This story has so many crazy parts to it, it’s hard to know where to start. And once you get to the end, you’ll have more questions than answers. And the biggest question will be, how could Washington let this stuff happen?
WHERE?
This takes place in a part of the United States that most people don’t know exists. The Commonwealth of Northern Mariana Islands (CNMI) are a U.S. territory just north of Guam. To the south, CNMI waters touch Guam waters, and to the north, they touch those of Japan.
The main island of CNMI is Saipan. From Saipan, it is around an eight-hour flight east to Hawaii. But it’s only around four hours to Tokyo, Seoul or Taipei.
This is America’s Asian frontline.
From 1914 until 1944 these islands were under Japanese control—and Tokyo considered them crucial nodes in their Inner Defence Line. That’s why the battle for Saipan was one of the most brutal and desperate of the war. Japanese war planners knew if America got control, it could set up air bases on the islands and would be within bombing range of mainland Japan.
And that’s exactly what happened. Once secured in 1944, Saipan’s neighbouring island of Tinian soon became one of the busiest airports in the world as waves of B-29 bombers took off for Japan. Until finally, almost exactly 80 years ago, the Enola Gay took off from Tinian for Hiroshima, and the world changed forever.
After the war, the people of CNMI eventually voted to join the United States—becoming the newest part of American in 1976.
Its strategic geography and non-standard labour and immigration laws meant almost from the start things got odd. And as time went on—and Beijing grew bolder—Chinese influence started to deeply penetrate and distort CNMI.
CHINESE CAN ARRIVE IN U.S. (CNMI) WITHOUT A VISA
Still today, Chinese can arrive in CNMI without a visa. Yes, you read that right. Chinese can arrive in a part of the U.S. without a visa. They aren’t supposed to leave CNMI but there are regular cases of Chinese illegally taking the 60-mile boat trip to Guam—where some have been found on U.S. military bases. Oh, and there’s also the birth tourism issue.
In November 2023, over 30 Members of Congress wrote to Homeland asking for the visa-free loophole to be closed and…nothing.
It gets worse. Much worse. Let’s start about 15 years ago, and look at the last four Governors of CNMI.
GOVERNOR BENIGNO FITIAL (2006-2013)
Another CNMI quirk is that, because it also had some control over its own labour laws several Chinese and Hong Kong companies set up garment factories in CNMI, some with appalling working conditions. One belonged to Willie Tan. Levi Strauss was so concerned about the way Tan’s company was run, it cut ties.
Willie Tan is part of the family that runs Tan Holdings—a company that has deep and wide reach in CNMI and beyond.
Before becoming Governor, Fitial worked as an executive for Tan Holdings. He also called convicted fraudster Jack Abramoff a “good friend”.
One of the oddest moments of his Governorship came when he had a Chinese woman, who was under arrest, and in jail, brought to his house to give him a massage. The story takes on deeper hues on learning that the masseuse was in jail for an attempt to illegally smuggle over 20 Chinese from CNMI to Guam. She later pled guilty and was released with time served.
Benigno was eventually impeached by the CNMI House for multiple counts related to the commission of felonies, corruption and neglect of duty. He resigned before his impeachment could be confirmed by the Senate. His Lt. Governor became the new Governor.
GOVERNOR ELOY S. INOS (2013-2015)
Inos first became Lt. Governor when Fitial nominated him to replace his previous Lt. Governor who had to resign after being convicted on federal fraud charges. Inos was also at one point an executive with Tan Holdings.
He died of natural causes while in office. His Lt. Governor became the new Governor.
GOVERNOR RALPH TORRES (2015-2023)
Torres is known facilitating the entry of a billion-dollar Chinese casino to CNMI. According to Bloomberg, when Torres was President of the Senate in 2013 he was against a casino. But after a trip to Hong Kong and Macau, he changed his mind and a bill was passed allowing the setting up of a casino that, in its first three months of operation had VIP bets totalling $5.3 billion over fewer than 20 tables.
