Round of finger-pointing begins in MRC debacle

The blame game has begun over the failure of the Marine Revitalization Corp. settlement agreement.

With the arbitration panel tackling the Marine Revitalization Corp. settlement ruling in favor of MRC—which resulted in the government having to pay some $6 million instead of $800,000 in initial payment, as provided for in the failed settlement agreement—the question on Capitol Hill right now is who is to blame for this fiasco.

“Not me,” according to Senate minority leader Pete P. Reyes, noting that his sole opposition to the MRC bill would not have been enough for it to flop.

Reyes noted that during his brief stint as Senate president during the 13th Legislature, the Senate passed the bill but Gov. Juan N. Babauta vetoed it.

“So who’s to blame now? Isn’t it the administration? They try to point finger at me as being at fault here, but I just voted based on my principle. I don’t agree with the bailout,” he said.

“It’s the Legislature’s failure,” observes House minority leader Arnold I. Palacios, citing that the Legislature had the chance to act on the bill for a long time.

Lt. Gov. Diego T. Benavente, he said, never lacked in reminding the Legislature to act on the proposed settlement.

“He [Benavente] came to the Legislature early this year, making a presentation on the subject. But in the past eight months, nothing materialized. Lately, he again wrote the Legislature, warning that the government was facing a huge liability,” Palacios said.

“This liability is a reality now. The government is penalized and it means that the taxpayers would be paying for it,” he said.

The settlement agreement, contained in House Bill 14-270, reintroduced by Palacios last month, needed to pass the Legislature before Nov. 30, 2004, the date set for resumption of the arbitration.

The bill passed the House on Nov. 23 on a majority vote.

It passed the Senate on Dec. 3, the day that the arbitration handed down its decision to penalize the government $5.7 million for breach of contract involving the MRC’s Outer Cove Marina development project.

The arbitration panel decision is up for submission to the Superior Court for its final entry of judgment.

Meantime, Palacios said the Senate legal counsel’s interpretation of the MRC settlement as a void document was wrong.

The lawmaker said it was understood between parties that the Legislature’s passage of the bill would be honored, although it was past the four-month deadline.

Senate legal counsel Michael Ernest earlier opined that House Bill 14-270, which the Legislature had deliberated on at length, was actually null and void since the legislative approval did not take place within four months after the agreement was signed—as agreed upon. The agreement was executed between MRC and the Attorney General’s Office on Feb. 11, 2003.

“That’s not the case. I myself clarified it with MRC before I introduced the bill and I was assured that, should the Legislature pass it, it would be accepted,” said Palacios.

The bill had sought to approve the 2003 settlement agreement between the government and MRC and Anthony Pellegrino, and to allocate $800,000 as initial payment to MRC.

The agreement also included the payment of additional $2.2 million in deferred monthly installment over 20 years through operating revenues of Outer Cove Marina or tax credit.