Hao vs LVS | Witness reaffirms major changes to bidders score done by commission

The former member from the gaming consultants’ team who was hired by the government to evaluate and grade tender bidders for Macau gaming licenses in 2002 – David Green – has reaffirmed during a court session, held yesterday at the Court of First Instance (TJB), that the government’s gaming commission had promoted changes to the tender bidders score list elaborated by the consultancy company Arthur Andersen LLC.
The topic, which was addressed last Friday when Green appeared for the first time on the witness stand, was raised once again by defense lawyer Luis Cavaleiro Ferreira and then by the judge presiding the trial.
To both, Green clarified that in the final ordination list in the report from Arthur Andersen to the government commission in 2002, from the bidders who scored higher in the consultancy company’s evaluation, to the third best, only Wynn Resorts was granted a gaming license. He explained that this was due to adjustments made to the list at a later stage by the government gaming commission.
“There were adjustments made to the scoring. I believe they [the gaming commission] added a 10% bonification to Wynn [Resorts] because Steve Wynn [who at the time was the CEO of Wynn Resorts] was the pioneer of what is now called the Integrated Resorts,” Green said. He added that the commission should have valued the fact that Steve Wynn was the forerunner of this new method, which was created in Las Vegas in 1999. Steve Wynn had significant experience in applying it on casino venues including The Mirage and Bellagio, among others.
On the initial list elaborated by Green as part of the Arthur Andersen team, the bid for Galaxy Entertainment Group (GEG) would come in fifth, he noted in a reply to Ferreira. Ferreira tried once more to highlight the importance of having gaming experience to the high scores attributed by the consultancy company.
Questioned also by the defense lawyer if there was any potential flaw or issue that would justify the adjustments made in the second stage by the gaming commission, Green said, “At Arthur Andersen, we always had this policy called ‘Four Eyes Review,’ which meant one of the partners would review all the methodology and results obtained by other. I am confident that the ranking was correct based on the application of our methodology.”
Returning to the topic of the comparison between the scores obtained in the evaluation of the Asian American Entertainment Corporation (AAEC), headed by Marshall Hao and of Galaxy, the judge requested once more a confirmation from Green on his previous statements which indicated that none of those companies had any proven experience in gaming, a reason to which they were in a similar position with low scores.
“There was my clear recollection that there was no experience in any of those parties, except for Las Vegas Sands (LVS), which partnered with them,” said Green.
Answering the judges’ questions on the matter, Green insisted that the experience on other aspects such as running hotel businesses or food and beverage venues, among others, would only score points if these “were somehow related with the gaming activities.”
“The ancillary services had to be related with the gaming activities because this was a license for gaming not for hotels or other entertainment or complementary facilities,” he said. “There might have been some kind of judgment made that would take into account other things but we were working on casinos, so we were basing our evaluation on the model of turning Macau to a gaming destination, the model which was invented in Nevada in 1999,” Green added.
Green also noted that on several occasions, the government officials, including the Chief Executive at that time, made it very clear to the consultancy team.
The witness, also added, replying to a question from the judge, that there was no way of either the AAEC or Galaxy were scored as having gaming-related experience and if they did, they would have been ranked much better.
Green also explained that the consultancy team only analyzed and evaluated the bidders based on the documents provided by the gaming commission and no further investigation or research was done apart from those official documents.
“We would just evaluate and rank the bidders using the documents provided by the commission. We could not even Google them to try to ensure if the information stated was real or not,” Green said remarking that there was a director from Galaxy that claimed to have gaming experience but that the team disregarded this during the evaluation because “we had no way to verify and make proof that such information was real.”
With no further questions to the witness, the judge dismissed Green as a witness, meaning that his testimony is completed in court.
The court case involves a filing by the AAEC. Hao’s company is claiming compensation amounting to an equivalent to USD12 billion (MOP96.2 billion) on the grounds of the role the AAEC claims to have played ensuring in the granting of LVS’s casino operator license in Macau almost 20 years ago. The court case will continue, according to the judge, until at least mid-December, when at least one more defense witness, who is currently in Canada, is expected to be heard in court.
Discussing procedural matters with both legal representatives, the judge also noted that the court is expected to reach a final decision on the eligibility of some of the witnesses to testify.
This comes after the claimant’s lawyer, Jorge Menezes, appealed to the court claiming legal impediment from three lawyers who have been listed as witnesses by the defense.
According to Menezes, the lawyers who were called as witnesses have worked directly with both parties on this case in the past, a fact that Menezes says would breach the universal and professional pact of the relation between the client and his lawyer.
For Menezes, if these witnesses are allowed to testify, they might have to reveal details that are strictly confidential and held by a trust pact between clients and lawyers and this might jeopardize a fair decision regarding this case.

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