As I’ve observed before, the discussions in the CNMI regarding federalization is like a debate about an ongoing, closely fought game between the Yankees and the Red Sox. Everyone is dead sure about his viewpoint and can cite his own “facts” to justify his stance. To shift metaphors, your view depends on where you’re standing — your reference point — while observing a rapidly moving and still unfolding event.
Try this. Ask a diverse group of perfectly reasonable people about federalization and chances are that they will not arrive at a consensus. Exactly like the famous story about a group of blind men (or men in the dark) trying to touch an elephant to learn what it is like and completely disagreeing with each other when they compare notes on what they felt.
In any case, what surprises me — or perhaps what should not have surprised me —regarding Kumoi’s comments is that they contradict his campaign statements regarding federalization. Based on the interviews he had with us, he was critical of the governor’s federalization lawsuit and seemed in favor of the law.
In his comments to DHS, however, he described the E-2 regs as “most disruptive; it will seal the CNMI’s fate as a backwater U.S. possession, one that will be continually dependent on U.S. food stamps and aid programs, and where land prices will become more depressed.”
As if taking a cue from the polemic employed by the governor’s lawyers, Kumoi argued that “the proposed regulations violate the intent of the Covenant to establish a commonwealth in political union with the United States.”
According to the former senator, federalization is supposed “to minimize to the greatest extend practicable the potential adverse economic and fiscal affects, and to maximize the CNMI’s potential for future economic and business growth.”
However, he said, “the cumulative adverse impact may drive the people of the CNMI to aggressively seek alternative self-determination options.”
The governor, at least, is just the suing the feds; Kumoi seems to be threatening “secession.” Good luck with that sir.
What do the governor, Kumoi and, come to think of it, former Senator Juanpan have in common besides their opposition to federalization? They are from the TT era, “when our people,” said Kumoi, “were strangers in their own land, unable to move freely in our own domain, and where visitors were restricted by regulations framed in Washington that have no relevance to our islands.”
Kumoi said the E2 regs will significantly reduce the guest worker population because federalization does not allow any extension of the CNMI foreign investor visa beyond 2014. Starting that year, investors must meet federal criteria. They must invest at least $1 million.
“For those investors with a million dollars…what would be a compelling industry to…invest in? What incentives have the government or the Department of the Interior done to compel investors to invest a million dollars in the CNMI after the federal immigration takeover?”
In essence, Kumoi said, “the U.S. Congress, instead of assisting the CNMI toward self-determination, has reversed our future toward continual dependency.”
He then went on to say that “economic development was never the job of DHS. DHS’s role is with border protection, and enforcement of the immigration and custom regulations. To assume or imply that DHS should be concerned with investments, business climate and future economic opportunities is a fallacy. This therefore is the fundamental problem. The United States Congress erred in tasking a regulatory agency to manage regulations that have significant economic impact on the CNMI without adequate provisions and funding to avoid adverse impact.”
The proposed regs, he added, “are most disruptive in economic impact [throughout] the transition period.”
DHS “has defined the minimal investment level to be at $150,000 when it is well-known that the CNMI accorded long-term business investor permits at a threshold of $50,000 since 1990.”
Moreover, “the regulations require long-term business investors to secure a visa to return to the CNMI anytime they depart after [Nov. 28]. This prevents investors from traveling abroad for any business purpose as there is no guarantee of a return visa…. This very fact of imposing new burdens shows a total lack of concern [for] any economic disruption.”
Kumoi said “grandfathering holders of CNMI investor certificates or long-term business permits poses a small task for DHS. … There are only 500 or so permit holders. How difficult would it be for DHS to undertake a background check of these permit holders? Their investment files and records are on Saipan.”
He believes that DHS “has chosen the easiest task so that the least amount of resource would be necessary to undertake any task of handling these permit holders. So, instead of ensuring minimal adverse economic impact to the CNMI, DHS has choseen to task U.S. embassies and consulates in an effort to minimize resource mobilization to the Northern Marianas.”
But that’s not all.
“These…investors [are] given only four years to turn their businesses into one that would allow them to be eligible for federal immigration programs. Since the transitional threshold defined is $150,000 the investor must inject an additional five times more investment in a four-year period to reach the investment threshold of $1,000,000. Could this happen? I much doubt that any small investor would pump in that kind of money without knowing whether they can stay. The only industry, tourism, will be decimated by visa requirements because of [federalization]. What industries could investors invest in when there are no population to serve, [and] no competitive advantages to compel…investments? The [federalization law] provides no avenue to address this significant threat of exit by investors. It only states lofty goals and niceties as is typical of the U.S. Congress in treating fellow Americans in insular areas.”
Kumoi said “the investors that have come to the CNMI cannot be blamed that our economy is too small to allow them to expand. But they serve a need even though such need is too miniscule by federal standards. And this is exactly the problem. Our small islands have no special consideration in spite of the Covenant [with the U.S.]. Federal agencies don’t even understand the obligations set in the Covenant….”
He said “those enlightened persons who [enacted the federalization law] DO NOT have to live in an isolated island with no natural or economic resources. [The law was enacted] because of the need of Congress to divert public attention from the excesses of the now convict Abramoff…and the need to appease George Miller’s ego. [It] was never about the betterment of the CNMI. The [law] was [passed] in bad faith and [is] injurious to the self-determination rights as provided in the Covenant….”
He then proposes changes in regulations and an amendment to the law. Otherwise, “I foresee that many of the investors with smaller businesses will exit the commonwealth by 2014.” And with them, the hundreds of jobs in the private sector and ultimately in the government itself.
“We will have 500 business permit holders mostly in exit mode. These investors will no longer invest additional capital, they will sell as many fixed assets as possible, purchasing new vehicles would be stupid at best, and hiring and training employees, extending their land leases, or any capital improvement would be the last thing in their minds. Worst, some may not even elect to pay taxes in the last year! How then, would the people of the CNMI benefit? Where is the standard to minimize economic disruption and where is the maximization of the economic future for the CNMI as so well drafted and presented in the introduction of the regulations? I do hope DHS can enlighten us.”
He then “implore[s] our American brothers to understand our unique relationship and not forsake us in our time of need. We do not need more dependency on federal food stamps. We need tools and means to be economically self-sufficient and the U.S. Congress and the federal government can certainly help us obtain such self sufficiency. We have lost our control of our EEZ to the United States due to our neglect in wording the Covenant…and now we have lost control of our economic development tools. [The federalization law] with such proposed investor E-2 visa regulations offered is at best a dependency entrapment program of the federal agencies. The framers of the regulations have the obligation to ensure that our livelihood and our rights under the Covenant…are not sidelined in the name of national security which is meaningless on a rock in the middle of the Pacific Ocean. To proceed based on the proposed investor E-2 regulations will destroy the small business base needed to support our tourism industry and our people. Failure to address the retention of small legitimate businesses is failure to ensure that the standard of living of the people of the Northern Marianas would be improved.”
Will these arguments, which were also made by the private sector and the administration, make any difference in D.C.? I doubt it.
What’s clear now is that those who have believed and hoped that federalization would be good for them — guest workers and small foreign businesses — are in for a rude awakening come Nov. 28.
