‘La Fiesta turnover may be illegal’

The Governor’s Office’ decision to take over the ownership of the La Fiesta complex in San Roque may be illegal as it would cause the government to incur a debt without the approval of the Legislature, according to minority bloc senator Pete P. Reyes.

Reyes, who pushed for a senate oversight on the La Fiesta acquisition, said that, by assuming the financial obligations from Northern Marianas College, the Executive Branch commits the government to paying the remaining debt amounting to $4 million.

The facility was acquired in Aug. 2003 for $7.5 million using a $3.5 million federal grant money from the Governor’s Office.

“The $4 million remains unpaid. In my opinion, it creates a debt for this government, which is contrary to what the Constitution says. The Constitution provides that nobody has the authority to create a public debt unless it is backed up by the Legislature,” said Reyes.

He said going into a public debt would require a passage of a resolution by lawmakers.

Reyes said the Senate legal counsel would issue an opinion on the legality of the La Fiesta ownership turnover.

“We want to pause for a moment and reflect on this whether or not the governor illegally brought indebtedness against the government without the proper sanction. I have asked the committee chairman [Sen. Henry San Nicolas] to request for a legal opinion,” he said.

Nicolas’s Committee on Health, Education, and Welfare and Programs had met with NMC officials last Friday to discuss issues surrounding La Fiesta. Also at the meeting were representatives from the Office of the Public Auditor, which is currently investigating the same issue.

During the meeting, Reyes said that the committee learned of another funding allocation of $290,000 for La Fiesta’s architectural and engineering design.

“We found out there’s an A&E design [contract] amounting to $290,000, which the governor and the NMC Foundation agreed to shoulder,” said the senator.

He said that NMC president Tony Deleon Guerrero informed the Senate panel that the A&E contract was eventually canceled “because it’s not feasible.”

“But when they stopped it, the contractor had billed them $70,000,” Reyes said, adding that, according to Deleon Guerrero, the billing has not been paid.

After authorizing the release of $3.5 million to NMC last year, Gov. Juan N. Babauta had also agreed to give an additional $250,000 to the college for the A&E design.

Meantime, Reyes said that the administration’s La Fiesta takeover agreement with NMC is not yet final as it would still require the concurrence of the sellers: Hotel Nikko Saipan and Coco’s Lagoon Development Corp.