IAG December 2015

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 CEO Steve Wynn, who he claims runs Wynn
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
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.
Barrack Obama—stepping up FCPA enforcement
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 Nevadaregistered
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.
December 2015 inside asian gaming 35