Gov. Arnold I. Palacios, right, gestures as he speaks to reporters while Lt. Gov. David M. Apatang listens during a press conference at the governor’s office on Monday.
THE administration of then-Gov. Ralph DLG Torres ignored the federal government’s call for documentation of expenditures of funds that the Commonwealth received in 2020 through the Coronavirus Aid, Relief, and Economic Security or CARES Act, Gov. Arnold I. Palacios told reporters in a press conference on Monday.
Palacios, who was the lt. governor at the time, said he remembered seeing communications from the federal government asking the Torres administration to provide documentation on the expenditures of CARES Act monies. But the Torres administration “just kind of ignored them. And that’s pretty freakin’ ridiculous. That is pretty bad on our part.”
The governor said the U.S. Department of the Treasury’s Office of Inspector General’s findings about the $11.1 million in questioned costs is a result of the CNMI government’s failure to provide documentation. “And that’s what we have to deal with to the best of our ability to try to fix that mess,” he added.
He said while his administration is trying to improve the government’s financial management system, “we still have to go back again and get additional resources — human resources and financial resources to get those things done.”
He said “we have to do that” because “it’s not something that we can ignore,” adding that “there is a lot” of missing documentation.
“This just put us in a real bad situation. I am really tired talking about negative things so we need to just address this the best way we can and continue to hope that the sanctions are not as bad as we think it might be,” Palacios said adding, that the inspector general’s findings could be “just tip of the iceberg.”
He said the U.S. Treasury provided the CNMI a total of $36.2 million in CARES Act funds, so he wonders if “it’s the same case” with all the other federal funds that were given to the Commonwealth.
“Just think about it. If you can’t even document what you spent [which was] at least $11 million, that’s a big problem. That is an institutional problem that we have to fix in our government,” Palacios said.
Asked if he had any idea how some of the CARES Act funds were spent, Palacios said, no, as he was completely “taken out of loop.”
“I wish I could answer that question. But that’s the fact of life. Believe me, even the janitor downstairs was reluctant to talk to me. That was how crazy it was because they, the janitors, were afraid of getting disciplinary adverse action from people who saw them talking to me. That was how isolated I was,” Palacios said.
He remembered walking into a Governor’s Covid-19 Task Force meeting and asking, “What’s up?”
He said those in the meeting, including Torres, were “kind of surprised.”
Palacios said he told them, “I hope you guys are doing the right thing on these federal funds because we have to account for them.”
Palacios said he warned everybody in that meeting of the possible consequences.
“I hope the sanctions are not going to be bad, and I hope that we can find those records that can account for those funds,” he said. “I really hope that we can account for it,” he added.
Asked if he will try to call the former Finance secretary to shed light on the CARES Act spending, the governor said, “That has certainly crossed my mind and that’s probably the fastest way to do this.”
He said he has also asked the Office of the Public Auditor and the Office of the Attorney General regarding the issue.
Lt. Governor Apatang said it shouldn’t be a surprise that the U.S. Treasury came up with its findings. But he said, “this shouldn’t be the case if the CNMI government followed the procurement process.”
He believes “there’s going to be more,” referring to a federal investigation of the previous administration’s expenditures of federal funds.
Variety was unable to get a comment from former Governor Torres or former Finance Secretary David DLG Atalig.
