I PITY the many Bank of Saipan clients that waited in lines that stretched as far as Pena House Boutique just to withdraw their money during Tuesday’s 10 a.m. re-opening of the bank’s main branch in Chalan Kanoa. Many of the customers were Chinese and Filipinos. There were also Bangladeshis, Koreans, locals, a few statesiders, Micronesians and other nationalities. I overheard a woman complaining that she was already at the bank’s door as early as 7:30 a.m. A Korean said his business was greatly affected by the sudden closure because he deposited most of his money there. Some could not hide their anger and disappointment; they kept cussing. A worker said his wife back home had been calling him repeatedly because his hard-earned savings got “stuck” in the bank. I heard other sad and funny stories.
The re-opening is a good sign that the court-approved receivership procedures are working. Bank of Saipan’s “inside” story, however, is far from over. I expect more fighting among lawyers. There will be lawsuits to be filed left and right in the following days. In any case, the people have the right to know about the real issues that rocked this 20-year-old financial institution.
Over the past couple of months, there had already been speculations that Bank of Saipan had a big problem because of mismanagement and fraud committed by some selfish individuals. However, there were press releases issued assuring the people that everything was fine and it was business as usual with the bank. Many people were shocked when the FBI arrested Tomas B. Aldan, the bank’s former chairman of the board and chief executive officer, for allegedly conspiring to defraud the bank of over $6.6 million. Three other people were also indicted in federal court. Major shareholders of the bank immediately assured the government that new funds would be infused to keep the bank solvent. On the evening of April 29, Gov. Juan N. Babauta revealed to Variety the truth—that the bank “is unstable and it is in trouble.” Many clients immediately rushed to the bank on April 30, only to be met by police officers guarding the already closed bank. A receivership was filed in local court and attorney Randall Fennel was named receiver. On May 1, former House Speaker Benigno Fitial resigned as board chairman and president of the bank. Other board members also stepped down.
Fennell has bared his plan that will allow the bank to re-open on a limited basis. However, some of the bank’s major shareholders are now up in arms, asking the court to replace Fennell as receiver due to his alleged lack of impartiality. The remaining directors, through the Calvo & Clark law firm, claimed that Fennell had already begun to act outside the scope of his authority. On May 17, some bank employees gathered at the law firm of Calvo & Clark, claiming that they had not been paid their salaries since the bank’s closure. The employees signed a petition demanding the removal of Fennell. But the Attorney General’s Office, on behalf of the CNMI Banking Commission, said the assertion was factually incorrect as stated in the declaration of Thomas D. Schoen. Schoen, the current chief operating officer of Bank of Saipan, stated that on May 16, only a very limited number of employees arrived at work. One of the employees upon seeing him working by himself, broke down in tears, Schoen said. The staff and others, Schoen said, informed him that some of the employees were meeting with a representative from Calvo & Clark and some employees did not want to work on May 20, the planned reopening day. But at the May 17 meeting with Fennell, Schoen disclosed that some employees said they were embarrassed by their previous action in signing a petition. Attorney David J. Lujan, a director of the bank and the representative of JLH Pacific Trust, one of the major shareholders of Bank of Saipan, was vocal against Fennell as receiver. Lujan in his declaration stated, among other things, that during the Larry Hillblom probate, the most vicious fights occurred between him and Fennell. He said Fennell was so jealous of the fact that everyone acknowledged Junior’s legal team was the driving force among all the Hillblom children’s attorneys and that most of the media attention was focused on their team.
It is clearly evident that the bank employees have been caught in the middle of the ongoing fight. Some employees are confused because they are worried about their employment and future. The staff should exercise extra caution when making their moves. They must bear in mind that the FBI’s investigation in the case is still ongoing. They should not let anybody use or manipulate them during this troubled period. The best thing to do is to simply follow the court-sanctioned procedures and they will never go wrong. The clients or depositors should also be more patient in falling in line to get back their money. For their part, the people responsible for all this misery should re-examine their conscience. This whole things boils down to stupidity and pure greed. Severe jail term punishment is awaiting these persons. The small depositors, who are the real aggrieved party, are not interested whatever “hatred” the lawyers have.
A lawyer was examining a witness when an earthquake shook the courtroom yesterday morning. The judge and everybody in the courtroom were looking at each other trying to figure out whether it was really an earthquake. Everyone cracked up when the lawyer on the podium broke the silence and said: “I don’t think I’m not that nervous!”
