CUC faces House scrutiny • Excessive spending, partnership agreement with OIA necessitate full-length investigation, says Rep. Camacho

The continued bickering on utility debts and excessive travel tabs incurred by officials of the Commonwealth Utilities Corporation are likely to cause more uproar as the Legislature prepares for an in-depth investigation next week.

The lower chamber of the CNMI Legislature has been summoning courage to stay focus on the issue despite CUC’s persistent refusal to provide the House of Representatives the requested financial status.

Committee on Public Utilities, Transportation and Communication chair Rep. Rosiky F. Camacho disclosed Friday that a committee meeting scheduled on March 8 for the CUC and the Commonwealth Development Authority has been set to discuss the partnership agreement entered into by the CNMI government and the Office of Insular Affairs.

House Bill 12-320 will relieve the utility company of all obligation to pay accrued interest by transferring payment of CUC loans obtained from CDA to the Department of Finance.

The proposed measure also seeks to provide CUC with credit against such indebtedness for all capital expenditures made from its revenues subsequent to the date of such borrowing from CDA.

Mr. Camacho said the Legislature hopes to obtain the necessary report from CUC.

This will update the public on the financial status of the utility company in light of allegations on excessive travel tabs, across-the-board wage increase and the hiring of 35 non-essential utility personnel.

Ironically, all of these were made by CUC within the time-frame of its self-imposed austerity measure, which the corporation implemented to help it rise from financial problems brought about by overdue utility bills.

Reports disclosed that from October 1999 to date, CUC spent more than $600,000 on board travel alone and over $120,000 on board members’ per diem during these off-island travels.

Most of these travels are made in line with negotiations on the construction of the 60-megawatt power plant with Enron and mostly attended by panel heads and CUC vice chair Laura Manglona.

Early this month, Ms. Manglona together with Board Chair Jesus T. Guerrero, members Sonny Flores and Ed Sablan, CUC legal counsel Steve Woodruff, Assistant Attorney General Murphy Peterson and another CUC staff left for a meeting in the mainland US.

In the past six months, CUC had also hired 35 personnel including Mr. Guerrero’s brother-in-law, Manuel Sablan, as liaison to Legislature with an annual salary of $49,000.

CUC also implemented a $2,000 across-the-board salary hike and an additional $1,000 anniversary increase for each of its employee. All these are believed to be approved by the CUC board chair.

Mr. Camacho earlier disclosed that he will ask the assistance of the Office of Public Auditor to investigate extensively and evaluate CUC’s financial status following allegations of breach of fiduciary duties.

The congressman also warned CUC officials that their excessive spending might result to possible absolution of their fuel tax exemption and the much needed OPA probe.

This, he said, will also pave the way for the evaluation of the OIA-Commonwealth partnership agreement and the Equity Conversion Program between CDA and CUC.

Mr. Camacho said if CUC is making enough money to shoulder all these expenses, there is no reason for the government to continuously absolve the utility company from the Liquid Fuel Tax.

The government-controlled corporation’s exemption has a major impact on the revenues generated by the government since its implementation.

Mr. Camacho said the meeting with CDA and CUC will give the Legislature a better picture of the financial status of the utility company, as well as shed light on the alleged violation of fiduciary responsibilities of CUC officials.

He said all angles will be looked into and other gray areas will be discussed openly and extensively. (EGA)