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A Chinese Casino company has set out to take over the U.S. island of Saipan (bloomberg.com)
165 points by bryanrasmussen on Feb 21, 2018 | hide | past | favorite | 51 comments



> Torres’s office said that all changes to laws or policies were undertaken “with the intent of achieving economic growth within the boundaries of the law.”

That's a great line. Of course they are changing the law to remain within the boundaries of the law.


States and territories still have to follow federal law and their own constitution, so it's valid to talk about modifying [state] laws within the boundaries of [federal] law.


Ya, but the FBI is really dropping the ball here.


and lobbying is legal, so it checks out.


Glad to see Ed Propst in legislature with a bullshit flag raised over this madness. Saipan's post-Fitial government apparently still reeks of nepotism and corruption, and it's going to take a proverbial shit-ton of Ed and community leaders alike who exemplify genuine selflessness to get that busted rock where it ethically needs to be.

True story: Once upon a time, Ed was a public high school senior English teacher who acknowledged an academically troubled yet "out of place" student by allowing independent calculus study while others were lectured...of course, iff all other assignments were satisfactorily completed ahead of time. Needless to say, the gesture left a meaningful impression, and--to this day--remains the sole high school teacher whose name wasn't forgotten.


I lived in Saipan for 3 years (2006-2009). Literally nothing goes on there - an extremely boring, run down place. No way this casino is generating any kind of real earnings. Locals don't have enough money to gamble, and total visitors to all of NMI(which also includes other islands like Tinian and Rota) per year is 500k - twice that many people visit Las Vegas every week.


The money might be actually be earned elsewhere, but declared to be earned here to avoid Chinese scrutiny / reporting / tax laws.


It is obvious from the article that this is merely a money laundering operation. The feds don't care because it is Chinese money being laundered into the USA and out. The Chinese don't care because it is the people in power (or close to people in power) whose money is usually being laundered.


This is far more likely.

Most people don't even know Saipan exists, much less what goes on there. You'll draw less scrutiny in a middle of nowhere island vs Las Vegas.


Yeah, isn't Saipan in the middle of nowhere? And its not a famous tourist destination like Tahiti.


Saipan used to be very popular with Japanese tourists, because it's only about a 4-hour flight from Tokyo. Then the Japanese economic bubble burst and that dried up.

FWIW, I visited once in 1998, when Japanese tourism was trailing off but hadn't completely collapsed yet, so flights & hotels were cheap. It was a bizarre but largely uninspiring combo of the worst of strip-mall America (McDonaldses, K-Marts) with mass tourism (huge, slowly decaying hotels and beachside hucksters). The snorkeling was OK and the beaches were pretty, but dotted with rusting WW2 tanks...


My guess is that this is not truly about "corruption" and that the US government is mostly happy about this arrangement.

Consider these possible upsides from the US perspective:

* The US can use the whole operation as a bargaining chip with China's governing party, which probably finds the operation irritating, given their policy of currency controls.

* US intelligence gatherers may be able to glean some info about who the wealthy are in China and what they want to do with their money.

* US intelligence gatherers may be able to strike up useful relationships with certain wealthy/elite/influential people in China.

* The operation itself may well be helping to pay the US costs for occupying such a remote island.


Also the trade deficit issue. If China's ultra-rich are exporting billions of dollars of capital a year out of China, then it helps balance the trade deficit and means more capital in the rest of the world and probably mostly the USA.


It doesn't balance the trade deficit at all. It does improve the current account balance but that's not necessarily a good thing for US exports.


It then goes into housing bubbles...which may or may not be in your interest depending if you own a home or not.


Junklets as a means to convert a large amount of Yuan to USD just begs the question: How do Junklets convert the large amount of Yuan they pull to the USD they give as credit to their big spenders?


The credit is likely extended in the form of chips, and then the chips are cashed in at the casino for USD.


The question is, where does the junket - or the casino, since they work together - get the USD when its only income from this activity is the debts it collects in CNY.

That's a side of the story that isn't explained here. However it's not a mystery who would want to be on the other side of that transaction. After all, an enormous part of the Chinese economy is international businesses who sell Chinese goods for dollars but need to pay their Chinese suppliers or workers in renmimbi.


Banks, there's nothing unusual about a casino withdrawing large amounts of USD.


Exactly this. It seems likely this is a giant money laundering and exfiltration scheme that both the US and China would nominally like to stop. That they don't is problematic.


