DUE TO NON-PAYMENT OF $15.5M ANNUAL CASINO LICENSE FEE
Commonwealth Casino Commission acting executive director Andrew Yeom has filed a complaint against Imperial Pacific International (CNMI) LLC before the CCC over its failure to pay the $15.5 million in annual casino license fee by the deadline last Aug. 12.
Yeom, through counsel assistant attorney general Michael L. Ernest, filed two claims against IPI for alleged violations of Commonwealth Code and CCC regulation, a claim of breach of contract, and a claim for a declaratory order.
As of press time, Saipan Tribune was still waiting for comments from IPI.
Yeom asked the CCC board to declare that IPI committed the violations and did not immediately self-report to the Commission the facts which gave rise to the violations prior to being contacted by the Commission’s enforcement staff.
The acting executive director requested CCC to declare that the violations committed by IPI were major violations pursuant to CCC regulations.
Yeom asked CCC to order the suspension of IPI’s license to conduct gaming operations on Saipan until such time the annual casino license fee is paid in full.
He asked CCC to order IPI pay $50,000 in fine per violation per day the annual license fee goes unpaid for the major violations.
Ernest stated the complaint that IPI is required by Commonwealth law, the Casino License Agreement, and the regulations promulgated by CCC, to pay an annual license fee.
Ernest said the annual license fee starts at $15 million per year and is subject to adjustment to reflect changes in the consumer price index.
Ernest said per the CLA, the annual license fee is due on Aug. 12 each year.
He said the annual casino license fee for the seventh year was due on Aug. 12, 2020.
He said the casino license fee amount to be paid on Aug. 12, 2020 was $15,502,570.
Ernest said IPI did not pay any amount for such fee to the CNMI Treasury on Aug. 12.
The lawyer noted that at the July 30, 2020 meeting of the commission, IPI chief executive officer Donald Browne stated that the annual license fee was non-negotiable, in the 13 days of him being CEO, the fee was one of the top issues, that he was in constant communication with IPI corporate, that IPI has some funding to satisfy such fee, and that IPI has to work on the method to draw the funds.
In the Aug. 11, 2020 letter, Browne informed Gov. Ralph DLG Torres, Senate President Victor B. Hocog (R-Rota), House Speaker Blas Jonathan T. Attao (R-Saipan), and other government officials that IPI indeed will not be able to pay the $15.5 million in annual license fee due by the Aug. 12 deadline.
Browne said pursuant to Section 25 of the CLA, and because of the worldwide pandemic, IPI requests an abatement of the casino license fee for the year 2020.
Browne also proposes that payment of the $3 million to support the operations of Commonwealth Casino Commission that IPI owes by this October, be delayed until 30 days before the scheduled reopening of IPI’s casino in Garapan.
Citing the COVID-19 pandemic that grips the world, Browne described what happened as a classic “force majeure,” and event that effects more than just IPI and that was beyond IPI’s control.