Anthony Pellegrino, in a letter, told lawmakers that the Fitial administration is blaming them.
Last Aug. 21, he said, the CNMI government should have started earning from the docking facility built by his Marine Revitalization Corporation in 1995.
Instead, he added, commonwealth taxpayers are now facing a debt that has ballooned from $3.5 million to $8.5 million because the government has refused to pay him.
The court has ordered the government to pay, but this requires legislative appropriation.
“The administration should start paying the $8.5 million now. MRC has always been willing to accept a reasonable payment plan,” Pellegrino told lawmakers.
In an interview on Saturday Pellegrino said the administration told him that it was the Legislature that failed to appropriate money to pay for the government’s obligation to MRC.
The fiscal year 2011 budget allotted only $76,258 for judgments against the government, which according to Rep. Eliceo D. Cabrera, R-Saipan, may not include MRC because “it was not mentioned in the governor’s submission and the Legislature’s [budget] discussions.”
To settle its debt, the government should pay MRC $45,000 monthly or $540,000 annually.
Cabrera said all the Legislature can do is come up with revenue-generating measures.
Agreement
In 1995, MRC built the Outer Cove Marina for $3.5 million.
According to their agreement, the CNMI government was supposed to pay MRC $800,000 upfront and allow the company to fund the construction cost by collecting fees from those using the slipping docks until the lease agreement expired on Aug. 21, 2010.
The government, however, reneged on the agreement, MRC said, and has refused to pay despite the Superior Court’s orders.
Then-Judge Juan T. Lizama issued a stipulated order awarding $5.9 million to MRC in Jan. 2005.
Because of the government’s failure to make any payments, its debt to MRC now amounts to $8.5 million.
In his third order in aid of judgment on Feb. 24, 2009, Judge David Wiseman said: “It is not the intention of this court, nor of the plaintiff to compound an already dire economic situation. However, the reputation of the commonwealth cannot afford the long term consequences of a government which accepts the benefits of a contract, refuses to fulfill their own obligations and ignores judgments which they have stipulated to.” Pellegrino said early this year, he was told the administration could use $4 million from the Commonwealth Development Authority to pay him.
But when he went to CDA to claim the money, he was told the governor took it to pay the Commonwealth Utilities Corp.
Frustrating
House Minority Leader Diego T. Benavente, R-Saipan, in a separate interview said the Outer Cove Marina fiasco is one of the saddest and most frustrating experiences that he has encountered as a public official.
Benavente was the lt. governor and Fitial was the House speaker when the CNMI government cut a deal with MRC.
However, Benavente said, “It was a major disservice in the community when the House leadership at the time refused to make the necessary appropriation.”
He said the government could have settled its debt in 2003.
He recalled that he even hand-carried the appropriation proposal to the House leadership of the 14th Legislature.
He said he emphasized the importance of appropriating $800,000 for MRC.
He said he knew that the then- administration did not have to touch the general fund because there was money with CDA to pay for it but the House under Fitial’s leadership refused to pass the measure.
“It would have been a settlement of real benefit to the CNMI because it would have only cost us a little over $2 million for the $3.5 million facility that was already built. And we would have an opportunity for future revenue once we paid off MRC for the entire $2 million,” Benavente said.
“I wish that when something like this happens, certain individuals must be held liable,” he added.
The governor now has the nerve to blame the present Legislature for his own fault when he was the speaker, Benavente said.
With the government getting poorer, he added, “I just don’t know how we can recover from such a big mistake. I don’t know what I and the community can do to straighten this up. It is a very flagrant mistake. There is no money available now.”
Pellegrino, in his letter, said, “I may receive or I may not receive money due to this injustice being done to me.
But it is even sadder when a community loses a major development for free to improve tourism. Do we wonder why the NMI keeps getting bad reputation in which its government cannot be trusted? I feel like a fool and betrayed for donating my time, money and love to this project.”