It's not that easy. Every step of it has a legitimate use and it's only when combined that problems are caused. Then, I don't see what reason the US would have to want it to stop, more USD in Chinese hands isn't a bad thing. China wouldn't like it, but as it's taking place in Macau or now Saipan there are jurisdictional issues.


Wonder if the headline was meant to stoke the fires shortly after the Maldives find themselves with the Chinese Navy in their waters and I assume India freaking out. The timing is uncanny.


Title is a little-clickbaity. "Conquering" seems a bit much and the part of America, in this case, is this remote island.


[flagged]


It's of significant strategic importance to DoD, and contributes more military recruits per capita than any other state/territory in the country by nearly a factor of two[1].

[1] http://www.statemaster.com/graph/mil_tot_mil_rec_arm_nav_air...

Guam MEPS services the entire Mariana Islands, including Saipan.


> if the US govt doesn't care about Puerto Rico, why are they going to care about this island?

It mostly doesn't, until things get so out of control that they are persistently in the news, as happened with slavery on the island in the late 90s through mid 00s, resulting in pressure which shutdown the sweatshops.


Because Puerto Rico stands guard against Cuba and Venezuela. Saipan stands guard against China, Russia, and North Korea.


Not in literal terms: that job falls to nearby Guam and Okinawa, which host huge US military bases.


You should read about how the US acquired its Pacific teritories. Interesting stuff. I love all those colonialist skeletons in the closet stories. This is nothing new, sadly.


[flagged]


Well, what would be the use of accumulating power otherwise?


What is amazing is that people think regulations can fix anything, whether poverty, economic situations, military conflicts, or anything, when time and time again the people at the top are shown to be utterly corrupt and bought.

It almost makes you want to be a republican and just argue for getting the state -every state- out of everything. Sure, we'd still be getting screwed, but perhaps a bit less.


This is incredibly cynical and so off the mark in absurd ways that I can’t even start listing them all, and I’m saying this as a very cynical person.

Have you heard of things like paid holidays, free public education for all children, the abolition of slavery, ... ?

These things just didn’t happen magically, they were the result of regulations and legislations pushed by people, in many cases “at the top”.


Last I checked the USA didn't have mandated paid holidays, unlike literally every other country in the world. Apparently it's a "perk".


> Last I checked the USA didn't have mandated paid holidays, unlike literally every other country in the world.

The UK, Netherlands, Japan, South Korea, and ~57 other countries do not have mandated paid holidays. Norway provides for two days. It's certainly common, particularly in the developed world; claiming it's literally every other country is blatantly false.


I guess maybe I'm confusing what I'd call holidays with what people in other countries would call leave or vacation days. What I mean meant was mandated paid days off work, whether a holiday/public holiday/bank holiday or annual leave/vacation.

Workers in the UK are entitled to 28 paid days off work, the other countries you've listed have similar entitlements.

It turns out that I'm wrong either way, the USA is joined by Kiribati, the Marshall Islands, Micronesia, Nauru, Palau, and Tonga. So to be correct, literally every country apart from a handful of Pacific Island nations making up less than 1 million people and the USA entitle their workers to as least some paid leave from work.


My comment applies to many societies beyond the US, but yes I will certainly agree that the US is backwards in many, many ways.


In all those societies beyond the US, the same is true. In Belgium, for instance, union protection was initiated after the government protected management of a firm in Ghent, which systematically raped women working for them. This was known, and then a supervisor managed to not just rape one of the new hires, who chose to attempt to unionize the firm, but he also killed her. Note that she wasn't just raped once, and was not in fact killed on the first rape. The government refused to persecute him.

That caused protests against this practice, demanding justice. The government had the police fire into those protests, which of course was highly illegal, even at the time. They managed to kill the brother of the woman that was raped, which initiated the action that got Belgium one of it's major worker protections.

What action caused the government to change it's mind ? A mob kidnapped the entire management of the firm, tortured and hanged them, then marched on city hall, demanding the head of the entire city commission. The police commissioner, it is said, marched in and told them that, given that 2 of his officers had joined the people calling for their heads, they probably had about 48 hours before they too would be hanged.

Now you analyze the situation for yourself, and decide what you think happened. Did government "grant" those worker protections ? I tend to strongly disagree. It also illustrates the folly of trusting anyone but a lawyer you hire with making sure you actually get what you have the right to.


> Have you heard of things like paid holidays, free public education for all children, the abolition of slavery, ... ?

