Lawsuit Seeks to Shut Down Carnival Casino

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A local businessman filed the lawsuit asking that the court compel the Mayor’s Council to put the casino out to bid instead of operating it “in-house.”

Guam – The Liberation Carnival casino could be shut down because of a pending lawsuit filed in Superior Court by a local businessman who believes the Mayor’s Council violated the law when it decided to cancel a bid for its casino and instead operate it “in-house.”

Children wait all year long for the Liberation Carnival, which only happens during the summer. Adults, too, wait all year long, for most it’s the only time they get to gamble at a casino and play games of chance. And now, two weeks into operation, all that could change because of a pending lawsuit in Superior Court.

Filed by Chinese businessman Jiu Sen Zheng, the lawsuit is asking the court to issue a writ of mandate which would essentially order the Mayor’s Council, which operates the carnival casino, to stop operating “in-house” and to put the contract out to bid.

Zheng’s attorney, Vincent Camacho, explains that at first, the Mayors Council was following the law.

“But then on April 20 they issue a bid, call for bids and then they expected the respondents to respond in 4 days contrary to the Guam procurement law. And according to the public law 31-25, the liberation carnival committee is required to use the Guam procurement law … for bidding out any awards or services greater than $15,000,” Camacho argues.

Suddenly, Camacho says, the Mayor’s Council put out a notice a month later that they have opted to cancel all Requests for Proposals and to just operate carnival gaming in-house, or through a specially formed committee called the Guam Liberation Historical Society. Agana Heights Mayor Paul McDonald is the Committee Chairperson of GLHS.

“When the foundation bidded it out, the typhoon came up and we had to postpone it. Well during the time of the postponement, we found out that we didn’t have to bid it out,” explains McDonald.

There seems to be two sets of Guam law that both parties are citing. Attorney Camacho cites law that was enacted about four years ago. That law specifically outlines the Mayor’s Council’s duties in operating the Liberation Carnival and also requires any activity over $15,000 go through a procurement process.

But Mayor’s Council Legal Counsel Jeff Moots, in his motion to dismiss the case, cites a different law–one that was created back in 1982 which authorizes the governor to issue a permit to whomever he wants to operate the Liberation Carnival casino.

But even at that, Camacho points out that, by law, any game of chance concession must be operated by a non-profit.

“Or sponsored by a non-profit organization. If you check the records with the Internal Revenue Service, as of today, together with Department of Rev and Tax, the Guam Liberation Historical Society is not a registered non-profit. Number 2, they’re employing people, based upon their motion to dismiss, but they don’t even have an employer identification number,” Camacho notes.

“If the law is on our side then they have to shut it down or put it out to bid. I mean, you can’t circumvent the law because of a timeline,” he adds, acknowledging that the Liberation Carnival has been operating for two weeks now.

The parties are due back in court tomorrow at 11 am in Judge Arthur Barcinas’ courtroom.