According to Bloomberg, eight casino executives and analysts said they didn’t see any way such volumes could be generated legitimately.
And those who know how China operates know there is no way Beijing would let that much money out of the country if it wasn’t to its advantage. As an added bonus, former CIA director James Woolsey was on the board of the casino’s parent company and advisors included former FBI director Louis Freeh.
The company, Imperial Pacific, started building a grand new casino and hotel—on an ancestral burial site. One of the workers fell to his death and, surprise, surprise, turns out he didn’t have a work visa. So, work ground to a halt, the FBI seized document, including from Governor Torres and…nothing happened.
During Torres’ time, there were also noticeable increases in the influence of Chinese tourism. As seen in places like Palau, China weaponizes tourism for geopolitical gain, and it was on full display in CNMI.
As were a range of other dubious activities. For example, the woman who ran the Bureau of Motor Vehicles was convicted of selling at least 50 fraudulent driver licenses to Chinese “who lacked lawful immigration status”. The going rate was $1700 for a new license.
In 2022, Torres was impeached by the House, and acquitted in the Senate. He lost the 2022 Governor’s election.
GOVERNOR ARNOLD PALACIO (2023-2025)
If you saw the movie “12th Fail”, Palacios was that kind of man.
He tried everything he could to go after corruption and diversify the economy away from China-linked levers. He came into office after Covid to find the government coffers were bare, in spite of CNMI having been given $1.6 billion in federal funds.
He repeatedly, and publicly, asked the federal government to investigate what was going on in CNMI. He offered to open up all the books, assist in audits, and abide by whatever the outcome might be.
On April 24, 2025, Palacios again asked for FBI Director Patel to do “intensive investigations of public corruption” in CNMI, mentioning he has “considerable evidence to provide”.
And… nothing happened. No, wait, something did happen.
On July 1, the FBI said it was CLOSING the years-long investigation involving former Governor Torres and the Chinese casino.
Palacios didn’t give up. On July 9th, he invited Taiwanese representatives on a historic visit to CNMI. He was talking to major Japanese investors about coming to CNMI.
And then, on 23 July, Governor Palacios died.
OPENING IN AMERICA’S ASIAN BORDER
What’s the situation now?
· The resumption of charter flights from Hong Kong has been announced.
· A digital coin to be used for online gambling is moving ahead (something Palacios vetoed but he was then overruled).
· A new company that may have links to the previous Chinese company, is trying to get the assets of the casino in order to reopen.
· The CNMI member of Congress is pushing for a lifting of caps on direct flights from China to CNMI.
You get the idea.
What’s happening at the federal level? The Department of Interior has responsibilities in CNMI. The Deputy Assistant Secretary for Insular Affairs at Interior is from CNMI. In fact, he was Governor Torres’ Chief of Staff, supported legislation easing the establishment of the Chinese casino and, during his failed bid for a Congressional seat, received campaign funds from people working for the Chinese casino.
WHAT DOES THIS MEAN FOR THE INDO-PACIFIC?
China needs to be emplaced in CNMI if it is going to take Taiwan. Usually the focus is on Guam, but widen the geographic aperture and it’s clear that whatever applies to Guam, applies equally to CNMI. And Beijing knows it.
Beijing has been working for years to develop economic pathways into CNMI to use for strategic advantage—feeding into and facilitating the corruption that has weakened the territory’s will and ability to resist.
You may not have known it, but in the fight for a free and open Indo-Pacific there was one man standing in the breach on America’s Asian border. In an interview Palacios described his fight as leaving him feeling like “John the Baptist out in the dessert…that’s how lonely it has been.” And now he’s gone.
And rumours are, Ralph Torres is thinking about another run for Governor.
So, the biggest question is, how could Washington let this stuff happen?
* Cleo Paskal is a Non Resident Senior Fellow at FDD, Washington D.C., and a columnist with The Sunday Guardian.
