Rep. Christina E. Sablan (D-Saipan) raised this question after the chairperson of Imperial Pacific International (CNMI) LLC’s parent company in Hong Kong and its executives on Saipan claimed they are not in charge of IPI’s operations on the islands.
At the House of Representatives Committee on Gaming meeting last week, Sablan, who is the committee’s vice chair, said that IPI executives here on island have always pointed to Imperial Pacific International Holdings Ltd. in Hong Kong as being the real decision maker and driver of funding for the company, yet Imperial Pacific International Holdings Limited board chair Cui Li Jie later stated under oath that she has no responsibilities, no duties, and nothing to do with IPI’s operations on Saipan.
Cui was recently cited for contempt of court and ordered by the federal court to pay sanctions for failing to appear at a deposition and failing to answer questions truthfully.
Sablan said last week that nobody seems to know who the CNMI is dealing with at IPI. “Not the [Commonwealth] Casino Commission, not the administration, not the Legislature,” Sablan said.
That begs the question, Sablan said: Is IPI even a legitimate business?
The other question, she said, is why should this government and the people of the CNMI continue to accommodate a “bad actor” that is failing in virtually every respect, in terms of governance, compliance, and financial suitability.
“Why should we change our laws or the license yet again, after so much bad faith, so much non-compliance, so many people in small businesses harmed, so many black eyes?” she asked. “How do we disentangle ourselves from this mess, uphold our laws and restore the Commonwealth’s credibility as a stable place to invest and do business?”
In line with this, Sablan moved to open an oversight investigation into the governance, financial suitability, and compliance failures affecting IPI. The committee later unanimously agreed to conduct the oversight investigation.
Sablan cited a Feb. 9, 2021, letter that IPI chief executive officer Ray N. Yumul sent the Legislature that presents the company’s wish list of changes to the law and the exclusive casino license. On that wish list, she said, is a Senate bill that would, among other things, remove the Commonwealth Casino Commission’s authority to regulate the nongaming portions of the casino license. In other words, Sablan said, IPI wants the Legislature to remove government oversight over what IPI promised would be a $7-billion integrated casino resort development.
She noted that the Legislature just passed a law barely two months ago to strengthen government oversight and the enforcement authority of CCC.
Sablan said IPI also wants yet another extension on the completion of the Garapan casino/resort project, extending it to five years from today. She said IPI was supposed to finish the project by last month and actually was supposed to finish several years ago. Sablan now doubts how IPI can complete the project at all, with no manpower plan and now that they are barred from the H2-B program and possibly the CNMI-Only Transitional Worker program as well.
The lawmaker said that when IPI got its last extension, it promised to pay $20 million into the community benefit fund annually. Yet only a few months ago, Sablan said, the Commonwealth Lottery Commission granted IPI a break on the community benefit fund.
She said IPI is also seeking relief from its obligations to pay the annual license fee and regulatory fee in full. Sablan said both are now long overdue—the license fee was due in August last year; the regulatory fee in October 2020. She said IPI has not paid even a penny, though, according to Yumul’s letter and according to IPI’s previous CEO, Donald Browne, IPI has had access to some funding all along to pay at least some of those fees. She said IPI has chosen not to do so.
“But if we change the law and reduce the fees, then they will pay a fraction of what they are legally and contractually obligated to pay right now. What a show of bad faith,” Sablan said.
Sablan said she has observed IPI closely these past almost seven years, to include the casino fact-finding trips to Hong Kong and Macau that certain members of the Legislature, including Gov. Ralph DLG Torres, took back in 2013 prior to passage of the Saipan Casino Act. She said they now know that the trips were funded by a company linked to IPI.