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Cohen declines to comment on debt writeoff bill
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Posted on Apr 05 2005
The federal government has turned down a request by the Commonwealth Utilities Corp. to comment on a defeated bill that would write off CUC’s longstanding loan from the Commonwealth Development Authority.
U.S. Interior deputy assistant secretary David Cohen said his office would take no position on House Bill 14-285.
“We believe it appropriate for this matter to be handled by local authorities in the Commonwealth,” Cohen explained in an April 4, 2005 letter to CUC chair Francisco Q. Guerrero.
Cohen’s letter was sent in response to Guerrero’s letter of March 22, 2005 asking Cohen to review the legislation. CUC hoped for an opinion that would dispel concerns over the possibility of the federal government deeming the debt waiver improper.
“It is our understanding that one of the reasons of [the bill’s] defeat was concern that the Office of Insular Affairs might consider such a waiver improper and [that the bill might] have a negative impact on OIA’s relationship with the CNMI,” Guerrero had said. “Therefore, this letter is to respectfully ask for your review of the matter and your response as to any concerns OIA may have over the proposed waiver of the repayment obligation.”
Introduced by Rep. Timothy P. Villagomez, House Bill 14-285 sought to waive any repayment of CUC’s $45-million loan from CDA. The write-off would have allowed CUC to obtain financing for utility projects.
The bill however was narrowly defeated on March 17, with eight House members voting against the measure and seven in its favor.” Two abstained from the vote.
House minority leader Arnold I. Palacios, one of the two representatives who abstained, said the waiver might impact the CNMI government’s relationship with the federal government.
The money loaned out to CUC was part of a $140-million federal direct grant assistance received by the CNMI and administered by CDA for infrastructure development in the Commonwealth.
