Dubious corruption claim | Inquirer Business
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Dubious corruption claim

/ 09:53 PM March 08, 2012

Once the best of friends and business partners in the gambling casino business, American billionaire Steve Wynn and Japanese tycoon Kazuo Okada are now the worst of enemies.

Wynn has accused Okada of engaging in illegal activities to obtain a gambling license in the casino resort being built by Philippine Amusement and Gaming Corp. at the Manila Bay area.

According to Wynn, Okada spent more than $110,000 – by way of luxury lodgings, extravagant dinners and shopping treats – to curry the favor of two Pagcor officials despite Wynn’s admonition not to do so.


These freebies supposedly violate the US Foreign Corrupt Practices Act and ethical standards of the Macau casino company where both of them own substantial shares of stocks.


In his complaint, Wynn described the Philippines as a “corrupt nation” and pooh-poohed the efforts of President Aquino to rid the country of graft and corruption.

Reacting to this scathing statement, the Philippine Chamber of Commerce and Industry denounced the “irresponsible and unwarranted dragging of the Philippine government in the private corporate squabble” between the two businessmen.


In military parlance, the Philippines has become collateral damage (or accidental or unintended casualty) in the clash between two warring gamblers.

With millions in dollars in gambling revenues at stake, which Wynn could lose if Okada gets his way, Wynn does not give a damn on who gets hurt in his efforts to put Okada down. Like a woman scorned, hell hath no equal to Wynn’s fury against his erstwhile high roller partner. Wynn’s use of the US Foreign Corrupt Practices Act (FCPA) to go after Okada is the usual modus operandi of American businessmen who lose out to their foreign counterpart in big-ticket projects in foreign countries.

By way of background, the FCPA prohibits certain classes of persons and companies doing business in the US from making cash and non-cash payments to foreign government officials to “secure any improper advantage in order to assist in obtaining or retaining business for or with, or directing business to any person.”


Enacted in 1977 during the administration of US President Jimmy Carter when several iconic American companies were found to have bribed foreign government officials to bag lucrative contracts in their countries, the law is aimed at restoring the integrity of the American business system.


It is not uncommon for American companies that are trounced by Chinese, Korean or Japanese firms in contracts auctioned off by foreign governments to claim that money exchanged hands in consideration for the award.

Some American businessmen have not yet outgrown their 19th century belief that US technology and skills are superior to any one else. So if foreign governments choose to do business with non-American companies, in their mind it’s because bribes were given to tilt the odds in the winner’s favor.

The losers cannot accept the fact that the world has changed many times over. No longer are companies from Asia and other developing countries pushovers in terms of technical, financial and managerial expertise.

They can already go toe-to-toe with the best that American companies can offer in a fair competition and emerge victorious with plenty of space to spare.

To show compliance with the FCPA, American businessmen often make holier-than-thou pronouncements about their manner of doing business or, at least on paper, make strong statements against engaging in unethical business practices.

But there is an ocean of a difference between what is said in public and what actually takes place in the highly competitive field of international business.


No babes in the woods in the Asian way of doing business, American businessmen who want to win contracts in the Philippines know the weak spots (or kiliti) of government officials or Filipino executives whose endorsement make a lot of difference in contract awards.

When in the US, whether at their expense or upon the invitation of American companies, most Filipino officials or businessmen find happiness watching NBA basketball games (if it’s the season), seeing Broadway shows, dining at Michelin-accredited restaurants (think Le Cirque) or sightseeing.

Enjoyment of any or all of these activities translates to bragging rights upon their return, complete with the ubiquitous photos to memorialize the occasion.

All they have to do is drop subtle hints about wanting to go to any of these places and (voila!) the necessary tickets or reservations will be booked and the visit made enjoyable. Or more specifically, something to be remembered when the bid documents are evaluated prior to the award of the coveted contract.

Although no cash actually changed hands, strictly speaking, such hospitable indulgence falls squarely within the coverage of the FCPA because they could induce their recipient to reciprocate their kindness in future business transactions.

Understandably, nothing would appear in the books of the American companies concerned about these generosities that may alert the authorities into looking deeper for possible violation of the FCPA.

The entertainment and its attendant costs will be handled by the companies’ law offices, investment bankers or public relations agencies.

The reimbursement of expenses will be taken care of in the “bill for services rendered” that will be later submitted to the client. Pre-arranged buzz words will subtly describe the particulars of entertainment activities. Very neat.

Just because a US law prohibits bribery does not mean that all American companies comply with it. The art of bribery has no territorial boundaries.

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TAGS: gaming and casinos, graft and corruption, Kazuo Okada, Laws, Philippines, Steve Wynn, US

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