2 taxpayers accuse Lt. Gov. Palacios of defrauding DPL

Two taxpayers yesterday requested the Department of Public Lands to report to the Office of the Attorney General and the Federal Bureau of Investigation about Lt. Gov. Arnold I. Palacios’ criminal act for allegedly defrauding the CNMI government by assigning to a private company public lands that he leased from DPL.

Steven Dela Cruz and William Villagomez, in their letter to DPL Secretary Sixto K. Igisomar, a copy of which was obtained by Saipan Tribune, said Palacios is making $3,330 profit a month with his assignment of government properties with South Pacific Lumber Co., but hid such deal from DPL.

The complainants attached in their letter documents about Palacios’ amended lease with DPL, promissory note, as well as the warehouse rental with the private company. 

When asked for comments, Palacios said he knows Dela Cruz and Villagomez are not capable of writing that letter but that it’s political season.

Palacios said he was the one who built the warehouse and that  lease allows that sublease and that Igisomar is aware of it.

Palacios is running for governor under a united independent team for  the Nov. 8 general elections. 

Dela Cruz and Villagomez said Palacios, owner of A&M Corp., violated the terms of his lease agreement with DPL and that he is defrauding the government.

The complainants said that, on Dec. 14, 1990 Palacios entered into a lease agreement with the government, which was amended on April 28,1992, for the lease of three properties, with a total of 6,573 square meters, for 25 years from DPL, with a monthly payment of $304.

Palacios allegedly defaulted on his monthly payments for more than 30 years and that as of May 6, 2020, he was in arrears of $65,000.

Dela Cruz and Villagomez said despite owing the government $65,000, as a lieutenant governor, Palacios requested the government to renew his lease agreement for another 25 years. 

They said that, on March 23, 2021, DPL approved Palacios’ request to extend the lease agreement for another 25 years with a monthly payment of $1,170 under his and his wife’s company name, A&M Corp.

They said that on Nov. 20, 2021, or eight months later, Palacios, under A&M Corp., assigned the government properties to South Pacific Lumber Co. signed by James C. Whang for $4,500 a month without written consent or approval from DPL.

They said this assignment, which Palacios is making $3,330 profit a month, was a direct violation of Article 14 of the new lease.

The complainants said Palacios did not file this assignment with the Recorder’s Office in pursuit of keeping it confidential and hiding it from DPL.

They said Palacios hid this agreement from DPL because he did not want to pay the additional 1.45% interest fee as required by Article 5 of the lease agreement. 

“This is completely wrong. Arnold is defrauding and stealing money from the CNMI government,” said Dela Cruz and Villagomez. 

In June 2018, the same issue against Palacios, who was then Senate president, was raised by Jack Muna, who alleged that Palacios owed DPL over $190,000, yet  allegedly continues to hold on to the lease of parcels of public land in Lower Base.

Muna said Palacios is leasing three parcels of public land and sub-leasing it to a private business, thereby earning thousands of dollars from the sublease rental of $4,500 per month.

Palacios then refuted this, saying that DPL and its legal counsel have agreed that the amount he allegedly owes is erroneous. 

“It is unfortunate that such a mundane matter as a dispute of a personal land lease would be used for political gamesmanship,” Palacios then stated in June 2018.