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    Wednesday, September 18, 2019-6:32:25A.M.






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New NMD group airs ‘grave concern’ over MPLT loan

THE Northern Marianas Descent Council Inc. on Thursday expressed “grave concern” over the $15 million loan that the CNMI government will obtain from the Marianas Public Land Trust for the Commonwealth’s “extraordinary expenses” in the aftermath of Super Typhoon Yutu.

Juan Castro

In a letter to the MPLT board and Speaker Blas Jonathan Attao, NMD Council Inc. interim chairman Juan R. Castro questioned the “prudence and the legality of the loan and its intent.”

The speaker introduced House Bill 21-144 that would authorize the loan. The House is expected to act on it today, Friday.

In his letter, Castro said the Legislature has already “abdicated” it constitutional authority to control the public purse by granting Gov. Ralph DLG Torres 100 percent reprogramming authority over the funding allotments in the executive branch.

“It is hard to see how fiscal discipline is achieved by putting the CNMI’s entire budget and cash flow into one basket over which the governor single-handedly has control, but this is what Public Law 21-2 has done. Why should it be necessary or permitted to also allow the administration to invade (by borrowing) the trust corpus built (by constitutional mandate) from the revenues from public lands collectively owned by NMDs? This is extremely difficult to fathom.”

Castro said the trust corpus is composed entirely of proceeds from the lease of lands owned collectively by the people of the Commonwealth who are NMDs, citing Section 805 of the Covenant, which designates the NMDs as a protected class with collective property interest in public lands.

Castro said the “consequent removal of fiscal discipline on government expenses makes the loan the functional equivalent of a loan for government operations.”

He added, “It is therefore probably unconstitutional. Similarly, labeling the loan as being for the purpose of ‘disaster relief and recovery’ when no new expenditures are being made but instead the government is simply recouping previous outlays for which no federal reimbursement has been made, on the assumption that Federal Emergency Management Administration reimbursement will be made, would not be consistent with the fiduciary duty of MPLT trustees.”

He said FEMA will reimburse only genuine and legitimate disaster relief and recovery expenses.

“There is good reason to doubt whether some of the disbursements made by the government post-Yutu under the guise of disaster relief and recovery can meet this test,” Castro added.

“For example, the governor implemented a pre-election so-called ‘typhoon pay’ program of 2.5 times regular pay for time allegedly spent on disaster relief and recovery. Under this program, highly paid members of the administration holding positions ineligible for OT pay were paid large sums of money,” he said.

Few, if any, frontline rank-and-file workers received this 2.5 times OT pay, he added.

“It is not only legal niceties and loss of fiscal discipline that we are concerned about,” Castro said. “We are also troubled by the foreseeable discriminatory effects of lending trust funds to the executive branch. We already know that the administration is not remitting to the Public School System the 25 percent of general revenues required by the Constitution. Hard-working active duty government employees are taking hits to their paycheck of up to 25 percent in the name of austerity.”

Meanwhile, he added, retirees have been receiving 100 percent of their retirement annuities even though the settlement agreement in the federal court case only guarantees them 75 percent.

Payments to the Settlement Fund with funds borrowed from MPLT will free up general revenues to continue paying the retirees the additional 25 percent even as active duty government employees endure austerity pay cuts of up to 25 percent each payday, Castro said.

“This clearly would be discriminatory in favor of retirees at the expense of active duty government employees,” he added.

“Such discrimination may violate the constitutional right to equal protection of the law.

“The discrimination is compounded by ‘bonuses’ that have been paid to retirees in the past and have even recently been promised. These bonuses likely are illegal.

“Extravagant, reckless and politically motivated spending are the roots of the CNMI government’s financial distress. MPLT trust funds should not be used to enable this kind of fiscally irresponsible behavior.

“We do not question that the CNMI has fallen into significant financial distress in the past nine months. We know that the executive branch incurred a hefty deficit well before Yutu hit. The causes of that deficit have yet to be meaningfully examined and explained. There is an expression, however, about throwing ‘good money after bad,’ and NMDs certainly do not want to see the benefit they are supposed to receive form the public lands they collectively own be squandered by the financial irresponsibility of a handful of elected officials.

“At a bare minimum, any trust funds lent to the CNMI government must be subjected to strict controls and accountability. Under no circumstances do we believe any funds should be disbursed from MPLT directly to the CNMI Treasury. MPLT itself should make disbursement to proper payees according to specific individually approved uses. Alternatively, MPLT could put the funds lent into the hands of a funds custodian who will disburse fund to proper payees only according to strict protocols,” Castro said.

Meeting on Saturday

In related news, the NMD Council will meet this Saturday, July 13, at 11 a.m., at the Saipan Leadership Courtyard in Chalan Kanoa.

Members will sign and approve the organization’s constitution and by-laws as well as corporate charter which will then be filed with the Registrar of Corporations.

“Everyone is encouraged to join and participate in this historic event,” Castro said.

“This our time to give a voice to the people of the Commonwealth who are of Northern Marianas Descent and to fulfill the promise of the Covenant and our Constitution regarding our public lands and the benefits derived from those lands,” he added.