SENATOR Celina R. Babauta wants Gov. Arnold I. Palacios to investigate Marianas Southern Airways for the purchase of two aircraft using American Rescue Plan Act funds awarded to the CNMI government, and take legal action against MSA.
In her letter to the governor last week, Babauta followed up on their previous meeting concerning two Tecnam P2012 aircraft acquired by MSA using the approximately $8 million in ARPA funds that then-Gov. Ralph DLG Torres allotted for a sole-source contract with MSA so it could offer low-cost inter-island flight service, including a one-way $99 airfare to Guam.
In February last year, Gov. Palacios terminated the contract between the CNMI government and MSA’s Marianas Pacific Express, saying there was no money for it.
MSA shut down on April 1, 2023.
In her letter, Babauta told the governor that the CNMI may have a “colorable claim” to ownership of the two aircraft.
She said when MSA cased its operation in the CNMI, the two aircraft were immediately brought to Guam for fuel tank modifications to enable them to fly to Hawaii.
According to Babauta, “It is concerning that these planes were reportedly now being utilized by Mokulele Air for their inter-island services within Hawaii.”
She said Southern Airways Express, MSA’s operating partner, has publicly stated that the aircraft will be used as reserve aircraft for their subsidiary, Mokulele Airlines, and will also be available for private charter.
“I believe this constitutes a significant breach of the original contract and misuse of public funds. The people of the CNMI deserve to have these assets returned or compensated for,” Babauta said.
“Given the substantial public interest in the matter and the financial implications the CNMI had encumbered,” Babauta urged the governor to initiate a “thorough investigation” into the purchase of the MSA aircraft.
“It is essential to determine if there were any violations of federal or local laws governing the use of these funds. If the findings support the assertion that the aircraft were improperly purchased using ARPA funds, I strongly recommend pursuing legal action against duplicitous actors who conspired and committed this fraud to recover these assets for the benefit of the CNMI and its people. By taking legal action, the government can protect the interests of taxpayers and ensure that ARPA funds are used appropriately,” Babauta said.
Variety was unable to get a comment from MSA.
