Inside Asian Gaming

December 2015 inside asian gaming 35 Blast from the Past who signed the FCPA into law—more than under the 16 years of the Bush and Clinton administrations combined. In the casino industry one hears about the Foreign Corrupt Practices Act mostly in connection with a tangled history of relations between Las Vegas Sands and the powers that be in Beijing and Macau and a cast of assorted middlemen peddling influence in the shadowy terrain in between, among them, so it’s alleged, a prominent Macau lawyer who is a member of the territory’s Legislative Assembly. Most of this was dragged into the light when Steve Jacobs, who was fired in 2010 as head of the company’s China operations, sued for wrongful termination. In March 2011, LVS disclosed that it had been subpoenaed by the Justice Department and the Securities and Exchange Commission “relating to its compliance with the Foreign Corrupt Practices Act.” It is not uncommon for FCPA investigations to begin this way, with somebody talking out of school. In his March 2012 counterclaim challenging the forced redemption of his Wynn Resorts stock, Mr Okada says he was ousted from the corporation for challenging the authority of Chairman and CEOSteveWynn, who he claims runsWynn Resorts as his “personal fiefdom”. This extended to questions he says he’d raised about the propriety of a sizable donation the company pledged in May 2011 to a University of Macau foundation—$135 million in 11 annual installments, the final payment to be made the year Wynn’s Macau casino concession is due to expire. Likewise, much of what former FBI Director Louis Freeh would report from the Philippines in support of Wynn’s breach-of-trust against Mr Okada appears to derive from information supplied by an attorney with an axe to grind and relationships with people in high places, including former executives with the Philippines Amusement and Gaming Corporation (PAGCOR), the government agency that licenses and regulates the industry. The report, compiled in late 2011 and early 2012, touched at some length on links between local affiliates of Mr Okada and one Rudolfo “Boysee” Soriano, who had been a comped guest of Mr Okada’s at Wynn Macau and Wynn Las Vegas on at least four occasions and is described as a PAGCOR consultant and confidante of Efraim Genuino, the agency’s former chairman. Soriano’s name acquired sudden notoriety last month after Reuters reported that Mr Okada’s Universal Entertainment Corp. was under investigation by the Nevada Gaming Control Board and the Philippines Department of Justice in connection with a 2010 transfer of $40 million from the United States to a company in Hong Kong, $30 million of which found its way to companies controlled by Mr Soriano. The money was moved through Aruze USA, the Nevada- registered entity that held Mr Okada’s Wynn Resorts shares. Aruze USA is wholly owned by Tokyo-based, JASDAQ-listed Universal, which is licensed in Nevada as a gaming machine manufacturer and is 67.9% controlled by an Okada family entity. Mr Okada is the chairman of Universal and president, secretary and treasurer of Aruze USA. Reuters reported that at least two former Universal employees were talking to the FBI in connection with the investigations. Las Vegas Sands, meanwhile, has marshaled the services of legal heavyweights Mark Mendelsohn, former head of the Justice Department’s FCPA unit, and Richard Grime, an FCPA expert in the White Collar Defense and Corporate Investigations Practice of D.C.- based O’Melveny and Myers; while Sheldon Adelson, the company’s famously combative chairman, who has said he fears “vilification” as an outspoken foe of the Obama administration, spent 2012 writing enormous checks to Republican candidates, political action committees and dark money non-profits to try to keep Mr Obama from returning to the White House. Had he succeeded it’s likely his FCPA worries would be behind him. As it stands, $150 million or so in direct and indirect campaign contributions later, his company is also the target of a federal probe into alleged money-laundering at its Las Vegas casinos. Mr Adelson was planning to travel to Washington this month, according to a Huffington Post report, to meet with Republican lawmakers. The agenda was to include the Foreign Corrupt Practices Act, the Post said, citing party insiders. Barrack Obama —stepping up FCPA enforcement Sheldon Adelson, who has said he fears “vilification” as a foe of the Obama administration, spent 2012 writing enormous checks to Republican candidates, political action committees and dark money non-profits to try to keep Mr Obama from returning to the White House.