Judge: Fund issue a Commonwealth problem

Superior Court Associate Judge Kenneth Govendo last Friday underscored the importance of finally resolving the Retirement Fund’s lawsuit over the government’s failure to remit the required employer contributions.

At a status conference, Govendo suggested to the parties in the case to get the Legislature, who has the control of government funding, involved in the discussion.

“It would be negligent for us if we keep continuing this!” said the judge as he granted Fund’s counsel Viola Alepuyo’s request to conduct two separate hearings.

The sole issue remaining in the case is to determine the amount of damages owed the Fund.

Govendo set phase one of the hearing for April 20, and phase two for June 8.

The judge said he is hoping that the Legislature will get involved because there are so many people affected by the issue and that this is an election year.

He compared the Fund to a savings account that is not earning an interest, but people are withdrawing their money.

“Eventually it becomes zero! That’s the issue!” Govendo said.

He said this is a major issue affecting almost 3,000 people in the CNMI.

“This is a Commonwealth issue. It’s a Commonwealth problem,” Govendo said.

Alepuyo said they asked for the April hearing so they could show the actual damages owed the Fund.

Alepuyo said that, in the June hearing, they could bring in experts to show just how much the Fund has lost because of the unpaid contributions and the loss of possible investments.

She agreed with Govendo that the Legislature should be brought in and be part of the discussion process.

“The problem really is, if you think about the hundreds of millions of dollars that is involved, it’s overwhelming! But I think that if you cut it down into several different parts and address that individually and separately, then once you able to resolve one issue and move on to the next one, then you can overcome it,” the lawyer told the media.

Assistant Attorney General Anthony Welch, counsel for the government, also agreed that without the Legislature’s participation, there is no practical solution to the issue.

Welch told the court that the government should be given enough time to address the issue.

“This is not a simple case!” Welch stressed.

Fund Board chair Juan T. Guerrero told Saipan Tribune after the hearing that he is happy that the judge set some dates and that even the government is pushing to resolve the issue.

“We believe those dates are very instrumental for further discovery and also for presentation. We are hopeful that the Legislature will get involved because it is clear that we would also need the Legislature to address some funding issues, especially when the awards are presented and approved by the court,” Guerrero said.

The Fund filed the lawsuit against the government, Gov. Benigno R. Fitial, Department of Finance, and Finance Secretary Eloy Inos in 2006 over the government’s failure to remit required payments.

In November 2008, Govendo granted the Fund’s request for default judgment after the government, through the Attorney General’s Office, waited nearly two years to answer the complaint.