NMD group concerned about MPLT loan to CNMI govt

A council that supposedly represents those of Northern Marianas descent has expressed concerns about House Bill 21-44 to authorize the Marianas Public Land Trust to loan $15 million to the CNMI government.

In a letter to House of Representatives Speaker Blas Jonathan Attao (R-Saipan) last Wednesday, Juan Castro, interim chairman of the Northern Marianas Descent Council Inc., said that MPLT’s decision to approve the loan to the CNMI government needs to be questioned. The council questions both the House’s passage of the measure and the legality of the bill itself.

“The Legislature has…abdicated its constitutional authority and responsibility to maintain control over the public purse by granting the governor essentially unlimited reprogramming authority,” Castro stated in the letter. “We know the Executive Branch incurred a hefty deficit well before [Super Typhoon] Yutu hit. …The causes of the deficit have yet to be meaningfully examined or explained.”

The letter also raises concern that the council is aware that the Public School System will not be remitted the 25% revenue and that government workers are experiencing a 25% cut in their salaries due to the ongoing austerity measures.

“Retirees have been receiving 100% of their retirement annuities, though the Settlement Agreement in the federal court case only guarantees them 75%,” Castro said.

Castro added in the letter that payment of the Settlement Funds with funds borrowed from MPLT will free up general revenues to continue paying retirees an additional 25%, which means the bonuses are likely illegal.

In a separate phone call, Castro informed Saipan Tribune that he was able to speak with Attao weeks before the bill’s passing and Attao acknowledged their concerns about the bill. “We were able to meet and we discussed the group’s concerns about this matter and I thank the speaker for his presence,” Castro added.

Castro said the council has two primary concerns about the bill. The first is that the funding that will be provided by the Federal Emergency Management Agency will “reimburse only genuine and legitimate disaster relief and recovery expenses.”

The other issue is the interest on the loan. The MPLT has set the interest rate of 7.5% and the loan must be paid in five years. The concern is that the government may not be able to pay back to loan in such a time.

A council participant who attended the group’s signatory meeting last Saturday and agreed to speak on condition of anonymity, said, “I am against the bill because the first [MPLT] loan hasn’t been repaid [yet],” he said, referring to the money MPLT loaned to the government to fund the Commonwealth Health Care Corp. years ago.

He described the new loan as “a breach of fiduciary duties” as there has never been a financial institution that has ever given a loan to a company that has a default loan. “I think that it’s imprudent and unconstitutional, because the Constitution requires prudence and reasonableness in how the [MPLT] manages the benefits,” he added.

A substitution bill of H.B. 21-44 was passed last Friday by the CNMI House of Representatives. It authorizes the loan and appropriates and authorizes the MPLT to withhold and to retain net annual distributable interest income starting fiscal year 2019 for repayment and security of the loan.