Yes, in all cases, the government was on the wrong side of those fights. In 2 cases (abolition of slavery and paid holidays) the government killed people extra judicially (of course) to try to prevent them from coming into existence (extra judicially means the government ordered either the police or the army to shoot them, then disclaimed responsibility, even if in quite a few cases it was known exactly who gave the -obviously illegal, even then- orders, as well as who executed them. Hell, in one case a governor was convicted for failing to pay out a bonus he had promised a police officer for shooting at protestors). In all cases, the government imprisoned many people to try and prevent them from happening. THAT is the government.

Those law changes, those were enacted by congress, usually after a massive electoral defeat. In other words, what happened in all cases is that people decided that they

But even those facts fall incredibly short of describing just how evil government is.

Let me describe a situation that occurred recently near me.

There's a lot of regulations about child abuse. Like anywhere else I guess, but there really is a lot. There is a government organization that is supposed to take in reports of child abuse and investigate what measures need to be taken to protect the child.

Now you might wonder, what could possibly go wrong here ? Well, their mandate is to determine what measures can be taken to protect the child. They cannot (and will not) propose anything else. In other words, no matter what, they will propose using "special youth services" to protect the child.

So what happened is this. A phys ed teacher in a school was found to ... well we all know what he did. It wasn't outright rape, it was less than that, but not much. So the parents that initially found this reported it to the school board, that, after 6 months and multiple reports filed a complaint against the teacher. They are now without a phys ed teacher, as he is suspended, but they cannot withhold pay or benefits. The parents made the horrible mistake to also report child abuse to the government, and this organization was set on it. This was done at the beginning of those 6 months, so the school board had done nothing at that point and the parents were receiving zero feedback about their complaint.

Now this organization within the government simply did what it's mandate said it should do. They proposed "placing" the child (ie. taking it away from the parents and placing it in foster care). After all, that's all they could propose. They did not report this to the parents, and then the parents proceeded to make the biggest mistake of their lives. You see, 2 months in, they hadn't had any feedback. The teacher was still there, and they couldn't even legally keep their kids out of phys ed without a doctor's note. So what was that huge mistake ? They reported to the government, and asked what was being done. Nothing was being done against the teacher, but the government employee helpfully told them that their request for help with child abuse could be marked as "urgent". Needless to say, the government employee wasn't a lawyer, and completely failed to inform the parents that this was a legal term, that would initiate a separate procedure. Nor did said employee inform the parents about the mandate of the organization she was working for. If either was done, the parents would have immediately stopped all proceedings and gone an entirely different path.

Why ? Well you see the government started the procedure for urgently protecting the children involved. 2 days later, without prior notice to the parents, a child services car and 2 police officers turned up at the school and took the children away. You see, they were urgently -as requested by the parents- removing the minors from their environment, to protect them.

Soon the parents would find out that the procedure to get the children back takes at least 6 months, and involves defending themselves (yes, really) to a youth judge. In those 6 months, in the urgent procedure, parents do not get visitation rights (not that those could have been feasibly provided).

Now you need to understand that when it comes to placements, there are WAY too few foster families to place children. Likewise, to say the orphanages are overloaded is understating matters to the extreme. There is one spot available per 3 children or so. So what happens ? Well, they find places anywhere in the justice system, in other words, free spots, even temporary free spots, in prisons and orphanages. Where did they find those places for these 2 children ? One they found in an utterly overloaded orphanage that at one point separated boys and girls, the other they placed in a prison. They did not want to place both of them in prison, plus it's standard practice to split up siblings (yes, really), so the girl ended up in an orphanage and the boy (14 years of age) ended up in prison, with a "roommate" of 22 years of age, and no supervision. The parents were not informed of their children's whereabouts, as is standard in the urgent procedure.

When the procedure completed, just shy of 2 years after the children were effectively kidnapped from their parents because A GOVERNMENT EMPLOYEE sexually assaulted them, the girl, barely 12, returned pregnant and the boy, addicted to cocaine.

So let me state this again. Because parents reported to the government that a government employee sexually assaulted one of their children, the children were kidnapped. After kidnapping, without so much as informing the parents, the girl was raped and the boy (claims) he was forced to take cocaine. What the teacher did to the girl seems far preferable in comparison, as horrid as that sounds.

Needless to say, the teacher is suspended. Which means, in case anyone might feel this matters, that he is not expected to turn up at work, but enjoys full pay and benefits until he is either convicted or cleared. The school is not allowed to tell anyone the reason for the suspension, and they have zero information other than "can be up to 7 years" about how long this situation is likely to persist.

Because it is not known who raped the girl, there is no legal complaint possible (no worries, an investigation "is in progress", but since there is nowhere to put the kids, they can't actually be removed from that orphanage, and of course there is no money for something basic like 24h supervision, and of course, it could simply be the case that the supervision is who raped the girl). For the boy, yes they know who did it, but what's the point in going after that guy ?

