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US senator plans legislation to limit trust fund spending

MAJURO — A move by the United States Interior Department to give islanders displaced by U.S. nuclear weapons tests complete control of a multi-million dollar trust fund has sparked a leading U.S. Senator to intervene to reverse the decision, and prompted concern at home.

In response to appeals from Bikini Atoll leaders, the U.S. Interior Department disengaged from oversight of a dwindling U.S.-provided trust fund last month. On Friday, just days after the Interior Department policy change, a powerful U.S. senator weighed in, saying spending from the trust fund must be controlled to ensure its longevity.

In a letter to Interior Secretary Ryan Zinke Friday, Sen. Lisa Murkowski, R-Alaska, rebuked Interior for the unilateral decision to wash its hands of trust fund management that she said she learned of “via a press release.” Murkowski chairs the Energy and Natural Resources Committee, which exercises oversight on United States policy and funding for the Marshall Islands.

The dust up follows Bikini Atoll elected leaders telling the Interior Department in the form of a resolution in August that they wanted full control of spending from the U.S.-provided Bikini Resettlement Trust Fund. The Interior Department on November 21 approved Bikini leaders’ request to take control of the trust fund for the first time since it was established in 1982.

The trust fund was initially established by the U.S. Congress with $20 million in 1982 and later increased by an additional $90 million for islanders who today remain displaced more than 70 years after they were moved for the first post-World War II nuclear weapons tests. The U.S. conducted 23 nuclear weapons tests at Bikini from 1946 to 1958, including the largest U.S. hydrogen bomb ever exploded, Bravo, in 1954. Today the trust fund has less than half of its $129 million peak.

Since 1982, Interior Department staff and the Bikini Council have negotiated annual funding allocations based on the performance of the fund during the three previous years.

A resolution adopted by the Bikini Council in August said the local government “has been handicapped in developing income-generating projects due to budget impositions placed on the Local Government by the Secretary of the Interior.” This has led to budgets “that barely provide for the sustenance of the people of Bikini without allowing the fruition, maintenance and growth of income-generating projects.”

“The time has come to end the federal oversight of the Resettlement Trust Fund,” said Bikini Mayor Anderson Jibas, who took office in January 2016 and has pushed what he describes as a “rescript” for control of the resettlement trust fund.

The “Baker

But Interior Assistant Secretary Doug Domenech’s acceptance of Jibas’ and the council’s proposed rescript, coupled with an $11 million withdrawal from the trust fund that immediately followed the November 21 change in policy, is worrying not only Senator Murkowski. Former Bikini Mayor Alson Kelen, who headed the Bikini Council for three years following the global financial collapse of 2008, expressed concern that the fund could be bankrupt in a few years. “Bikinians receive salaries, electricity allowances, fuel for the power plant on Kili Island, food, scholarships and other benefits from the trust fund,” Kelen said. “If there is no money, all of these are gone. If we’re not careful, it will be gone in 10 years.”

As a result of ups and downs in stock market investments, budgets for the Bikini Council went from a high of $12 million annually prior to 2000 to as low as $5 million after the 2008 financial crisis. It has remained in the $6 million to $7 million level since that time, said Jack Niedenthal, who managed the Bikinians’ trust fund spending from Majuro from 1986 until he resigned last year, soon after Jibas took over as mayor.

But Mayor Jibas questioned critics, saying Friday: “This new relationship between (the Bikinians) and (Interior’s) Office of Insular Affairs is a breakthrough with the Trump administration recognizing that the people of Bikini can control their own future. We elected leaders of Bikini will decide how to use our Resettlement Trust Fund to best serve the current and future needs of our people. Now (we) can look to income-generating projects to further add to revenue for operations and reduce the reliance on the Resettlement Trust Fund.”

This was impossible to do with restraints on spending from the trust fund, he said. “The question to ask is, ‘Why wasn’t this done earlier?’” said Jibas. “We are free to determine our own destiny, and every Bikinian should be proud of this new era, and together with God’s help, we will succeed.”

“Until now Bikini leadership has not had full control over the Trust Fund, as the Department of the Interior has reviewed and approved the budget each year,” said a spokesperson for Interior’s Office of Insular Affairs Friday. “The Assistant Secretary has decided to honor the Bikini leadership request, through Resolution 2017-39, to exercise more complete control over their assets and has transferred full decision-making authority and responsibility to the leaders and the people of Bikini.”

