THE transition subcommittee assigned to the Marianas Public Land Trust has expressed concern over its $1.3 million loan to Tinian Shipping at an interest rate below MPLT’s investment policy statement.
According to the transition team report, the trustees chaired by Vianney Hocog also terminated MPLT financial consultant Bruce MacMillan who noted a “deficiency” in Tinian Shipping’s financial statements.
A U.S.-certified public accountant, MacMillian recommended a 7% interest to mitigate the risk.
Against the advice of the financial consultant, MPLT trustees Vianney Hocog, Peter Q. Cruz and Martin Ada voted to approve a $1.3 million loan, at 5% interest rate, to Tinian Shipping. Maria Frica Pangelinan, who was the MPLT chair at the time, recused herself.
The transition team report said the MPLT trustees “deviated from their investment policy, and lowered the interest rate to 5% below their investment policy statement’s 6.3% expected return, in order to expedite and approve the Tinian Shipping loan proposal.”
It was in 2021 when MPLT received from Tinian Shipping’s Joaquin Manglona Jr. a loan proposal in the amount of $1.3 million. The following year, then-Gov. Ralph DLG Torres supported a conditional approval of Tinian Shipping’s loan proposal, and authorized the Department Public Lands’ remittance of the entire amount, the transition team report stated.
It added that the 5% interest rate charged to Tinian Shipping is lower than the 7.5% interest rate set by MPLT for a loan it issued to the CNMI government.
The Tinian Shipping loan is under MPLT’s “diversified local investment.”
Based on its investment policy statement, MPLT considers diversified local investment “to be a rarely considered exception and every…proposal must be compelling as to its mission and purpose and beneficial in its scope and impact to the people of the CNMI.”
The transition team also reported that Vianney Hocog, as the MPLT chair, hired his son “as a financial officer who reports directly to the Trustees….” This “could be perceived as nepotism and a conflict of interest. Generally, fiduciaries are required to act in good faith and in the best interests of their clients, which could be seen as not being met if the decision was based on personal interests or favoritism,” the report added.
It stated that a “more thorough and in-depth review of MPLT seems warranted, due to the lack of transparency and accessibility of information and documents. It should be noted that information that should be easily obtained for the transition report and the general public were initially delayed and restricted by the Chairman and trustees, who must authorize any dissemination of information not available on their MPLT website.”
The MPLT transition team was chaired by Phillip Mendiola-Long, and its members were Marian May M. Guerrero, Fred C. Cruz, Margaret P. Camacho and Marie Coleman.
