‘Govt will impose cuts on employees but silent on $40M owed by IPI’

The CNMI government is willing to impose a 16-hour cut for government employees, yet remains silent about the whereabouts of the $40 million that Imperial Pacific International (CNMI) LLC owes the CNMI people.

That was one of the issues that Sen. Paul A. Manglona (Ind-Rota) raised yesterday during a Senate session, where he described the 16-hour cut for government employees as “harrowing, agonizing, and a disturbing déjà vu encounter.”

This developed as House of Representatives members held a closed-door meeting with Finance Secretary David DLG Atalig yesterday afternoon in the House chamber. When Saipan Tribune left the Legislature at 4pm, the meeting was still going on.

At the Senate session, Manglona outlined his many concerns and questions about Gov. Ralph DLG Torres’ Directive 2020-002 announcing the implementation of the 64-hour work schedule beginning March 15. In particular, he said the Torres-Palacios administration is imposing the 64-hour work schedule, but there is not a whisper from Torres or Finance Secretary Atalig as to where the $40 million in Community Benefit Fund for fiscal years 2018 and 2019 are.

Manglona pointed out that, although the Community Benefit Fund monies are not deposited into the general fund, such monies should be considered public funds as they are part of the consideration for the exclusive casino license to IPI.

He said the funds were pledged in exchange for the casino license. Therefore, the Community Benefit Fund is tantamount to earmarked funds of the CNMI, he added.

“There is no question about this, and there is also no question that if there is a better time to make good use of these monies, it is at this very moment when we are about to ask our people to take a cut of 20% from their paycheck,” Manglona said.

Pursuant to the casino license agreement, IPI should have made available to the Community Benefit Fund a total of $40 million as of Oct. 1, 2019, Manglona said, not including the fiscal year 2020 contribution of another $20 million this Oct. 1.

“To date, there is no official report on disbursement or expenditure, if any, of the Community Benefit Fund monies,” said Manglona, adding that the press reported that only approximately $3 million had been paid by IPI, leaving an unpaid balance of $37 million. These funds, he said, must be accounted for and any distribution must be disclosed.

On the announcement of austerity measures, Manglona said that Atalig, in a letter to Torres last Feb. 3, based his belt-tightening policies and budgetary projections on a 72-hour bi-weekly work schedule. Then, he said, a mere four days later, Torres issued the 64-hour schedule directive. The senator said the government should stop making drastic decisions without having factual and reliable financial information in its possession.

Manglona said everyone can blame the 2018 Super Typhoon Yutu, but that even a year before it hit, the government already had a $25 million deficit in fiscal year 2018.

“We can also now blame the coronavirus, but even before this, we already knew we had about $90 million in fiscal year 2019 deficit spending,” he said.

Yet, the senator said, the Legislature was misled into thinking that the CNMI was on its way back to fiscal normalcy. In fact, Manglona said, Torres rescinded the 72-hour work schedule just two months ago when he should have already known that first quarter revenue projection was short by more than $4 million.

Obviously, he said, Torres was working with inaccurate financial figures, which led to the premature lifting of the austerity measure.

Manglona said Finance should answer the question whether the casino Business Gross Revenue Tax funds are being intermingled with CNMI general fund revenues, and are being used as part of its cash flow management.