UMDF: Wynn’s US$25-M Donation In Good Hands

by Joseph G. Lariosa

CHICAGO (jGLi) – The MOP200-Million (Patacas), roughly US$25-Million, that is part of the HK$1-Billion (US$135-Million) donated by Stephen A. Wynn, chair of the Wynn Resorts of Las Vegas, Nevada last year to the University of Macao Development Foundation (UMDF) is out of the hands of the UMDF’s Chancellor Fernando Chui Sai On, the Chief Executive of Macao.

According to UMDF website FAQ meant to disabuse the impression of Mr. Kazuo Okada, the estranged vice chair of Wynn Resorts, who insinuated that the donation Wynn and the joint board of Wynn Resorts and Wynn Macao gave to UMDF was aimed as “paying for benefits” to coincide with the payment of US$135-Million Wynn’s donation to UMDF spread over ten years at US$10-Million a year to protect Wynn’s gaming concession that expires in June 2022 and Wynn Resorts’ effort to develop rights to a third casino in Cotai, Macao.

Mr. Okada, who objected to the donation due to its “lack of deliberation” during the joint board meeting, feels that because the UMDF Chancellor (Fernando Chui Sai On) has “ultimate oversight over gaming matters,” Mr. Wynn and the boards decided to make the initial donation of US$25-Million last year, which could be Wynn Resorts’ violation of the United States Foreign Corrupt and Practices Act (FCPA) that penalizes a U.S. company for bribing a foreign government official.

Mr. Okada, the Japanese casino billionaire, who was thrust into a bitter public corporate divorce with Mr. Wynn, enclosed his objection to the donation in a 75-page counterclaim and answer his parent Tokyo, Japan-based Universal Entertainment Corporation and Universal’s subsidiary Las Vegas-based Aruze USA, Inc. he had filed before the United States District Court in Las Vegas.

“REMOVED” OR CHANGED THE COURT VENUE

He earlier “removed” or changed the venue of the case from the Eight Judicial District of the State of Nevada in Clark County in Las Vegas to the U.S. District Court in Las Vegas, saying “a state-created cause of action can be deemed to arise under the federal law, where federal law completely preempts state law, where the claim is necessarily federal in character, or where the right to relief depends on the resolution of a substantial, disputed federal question.”

Last Feb. 19, Mr. Wynn filed a case before the Eight Judicial District against Okada, Aruze USA and Universal for breach of fiduciary duty by engaging “in unlawful activities with foreign (Philippine) government officials” at Mr. Wynn’s properties in Macao in violation of FCPA.

The UMDF website FAQ said, “Macao SAR (Special Administrative Region) is not involved in the operation of UMDP. Over the past three years since its inception, UMDF has always received donations in a transparent and open manner, regardless of the size of the donation. The Macao SAR government is very strict in terms of legal compliance in the operation of private foundations registered as non-profit organizations.

“UMDF is a private foundation. The laws of Macao SAR do not require private foundations to disclose their financial reports, but in practice UMDF submits its annual financial reports to the donors for purpose of accountability.

“UMDF ENGAGES INTERNATIONAL REPUTABLE AUDIT FIRM”

“Following the practice adopted by local and overseas non-profit charitable organizations, and as required by the UMDF Charter, UMDF engages an international reputable audit firm to conduct audit annually and submits the relevant report to the Fiscal Committee, Executive Committee and Trustees Committee for deliberation.

“So far UMDF has received donations of over MOP500-million (US$62.5-Million), not including committed or intended donations payable by installments.
“Funds allocated to UM by UMDF will be used to support the University’s academic and research projects, establish scholarships, subsidize overseas exchange programme for local students, etc.”

Mr. Wynn also sought “declaratory relief” before the court to sustain Wynn-dominated board’s declaration that Mr. Okada, Aruze USA and Universal was not “suitable” as a Wynn Resorts stockholder for violating of FCPA. Only a regulatory gaming agency, not a board, can declare someone “suitable,” Mr. Okada contends.

Wynn used the report of former Director of U.S. Federal Bureau of Investigation Louis J. Freeh, retained by Wynn, that Okada bribed Filipino gaming officials by as much as  US$110,636 so he can be under the good graces of the Philippine government while he is building the 30-hecare (74-acre) U.S.$2.3-billion Manila Bay casino resort in violation of FCPA.

Mr. Okada denied the Freeh report

Freeh reported that last September, Okada provided officials of the Philippine Amusement and Gaming Corporation (PAGCOR), headed by Cristino L. Naguiat, Jr. US$50,000 shopping money during a junket hospitality trip and expensive hotel accommodation to sample Wynn Macao’s hospitality. Naguiat had denied receiving any shopping money. (lariosa_jos@sbcglobal.net)

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