BUSINESS

Why did Steve Wynn give $50m to a guy named Ho Ho?

TAGs: Cotai strip, edmund ho, ho ho, Macau, Steve Wynn, Wynn Resorts

wynn-resorts-50-million-ho-hoQuestions are mounting regarding a $50m sum Wynn Resorts paid a mysterious figure known as Ho Ho in connection with the Cotai Strip property on which the company intends to build its new $4b Macau casino. Following analysis of company documents, public records and a sit-down with Wynn Resorts CEO Steve Wynn, the Wall Street Journal’s Kate O’Keefe concluded the following:

Around the middle of the last decade, Macau’s then top official Edmund Ho told Steve Wynn about a plot of Cotai land that had been set aside for the aforementioned Ho Ho (whose name translates as ‘river’ and is not believed to be related to Edmund). Wynn claimed he subsequently met with Ho Ho at Wynn’s Macau offices. In 2005, the pair signed a deal to jointly pursue rights to the Cotai land via a Ho Ho-controlled company named Cia. De Entretenimento e Investimento Chinese Limitada. This company was 90% owned by Ho Ho, with the other 10% belonging to businessman Jose Vai Chi ‘Cliff’ Cheong, who has ties to local junket operations. Both Cheong and Ho Ho listed Cheong’s Macau office as their residential address.

Steve Wynn told the WSJ he’d never heard of Cheong, which is odd, because in 2009, Las Vegas Sands paid Cheong and two associates $42.5m to settle a very public lawsuit brought to recover compensation they claimed to be owed for helping Sands secure its Macau casino license in 2002. In court, one of Cheong’s associates testified that Cheong’s close relationship with Edmund Ho meant Cheong “had his finger on the pulse all the time” on Macau policy-making. In May of this year, Sands president/COO Michael Leven described the Cheong settlement to the Macau Daily Times thusly: “Well, the assessment of the individuals involved in that case [indicated] there were some risks … it came at a time when, a few years ago, it was probably wise to get it off the table. I’m not privy to the case except that there were some risks involved.” Sands has (so far) chosen not to settle a similar suit brought against it by another former Macau partner, Asian American Entertainment.

$35M FOR FINDER’S FEE, $15M TO GET LOST
In May 2006, Wynn Resorts entered into a joint venture dubbed Cotai Land Development Co., with Steve Wynn, Ho Ho and Wynn COO Marc Schorr listed as directors. Under this arrangement, another company controlled by Ho Ho, Tien Chiao Entertainment Ltd., would be paid a “one time finder’s fee” of $35m once the government agreed to give Wynn the nod to build the casino. In 2008, Steve Wynn decided he wanted to dissolve the partnership, and offered Tien Chiao an extra $15m to walk away once the government gave the go-ahead.

In 2009, Wynn filed a statement with the US Securities Exchange Commission, identifying the $50m payment to Tien Chiao for the “relinquishment of certain rights with respect to its business interests.” Neither Ho Ho’s nor Cheong’s name appear in Tien Chiao’s public records, but Wynn lawyers maintain that Ho Ho controls the company, whose shareholders are listed as Ho Ho’s brother and another man with a business also registered at Cheong’s office.

Realizing that US authorities are always on the prowl for possible violations of the Foreign Corrupt Practices Act, Steve Wynn claims to have stringently vetted “everybody with Ho Ho, and everybody came up dandy.” Trouble is, no one seems to know how to locate Ho Ho, and the WSJ was unable to locate any documents indicating Ho Ho was ever earmarked for possession of the Cotai land in question. All we can say is, if Steve Wynn’s former BFF and now mortal enemy Kazuo Okada chose to sue Wynn over a questionable $135m donation to the University of Macau, Okada likely has private detectives scouring Asia for the elusive Ho Ho to see where this ‘river’ of money might flow.

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