IPI pays $15M license fee

CCC demands $502K more, based on CPI adjustment

In addition to the $15 million that Imperial Pacific International (CNMI) LLC was required to pay as its annual casino license fee, it was also made to pay $502,000 more, based on an adjusted consumer price index, as required by law.

Commonwealth Casino Commission executive director Edward Deleon Guerrero also disclosed yesterday that he was informed by their staff that IPI sent the $15 million payment for its annual exclusive casino license fee via wire transfer.

The deadline to pay the fee was Monday, Aug. 12.

Deleon Guerrero said that his office informed IPI last week about the additional $502,000 it has to pay on top of the $15 million. As of yesterday, he has no information whether IPI paid the $502,000 on top of the $15 million, or if they have their own calculation of the CPI adjustment.

“If they overshoot, I’m sure next year they can credit it. If they undershoot, then they have to catch up,” he said.

As of yesterday, Deleon Guerrero said they are verifying the information that IPI indeed made the $15 million license fee payment.

He said payment was reportedly made, not at CCC but at the Revenue and Tax’s Treasury.

“I’m checking out for actual confirmation. I want to see the actual deposit…,” he said, adding that he is not sure if the Department of Finance can release that information. “Whatever tax information you give Finance is protected by law,” he pointed out.

If IPI fails to pay the annual license fee by the deadline, Deleon Guerrero explained that the CCC is procedurally responsible to ensure that IPI complies with its contractual agreement.

Procedurally, if the CCC feels that IPI has violated that agreement, then an enforcement case will swing into action, he said. He said they will then send investigators to interview the principal or the parties involved.

“Then once we get…the facts, we separate rumors from reality. We look at the law. We look at the regulations. We look at the casino license agreement. We look what happened, what’s required,” he said.

The CCC will then have their investigators determine the violation and they sit with their staff and go over the matter with their legal counsel.

“If we think that there is an obvious violation—either the license agreement or violations of Commonwealth law or the casino regulation violation—we will issue a complaint,” he said.

Deleon Guerrero said the licensee—in this case IPI—then has 15 days to respond to correct the complaint.

He said the law imposes criminal penalty of $10,000 to $100,000 for a criminal offense, and if it is willful violation, three years of imprisonment or both.

Otherwise, if it is just purely a civil issue, CCC can impose fines. Deleon Guerrero said their maximum penalty is up to $50,000 per violation.

Deleon Guerrero said that Gov. Ralph DLG Torres is on top of these things as he is very involved in making sure that IPI honors its obligations and that CCC is working with the Office of the Attorney General and the Governor’s Office on this.

On the adjustment issue, Deleon Guerrero said that, based on Public Law 18-56, the exclusive casino license fee is $15 million a year, and on that fifth year of operation, the annual license fee would be adjusted based on the consumer price index, as provided for by the Department of Commerce.

He said they have been working with Commerce since 2014 to pin down what was the CPI since the third quarter of 2014, all the way to the current CPI.

He said they finally got the CPI in the full quarter of 2018 and, based on that, it is their belief that the CPI index increases the fee by $502,000.

He said they came up with the amount based on the CPI index provided by the Department of Commerce last week. The CPI factors include unemployment, housing, and other criteria.

“We got a little bit of problem because we have issues of transportation. We have issues of typhoon price freeze. We have a couple of issues that made it a little bit more complicated for Commerce to put together,” he said.

Deleon Guerrero said they did not question Commerce’s numbers and just took whatever they gave them. “They are the statistical department,” he pointed out.

Deleon Guerrero said they showed their calculation to IPI to show how much more they need to pay.

Ferdie De La Torre | Reporter
Ferdie Ponce de la Torre is a senior reporter of Saipan Tribune. He has a bachelor’s degree in journalism and has covered all news beats in the CNMI. He is a recipient of the CNMI Supreme Court Justice Award. Contact him at ferdie_delatorre@Saipantribune.com

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