Azmar speaks out

Please allow me this opportunity to cast some light on the recent actions between MPLA and Azmar. As far as we at Azmar International Trading Company CNMI Inc. are concerned, we are still in negotiations. Therefore, I will say nothing about the draft agreement itself. However, we have given MPLA the opportunity to settle a wide variety of unanswered questions out of court and in plain public view. So far, they have declined. We are left with no other choice but to correct some misinterpretations that were created by the action of the MPLA board of directors last Friday.

I need to make it clear from the beginning that we are not blaming the members of the board for what may appear to be an irrational action. We respect each one of them. Manny is a former senator from Tinian and highly regarded. We all appreciate Mr. Sasamoto’s record of government service. Ana and Mr. Nekai have gained Mr. Moore’s respect. I have never met Mrs. Manglona; however, I am sure that she and the each of the board members are good citizens or they would not have been nominated by our governor and confirmed by our Senate.

No, we think the problem lies internally. In the three years Azmar has given to bringing the pozzolanic ash project to fruition, we have seen repeated instances where documentation has been mishandled, misplaced, or simply not provided to the board members. Although three other companies had received permits and failed, the project was assigned to a small group of inexperienced individuals who were still unprepared and unskilled in the talents necessary to deal with the magnitude of this issue professionally. Because they were not able to collect and properly disseminate information, they created confusion and concern among the members of the board. They were overwhelmed by the idea of someone creating an organization and discovering the financing mechanism necessary to successfully excavate 200 million tons of pozzolan from Pagan, while providing an avenue for the resettlement of its displaced residents.

Some people, maybe more than a few, have wondered why I have not been jumping up and down, throwing documents in the trash, and generally raising hell in the media, as I have been known to do in the past. There are two reasons why I have not. One, cooler heads in Arizona prevailed. And two, I believe we have discovered the rational reason behind a seemingly irrational act.

Readers may remember that, acting under pressure from the advice of the Senate and the governor, MPLA met in mid-August supposedly to give Azmar a “conditional permit.” No such permit was ever granted.

With no action by mid-September and the L.A. conference on Micronesian investment approaching, MPLA met hurriedly, again with encouragement from the governor and the Senate. In that meeting, the members created what could only be referred to as an overwhelming list of information that they wanted before they would begin negotiations for a permit. It included a list of all of Azmar’s financial resources, including their buyers. No company should be asked by any representative of the CNMI to surrender all of their proprietary information before an agreement is signed.

The next week a meeting took place in L.A. wherein the governor and Senate moderated a meeting between Ken Moore and Greg Whitehorn, our chief operating officer, and MPLA represented by chairperson Ana Castro, MPLA attorney Alan Lane, and deputy commissioner Frankie Eliptico. After coming to an agreement that would ensure negotiations for a permit would be completed, a realistic list of information that was necessary for negotiations to begin was agreed to. This agreement was memorialized in message dated Sept. 29, 2004, between Ana Castro, Alan Lane, Greg Whitehorn and Jeffrey Finley, our corporate attorney. It was reconfirmed on Oct. 3. We at Azmar have operated under that agreement ever since.

When there was no action from the board by November, the governor threatened to use his authority to abolish the MPLA board by executive order and transfer MPLA’s authority back to the Department of Lands and Natural Resources. This offer was greeted enthusiastically by the public.

Again, MPLA called a hurried board meeting, at which they raised the question of the list again. No mention was made of the Sept. 29 agreement.

Following the hurried Dec. 3 board meeting we were shocked by what had happened, not having been informed in advance of any action to be taken by the board. It seemed totally irrational. Then it slowly dawned on us that during that meeting, the members never once referred to the Sept. 29 agreement. It is now our belief that they were never informed of it.

We are hopeful that now that they have seen it, they will sit down with us and seriously negotiate a contract that is in everyone’s best interest and let us get on with the business of moving product and paying royalties to MPLA.

I hope we would not be out of line to suggest that they use some of that new income to hire more professionals in their staff.

We would like to address the question of Mr. Moore’s police clearance. Here in the CNMI, it is standard operating procedure to obtain your own police history. Every time a person applies for a job that requires a police clearance, he or she goes to the court house and asks for one at the clerk’s office. Pay for it, and you receive the proper form.

