San Agustin authored 2018 law that benefited indicted residents, club he belonged to

Sen. Joe San Agustin on July 11, 2018 authored a law that changed bingo laws to the financial benefit of the Guam Shrine Club in which he is a member, and the company that operated a bingo business for the Shriners. Several of the officers, and the owner of that bingo business were indicted last month on 62 counts of illegal gambling conspiracy, money laundering conspiracy, and money laundering.

The U.S. Attorney has charged seven people – Michael Marasigan, Al Guerrero, Art Chan, Christine Chan, Juanita San Capulong, Minda San Nicolas, and Richard Brown – with a scheme that allegedly enriched the defendants using bingo proceeds that were supposed to go to children in need of medical care off island.

Mr. Marasigan is the owner of Ideal Ventures, LLC, the company under which the bingo operated allegedly against the laws of Guam. The other six defendants are associated with the GSC, three of whom are Shriners.

Mr. San Agustin, Kandit has discovered, also is a Shriner. He has refused to answer several questions regarding his involvement in the now-tainted organization, or whether he knew about or was involved in the conspiracy.

Mr. San Agustin initially wanted to change bingo rules in the Guam Administrative Rules and Regulations (GARR) via his original version of Bill No. 318-34, which eventually became Public Law 34-152, signed by then-Gov. Eddie Calvo on December 28, 2018.

The original version of the bill sought to change the sections of the GARR related to bingo. Former Sen. Robert Klitzkie opposed the legislation on the grounds that senators should not be tinkering with administrative rules as such an action would create a statute that can’t be codified into administrative rules, and therefore will not be locatable. The law, in theory, would then exist in a sort of oral tradition. Following that testimony, Mr. San Agustin’s committee, to which the bill was referred, substituted the bill with language to change Guam Code Annotated, rather than changes to the GARR. The changes to law – always superseding administrative rules – were made “notwithstanding any other law, rule, or regulation.”

Here are the substantive changes Mr. San Agustin’s law made:

The first change took out the requirement for a non-profit organization to directly lease bingo equipment (such as mobile bingo machines), and allow for any company to lease those machines. Those machines are the cash cows of every permitted bingo operation.

The second change took out the former requirement for the non-profit organization with the bingo permit to operate the bingo games on its own premises, or on premises leased from another non-profit organization, or from a place where the bingo operation will have the majority use of the premises.

The third change took out the former prohibition on members of the non-profit organization with the bingo permit being paid more than $30 per day for the ‘volunteer’ work they do for the bingo operation.

 

Federal investigation also began in 2018

The date of the introduction of the law – July 2018 – coincides with the start of the federal investigation into Mr. Marasigan, which was the result of an unrelated federal investigation into his former business partner in the bingo operation – Won Sun Min. Ms. Min already has pleaded guilty to her part in the conspiracy, in a separate indictment filed July 2022.

In early 2019, the Federal Bureau of Investigation agent who worked the case from its infancy was seen observing senators in a public hearing at the Guam Congress Building. Mr. San Agustin was at that hearing.

In the case of the alleged conspiracy for which the Shriners and Ideal Ventures’ owner, Mr. Marasigan, were indicted in federal court this year, the Guam Shrine Club is accused of purposefully securing bingo permits under the pretense that the Shriners would operate the bingo themselves, and that the proceeds they made from the nightly games would pay for off island medical trips for children in need.

Instead, according to the federal indictment, it was Marasigan, through Ideal Ventures, who operated the bingo games. Between March 2015 and December 31, 2021, more than $34 million were deposited into multiple bank accounts under the names of Marasigan and some of the co-conspirators. The indictment states Mr. Marasigan profited $15 million, and that the Shriners indicted, and the three women associated with them were part of the conspiracy to enrich themselves “and others,” through the scheme.

The indictment repeatedly makes reference to people “known and unknown to the Grand Jury,” who benefited from the alleged conspiracy.

 

Conflict of interest

Only one other current member of the legislature was a senator in 2018, Speaker Therese Terlaje. And, according to her, the issue of a conflict of interest Mr. San Agustin would have as the prime sponsor of the legislation never came up.

“I do not recall the issue of conflict being raised or anyone asking to be excused from voting except for those off island,” Ms. Terlaje said.

Then-Sen. Michael San Nicolas, also surprised by the finding, said Mr. San Agustin should have never been allowed to introduce that bill if in fact he was a member of the Guam Shrine Club at the time.

“He never disclosed any such associations, and had he done so we would have never permitted him to be a prime sponsor of such legislation,” Mr. San Nicolas said of his former colleague Joe San Agustin. “He also would have been required to recuse himself should another member introduce the same.”