Philippines’ gambling regulator denies bribery charge

MANILA, Philippines — The head of the Philippine Amusement and Gaming Corp. (Pagcor) denied “in the strongest possible terms” Friday what he called “uninformed and reckless allegations” recently made against him by a US casino mogul.

The statement of Pagcor chairman and CEO Cristino Naguiat Jr. came after US casino operator Wynn Resorts sued its former partner Kazuo Okada in a Las Vegas court, accusing the latter of bribing Philippine gaming officials with free accommodations at a $6,000-a-night Macau hotel and a pricey Chanel bag for Naguiat’s wife.

In Wynn’s court filing, company officials also presented the results of a third-party probe the company t commissioned in January 2011 about the Philippine gaming industry.

In the report prepared by former Federal Bureau of Investigation director Louis Freeh, the Philippine gaming industry was described to have “deeply ingrained” official corruption.

The same report expressed “doubts that [then] newly elected President Benigno Aquino III’s stated plans for reform would eliminate corruption from the gaming industry.”

The government-owned Pagcor, apart from itself being a casino operator, regulates all gaming and gambling operations in the Philippines.

The findings came after a heated boardroom battle erupted between Wynn founder Steve Wynn and his former partner, pachinko tycoon Kazuo Okada, with the former exposing the latter’s alleged violations of the US Foreign Corrupt Practices Act, a  law which expressly prohibits bribery by US firms operating anywhere in the world.

The Freeh report also noted that the Philippines’ legal and regulatory frameworks “are not closely aligned with American compliance and transparency standards.”

These differences were underlined by Wynn’s insistence in its complaint in the Las Vegas court that Okada — then the company’s vice chairman — had bribed Naguiat and his predecessor, Ephraim Genuino, in order to further the Japanese businessman’s interests in Pagcor’s $4-billion Entertainment City project.

Naguiat and Malacañang Palace maintain, however, that the complimentary stay he and his family enjoyed in Wynn Macau’s 7,000-square foot villa was standard practice in the gaming and hospitality industries.

In addition, the Freeh report also raised questions about the acquisition of land on the reclaimed area at the edge of Manila Bay for the casino development of Okada’s Tiger Entertainment (formerly known as Aruze Corp.), suggesting that the Japanese businessman may have violated Philippine constitutional limits on foreign ownership of land — capped at 60 percent — through layers of proxies.

In his statement on Friday, Naguiat described the entire controversy as a “business dispute into which I have been dragged.”

“The recent allegations against me are outrageous, politically motivated and untrue,” he said.

“The facts are that I and a group of Pagcor officials, with approval of Pagcor’s board, visited Macau in September 2010 to meet with key gaming industry players and examine their operations,” he said. “The then vice chairman of Wynn Resorts, Mr. Okada, invited the group to meet with executives of Wynn Macau and stay at their resort in VIP quarters, compliments of Wynn Macau.”

He said he learned of the supposed $20,000 cash from Wynn Macau credited to his room only from from media reports. Later inquiries by Pagcor revealed that the advance was drawn by Mr. Masato Araki, a business associate of Mr. Okada’s at the time.

“I found out about the reported $5,000 credit allocation from the Freeh report,” Naguiat added. “The Pagcor delegation was never aware of any such allotment, nor was any offer or request made during the trip.”

“The much commented upon Chanel bag was left in my room as a gift and on seeing it, I had it immediately returned,” he added, although the Freeh report pointed out that Okada’s assistant, upon returning the bag, said that this was because Naguiat’s wife did not like the bag so he would give it to his own wife instead.

“The reported $1,673 dinner that was paid for by Wynn Macau included not just the Pagcor delegation but a number of business associates of Okada who were meeting with Pagcor at the time,” he added. “I know nothing about the reported $110,000 in payments supposedly made to Philippine regulators since 2008 and certainly did not receive any such payments.”