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Sen. Manglona says AG should ‘diligently review’ IPI’s proposed amendments

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SENATOR Paul A. Manglona is asking Attorney General Edward Manibusan to “diligently review” the casino license agreement amendments proposed by Imperial Pacific International to the CNMI government .

The proposed amendments submitted to the CNMI Lottery Commission include a 50% reduction in the annual casino license fee; a smaller amount of contribution to the community benefit fund; and an extension of deadlines to complete each phase of the integrated resort project.

In his letter to the AG, Manglona wants to know whether the IPI request can be legally considered or accepted by the Lottery Commission without legislative action.

Paul A. Manglona

In particular, the senator said, “I am concerned as to whether the requests from IPI to change the sum and schedule of payments due to the CNMI can be considered by the CNMI Lottery Commission since such amendments materially change the consideration by which the CNMI granted the license.”

He said the license agreement did not provide provisions or any authority to allow reductions in licensing fees. He also does not think there is a law that allows any attorney, representative, or employee of any branch of the CNMI to allow the reduction of licensing fees in any circumstance.

Manglona would also like to know if any consideration of such changes invokes the fiduciary duties of the Lottery Commission members and the attorney general himself.

Manglona said the monies owed to the CNMI would be reduced at the sole discretion of the commission members.

“It would appear that Amendment No. 9 has originated from the licensee, and that any approval by the CNMI Lottery Commission, if endorsed by the attorney general, would reduce a future contractual debt of a private party to the CNMI, a dangerous precedent without legislative standing that would materially harm the financial affairs of the CNMI. Hence, the potential action calls for a clear establishment of the fiduciary responsibility by law of each employee, commission, or representative of the CNMI that may lead to the approval in the reduction of CNMI fee-based revenues. The Lottery Commission and the attorney general should therefore provide clear guidelines to all decision makers as to the fiduciary duty attached to each person in the review process of reduction in fixed licensing fees,” Manglona said.

“We do not have any public record that the Lottery Commission has met, nor have public hearings been made related to the request from IPI,” he added. “Yet, the Lottery Commission made a decision to forward the document [to the AG] for review when it has not met. This procedural requirement would become important if the proceedings for the amendment approvals are faulty.”

Manglona said the authority was never conferred to the Lottery Commission to extend the development schedules for Phase I and Phase II of the Saipan integrated resorts.

He said the casino license agreement “has clearly delegated to the Development Plan Advisory Committee the responsibility to review or propose amendments to the development schedules of Phase I and II of the integrated resort project. Any amendments to the development schedule without DPAC’s endorsement would be outright illegal.”

Manglona said the Development Plan Advisory Committee, for its part, has executed a contract, which prevents its members from communicating or disclosing their CNMI contracted works due to a non-disclosure section that the Office of the Attorney General has approved.

“I would like to ask the Office of the Attorney General as to why such a non-disclosure requirement was imposed on the CNMI contractor when the project is to provide assistance that does not appear to involve state secrets or commercial secrets,” Manglona said. “It is clear that this non-disclosure requirement is contrary to transparency expectations for public good. Therefore, my office asks that the Office of the Attorney General remove this non-disclosure and remove all communication restrictions imposed on the CNMI contractor.”

Lastly, he added, “but of no less importance, is whether the CNMI has performed sufficient independent analysis as related to the requests made by IPI. We are not provided a copy of the documents submitted to your office, but we doubt that the CNMI has done anything except to rubber-stamp the request from IPI. We doubt that the CNMI has invested any resources or engaged any persons capable of doing such analysis. It was obvious from the Extension Report performed by the [Development Plan Advisory Committee] that the consultant has such skills and credentials to perform such analysis.”

Manglona said the AG [has to], “at a minimum, review the prior work which establishes the critical factors that the CNMI must consider, but  remain ignored, by the CNMI Lottery Commission.”

“I urge your Office to diligently perform a critical review of the requests submitted by the Lottery Commission. Already, the CNMI has adopted 8 amendments, of which some are legally inconsistent with the original Casino License Agreement. Amendment No. 9, as proposed and if adopted without significant analysis and change, would establish undisputable breach of fiduciary duties by members of the Lottery Commission, as well as your Office,” Manglona said.

November 2020 pssnewsletter

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