Govt debt to Pellegrino, MRC now near $8M

The CNMI government’s $5.46 million debt to Anthony Pellegrino and his Marine Revitalization Corp. has now ballooned to almost $8 million due to accrued interest.

Attorney Michael Dotts, counsel for MRC and Pellegrino, told Saipan Tribune that they are filing a motion in the Superior Court to make the CNMI government pay the court judgment.

Dotts said the court gave Pellegrino some tax relief, but it’s not enough.

“We’re trying to get more,” the lawyer said.

In MRC and Pellegrino’s motion, Dotts said the amount owed on the stipulated judgment as of June 2008, has now reached $7,735,623.

He said the judgment is currently accruing interest at the rate of $43,790 a month.

Dotts said the Department of Lands and Natural Resources had agreed to a court judgment ordering it to pay more than $5 million to MRC. He said the court approved the agreement in January 2005. However, DLNR refused to pay, according to the lawyer.

MRC, he said, is therefore forced to go to court to compel DLNR to pay.

Dotts said the court’s first order in May 2005 ordered DLNR to immediately pay $20,000 to MRC, and to pay all income from DLNR operations into the court bi-weekly.

“It did neither,” he said.

Dotts said the court’s second order in May 2008 again ordered the prompt payment of the $20,000, this time by a certain date. It also allowed MRC to recoup the balance of the judgment through tax credits.

Dotts said DLNR did not object and did not even appear at the hearing.

DLNR, he said, still did not pay the $20,000, but at least MRC, by taking credits against its tax liability, was finally able to at least stop losing money as a consequence of its marina deal with DLNR.

Dotts said DLNR now has returned to court, seeking to block even this negative form of relief to MRC.

“To add insult to injury, DLNR has remained in possession and control of the Outer Cove Marina, collecting, or at least having the ability to collect, usage fees that could be applied to pay off MRC, who built the marina in the first place,” he said.

Assistant attorney general David Lochabay, in his opposition to the motion, said there is simply no authority for the Superior Court, or any CNMI court, to issue an order that directs the Commonwealth to expend funds that have not been appropriated.

“The statutes are quite clear about this,” Lochabay pointed out.

Associate Judge David Wiseman is expected to hear the motion on Dec. 18, 2008.

Pellegrino established MRC to build the Outer Cove Marina in the mid-90s.

A dispute between MRC and the government arose in 2001 after the government not only failed to bar commercial vessels from renting slip space at Smiling Cove, but also actively solicited commercial lessees.