bag for his wife. Naguiat said he returned the bag.
In reaction, Naguiat explained that it was an industry practice among casino operators to extend courtesies to each other.
The suit also claimed that Okada spent $50,000 on Naguiat’s visit in September 2010, including $20,000 in cash given to the Filipino delegation for shopping and gaming. Okada told Wynn investigators that he had paid for Genuino’s trip to Beijing for the 2008 Olympics.
In the wake of the Reuters report, Sen. Miriam Defensor-Santiago wants to curtail the power of consultants of government officials in facilitating state-sanctioned deals.
In Senate Resolution No. 901 seeking a probe of the $5 million given a month before Soriano and Genuino stepped down, Defensor-Santiago also called for “greater penalties on government officials who give a blanket authority to consultants to transact on behalf of their agency or the Philippine government.”
The senator said she was “aghast” that a reported bagman like Soriano was tasked with negotiating in behalf of Pagcor.
She said the disclosure of the bribe money should spur a “broader review Pagcor’s charter, and provide for stricter guidelines on granting franchises to foreign entities.
Senator Santiago said the Senate probe of the bribery charges against Okada was needed to determine whether “certain Pagcor officials and employees received millions of dollars in bribes” and recommend the filing of charges in the Office of the Ombudsman.
Both Genuino and Soriano would be summoned in the Senate probe to explain and account for the alleged millions of dollars they received from Universal.
Bayan Muna Rep. Teodoro Casiño urged President Aquino to cancel Universal’s license to operate a casino and pressed Congress to initiate hearings on the deal to uncover possible additional anomalies surrounding it.
Casiño, who filed a resolution in October to investigate the Las Vegas-style casino project because of constitutional questions, said the most recent allegations of bribery could hint of more shenanigans concerning the lucrative project.
“I think this is still the tip of the iceberg,” Casiño said in a phone interview Monday.
“If they can spend millions of dollars during the time of Genuino, given what happened in Macau, I’m sure Okada could have tried to buy people under the new Pagcor administration. Genuino was involved in these [activities] because he was in a position to do so then, and now Okada could have been looking for a new patron,” he said. With reports from Leila B. Salaverria and Dechen Tshering, trainee