DPL not remitting land lease payments for four years

For four consecutive years now, the Department of Public Lands has not been remitting public land lease payments to the agency at the end of every fiscal year as mandated by the CNMI Constitution, according to the MPLT board Friday.

MPLT chair Alvaro Santos disclosed that the agency last received payments from DPL in 2008, amounting to $5 million, including the $3.5 million loan payment related to the Commonwealth Utilities Corp.

Santos said that even the fiscal year coverage of the last remittance of $1.5 million for public land leases was not clear.

According to the board, the uncollected lease payment was from fiscal years 2008 through 2011.

MPLT is constitutionally mandated to handle and invest all monies generated from public land leases and related fees. All revenue earned from these investments are then turned over to the general fund.

Santos said that DPL has been using the awarding of homesteads and the infrastructure developments DPL is doing on Saipan, Rota, and Tinian as reasons for the delayed remittances. However, he pointed out that no records-particularly financial statements-have been shared or provided to MPLT to validate DPL’s expenses and development claims.

In numerous instances, DPL also included among its reasons the significant decline in the number of public land leases, Santos said, yet MPLT has been provided no concrete data to support this claim.

Santos said that DPL’s failure to timely remit public land lease revenue is a clear violation of the law and that the board will take strong measures if DPL will not cooperate and work with MPLT.

“Draw your conclusion but unfortunately, that can happen because we did it twice already with [DPL Secretary Oscar Babauta’s] predecessors. For me it’s problematic because they don’t share with us how much they collected. They leave MPLT in total darkness and because of that, we’re just making guesstimates on their collection,” he said during a break in the meeting.

Santos said that MPLT may be receiving “untruthful” information from DPL due to the absence of clear and accurate records about DPL’s transactions. He described these non-remitted funds as an “opportunity loss” for MPLT.

Santos also revealed that prior to the 2007-2008 collection from DPL, the last time MPLT received money from DPL was in 1991.

“That’s over 10 years. Can you imagine if you pump that money into the portfolio?” he said.

MPLT’s investment portfolio is currently valued at $71 million.

When asked why MPLT did not take any action in the last four years, Santos said that MPLT was always given the argument that monies were used for homestead developments.

“It’s very hard to draw conclusion because we really don’t know the facts other than what they tell us. If we have the documents, we can refute or contest their honesty. But with lack of information, we’re just speculating how much they collected,” he said, adding that DPL is clearly violating the constitutional mandates.

“It is in violation already. And even if they have a very good reason, at least be transparent and share with us [the data]. With that kind of transparency, we can understand the real situation and perhaps we may be more considerate,” he said.

Last Oct. 5, MPLT sent Babauta a follow-up letter asking for the remittance of land lease payments. Meetings took place after that and on Oct. 12, Babauta promised anew to provide the necessary remittances for fiscal year 2011.

The DPL secretary, in his letter to Santos, said they are closing the 2011 books and will shortly remit the funds. However, he described as a “gargantuan task” MPLT’s request for documents, which include “all current land leases for public lands, permits and other permitted operations for which fees are collected.”

For Babauta, these requested documents are not covered by the scope of the Open Government Act and MPLT must specify what records it wants.

Board members described the situation with DPL as “very disturbing” and agreed to give the agency some sort of ultimatum before pursuing stronger steps.