Marriott International's CO-MAR20 virus penetrates US and Thai regulators - "Silence Enables Corruption" [SEC]

Marriott's CO-MAR20 virus penetrates US and Thai regulators - Silence Enables Corruption (SEC)

The following letter (main letter, covering letter and appendix) was delivered by courier post to US and Thai regulators at the beginning of 2020. It concerns Marriott International and a longstanding tale of subverted due diligence, global corruption and whistleblower retaliation. Despite the seriousness of the situation in which at least one life is currently in danger regulatory silence has once again prevailed.

It has just been announced that Marriott has suffered its third data breach in 18 months. ["Most regulators understand that even companies as large as Marriott can’t fend off every cyberattack", said Richard Lawson, a partner at law firm Gardner Brewer Martinez-Monfort PA. “But when you get into multiple breaches, then you’re automatically going to be dealing with intense scrutiny from the regulators,” WSJ March 31, 2020] But is that really the case?

With regard the Boeing 737 MAX scandal it took two plane crashes to pressure the regulators into action ["FAA knew doomed Boeing 737 Max had high crash risk... the "lopsided" relationship between Boeing and the FAA led to a lack of oversight." CNN December 2019]

How many other lopsided relationships exist between the regulators and major corporations? Are US regulators supporting a cover-up to save yet another major company from potential disaster? When will it be understood that transparency on both sides is the healthiest way forward?

Do please read on... [Occasional edits have been made to the letter so as to protect the identity of certain entities]

Rajadamri Residents Group in association with Mahadlekluang Green Law Action Group

Mr Jay Clayton, US SEC Chairman; Mr. Joseph Simons,  US FTC Chairman                       

18th January 2020  

Page 1 of 139                                                                 

Dear Mr. Simons / Mr Clayton,

A very serious situation has developed which requires immediate action. Your attention is drawn to the attached letter with appendix in which the SEC / FTC is invited to facilitate a process for negotiation between Marriott International Inc [MAR] and the Mahadlekluang community in Bangkok.

As you will read, at least one life depends on your help.

This long-standing case is already filed in the USA with the SEC, FTC, NYSE, ICE and The Office of the Whistleblower and in Thailand with the SEC and SET.

Yours sincerely,

******

Mahadlekluang Residents, Bangkok, Thailand

Cc: FTC, SEC USA; SEC, SET Thailand; Marriott International [MAR]

Rajadamri Residents Group, in association with Mahadlekluang Green Law Action Group

SEC (USA)         Jay Clayton, Mr. Chairman                                                            

FTC (USA)         Joseph Simons, Mr. Chairman                                                                      

SEC (Thai)          Ruenvadee Suwanmongkol, Ms. Director General                              

SET (Thai)          Chaiyawat Wibulswasdi, Dr. Chairman                                    

Dear Regulators,

This pack addresses serious, long-standing and unreported claims against Marriott International Inc [MAR]. It incorporates a plea to all relevant regulatory entities in the USA and Thailand for immediate action and offers a possible solution (of which there are a number).

As a brief overview, the attached compendium of information concerning the St Regis Hotel and Residences in Bangkok pertains to the above-mentioned legal challenges and claims brought by resident groups in an area of the city called Mahadlekluang. The St Regis is operated by Marriott under an operating licence issued by the Ministry of Interior of Thailand. The investor is Minor International Pcl [MINT] which leases the building from [a specially designated local authority].... Also legally implicated in the St Regis development is Minor International's Anantara Siam Hotel (previously Four Seasons). The case now involves other serious regulatory matters that go far beyond the borders of Thailand. A major, multifaceted international cover-up and a serious lack of due diligence by all parties underpin the entire matter.