That is fine here for a population of a mere few thousands. It is impossible in a population of thousands. They make computers do the walking. The first thing a person does stateside when applying for anything is to give their complete name, date of birth and Social Security number. One of the first things Ken Moore did when he filled out the application for the MPLA permit three years ago was supply his full name, date of birth and Social Security number. He struck it from MPLA’s draft agreement like so many other issues, believing that it was repetitive. He already did what he was asked.

The one most important point I would like to leave you with is that Azmar is a local company. It is a CNMI-based company. It is built on the knowledge and experience of a top notch corporate attorney from Phoenix and two semi-retired internationally experienced businessmen, coupled with four locals, two indigenous and two not.

I first saw Pagan in 1979 aboard my sailboat and had dinner with the Aldan family. The harbor and the island are familiar to me. I participated in planning the very first Pagan project in 1984, just three years after the volcano erupted in 1981. That is when I gained my knowledge of pozzolan and its value. Glen, Jesse and I met Ken Moore in 1998-99 when he was searching for his Uncle’s lost B-29. I challenged him then to find a mechanism to fund the Pagan project, more as a joke under the gazebo at my home than anything else. When it began to develop we agreed that Ken would handle all the financial stuff and the three of us would manage local operations. So three from Arizona and three from the Marianas formed Azmar International in 2002. This year it transformed into Azmar International Trading Company, CNMI. Inc. We didn’t ask for shares in the company. A good salary is fine. We just want to be a part of the team that breaks new ground. We want to see the island of Pagan grow as a result of our work. That is satisfaction enough for us.

During this year we have added to our team one of the world’s largest suppliers of mining equipment, who will also be our consultant until we establish standard operating procedures for our local workers. We have one of the most experienced horticulturists and natural resources reclamation experts in the Pacific in another long time local, Dr. Thomas Arkle of Tinian. We have a local company just itching for the opportunity to build a geothermal energy system that will be capable of supplying energy to the entire island. (No fuel surcharges on Pagan!) And another company is going to install our water desalinization system, sufficient to provide water to the entire island.

The reason why we are going to succeed compared to the three that have failed is that Ken Moore has better worldwide contacts. He was able to bypass all the middlemen, and go straight to the top. As a result he is able to get a better price, as proven by the purchase order agreement he obtained in January at $46 per ton, CIF destination. Had MPLA been able to act more quickly then, the CNMI would already be receiving the benefits of our work.

We are asking nothing from the government, other than permission to remove the pozzolan that now blankets the northern third of the island and turn it into money. In return, with no risk to the CNMI, MPLA gets 7 percent of the gross revenue FOB CNMI, 5 percent BGR, 5 percent excise tax at the port, and all the secondary revenue resources from employee salaries etc. That is nearly equal to the 15 percent profit margin we hope to achieve.

Moreover, virtually all of the profit we do make will re-circulate in our economy. We will be selling a volcanic deposit to foreign agencies, bringing money into the CNMI. The profits will be reinvested in the CNMI, because we would get killed on taxes if we declared the income in the states. Every citizen in the CNMI will benefit from this project, and it does belong to all the citizens of the CNMI as Connie Blas Cabrera Togawa so succinctly pointed out.

Even though Azmar is not planning to recognize a profit until Year 3 of operations, the CNMI will begin gaining revenues within 30 days of the signing of our buyers contract as a million dollars worth of equipment begins to pass through Charlie Dock on its way to Shimushan Bay, Pagan. And the first royalties will be paid as fast as we can finish the other permits and make the first shipment.

We have spent three years providing what information MPLA needs to assure they have fulfilled their fiduciary responsibility. The corrolary to protecting one’s fiduciary responsibility is recognizing an opportunity when it knocks on your door. Ken, Jeff, Greg and the rest of the Azmar team are amongst the finest people I have ever worked with. We hope that the members of the MPLA board of directors will open the door to us again, and sit down at the table with us until we can complete a contract that is beneficial to both the future of our company and the people of the CNMI.

Don A. Farrell
Marpo Heights