Of course child services did exactly what their mandate said, and therefore is being sued for this, but this is unlikely to yield any results.

THAT is government at work. This is what government will do when you ask them to protect children.

And that is one reason you should NEVER EVER FOR ANY REASON cooperate with any government department for anything. Especially nothing you feel strongly about. There are many others.

I think even you will agree that the abuse that started the whole situation was far preferable to the government's help. FAR preferable.

Regulation does not work. And having the government help you with regulations can result in incredible disasters.

And, by the way, remember this the next time you read in the newspaper that a school "hid" sexual abuse, fired the person involved, and does not initiate any action against them (which would expose them to a wrongful termination lawsuit that, yes, the government would help the teacher with).


I'm not sure what the point of this article is? Am I supposed to be enraged that there exists a job-site that is cutting every corner, a casino is being used for money laundering by the Chinese elite and politicians are probably making money in unethical ways as a result?

>several businesses offer Asian tourists access to American eccentricities, like assault rifles. “Experience the thrill of firing a real gun,” reads an advertisement for a local shooting range. “In Saipan, it’s legal and is guaranteed by the United States Constitutions 3rd Amendment.”

Is the typo in the sign or from the author? I hope it's the sign but stuff like this[1] doesn't come from nowhere

[1] https://www.nationalreview.com/blog/corner/journalists-guide...


It’s an interesting piece of real journalism, the kind that is increasingly rare. So many shady things are going on all at once, it is easy to be confused about what to be mad about, but that doesn’t make the story less interesting.

As for the 3rd amendment, probably a typo from the source that was reported straight through for comedic effect.


A similar story is playing out in Vancouver and reported on in the newspapers fairly regularly, however law enforcement seem strangely reluctant to investigate, and the Canada Revenue Agency claims they don't have sufficient capability to perform audits on any of the people involved. As a result, no charges have been laid, therefore there is no "proof" ("anecdotes aren't data"), so it seems to generally be considered fake news by most people.

What's that ancient Chinese saying? May you live in interesting times?


> Am I supposed to be enraged that there exists a job-site that is cutting every corner, a casino is being used for money laundering by the Chinese elite and politicians are probably making money in unethical ways as a result?

Um... yes? Do you think killing workers, money laundering and corruption are OK?


This is America, dangit.

The Northern Marianas need another privately-operated, for-profit prison built ASAP. We gotta throw those corrupt casino folks in it and replace them with slightly less corrupt folks from the civic-industrial complex. Those kickbacks and hush money payments need to be going to judges and prosecutors instead of casino regulators.~

It is not okay, but the thing about corruption is that it doesn't care what decent people think of it, until they start waving torches and pitchforks around.


> Do you think ... money laundering ... [is] OK?

Your other two items are clearly not okay, but doing what you want with money you earned is perfectly fine.

I have yet to hear a legitimate argument for why "money laundering" is wrong. Laws already exist to criminalize the illegal acts committed to acquire money - what, precisely, is the rationale for criminalizing the voluntary obfuscation of money, however earned?


> I have yet to hear a legitimate argument for why "money laundering" is wrong.

Money laundering is wrong for the same reason that accessory after the fact, obstruction of justice, spoliation of evidence, misprision of felony, and related offenses relating to after-the-fact concealment of crime are wrong.


China restricts money flowing out so laundering that cash may not have been tied to an actual crime.


It usually is gray money though, earned by skimming huge capital works projects, bribes, or whatever. For non-party-nobles who earn money via our jobs, the $50k exchange limit is probably enough for anything you would need to do.

The whole point to get the money out of china is as insurance if Xi decides to crack down on that official for corruption (they are mostly all guilty of it, so all they have to do is fall out of favor), then all they have to do is get out of the country and lead the good life.


Is facilitating committing a crime somewhere else better?


That's like saying, "I have yet to hear a legitimate argument for why burying a body is wrong." Well, yes, putting a dead body in the ground is not by itself wrong. But step back a tiny bit and think about why that might raise some flags.


Seriously? Money that is gained criminally is not in any way "earned."


It has nothing to do with legally earned money, please don't be disingenuous.

It's the same concept as stealing a car and swapping VIN plates to conceal the theft. If the money was obtained legally, there is no reason to launder it. Laundering money is literally taking stolen currency and converting it into a form that is not traceable back to the theft, in order to hide the theft from the authorities.


The business doing the laundering is enabling the crime by providing a way to make the money useful




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