It should be understood that the objective of Mahadlekluang residents (the plaintiffs) remains as it always was from the outset, more than ten years ago. That is, to seek a dialogue under a proper legal protocol with the aim of designing a win/win solution for all stakeholders involved in the claims (as ratified by Marriott CEO, Arne Sorenson, on September 23, 2019 during a meeting at Marriott Head Office in Bethesda). A negotiated agreement of this kind would aim to prevent widespread reputation risk - to the listed companies, regulators, residents (the lessees), [local authorities], government departments and the financial markets. Most important of all, it would focus on saving lives. The life to save first is that of John Shepherd whose case is well documented in every circulated discussion paper and letter, including those to the SEC Office of the Whistleblower in Washington (TRC Submission no: TCR1409894852305). Positive action is required [now]. (See bullets 6, 23, 24 in Appendix  and "Why the Marriott hunger strike is to resume: A brief report on the outcomes of a meeting with CEO Arne Sorenson" [02 December 2019])

This is the latest addition to a series of information briefings sent to US and Thai regulators over a significant period of time. Under the mandate of what we now call "The Arne Sorenson Win-Win Initiative", all regulatory bodies are invited to take part in the design process of a legal protocol for negotiation to settle the claims of Mahadlekluang residents. These claims were originally filed with Starwood Hotels and Resorts and, resulting from the Starwood/Marriott merger, have become an integral part of Marriott's Starwood legacy. Marriott was informed of the claims long before the merger went through. Substantial evidence surrounding this complex case dates back as far as 2006/7. Initially demanding to examine some of this evidence at a meeting in London, Marriott executives, rather bizarrely, opted (without explanation) to ignore it. One of a number of possible solutions has already been turned down by Marriott but there are other possibilities still to be considered.

On the advice of legal and compliance specialists, Mahadlekluang residents wish to conclude and reiterate the suggestion that, vested under their legal duties, the collective regulatory bodies that oversee both Marriott and Minor International (USA and Thailand) might agree to participate in the formulation of a legal protocol for negotiation. For reasons already explained, arrangements need to begin as soon as possible and we implore you to consider our proposition.

Yours sincerely,

********                                

Mahadlekluang Green Law Action Group               Rajadmari Residents Group

Attachments (11):

·Appendix of 24 points to this letter to Regulators 18 January 2020 (2 pages)

·Cover notes (4) re. Letter to Regulators 18 January 2010

·Letter to Rena Reiss, 12 January 2020, re. [local authority] pack Sorenson 2019

·Letter to Arne Sorenson 30 December 2019, re. VC Pack 2019

·Letter to [local authority] dated 14 December, 2019, re. Public meeting at the Anantara

·Letter to [local authority] dated 30 December 2019, re. Notice of Closure of the St Regis and Anantara Hotels

·Compendium of Correspondence........ [some 60 pages]

·Relevant letters and reports of discussions between Mahadlekluang residents – John Shepherd and ***** – and Marriott International executives, CEO Arne Sorenson and APAC President Craig Smith et al

·An open letter to all employees of Marriott International Inc [MAR] - Hospitality and the abolition of integrity and compassion [30 December 2019]

·Lifting the Marriott Corporate Veil – What Marriott customers, investors and local communities need to know about Marriott International Inc [MAR] [12 09 19]

·Why the Marriott hunger strike is to resume: A brief report on the outcomes of a meeting with CEO Arne Sorenson [02 December 2019]

Cc list - Marriott:  Arne Sorenson, Bruce Duncan, Rena Reiss, Leeny Oberg, Craig Smith

Regulators: Jay Clayton, Joseph Simons, Ruenvadee Suwanmongkol, Chaiyawat Wibulswasdi

APPENDIX to Letter to Regulators 18 January 2010           

From the small selection of papers submitted in this round you will discern that:

1. There are 3 likely "collusion and cover-up" scenarios in this case: Starwood & Minor; Minor and Marriott; Starwood and Marriott. The Starwood/Marriott merger was rushed through under these scenarios to cover up deliberately unanswered correspondence and information pertaining to the claims of Mahadlekluang residents. Marriott inherited the cover-up but was prepared to continue with it after reassurances that everything was under control (see # 19 below). It is crystal clear that the Minor & Marriott "collusion and cover-up" continues to this day. (The former Chairman of the Starwood Board, Bruce Duncan, orchestrator and front man of the Merger, is now on the Marriott Board)

2.     Starwood and Marriott (along with Minor International....) did not conduct proper due diligence on the St Regis Hotel investment package, consequently creating unmitigated risk to the stakeholders involved, particularly to the Landlord of the St Regis and Anantara hotels...

3. Marriott has claimed that the (legally questionable) operating licence issued by the MOI absolved it from having to conduct proper due diligence in Thailand. (This was confirmed by Craig S Smith, President and Managing Director APAC, in meetings with resident representatives.) That action alone has exposed Marriott to the risk of litigation under the FCA and FCPA. Marriott is very keen indeed to find excuses as to why its due diligence procedures were less than rigorous - (breach) - but just look at the consequences of the data hack!

