‘Stop focusing on IPI faults; it paid $204M in 4 years’

Senate President Jude U. Hofschneider (R-Tinian) has asked senators to not just focus on the faults of Imperial Pacific International (CNMI) LLC, reminding them that IPI paid a total of $204.80 million in taxes, license, and fees from 2015 to 2018.

At a Senate session last Thursday, Hofschneider pointed out that the $204,804,991 that IPI paid out are the audited numbers generated from IPI’s integrated casino in that four-year period.

The Senate president also reminded senators that it was IPI’s contributions that saved the CNMI’s Retirement Fund from collapsing, after Sen. Paul A. Manglona (Ind-Rota) brought up the importance of the Development Plan Advisory Committee, which was created under the casino license agreement to oversee the construction and completion of the initial gaming facility and phase 1 of IPI’s integrated resort.

“I’m not saying that we’re wrong,” Hofschneider said, adding he’s just reminding lawmakers that every time they try to point out the ills of the casino industry, they all should be reminded that without these millions of dollars generated from IPI, the CNMI government will never retire or fulfill its obligation to retirees.

The Senate president asked the senators for recommendations and come up with revenue-generating legislations and other legislations to allow more efficiency on government service so they can work with colleagues from the House of Representatives to push things forward.

Hofschneider said that IPI paid $16,280,630 in licenses and fees in 2015; $35,601,247 in taxes and $15,934,433 in license and fees in 2016; $70,483,539 in taxes, and $16,244,382 in license and fees in 2017; and $46,349,751 in taxes and approximately $3.911 million in licenses and fees in 2018.

However, in order for the people to accept any amendment to the casino license agreement, there is a need to be open and transparent to the public, Manglona said

The senator underscored the importance to have these public hearings, to have a discussion where everyone sits around the table with a professional or an expert on casino gaming. “I believe nobody in this room is in any position to make a wise and informed decision. We have to give it to the experts,” Manglona said.

He noted that a DPAC report in January 2018 specifically states that they actually intended to create a committee consisting of experts with experience of 30 to 40 years and legal counsel with similar experience. “And that’s what we need to do. I don’t think it is right that we go piecemeal by piecemeal and not bring all the issues on the table so that we can discuss it,” he said.

Manglona said he wants to help IPI, but the company needs to be upfront. “Why is it that when I wrote a letter to the Office of the Public Auditor last year to conduct an audit of the casino benefit fund, they will not open their books?” he asked.

For one, what is there to hide, Manglona asked, when the community benefit fund requirement is clear in the casino license agreement. “They don’t even want to show that. And so this is something what we all need to bring to the table,” he said.

Hofschneider said that Manglona’s message is well taken and they understand there’s a multitude of problems that the casino industry is faced with, but the Senate should offer solutions for what they can do.

“I’m simply saying that if they need to trim down, then let’s sit down and talk to them,” he said.

The president said he does not want to continue the discussion until they get more information on IPI’s requested items.

The Senate president reminded the senators that when IPI and the government first signed the casino license agreement, the CNMI was retiring a lot of its obligations in the community.

“We were accepting of the fact they’re [going to] help the CNMI. …Let’s try and pitch in our efforts to help this casino industry,” he said, adding that IPI’s contributions averted the demise of the Retirement Fund. “Let’s not deny that. Everyone should remember that,” he said. “To this day, we’re paying the Retirement Funds 25% obligation of the CNMI government absent the $15 million, absent the revenue that’s coming in from the casino as intended.”

He said IPI is responsible for the many challenges it has been facing but the enactment of law that empowers the Commonwealth Casino Commission to have more enforcement teeth is indicative of what the Senate is trying to do to give the commission more authority to address these concerns.

“So we’re moving ahead as members of this Legislature. It’s not like we’re not doing anything,” he said.

Manglona said he cannot overemphasize again the need to read the DPAC report. “That’s my point today. It’s from professionals, from experts in the casino industry. We’re just putting it on the side [but] we need the guidance and the advice of professionals,” he said.

Manglona agreed with Hofschneider that the casino legislation was passed primarily to benefit the retirees.

“And for that reason, we need to do everything we can to solve this but, at the same time, we need to do it right,” the senator said, adding that DPAC is the right way.