RECENTLY, the Marianas Public Land Trust recently published in the local newspaper a paid advertisement entitled: “Marianas Public Land Trust, Bid No. MPLT ITB 2024-01, Effective: 12:01 AM, 01 October 2024.”
On behalf of Matua Council, we are requesting information and clarification on the recent publication soliciting and inviting interested insurance brokers who are licensed to conduct business on Saipan to submit priced bids providing “Directors” or “D” and “Officers” or “O” insurance.
It is important that we receive clarification on who are the “Directors” and “Officers” this solicitation and invitation for bid will provide insurance coverage for, and whether this insurance policy will also cover policy decisions made by the MPLT Trustees if they are what is referenced in the ITB as “Officers” or “O” as well as decisions made by the MPLT Administrator or what is referenced in the ITB as “Directors” or “D.” This ITB or invitation to bid is vague at this point based on the information published in the local newspaper.
Incidentally, the itemized list of requirements for the bidding insurance agent or broker stated that they be licensed to conduct business in the CNMI and “having a financial rating of at least A- (Excellent) by A.B. Best, or Aa3 (Excellent) by Moody’s, or AA- (Strong) by Standard & Poor” because this standard should be applied to all companies doing business with and be paid from proceeds of the MPLT trust funds.
Ironically, this rating and standards have not been the same or equal to the standard applied to the CNMI government in its nearly $50 million loans for its government projects and operations.
Simply put, the MPLT loaning scheme also termed and themed as “line of credit” is not what the “alternative investment” is for when the Board of Trustees approved this concept of “diversifying local investments” in their policy statement several years ago. This is to allow our local community to have this as an option for business growth, not to turn MPLT into the CNMI government’s bailout financial institution. The CNMI government is a trustee that should not be exploiting its fiduciary duty entrusted to it when it received the $33 million from the United States government as payment of its land leases listed herein upon signing of the Covenant in 1975.
It is equally puzzling that the (executive branch) loan payments have been and will continue to be made by the MPLT’s trust funds’ “earned interests income” from its investment proceeds. Instead, these earned interest income should be earmarked to benefit directly the beneficiaries of these trust funds because these were funds received from the United States government as payments of its leased lands nearly 50 years ago (1975) for: Two-Thirds of the entire landmass of the island of Tini’an; entire island of No’os (Farallon de Medinilla coined after a Spanish Governor in the Marianas); and Tanapag harbor (portion of Sengsong Puntan Muchot and Sadog Tasi).
In a nutshell, we need this clarification on MPLT’s ITB for insurance coverage to ensure the greatest protection of the beneficiaries’ interests and assets because in the last decade this loaning scheme through MPLT’s alternative investments is now mechanized and exploited by every governor, legislator, department and agency heads, and boards in the CNMI.
In the last decade these are the exploitations that were made: $15 million loan was executed in 2019, under P.L. 21-3 and P.L. 21-6 (amended) after Super-typhoon Yutu, which should have paid off this year, 2024. But it remained at $10 million balance when P.L. 23-12 was recently passed that allowed Governor Arnold Palacios to obtain another $15 million to pay for government projects and operations, that also included a handful of non-profit organization who benefitted from this $15 million loan scheme authorized by P.L. 23-12 signed by the 23rd Legislature, Speaker Edmund Villagomez, Senate President Edith Deleon Guerrero, the Governor, and the Attorney General.
In 2016 MPLT extended a $1.3 million loan from the trust funds to the Tini’an municipal government to pay-off the U.S. Geological Survey for its water drilling services performed for exploratory purposes. This loan was executed because the U.S. government was poised to seize the municipal and personal bank accounts of the Municipality of Tini’an and Aguiguan, including personal bank account of the mayor, and members of the Tini’an legislative delegation at the time. This was authorized by Tinian Delegation Resolution 19-6.
Again, in 2014 MPLT extended a $5 million loan from the trust funds to the CNMI government to pay for the Commonwealth Utilities Corporation’s stipulated order under the U.S. District Court of the NMI for CUC’s noncompliance to U.S. Environmental Protection act on “safe drinking water” standards. This was authorized by P.L. 18-71.
Further, in 2012 MPLT extended a $3 million loan from the trust funds to the Commonwealth Healthcare Corporation for its operation; and another $328,655 loan to its electronic health record project.
Furthermore, in 2011 MPLT extended a $3.5 million loan from the trust funds to the Public School System to pay for its operation, including paying for PSS’ power bills. This was authorized under P.L. 17-7.
Again, in 2008 a $3.5 million loan was executed to the Commonwealth Utilities Corporation for its operation, and to purchase power generation (not generator) from the existing and current power contractor, Aggreko. This was authorized under P.L. 16-7.
To this end, it is important that the beneficiaries of the trust funds are equally informed, and consent to these kinds of expenditure from the proceeds of the trust funds. And whether it is prudent and ethical to appropriate funds to pay for insurance coverage on policymaking decisions made by the trustees and the administrators of MPLT.
Similarly, is this the safeguard for the MPLT Trustees and Administrators in collaboration with the CNMI government, Governor’s legal counsels in collaboration with the Attorney General to protect and provide assurance and to indemnify the trustees and administrators from any future lawsuit brought against them for any of their policy decision in the management and disposition of the trust funds in investment and distributions of all proceeds thereof.
Equally important, the Governor, the Legislators and the MPLT Trustees should embark on a legislation and policy decision to begin the distribution of the MPLT’s investments earned interest income as annual Stimulus payments to the beneficiaries of the land and trust funds.
In closing, we look forward to receiving clarification on the specifics of MPLT ITB 2024-01 Insurance coverage for MPLT’s directors and officers. As well as the names of who will be covered upon the effective date and time of October 1, 2024, at 12:01 a.m.
Si Yu’us Ma’asi,
LIANA M.S. HOFSCHNEIDER
Matua Council President & CEO
