Sen. Edith E. DeLeon Guerrero (D-Saipan) believes Imperial Pacific International (CNMI) LLC should hire someone “from the outside” for the CEO job, to ensure that the person will have the qualifications to fix the multitude of problems currently besetting the exclusive Saipan casino licensee.
Speaking at the Senate session last Thursday, DeLeon Guerrero said this person should not only guide IPI but also guide the CNMI government when it comes to the casino industry.
The senator talked about IPI in reaction to IPI chief executive officer Ray N. Yumul’s letter last month to the Legislature that outlined the company’s strategy to recover.
“The CNMI must cease looking for instant solution to the CNMI’s financial situation,” she said, adding that this “bad habit” of looking for instant solutions is why the Commonwealth is now at risk.
In his letter to Senate President Jude U. Hofschneider (R-Tinian) and House Speaker Edmund S. Villagomez (R-Saipan), Yumul sought legislative action to allow IPI to pay $5.7 million of the $15.5 million it was supposed to pay last August for the casino license fee. The remaining $9,802,570 of the 2020 license fee would then be paid in five equal annual installments beginning in 2023, according to IPI’s proposal. Yumul said in his letter that allowing IPI to pay the $5.7 million now will help the government prevent the termination of 180 government employees on furlough.
Yumul said that IPI offers to pay a portion of the $15.5 million annual casino license fee despite knowing that casino operations will not be possible for this license period.
DeLeon Guerrero said IPI and the CNMI government had no real understanding of what will work from the get-go. “It went for the grandiose idea [that] was not financially or economically possible. The CNMI government allowed this to happen,” she said.
DeLeon Guerrero said this is a time to ask for a permanent change in the rules. “Process is paramount, process that is wide open to the public and is cemented in accountability. When disclosure is absent, there’s no public discussion,” she said.
The senator cited a Saipan Chamber of Commerce message to the government, where it expressed its concerns about the casino industry, and how accountability and compliance with laws and regulations must be addressed.
She also cited the U.S. Department of Labor’s filing in the U.S. District Court for the NMI about putting IPI on receivership.
DeLeon Guerrero said her review of IPI’s mother company in Hong Kong, Imperial Pacific International Holdings Limited, shows that earnings of the CNMI casino industry declined 53.8% over the past five years. “Are they in good financial position? The report…that I looked at says they have less than one year of cash,” DeLeon Guerrero said.
“Mr. president, we need to protect first and foremost the interest of our CNMI and our people. We can no longer continue to bend over on concessions without any industry-recognized analysts report,” she said, in addressing Hofschneider, who presided over the session.