BoG opinion backs MPLA’s Castro in dispute with Hofschneider

Only the Marianas Public Lands Authority can approve and alter the amounts to be paid to land claimants, Bank of Guam’s bond counsel said.

Bond counsel Roger Davis issued this legal opinion in view of the controversy involving MPLA commissioner Henry Hofschneider’s decision to allow the Commonwealth Development Authority to alter the amount listed on an MPLA request for transfer of its funds at the bank to pay for land compensation claims.

In an Aug. 16 letter to Ada, Bank of Guam assistant vice president and trust officer Joseph H. Paulino quoted Davis as saying that, “Only the MPLA can approve the amounts to be paid to land claimants and only the MPLA can change the amounts due to land claimants.”

“Therefore, any compensation amounts…[originally] approved…by MPLA will not be altered in any way without the full consent of MPLA,” Paulino added.

The Bank of Guam official also described the disbursement process for land claimant payments.

The Saipan Tribune repeatedly phoned Ada for her comments yesterday, but she was unavailable. Neither did she return the calls.

On June 18, upon the MPLA board’s approval, Hofschneider and MPLA comptroller David S. Demapan prepared a request for the transfer of $216,322 of MPLA’s funds at Bank of Guam to pay for land compensation claims.

The amount was earlier approved by the board. It was also concurred by the Finance Secretary. The drawdown request was then forwarded to CDA for processing, and then sent to the bank.

However, the document that reached the bank was different from the one originally prepared by Hofschneider and Demapan. The amount $216,322 was altered with a strikethrough and above it was typed $134,695.91. Beside the alteration were Ada’s initials.

For allowing Ada to make the change without informing the board, MPLA chair Ana Demapan-Castro suspended Hofschneider for an initial 15-day period. The suspension was later extended, pending the resolution of an investigation that Demapan-Castro requested from the Attorney General’s Office.

For his part, Hofschneider had claimed that Ada had authority over requisitions for fund drawdown and therefore, he committed no violation when he allowed her to deduct $81,626.09 from the requisition document.

“For your information, requisitions for fund drawdown are prepared at my call and are not subject to…[the] MPLA [board’s] approval. For example, Requisition Nos. FY04-01, FY04-02, and FY04-03 were all prepared at my instructions and sent to the Secretary of Finance for his concurrence and then to CDA, without the Board of MPLA ever approving any one of them,” Hofschneider had said.

Hofschneider remains suspended.

The disbursement process for land claimant payments:

* The MPLA board of directors will negotiate with land claimants on the desired and approved compensation amount.

* The MPLA commissioner will sign and forward the approval and schedule of payments to the Secretary of Finance.

* The Finance Secretary will concur and forward the documents to CDA.

* CDA will forward the required documents to the trustee, which is Bank of Guam.

* The trustee will request the redemption of funds and execute the release of funds via a check to the individuals listed on the payment schedule on the following business day.

* The checks will be delivered to MPLA for distribution to the land claimants.