Atalig letter on BoS stricken from record

The Superior Court on Wednesday struck from the record a May 2002 letter written by then acting Commerce Secretary Fermin Atalig regarding the Bank of Saipan’s practices and procedures, saying there was no justification for the document.

Associate Judge David A. Wiseman issued the order after giving the Bank of Saipan and the CNMI government a negotiation period of almost two years.

In giving out the order, the judge also took into consideration the commencement of Bank of Saipan’s Texas trial, which was scheduled for April 4. CNG Corporation, the defendant in the civil action filed by Bank of Saipan, is expected to use the letter at the trial.

Wiseman said he saw no rationale for Atalig’s May 2002 letter, noting that it was issued subsequent to findings that had already met statutory requirements to invoke the bank’s receivership, and after the bank had already been placed into receivership.

“The May letter served little purpose other than providing superfluous and derogatory statements which were unnecessary and made without the bank having the opportunity to reply to the allegations… As such, the letter could not be issued absent a hearing and proper notice in which the bank had an opportunity to contest the findings. The bank was never given that opportunity,” Wiseman said. “For [these] reasons…, the court orders that the May letter is hereby set aside and stricken from the record.”

Records show that Atalig wrote the letter on May 28, 2002 to support his earlier determination regarding the bank’s financial condition, which had led to the bank being placed into receivership.

In early June 2002, Bank of Saipan filed a petition for judicial review and asked for the letter to be stricken from the record. The bank argued that Atalig’s findings in the letter would jeopardize the bank’s rehabilitation efforts, as well as its long-term obligations to its depositors.

In response, the government said the letter merely expounded on the April 2002 findings, and as such, was proper and should not be stricken.

In September 2002, the court appointed a receiver for Bank of Saipan. The bank withdrew its opposition to the receivership, but renewed its objection to the May letter.

The court then directed both parties to enter into negotiations.

In a status conference in December 2004, the parties reported that no agreement had been reached.