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Blood money: A Kandit investigative series

Updated: Oct 18, 2019

The gambling mafia of Guam: They bought out the Catholic Church and most elected officials; and they take nearly all of the drug money and paychecks of drug users

By Jacob Nakamura, Johnnie Rosario, Eric Rosario, and Troy Torres

(Tumon, Guam) Three times Guam's voters overwhelmingly said no to gambling on Guam, yet poker-style machines have been tearing families apart nonstop since 2013. Kandit begins its inaugural coverage into the dons of this gambling mafia on Guam, whom they're connected to, whom they've bribed among elected officials to keep their illegal business open, and how much they've hurt people suffering from addiction.

It was in June 2008, when the Department of Revenue and Taxation revoked the licenses of about 1,400 amusement gaming devices that resemble Vegas-style poker machines. The concept is the same: certain combinations or jackpots earned by chance accrue points that are redeemed out for cash. Most residents, who enter the gamerooms, where these machines are located, leave the gamerooms with their entire paychecks or the proceeds or their drug sales paid into those machines.

As a matter of fact, most people who enter those gamerooms are drug users, addicted more to the machines than even the drugs that propelled them there. While government-sponsored and -funded programs exist for drug addiction, there is no funded program for gambling addiction, and no research coming out of the University of Guam to help the government understand how gamerooms and drugs are inseparable co-parents to the majority of crimes afflicting the island.

So why is the government acting like the problem doesn't exist? Why have the gamerooms been allowed to flourish?

Gamerooms are the viruses of this island, killing families and systematically sending drug addicts into lives of violent crime. And politicians are the whores who spread the disease.

Shortly after the so-called Liberty machines were shut down by DRT, the department promulgated rules that allowed for the operation of machines that were licensed in August 2001. That rule had the effect of allowing 1,200 of the 1,400 machines to operate. Those 1,200 machines were owned by one company: Guam Music, Inc. At the time the controversy started, Pedro "Dongo" Pangelinan ran the company, co-owned by Lauron Bromley. Mr. Pangelinan has since died.

Shortly after the Liberty machines were reinstituted, Judge pro tempore Robert Klitzkie ruled that that operation of the machines violated Guam's anti-gambling laws. Shortly after that, Superior Court Presiding Judge Alberto Lamorena III ruled that the machines could be operated. The operation of the machines, however, was held in abeyance as two lawsuits made their way through the court system.

From left: (Unidentified woman), Johnny "Cool" Torres, Senator Amanda Shelton, Gil Shinohara, Connie Jo Brennan Shinohara

The attorney for Guam Music, Inc. has been former senator F. Randall Cunliffe, who also is the law partner for Guam's first gentleman, Jeff Cook. Along the way, Mr. Pangelinan and Ms. Bromley brought on affiliates: Johnny "Cool" Torres and convicted felon Gil Shinohara, former chief of staff to former Gov. Carl Gutierrez. Mr. Shinohara's wife, Connie Jo Brennan Shinohara, is the deputy manager of the Port Authority of Guam, appointed by Mr. Cook's wife, Guam Gov. Lou Leon Guerrero.

We'll come back to that point further down.

The 2010 gubernatorial election, which would decide former Gov. Felix Camacho's successor (Gov. Camacho was the leader, who put an end to the Liberty machines and had his director of revenue and taxation challenge the operation of the machines in court), pitted Mr. Gutierrez against then-Senator Eddie Calvo.

Former Gov. Eddie Calvo

Mr. Pangelinan and Mr. Shinohara supported Mr. Gutierrez. Ms. Bromley helped to fund the Calvo campaign. Following the election, Calvo's chief of staff, Franklin Arriola, began meeting with Mr. Pangelinan and Mr. Shinohara; and in return for their support and funding of the Calvo re-election campaign in 2014, Mr. Arriola set into motion the political wheels that would validate the Liberty machines once and for all.

Former Sen. Chris Duenas

In January of 2013, former Senator Chris Duenas introduced Bill No. 19-32 in the 32nd Guam Legislature. The original version of the bill sought to discretely ratify the DRT's rules that seemed to validate the Liberty machines. The attorney general issued an opinion, stating that the anti-gambling laws clearly trump DRT's rules, and that a law stating that DRT's rules are ratified by the Legislature still places those rules in contravention of the laws of Guam.

Despite major public backlash, Mr. Duenas pushed on. He ended up substituting his original bill with one that created a fund for the Guam Memorial Hospital and a tax on gaming machines, to include these Liberty machines, cockfighting, and bingo machines. A portion of the proceeds from that tax would go into that fund, purportedly to provide millions of dollars to the improvement of GMH. The bill was passed unanimously by the Guam Legislature - NOT ONE SENATOR VOTED AGAINST IT - and was signed into law by Mr. Calvo.

Everyone who told the voters that they were against gambling ended up approving the worst kind of gambling devices and the monopoly that operated them.

Millions never made it into that hospital fund. But hundreds of millions have made it into those Liberty machines.