It’s simple: We just want IPI to follow the law


Editor’s Note: The following was submitted by members of the minority bloc of the CNMI House of representatives in the 21st Legislature.

Casino apologists and proponents often accuse House minority members of being “anti-casino” and overly critical of Imperial Pacific International (CNMI) LLC, d.b.a. Best Sunshine, and the casino industry on Saipan. The truth is we are not. We just want IPI to follow our laws and the casino license agreement. Is that such a bad thing?

While the pro-casino group turns a blind eye to multiple violations and red flags, the House minority members speak out and seek to hold IPI and the government accountable. When have we spoken out? In the 19th, 20th, and 21st legislatures. Here are 17 examples of House minority members speaking out on behalf of the people of the CNMI, with their best interests at heart:

1. When CNMI Public Law 18-56, the law that legalized casino gambling on Saipan, failed to include a gross gaming revenue tax for the casino industry on Saipan. Saipan is the only place in the entire world with a casino industry and no gross gaming revenue tax. Minority members in the 19th and 20th legislatures introduced legislation to provide for a casino gross gaming revenue tax, but it failed to gain support from the GOP leadership and the administration. In the 21st Legislature, minority members are trying again—this time with a local gaming tax for the 3rd Senatorial District.

2. When IPI violated the Smoke-free Air Act of 2008 (P.L. 16-45) with its temporary casino built inside the Duty Free Galleria. IPI failed to build walls or an enclosure to keep smoke inside the casino, thereby subjecting employees and patrons of Hard Rock Café and Duty Free Galleria and boutiques to noxious cigarette fumes. Many employees complained to us and we demanded IPI follow the law. After many battles, IPI finally complied.

3. When the GOP majority in the Legislature and the administration pushed to take the $15-million annual casino license fee away from retirees to ensure they receive 100% of their pensions, and gave it to the three senatorial districts to spend as they please. This legislation became Public Law 20-10. House minority members voted no to this bill, but it still became law. Sorry, retirees. We tried. Sadly, it was retirees who lobbied for the legalization of casino gambling on Saipan to protect their pensions.

4. When IPI was not required to provide a construction completion bond for its casino hotel. Minority members advocated for a mandatory completion bond to ensure the casino hotel project in Garapan would meet construction deadlines and be finished on time. That bond requirement appeared in the original version of H.B. 19-95, but a last-minute amendment on the House floor removed the requirement from this bill. The House minority members voted no to the bill. Why the completion bond requirement was removed from this legislation remains to be answered, but one thing is clear: only IPI benefited. Five years into the project, casino construction is far from complete.

5. When IPI and the administration amended the casino license agreement eight times and counting. The amendments have included multiple extensions on construction deadlines, and no penalties have been imposed for delays or damage. Every single amendment has been favorable to IPI.

6. When IPI was fined $210,000 by BECQ for polluting the Garapan lagoon on multiple occasions. These egregious crimes against our environment and public health were completely unconscionable and totally avoidable.

7. When IPI blocked off half of the public road in front of their casino, financially crippling many of the small businesses along that street and adjoining streets. These small businesses complained multiple times, and it seems only a few of us heard them. Some have finally sued.

8. When local employees at the casino complained they were receiving a lower hourly wage than their Chinese counterparts who had the same duties and responsibilities. According to the local employees, they were paid less because they didn’t speak Mandarin. We encouraged them to file complaints with the Federal Wage Commission under the U.S. Department of Labor along with a complaint to our local Department of Labor.

9. When there were multiple protests and strikes by foreign construction workers who were not getting paid their promised salaries and were living in deplorable housing conditions, many of whom left island without full compensation. A few of us actually went and met with them and even dropped off food and water that were donated by concerned citizens and non-profit agencies.

10. When a construction worker was killed on site and multiple OSHA violations were discovered at IPI’s construction site that resulted in dozens of documented injuries, many of them life-threatening and debilitating, with some workers losing limbs and becoming paralyzed. CHCC doctors and nurses and administrators were well aware of all of these horrific injuries, but somehow the CNMI administration was not. We do not know what action, if any, the CNMI government took to protect these workers, but we do know that many were never compensated for their injuries, and some have finally sued IPI and its contractors.

11. When IPI failed to pay its developer’s infrastructure tax. To date, IPI still owes an estimated $18 million in developer’s infrastructure taxes, and no government agency with any authority seems to be doing anything to make IPI pay what it owes. What other business is allowed to get away with this?

12. When IPI failed to pay its corporate income and business gross revenue taxes. According to a 2018 audit, IPI owed $33 million in corporate income taxes and $5 million in business gross revenue taxes to the CNMI government. In 2019, IPI only paid a measly $41,000 in BGRT. How much will IPI owe in 2020?

13. When IPI failed to pay out the Community Benefit Fund, a requirement under the license agreement. The 2018 audit showed that IPI owed $17 million in Community Benefit Fund distributions, and an additional $20 million as of Oct. 1, 2019. No one in the administration—not the governor, not the Lottery Commission, not the Casino Commission—seems to want to answer questions about why IPI is not being required to honor this contractual obligation.

14. When IPI failed to pay dozens of vendors. A 2018 audit showed that IPI owed more than $35 million to vendors. Some of these vendors are now suing IPI, and many have petitioned the Commonwealth Casino Commission to exercise its authority to compel IPI to pay up.

15. When IPI sued the Commonwealth Casino Commission to prevent the commission from releasing public information that was requested through an Open Government Act request filed by Rep. Ed Propst in his official capacity. IPI lost that lawsuit in federal court and the CCC complied with the OGA request. The records released included IPI’s financial statements that are required by CNMI law to be disclosed.

16. When the FBI raided the construction companies working for IPI and arrested construction officials for illegally employing tourists. These construction officials later pleaded guilty to harboring aliens.

17. When the FBI raided IPI offices and seized computers, files, and personal cell phones of IPI executives and employees. Search warrant records for this second FBI raid involving IPI indicate the feds are looking at the casino’s possible involvement in money laundering, fraud, and public corruption.

House minority members want the casino to succeed, but we also expect the casino and its proponents to honor the laws they are bound to, like all other businesses. We expect IPI to live up to its promises to our people and we object to any special privileges that allow IPI to operate above the laws of the Commonwealth and outside norms for the casino industry.

The mere fact that IPI is the only casino in the entire world that does not pay a gross gaming revenue tax is deeply troubling. This gaming revenue tax could have been used to help our people living in tents. It could have been used to rebuild our broken homes and schools and infrastructure. It could have been used to pay down land compensation claims and to help fund our healthcare system. And while the casino has enriched a few privileged and well-connected people, the majority of our people do not see direct benefits from the casino industry.

House minority members are not the “opposition.” We are advocates for good governance. We are not beholden to the casino, or any special interest. We are independent-minded and we speak freely and from the heart. Perhaps one day the minority will become the majority. Whether that happens through the will of the voters or not, we will continue to be a voice for the people we serve, and no special interest group will ever silence us.

We wish all the people of the Commonwealth a blessed and healthy 2020.

Edwin Propst, Tina Sablan, Edmund Villagomez , Sheila Babauta, Richard Lizama, and Donald Manglona

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