EDITORIAL - Industry practice

Accepting expensive freebies, the nation has been told by Malacañang, is “industry practice” in the gaming business. But if it had been revealed during the Arroyo administration that the chairman of the Philippine Amusement and Gaming Corp. and his family had been lavished with $6,000-a-night accommodations and limousine service by a casino operator in Macau, plus $5,000 in “cash advance” for each member of the party, the current proponents of the straight path or “daang matuwid” would have issued a deafening condemnation and might have initiated a congressional investigation.

PAGCOR, after all, is not just a gaming operator but also a regulator of those running or wanting to run casinos in this country. This is why the freebies provided by a private venture headed by Kazuo Okada, a director of US gaming giant Wynn Resorts, to PAGCOR chairman Cristino Naguiat Jr., his family and several other senior PAGCOR officials should warrant more attention from Malacañang than the comment that these were standard industry practice, and Filipino taxpayers actually saved money.

Okada, a director of Wynn Resorts who formed his own Aruze USA, Inc. and Universal Entertainment Corp., is the subject of a civil suit by Wynn in the United States for pursuing a gaming contract in the Philippines and allegedly misrepresenting the company despite opposition from Wynn management.

The Japanese gaming executive is also accused of improprieties in winning that deal in the Philippines, in violation – according to the civil suit – of the US Foreign Corrupt Practices Act and Wynn Resorts’ corporate Code of Ethics. Wynn retained a law firm headed by Louis Freeh, former director of the Federal Bureau of Investigation. Among other things, the investigation showed 36 separate instances, from May 2008 to June 2011, wherein Okada and his associates or affiliates allegedly made payments exceeding $110,000 that “directly benefited” senior PAGCOR officials including Naguiat and his predecessor, Efraim Genuino.

It was bad enough that Wynn Resorts refused to go along with Okada’s plan to go into Philippine gaming because the company believed, based on a commissioned independent probe and risk assessment, that official corruption in the Philippine gaming industry is “deeply ingrained.”

The company also doubted that President Aquino’s avowed reform agenda would eliminate corruption from the Philippine gaming industry, with the country’s legal and regulatory framework not closely aligned with US compliance and transparency standards. So far the reaction from Malacañang on the actions of Naguiat, an Ateneo classmate of the President, can only reinforce such perceptions.