CNMI terminates contract with coin maker

The Governor’s Office is terminating its contract with coin-maker Softsky following a federal court injunction suspending the sale of commemorative “Twin Tower” coins due to alleged fraud in the marketing of the coins.

“That contract is being terminated now. That’s the way to go, based on an analysis,” attorney general Pamela Brown said yesterday.

Gov. Juan N. Babauta, who signed the agreement with Wyoming-based Softsky to develop and market commemorative coins bearing the CNMI emblem, earlier suspended the contract pending a review of the court action.

During the suspension, Softsky was not authorized to develop, mint, or market any coins using the authorization of the CNMI.

Brown said that disposing of the proceeds from the contract should not be a problem. Softsky has remitted some $160,000 in royalty fees to the CNMI from July to October this year.

Brown said that it would be unacceptable to profit from the Sept. 11, 2001 tragedy. The seller of the coin reportedly advertised it as being made of nearly pure silver recovered from the World Trade Center site in lower Manhattan.

Brown said the money may likely be donated to the victims’ fund.

She said the governor was very disappointed over Softsky’s involvement in the fiasco. “What they did was not what we had wanted to do,” she said.

A New York court earlier imposed an injunction against the company over alleged fraudulent acts in the release of the “twin tower” coins.

This after a state judge reportedly found that National Collector’s Mint Inc., which markets Softsky coins, engaged in civil fraud, false advertising and deceptive business practices when it marketed its “2004 Freedom Tower Silver Dollar” for $19.95 in television and print ads.

New York attorney general Eliot Spitzer said that, contrary to the claim, the coins were made of inexpensive metal alloy plated with about one-ten-thousandth of an inch of silver. Spitzer had filed an $8-million lawsuit against the Port Chester-based company.

In his recent letter to Softsky president Joseph Hartman, Babauta said, “We are not happy taking these actions but the events surrounding this agreement warrants this suspension.”

Hartman came to Saipan last July to personally hand the royalty fee to the governor. SoftSky had issued two $25,000 worth of checks to the CNMI from the proceeds of the sale of minted CNMI coins. Last October, the company sent in additional $110,000 to the CNMI as royalty fee.