4.     Starwood was in breach early on by not responding or investigating residents’ claims appropriately 

5.     Marriott was and remains in breach by not investigating the residents' claims after receiving information prior to the merger (also copied at the time to FTC and SEC)

6.  At a meeting in London in October 2019, Marriott executives failed to examine substantial evidence supporting the claims of Mahadlekluang residents (including the John Shepherd case) when it was presented to them, after having demanded that the said evidence should be produced (refer papers Shepherd-Smith meeting attached)

7.     The St Regis and Anantara hotels should be closed down immediately because they are not in compliance and continue to put residents, guests and employees in harm’s way, which could lead to injury or death. (A notice of closure has already been issued to [the appropriate local authority]. A notice to Marriott to cease operation is being processed)

8.     Marriott’s Operating Licence issued by the MOI is corrupt and illegal

9.     Marriott is exposed to possible prosecution under the FCA and FCPA 

10.     The Starwood / Marriott merger is in danger of being adjudged invalid 

11.     Marriott, Minor and [local authorities] have solicited Human Rights abuses and exposed themselves to legal challenge

12.     The Licensing contracts and Operating Licenses under which Marriott conducts its business worldwide seem likely to be in breach of regulatory rules and regulations and should be investigated by regulators

13.  Marriott is seen to be in breach by citing world-class ethical compliance programs that are touted to work in real life but which in fact do not. "In 2020, companies must move beyond simply citing world-class programs practices and focus on whether their compliance programs work in real life" - Compliance Week. (See attached article: DOJ enforcement priorities for 2020 include antitrust)

14.  Under its ‘covert’ contracts blueprint, Marriott has apparently become unable to control brand licensees (eg. Minor) which could lead to criminal indictments. (See attached article: What This Minor Vs. Marriott Lawsuit Reveals About the Hotel Biz - Skift)

15.  Public Liability Insurances are unenforceable at, including but not limited to, the St Regis, Anantara and Courtyard by Marriott hotels because the Mahadlekluang infrastructure is unable to support their operations, making them non-compliant with the legal requirements for publicly listed companies, creating further significant risk

16.  Minor was convicted in the High Court of Thailand regarding its operation of the Anantara Si Kao, once again demonstrating that proper due diligence had not been conducted, creating further serious reputation risk to the company and setting a precedence for its modus operandi

17.  Minor’s Anantara brand (operated worldwide) is now also under scrutiny and is exposed to litigation internationally because it is implicated in the illegal construction and operation of the St Regis 

18.  Minor provided yet another example of being in breach of its compliance programs when William Heinecke, then CEO of Minor, signed a CAC anti-corruption pledge (attached) just months after residents had lodged their claims with Starwood against the St Regis. After residents contacted CAC with information the pledge was not renewed

19. It was originally assumed the residents (plaintiffs) would have difficulty in starting litigation in Thailand because the land, the building (St Regis) and the infrastructure are owned by [high-level local authorities....] Of course, the situation is now entirely different. Minor’s purchase of NH Group hotels has enabled Mahadlekluang residents (including foreign nationals) to elevate any legal action (including class action) to an international platform and scale, for example in the USA

20.  Listed company NH Group will have to endure reputation risk and may be investigated by Spanish regulators (already in the loop) for complicity

21.  Leasing contracts operated by [local authorities] are not in compliance. [These authorities have shown themselves] unable to control licensees from engaging in indictable activities which could cause serious reputation risk to the Licensor [and its authorities]

22. [Local authorities] refused to mediate in this dispute and advised residents to take legal action against its licensees (such as Minor and Marriott)

23.  People have already died in Mahadlekluang and residents are waging this case to prevent any further fatalities, starting with John Shepherd's imminent "death by hunger strike" in [the early half of ] 2020

24.  Evidence regarding John Shepherd’s case is enclosed in the compendium which was received by Marriott Head Office on 10 January 2020, 2.24pm. Marriott was initially made aware of the case prior to the merger

Other link:

Death by Marriott and the "C" word - An open letter to the Marriott Board of Directors, CEO Sorenson and General Counsel Reiss