By INA ALLECO R. SILVERIO
MANILA — The plans of the Aquino government to turn the Philippines into a gambling and gaming capital in Asia are laden with corruption, a progressive lawmaker and a multisectoral alliance said.
Bayan Muna Rep. Teddy Casiño and the Bagong Alyansang Makabayan (Bayan) are calling for the immediate suspension of the Philippine Amusement and Gaming Corporation’s (PAGCOR) Entertainment City project. They said new information that has been recently made public point to more anomalies involving Pagcor officials and its main investor Japanese gambling magnate and billionaire, Kazuo Okada.
Pagcor is currently building four integrated resorts for the 100-hectare Entertainment City project in Manila Bay reclamation area. Proponents have said that at full development, the project can deliver up to $10 billion annually in gaming revenues. They also promised that the project can create at least 400,000 direct and indirect jobs. The previous government under Macapagal-Arroyo approved the project; it was continued by its successor.
Okada is now the subject of an investigation by United States gaming regulators after a highly-controversial falling-out with former business partner Steve Wynn.
According to reports, gaming regulators in the United States are investigating millions of dollars paid by affiliates of Okada’s Universal Entertainment Corp to a former consultant for the Philippine gaming authority around the time the company was lobbying to win concessions for a $2 billion Manila casino.
Casiño said the House of Representatives should immediately begin deliberations on his House Resolution 2809 calling for an investigation into the Entertainment City Project. Congress, he said, should also support the project’s suspension.
“When the House hears HR 2809, we will have to include new pieces of evidence unearthed by Reuters news agency that can help complete the picture of corruption in PAGCOR and its proposed Sin City,” Casiño said.
Underhanded deals for a gaming license
It was revealed in a Reuters report that a subsidiary of Universal allegedly gave a $5 million payment in May 2010 to Rodolfo Soriano, a close associate of former Pagcor chair Efraim Genuino. These reports came out after the international news agency examined bank records, corporate filings, court documents and records prepared by Universal staff. The payment was made via a shell company in Hong Kong and was part of $40 million in transfers made by Universal’s US- affiliate Aruze USA which is now under investigation.
Reports said Aruze USA, transferred funds to affiliate Future Fortune in Hong Kong, which then transferred the money to People’s Technology Holding Ltd., a firm established in 2009 and wholly-owned by Soriano. The document trail connecting Soriano to the $5 million payment has not been previously reported.
Prior to this latest exposé, Okada’s group was charged with violating Philippine constitutional restrictions on foreign ownership of land after it was proven that entities linked to Okada owned 60 percent of the land. The Office of the Government Corporate Counsel also affirmed that there were violations with regards to the Constitutional restrictions on foreign ownership.
“The anomalies may have well extended to the new Pagcor management under Cristino Naguiat considering that they accepted illegal favors from Okada during their trip to Macau last year,” Casiño said. “We must use extreme diligence here because we are dealing with billions of public funds and PAGCOR’s dealings regarding the Entertainment City are very shady to say the least.”
Philippines as a gaming capital a la Las Vegas
Earlier in October, executive secretary Edwin Lacierda defended the project saying that “it goes beyond gaming” and that the government envisions to turn the project into something like Las Vegas, Nevada. Las Vegas is the gaming and gambling capital of the US.
“We’re trying to develop a situation where we can pattern it after Las Vegas. We can have the entire family brought in to enjoy the amenities of a family vacation,” Lacierda told Gmanetwork.com.
In the meantime, current Pagcor chairman CEO Cristino Naguiat, Jr also announced that the Aquino government wants to secure 10 percent of the world gambling entertainment activities and profits in the following years. This he also announced during the 9th Finance Ministers’ Investor Seminar of the Association of South East Asian Nations (Asean) in Hong Kong.
Naguiat said that even while it is true that the country’s gaming industry lags very far behind those of Las Vegas, Macau and Singapore when it comes to revenue potential, much can still be achieved if there is the perfect mix of “private sector investment, regulatory maturity and improvements in tourism infrastructure.”
Lacierda said the project will help change the landscape of gaming and entertainment in the Philippines. He said whole families can go on vacation: the adults can go to casinos while the children can go to the theme parks and other entertainment venues.
Cancel the project now
Regardless of Lacierda’s arguments for the project, however, multisectoral alliance Bayan challenged President Benigno Aquino III to cancel the provisional license his government awarded to Okada’s company.
“The deal with Okada obviously stinks, and the stench of corruption is now coming out. With so many allegations of anomalies surrounding this deal, it is strange that, up to now, Pres. Aquino has not made any effort to cancel Okada’s provisional license. Neither has Aquino’s classmate, current Pagcor chair Naguiat done anything to end this apparently anomalous deal tainted with violations of Philippine laws,” said Bayan secretary general Renato Reyes, Jr.
Reyes said the authority to cancel the provisional license rests with the executive, and that the cancellation can be done when the licensee has been in clear violation of Philippines.
“In the case of Okada, there have been allegations of multi-million dollar pay-offs, as well as violations of the anti-dummy law. Failure to cancel the provisional license gives the impression that Pagcor and the Aquino government are protecting Okada,” he pointed out.
Reyes also argued out that Soriano is also a stockholder of one of the alleged dummy companies that circumvented the country’s laws on foreign ownership of land.
“It’s no coincidence that Soriano, an associate of Genuino, figured in both the land ownership issue and the payoffs incident. There are so many issues surrounding Okada’s license issued during the time of Genuino. For the government to say it’s still business as usual in the Pagcor Entertainment City implies that it tolerates these anomalies. It is also strange that the Pagcor board, with its vast intelligence funds, seems unaware of these anomalies. Or did they just choose not to investigate, not to look at all?” Reyes said.
Reyes said Okada issue will test this regime’s so-called resolve to clean up corruption in government.
“The more this issue drags on without decisive government action, the more it becomes clear that Aquino’s anti-corruption drive is selective and just rhetoric. The more it becomes clear that Aquino’s classmates in the administration are not held up to strict standards of accountability,” he concluded.