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Propst and Sablan make it clear to casino commissioners: Drop the hammer on IPI

By Jacob Nakamura

The leaders of the CNMI House of Representatives Gaming Committee spoke before the Commonwealth Casino Commission Wednesday morning and minced no words. Chairman Ed Propst, and vice chairwoman Tina Sablan each took a turn expressing their expectation that the CCC hold Imperial Pacific International (CNMI) LLC responsible for an array of problems strewn across the CNMI.

From the treatment of and payments owed to contract workers to a call for a financial stability hearing that all but assures the demise of the Saipan casino, Propst and Sablan did what the voters largely expected them to do - they used their new power as the de facto leaders of the new Legislature to crack down hard on the casino, that has caused the CNMI more problems than good.

Here are the relevant transcript portions of their speeches before commissioners. You may also view their speeches below.


Transcript excerpts from Congressman Ed Propst's remarks:

They were given a document to sign by IPI, and mind you, these are people who don’t speak or read English,
Early morning when they were leaving, and remember these service workers don’t speak English - very limited - they were given a document by IPI that asks them to sign it that basically will forego all of their future claims from the casino, from IPI. Fortunately, it was null and void. Federal Judge Manglona had the wisdom to throw it out. But the fact that it was even attempted, that ‘I’ll give you $250 for your four days of travel back to the Philippines; but in order for us to give you this, you have to sign this document that you can no longer get any money from us or make any future claims.’ Who would do that? They’re talking about doing good, being good corporate citizens wanting to do good, but then they pull something like that?
Several of these workers sent me their documents, actual emails that we have records of that state from IPI’s HR department in an email, stating, ‘This is what you’re owed.’ One of the former employees who sent me the document, she was guaranteed the three-fourths guarantee under the code of federal regulations… that she was owed 300 some hours and for her PTO, it was 170 hours. So it was over 500 hours. And the date she was supposed to be paid was since last year. Since August of last year. That is several months ago. She’s been asking, ‘Can I get paid for this, what you promised me?’ But she’s one of many. So as we move forward and we want to make this casino industry better and everything, we have to take care of these workers who have been stranded until now. They are being told that they should get on a plane and leave. But let’s be honest, the same workers who left back less than a year ago have still not gotten paid.
If they take that ticket and go home, let’s be honest. Do we honestly think that IPI, based on its record, will pay these workers?


Transcript excerpts from Congresswoman Tina Sablan:

I would ask you, Commissioners, at this point, given everything you have seen and heard, why would you settle? And what would the CNMI get in return if the casino commission were to move forward in settlement with IPI? I suggest that even if the commission were to move forward with settlement in all five cases, that there should still be a financial stability period.
You are aware that IPI is facing receivership in the federal court related to the consent judgement with US Department of Labor. You are aware of the Secretary of Finance’s indication with his intent to move forward with the $9 million tax lien. You have audited financial statements for the past couple of years that indicated the doubts of auditors that IPI is able to continue with the going concern. You have raised concern with them about Finn and 93 pages of violations, and it’s still not clear to me anywhere in the record with nobody in compliance at IPI, whether IPI will be able to address any of these issues.
You know, from the records, that there is a board director that has certified to this body before that IPI is financially incapable of holding on to its license. Not to mention, the tens of millions of dollars in judgements that have been awarded, and the pending lawsuits that are in CNMI and federal court.
So to go back, who is actually leading IPI? We have seen a revolving door.
As we have seen in federal court this week, the chairwoman of the parent company, IPI Hong Kong, she’s been on island for the last, almost a year now. She testified under oath in a deposition that she’s never attended a board meeting. She’s never been involved in the workings and ins and outs of some of the most basic operations and decision making actions of IPI. She claims to have never met with CNMI government officials. She says she has no involvement with IPI Saipan, no dealings with IPI Holdings as chair. I would urge all of you to read that transcript. It’s shocking.
Here we are in the Legislature being asked to change all these laws. You are being asked to consider making changes to the license, giving more breaks to IPI and its obligations to the CNMI. And yet we have IPI Saipan saying ‘We have to rely on IPI Hong Kong to make the decisions,’ and here we have on record under oath IPI’s chair saying basically, ‘We have nothing to do with what’s happening here.’ She’s not claiming responsibility. She even says she has no money invested. So, you know, there are real questions of governance, and a failure of governance happening here. And so, if you are moving forward with evidentiary hearings, I hope you whatever settlement you consider takes seriously all the various failures - compliance, financial, governance - that we are dealing, that the CNMI is entangled with. How do we move forward? I think a financial stability hearing is necessary.
I also want to call your attention, commissioners, the Gaming Committee is having a meeting this week, and the particular bill that we mentioned that would remove some oversight over the casino is on the agenda this week. I hope that you will comment on that.


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