But Murkowski has already drafted legislation that she said will be introduced into the U.S. Senate in January to “provide a reasonable limit on withdrawals from the Fund each year.” She told Secretary Zinke she was concerned “that the department will not meet its legal and fiduciary obligations with respect to the expenditure of U.S. taxpayer dollars from the Fund for the rehabilitation and resettlement of Bikini Atoll for the benefit of its people.”

In opposition to Domenech’s November 21 policy change, Murkowski is planning to legislate Interior’s authority “to disapprove of withdrawals from the Fund” and to limit withdrawals to lower amounts than existed prior to the recent policy change by the Interior Department. Murkowski’s proposed legislation would “limit the amount that can be withdrawn each year to five percent of its corpus, based on its average market value for the previous five fiscal year, until a resettlement plan is developed and submitted to Congress,” she said in her December 1 letter to Zinke. Based on the trust fund being between $60 million and $80 million in the past several years, this could limit funding to under $4 million a year, well under the all-time low for Bikini budgets following the financial collapse of 2008.

Under the previous system with Interior veto authority, “the Bikini Council had a lot of freedom for spending,” said Niedenthal, who managed trust fund spending for the Council from 1986-2016. “We’d go to the money managers to discuss with them what we could afford to withdraw and keep the trust fund strong. We’d give this number to Interior. Once the overall budget amount was approved, the Bikini Council would make its own spending decisions. It was a great system and it worked for 30 years.”

The trust fund was slammed by the 2008 financial crisis, hitting a then-low of $66 million. “If we didn’t cut our budget, we’d lose the trust fund, so we cut,” said Niedenthal of Kelen’s term as mayor. They cut funding for power, so islanders lived with daily power outages for lack of money, and cut payroll. “But we brought the fund back to $82 million by 2013.”

The last church service on Bikini Atoll shortly before the islanders were removed by the U.S. Navy for the start of nuclear weapons testing on the atoll.  U.S. Navy photo

Last month, the fund stood at $59 million, according to the Interior Department. But no one in authority will confirm the present value following an estimated $11 million withdrawal immediately after Domenech gave the Bikini Council full authority over the trust fund.

Murkowski told Zinke that through the consultation process with the Bikinians, their annual budgets have averaged between $5 million and $8 million annually in recent years. “It is my understanding, however, that in the one week since the Interior Department relinquished its oversight role on November 21, at least $11 million — nearly double the average annual budget — has been wired out of the Fund to Bikini Atoll leadership without any agreement on how the money will be used,” said Murkowski. She said earlier withdrawals were already unsustainable, reducing the fund “from its high of $129.2 million in 2000 to $66 million in 2016.”

Kelen said the process was lacking for the Bikini mayor and council’s resolution seeking removal of Interior Department authority over the trust fund. “Any big move should include the Bikini public in that decision,” Kelen said. “The money belongs to every Bikinian alive, not just to council members.” He was also critical of Interior for ending its authority over the trust fund.

In approving the change, Domenech said: “…The Department shall never again interact with you or the Members of the Council on any aspect of the Resettlement Trust Fund, including the possibility of the Department’s seeking additional appropriations for the Trust Fund.”

“Because we know they won’t give more money to Bikini, their (Interior) little contribution was to look over our spending,” said Kelen. “We don’t have credible finance people or economists to help us with the little money we have.” He said Interior had “run away” from the help it previously provided.

Niedenthal, who is married to a Bikinian, said Interior’s role with the Bikini Council is directly linked to a promise made during the U.S. Navy’s forced relocation of Bikini islanders for the start of nuclear testing in 1946. “The U.S. Commodore told the old men on Bikini in 1946 that no matter where they were, the United States would take care of them like America’s children,” said Niedenthal. “The elders of Bikini wanted them (the U.S. government) involved, we wanted the connection.” Interior’s new plan sends the message to Bikinians that they are no longer America’s children, Niedenthal said.

But Mayor Jibas takes a different view. In a letter to U.S. officials earlier this year, Jibas said he wasn’t criticizing U.S. Congress or Interior Department oversight. But, he added, as elected representatives of the Bikinians, “we should be the ones solely responsible for deciding how and when to spend our Resettlement Trust Fund.”

Jibas’ and Domenech’s action to restructure trust fund oversight may be a moot issue if Murkowski’s proposed legislation goes through.